Talvivaara Mining Company annual results review for year ended 31 December 2010

STOCK EXCHANGE RELEASE
17 February 2011


Talvivaara Mining Company annual results review for year ended 31 December 2010


Highlights of the fourth quarter of 2010
·         Nickel production 3,831t, up 19% from Q3 2010
·         Zinc production 9,369t, up 36% from Q3 2010
·         Record quarterly net sales at EUR 60.2m and third consecutive
quarterly operating profit at EUR 14.3m
·         Successful issuance of EUR 225m senior unsecured convertible bonds due
2015 in December
·         54% upgrade in total mineral resources to 1,550mt announced in
October; 3.4mt contained nickel and 7.6mt of contained zinc warrant assessment
of options for production capacity expansion

Highlights of 2010
·         Net sales EUR 152.2m (2009: EUR 7.6m)
·         First full-year operating profit of EUR 25.5m (2009: loss of EUR
54.8m)
·         Progress in ramp-up confirmed through 10,382t nickel production (2009:
735t) and 25,462t zinc output (2009: 3,133t)
·         EUR 100m corporate revolving credit facility signed in June; facility
undrawn at year end
·         Zinc streaming agreement with Nyrstar for 1.25mt of zinc in
concentrate completed in February; USD 335m pre-payment received
·         Net debt significantly reduced through repayment of USD 320m project
loan facility in February using the Nyrstar pre-payment
·         Permit application to extract uranium as a by-product lodged in April;
Environmental Impact Assessment on uranium extraction carried out during the
remainder of the year

Highlights after the reporting period
·         Uranium off-take agreement signed with Cameco Corporation on 7
February 2011; Cameco to provide an upfront investment of up to USD 60m to cover
the construction costs of the uranium extraction circuit

Key figures

----------------------------------------------- ------ -------- ------ --------
EUR million | Q4| Q4| FY| FY
| 2010| 2009| 2010| 2009
----------------------------------------------- ------ -------- ------ --------
Net sales | 60.2| 5.0| 152.2| 7.6
----------------------------------------------- ------ -------- ------ --------
Operating profit (loss) | 14.3| (31.6)| 25.5| (54.8)
----------------------------------------------- ------ -------- ------ --------
      % of net sales | 23.8%|(635.6%)| 16.7%|(723.5%)
----------------------------------------------- ------ -------- ------ --------
Profit (loss) for the period | (4.7)| (33.0)|(13.1)| (55.0)
----------------------------------------------- ------ -------- ------ --------
Earnings per share, EUR |(0.02)| (0.11)|(0.06)| (0.19)
----------------------------------------------- ------ -------- ------ --------
Equity-to-assets ratio | 31.3%| 43.5%| 31.3%| 43.5%
----------------------------------------------- ------ -------- ------ --------
Net interest bearing debt | 315.0| 426.2| 315.0| 426.2
----------------------------------------------- ------ -------- ------ --------
Debt-to-equity ratio | 82.8%| 111.4%| 82.8%| 111.4%
----------------------------------------------- ------ -------- ------ --------
Capital expenditure | 23.5| 36.5| 115.7| 118.5
----------------------------------------------- ------ -------- ------ --------
Cash and cash equivalents at the end of the | 165.6| 11.9| 165.6| 11.9
period | | | |
----------------------------------------------- ------ -------- ------ --------
Number of employees at the end of the period | 389| 308| 389| 308
----------------------------------------------- ------ -------- ------ --------

All reported figures in this release are unaudited.



CEO Pekka Perä comments: "2010 was a significant year in Talvivaara's
development as we overcame early challenges in metals recovery to produce more
than 10,000t of nickel and reached a close to 30,000tpa nickel peak production
rate by the year end. In 2011 our full focus remains on the ramp up of our
operations as we complete the final phase of Talvivaara's development and
proceed into full production. For the current year, we reiterate the
30,000-35,000t nickel production guidance.

Talvivaara enters 2011 in a strong financial position following our recent
convertible bond issue in December and the innovative zinc streaming agreement
signed with Nyrstar earlier in the year. We are also proud to announce our
maiden full-year operating profit and a third consecutive quarterly operating
profit.

In the past year, we announced a further upgrade in our resources, the third
since Talvivaara came to the market in 2007. Alongside a robust financial
position, this enables us to consider our future options as a growth company and
strengthens our potential to expand organically.

While we aim to deliver value from our deposits through further production
expansion, we believe we can also better exploit the polymetallic nature of the
ore by broadening our product portfolio using our low-cost and sustainable
technologies. To this end, we were delighted to announce the recent off-take
agreement with Cameco for uranium production; we look forward to their support
and expertise through the permitting process and the planning and construction
of the uranium recovery circuit at the site.

Our outlook on the commodity market remains positive for 2011. Whilst the
volatility seen in the last few years is likely to persist, commodity prices are
supported by strong demand from China and a gradual recovery in demand from
Western economies.

Finally, I would like to thank our shareholders for their ongoing support and
our management and operational teams for their hard work during the past year
and for their commitment as we seek to realise Talvivaara's full potential."



Enquiries:

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

Merlin Tel. 44 20 726 8400
David Simonson
Anca Spiridon





Presentation and live webcast on 17 February 2011 at 12:00 GMT/14:00 EET

A combined presentation, conference call and live webcast on the annual results
will be held on 17 February 2011 at 12:00 GMT/14:00 EET at Hotel Scandic
Simonkenttä, Simonkatu 9, Helsinki, Finland. The presentation will be held in
English.

http://qsb.webcast.fi/t/talvivaara/talvivaara_2011_0217_Q4/

A conference call facility will be available for a Q&A with senior management
following the presentation.
Europe & U.K Participants: 44 (0)20 7162 0077
US Participants:                                        1 334 323 6201
Finnish Participants:                                 358 (0)9 2313 9201

Conference id: 886274

Further details on the event can be found on the Talvivaara website,
www.talvivaara.com. The webcast will also be available for viewing on the
Talvivaara website from shortly after the event until the end of December 2011.






Summary of stock exchange releases and announcements

Talvivaara has released a summary of stock exchange releases and announcements
made in 2010 in accordance with the Finnish Securities Market Act, Chapter 2
Section 10c. The summary is posted at www.talvivaara.com.

Talvivaara notes that some of the information given in the releases may be out
of date.

Talvivaara's fourth quarter review

Base metals markets strengthened towards the year end

Base metals prices improved during the fourth quarter, partly as a reflection of
improved investor sentiment and strengthening of the equity markets. Other
factors behind the market development included continued strong growth in Asia
and Germany and significant improvement in North America. Overall there was also
evidence of stronger demand for commodities as an asset class, providing
participation in the Chinese economic expansion. Sovereign debt concerns in
certain European countries seemed to have relatively small and short lived
carry-over effect in the base metals markets.

The supply-demand balance in nickel was under much speculation for most of
2010. Towards the end of the year, the expectations for supply in 2011
decreased, as it was becoming increasingly likely that the commencement of
several new nickel operations would be slower than previously anticipated. The
potential supply tightness, together with the anticipated recovery in stainless
steel demand, were also factors in the 5.8% increase in the nickel price to
above USD 24,700 per tonne during the quarter. Zinc price increased by 11.8% to
more than USD 2,400 per tonne.

Continued progress in ramp-up

Production ramp-up at the Talvivaara mine continued at a steady rate during the
fourth quarter resulting in another record set of quarterly production numbers.
Nickel production amounted to 3,831t, up by 19% from 3,211t in Q3 2010. Zinc
production increased by 36% to 9,369t from 7,557t in the previous quarter. The
comparative fourth quarter production figures in 2009 were 410t of nickel and
2,313t of zinc.

The mining department produced 3.3Mt of ore (Q4 2009: 3.5Mt) and 4.3Mt of waste
(Q4 2009: 1.5Mt). While the mining operations overall were uneventful during the
period, the ore mining was restricted by bottlenecks in materials handling.

In materials handling, a significant milestone was reached when reclaiming and
re-stacking of the primary heap commenced in November with purpose-built
production scale equipment. However, the process suffered from technical
commissioning issues through the year-end, causing the crushing and stacking
operations to fall behind the budgeted levels. The amount of ore crushed and
stacked during the quarter was 2.9Mt (Q4 2009: 3.0Mt).

Bioheapleaching progressed according to expectations during the fourth quarter.
The average nickel grades in solution pumped to metals recovery rose from
1.7g/l in October to 2.0g/l in November and further to above 2.2g/l in December.
By the year-end, the main sources of leach solution were heap sections 3 and 4.
Leaching rates from the secondary heap were good during the quarter, but
solution quantities were not sufficient for metals recovery due to the start-up
problems faced in primary heap reclaiming.

The planned set-up of the metals recovery facility was completed in December
with the commissioning of the second hydrogen plant. While the additional
hydrogen capacity in itself is critical for full scale production, the second
plant also provides much needed additional certainty to plant availability.

The plant availability improved overall during the fourth quarter, but a setback
was suffered as a result of a transformer failure in December. Although the
failure caused a power outage of only some hours, it resulted in notable
production loss because the second production line was off-line for nearly two
weeks as a consequence of the outage. The production line stoppage resulted
primarily from freezing of pipes in the sub -20°C temperature prevailing at the
time; no material equipment breakages were detected.

The annualised production rate during the fourth quarter was on average 15,200
tonnes of nickel. The peak production rates reached during the period were close
to 30,000 tpa of nickel, proving the capability of the plant in achieving the
rate targeted for the year end. However, as process optimisation at the plant
still continues, the higher production rates were not yet sustainable for
extended periods of time.

A break-through in controlling the hydrogen sulphide odours was made through the
use of hydrogen peroxide as the odour controlling chemical. The necessary plant
modifications to enable the permanent use of hydrogen peroxide in the process
were planned during the fourth quarter, while the hydrogen peroxide feed into
the system was managed using temporary equipment for the time being.

Production key figures

-------------------------- ------ ----- ----- ------ -----
  |  | Q4| Q4| FY| FY
| | 2010| 2009| 2010| 2009
-------------------------- ------ ----- ----- ------ -----
Mining |  |  |  |  |
-------------------------- ------ ----- ----- ------ -----
     Blasted ore |Mt | 3.3| 3.5| 13.3| 10.8
-------------------------- ------ ----- ----- ------ -----
     Excavated waste |Mt | 4.3| 1.5| 16.7| 4.3
-------------------------- ------ ----- ----- ------ -----
Materials handling |  |  |  |  |
-------------------------- ------ ----- ----- ------ -----
     Stacked ore |Mt | 2.9| 3.0| 13.3| 8.5
-------------------------- ------ ----- ----- ------ -----
Bioheapleaching |  |  |  |  |
-------------------------- ------ ----- ----- ------ -----
     Ore under leaching |Mt | 24.3| 11.0| 24.3| 11.0
-------------------------- ------ ----- ----- ------ -----
Metals recovery |  |  |  |  |
-------------------------- ------ ----- ----- ------ -----
     Nickel metal content|Tonnes|3,831| 410|10,382| 735
-------------------------- ------ ----- ----- ------ -----
     Zinc metal content |Tonnes|9,369|2,313|25,462|3,133
-------------------------- ------ ----- ----- ------ -----


Financial performance in the fourth quarter of 2010

Talvivaara's net sales for nickel and cobalt deliveries to Norilsk Nickel and
for zinc deliveries to Nyrstar during the three months ended 31 December 2010
increased by 34% from the previous quarter and totalled EUR 60.2 million (Q4
2009: EUR 5.0 million). The product deliveries amounted to 3,823 tonnes of
nickel and 5,710 tonnes of zinc.

The Group's other operating income of EUR 3.7 million (Q4 2009: EUR 6.0 million)
comprised mainly an indemnity from stop-loss insurance relating to a hydrogen
plant failure in February 2010.

Materials and services amounted to EUR (30.7) million (Q4 2009: EUR (24.9)
million). The costs increased by 14% from EUR (26.9) million in the previous
quarter, reflecting the growth in production volumes and related use of
production chemicals, particularly burnt lime and propane.

Other operating expenses amounted to EUR (13.6) million (Q4 2009: EUR (28.6)
million), increasing by 24% from the previous quarter. The relative growth in
costs was slightly higher than the growth in production, mainly due to accruals
in maintenance costs, higher cost and consumption of electricity during the
colder winter season, and freight.

Operating profit for Q4 2010 was EUR 14.3 million (Q4 2009: loss of EUR 31.6
million). The operating margin of 24% remained essentially unchanged from that
reported for the third quarter.

Finance cost, net of finance income of EUR 81,000, amounted to EUR (13.2)
million (Q4 2009: EUR (13.5) million). It consisted primarily of interests on
borrowings of approximately EUR (7.2) million, and non-cash exchange rate losses
of approximately EUR (5.2) million on the USD 335 million Nyrstar advance
payment.

Loss for the period amounted to EUR (4.7) million (Q4 2009: EUR (33.0) million).

Capital expenditure during the quarter totalled EUR 23.5 million (Q4 2009: EUR
36.5 million). The expenditure related primarily to earth works at the secondary
heap foundations, and to the secondary heap stacker and conveyors.




Talvivaara's annual results review 2010

Market environment improved in 2010

The global economic recovery after the financial crisis reflected positively in
commodities demand and prices in 2010. Base metals benefitted from growing
demand arising particularly from China, but improvements were also seen in
Europe and North America especially towards the year end. Besides physical
demand, investor activity and sentiment in the equity markets also recovered
during the second half of the year.

The London Metal Exchange ("LME") cash price for nickel averaged USD 21,804/t
for the year, improving significantly from the 2009 average of USD 14,711/t. In
the first four months of 2010, nickel prices rose from the lows of around USD
17,000/t to the highs above USD 27,000/t for the year, reflecting restocking and
Chinese imports of the metal. After the restocking cycle ended in the spring,
demand, particularly in the stainless steel industry, weakened for several
months, but started to improve again especially during the fourth quarter.
Overall, the world stainless melt production in 2010 is estimated to have grown
by some 23% to 30.8 million tonnes, with much of the increase taking place in
China.

The world refined nickel supply is estimated to have increased by 6.5% over
2009 to 1.42 million tonnes in 2010. Reflecting the global economic recovery,
the demand increased by 13.5% to 1.50 million tonnes, leaving the market at a
deficit of over 80,000t (Source: Brook Hunt). The outlook for the nickel market
in 2011 shaped towards the more positive during the last months of 2010, as it
was becoming increasingly probable that demand would continue to grow, but
supply from several new greenfield projects was likely to be delayed.

Largely in line with nickel, the zinc market also showed signs of improvement.
Zinc price movements through the year followed a similar pattern to that seen in
nickel, with the LME cash price ranging from slightly less than USD 1,600/t to
almost USD 2,700/t. The average price of zinc in 2010 was USD 2,157/t.

Volatility in the EUR/USD exchange rate remained high and very reactive to a
range of economic indicators throughout the year. Volatility in currency
exchanges was also reflected in commodity prices, where the relative weakness in
the US dollar typically correlated with higher commodity prices, thus partly
hedging Talvivaara's exposure to EUR/USD volatility.

As Talvivaara's revenues reflect US dollar denominated metal sales while the
cost base is primarily in euro, the Company is highly exposed to the market
environment both as regards commodity prices and currency exchange rates.
Talvivaara is, however, not directly exposed to variations in global demand as
its main products, nickel and zinc sulphides, are sold to customers under long-
term contracts.

Focus on production ramp-up

Talvivaara's focus remained firmly on production ramp-up throughout the year.
Optimisation of the already operating equipment and processes continued, and
pre-requisites for full-scale production were fulfilled through the
commissioning of the second production line at the metals recovery plant,
completion of initial sections of the secondary leaching areas, installation of
the secondary heap stacking and primary heap reclaiming systems, and finally the
commissioning of the second hydrogen and hydrogen sulphide plants.

The scalability of the production processes and progress in ramp-up were
confirmed by the production volumes achieved in 2010: 10,382t of nickel (2009:
735t) and 25,462t of zinc (2009: 3,133t). Although the production fell short of
the originally budgeted figures, the ramp-up trend seen from the second quarter
onwards was encouraging with a relatively steady, close to 20% quarterly
increase in nickel production and the pre-requisites in place for the trend to
continue into 2011.

The Sotkamo operations faced a series of technical challenges during the year,
ranging from a hydrogen plant failure to insufficient hydrogen sulphide capacity
caused by installation faults in the hydrogen sulphide generator. Also, hydrogen
sulphide emissions forced production levels to be restricted for several months
because of odour discharges. Production losses resulting from these and other
start-up issues were inevitable and at times substantial, but the problems were
nevertheless overcome in an effective manner and production reliability improved
markedly towards the end of the year. The organisation demonstrated its ability
to solve technical problems and to learn from its mistakes, which is of great
importance in view of the remaining ramp-up and eventual steady-state
operations. To further improve thorough understanding and optimisation of the
production processes, risk management and preventive maintenance, a production
reliability programme was established in August 2010 involving the entire
production organisation at all levels.

At the departmental level mining performed well throughout the year, blasting
13.3Mt (2009: 10.8Mt) of ore and 16.7Mt (2009: 4.3Mt) of waste, increasing the
total mining output by 99% compared to the previous year. Waste mining increased
significantly as waste rock was used for the levelling of the secondary heap
foundations.

In materials handling, the volume of crushed and stacked ore in 2010 amounted to
13.3mt (2009: 8.5mt). Although the increase in output compared to the year
before was substantial and the peak production levels improved beyond the
nameplate capacities, the overall availability of the crushing circuit still
remained below target. Given the large amount of ore already under leaching,
this is not considered an issue in view of the planned 2011 metals production,
but needs further attention with regard to longer term production targets.

The installation and commissioning of the primary heap reclaiming and secondary
heap stacking systems represented a major challenge and a milestone for the
materials handling department. Both systems were started up in the autumn and
the secondary stacker has since been in production with good results.
Commissioning of the primary heap reclaiming equipment has however been slower,
resulting in reduced overall crushing and stacking output in the fourth quarter.

Bioheapleaching progressed according to expectations during the year. The
primary heap was fully stacked for the first time in November, and secondary
leaching had started with good results earlier in the fall. In process
development, particular attention was paid to improved aeration. As a result,
nickel grades in leach solution increased especially in the newer heap sections,
reaching levels well above 3 g/l in some sections. Overall, the nickel grade in
solution pumped to the metals recovery plant increased to around 2.2 g/l by year
end.

The successful and timely commissioning of the second production line in the
summer and the start-up of the second hydrogen plant and hydrogen sulphide
generator in the autumn were major milestones for metals recovery in 2010.
However, in its first year of continuous operation the metals recovery plant
also suffered from various technical start-up problems and related down-time.
Furthermore, process optimisation and de-bottlenecking were ongoing through the
period and will continue into 2011. At year-end 2010, plant availability and
throughput had already improved especially on the first production line, but
work remained to be done in order for the plant to be capable of sustained full
capacity production.

Financial review

Financial result

Talvivaara's net sales during the financial year ended 31 December 2010 amounted
to EUR 152.2 million (2009: EUR 7.6 million). 9,438 tonnes of nickel, 20,320
tonnes of zinc, and 94 tonnes of cobalt were sold during the financial year.

The Group's other operating income consisted mainly of realised gains on nickel
and zinc forwards and indemnity from stop-loss insurance relating to a hydrogen
plant failure in February 2010 and amounted to EUR 20.9 million (2009: EUR 43.1
million).

Personnel expenses including the value of employee expenses related to the
employee share option scheme of 2007 were EUR (19.9) million (2009: EUR (17.7)
million). The rise was attributable to an increased number of personnel.

Other operating expenses amounted to EUR (43.8) million (2009: EUR (61.1)
million) and included realised and fair value losses on interest rate swaps and
USD forwards and options. Maintenance costs of EUR (13.0) million and energy
costs of EUR (11.2) million comprise most of the remainder.

Operating profit amounted to EUR 25.5 million (2009: loss of EUR 54.8 million).

Finance income for the financial year was EUR 3.5 million (2009: EUR 11.5
million) and consisted mainly of exchange rate gains on deposits. Finance costs
of EUR (38.8) million (2009: EUR (31.8) million) comprised primarily unrealised
exchange rate losses of EUR (18.7) million on the USD 320 million Project Term
Loan Facility and on the USD 335 million Nyrstar advance payment. Interest on
borrowings amounted to EUR (18.5) million.

Loss before income tax was EUR (9.9) million. The tax expense of EUR (3.1)
million resulted from a decrease in deferred tax assets, in turn caused by a
release of deferred tax assets relating to sale of derivatives. Reflecting the
progressing ramp-up of production, the Company's loss for the financial year
reduced to EUR (13.1) million from EUR (55.0) million in 2009.

The total comprehensive loss for 2010 was EUR (24.4) million (2009: EUR (124.7)
million), including a reduction in hedge reserves resulting from the occurrence
of the hedged sales.

Balance sheet

Capital expenditure during the financial year totalled EUR 115.7 million (2009:
EUR 118.5 million). The expenditure related primarily to the construction of
heap foundations, installation of the second production line of the metals
recovery plant, and to the secondary heap stacker and conveyors. On the
consolidated statement of financial position as at 31 December 2010, property,
plant and equipment totalled EUR 728.2 million (31 December 2009: EUR 644.4
million), including finance lease contracts amounting to EUR 77.8 million. Of
this, finance lease contracts entered into in 2010 amounted to EUR 59.9 million
(2009: EUR 16.0 million).

During 2008-2009, Talvivaara Infrastructure Oy constructed a new railway
connecting the mine site with the national railway grid. As of 30 June 2010, the
railway has been classified to assets held for sale, as the first agreed minimum
transportation requirement was reached in May 2010 and the Finnish State made a
partial redemption payment for the railroad in June. Property, plant and
equipment was reduced by EUR 39.4 million due to the reclassification.

In the Group's assets, inventories amounted to EUR 175.4 million on 31 December
2010 (31 December 2009: EUR 109.5 million). The increase in inventories
reflected the ramp-up of production and the consequent increase in the amount of
ore stacked on heaps, valued at cost.

All nickel, zinc and USD forwards were closed in Q1 2010 and as at 31 December
2010 the derivative financial instruments consisted of interest rate swaps and
USD options, which were valued at EUR (1.2) million and recognised in
liabilities (derivative financial assets on 31 December 2009: EUR 33.1 million).

At the end of 2010, cash and cash equivalents totalled EUR 165.6 million (31
December 2009: EUR 11.9 million).

In equity and liabilities, the total equity amounted to EUR 380.3 million on 31
December 2010 (31 December 2009: EUR 382.6 million), including approximately EUR
25 million from a perpetual capital loan. A total of 174,378 new shares were
subscribed and paid for during 2010 under the company's stock option rights
2007A and the entire subscription price of EUR 0.5 million was recognised in
equity.

Borrowings increased from EUR 438.1 million on 31 December 2009 to EUR 480.6
million at the end of 2010. The changes in borrowings during the year included
the repayment of a USD 320 million Project Term Loan Facility in February, and
an offering of EUR 225.0 million of senior unsecured convertible bonds due 2015
in December.

Talvivaara received a total of EUR 263.0 million in advance payments during the
financial year, comprising USD 335.0 million for the Zinc in Concentrate
Streaming Agreement with Nyrstar NV ("Nyrstar"), and EUR 20 million paid by the
Finnish State as an advance payment for the redemption of the Talvivaara-
Murtomäki railway.

Total equity and liabilities as at 31 December 2010 amounted to EUR 1,216.3
million (31 December 2009: EUR 879.0 million).

Currency and commodity hedges and hedge accounting

In connection with the repayment of the USD 320 million Project Term Loan
Facility in February 2010, the Group closed all of its commodity and foreign
exchange risk hedging positions realising net proceeds of EUR 46.0 million.

Financing

In December, the Company completed an offering of EUR 225 million of senior
unsecured convertible bonds due 2015. The bonds are convertible into 27.0
million fully paid ordinary shares of the Company. The interest rate applied to
the convertible bond is 4.00% and the yield to maturity 6.50%, reflecting a
redemption price of 114.5% at maturity.

In June, Talvivaara signed a EUR 100 million three-year revolving multicurrency
credit facility with Nordea Bank, Handelsbanken and Sampo Bank. The facility had
a margin of 3.00% until the end of 2010 and thereafter it has a varying margin
of 1.75%-3.00% depending on the Company's leverage ratio. The facility is
intended for general corporate purposes. As at 31 December 2010, the facility
was undrawn.

In June, Talvivaara also signed a EUR 10 million investment and working capital
facility with Finnvera Plc with an eight-year maturity and a margin of 4.1%. The
facility is fully drawn.

In June, the Finnish State paid the first 50% instalment towards the EUR 40
million (0% VAT) reimbursement granted for the Talvivaara-Murtomäki railroad.
The instalment was used in its entirety to partially repay the EUR 41 million
loan drawn by Talvivaara Infrastructure Oy to finance the construction of the
railroad.

In February, Talvivaara completed a Zinc in Concentrate Streaming Agreement with
Nyrstar. For the agreement, Nyrstar paid a USD 335 million advance payment, the
majority of which was used to completely pre-pay the USD 320 million Project
Term Loan Facility.

In February, Talvivaara also drew down a EUR 25 million perpetual capital loan,
which is recognized in equity according to IFRS.

Business development and commercial arrangements

Zinc in Concentrate Streaming Agreement with Nyrstar

Talvivaara Sotkamo Ltd completed a long-term zinc streaming agreement with
Nyrstar NV in February 2010. Under the terms of the agreement, Talvivaara will
deliver all of its zinc in concentrate production to Nyrstar until a total of
1,250,000 metric tonnes of zinc in concentrate has been delivered.

Nyrstar paid a USD 335 million advance payment for the zinc stream, in addition
to which it will pay Talvivaara an extraction and processing fee of EUR 350/t of
zinc in concentrate delivered (with escalators in relation to prices of
elemental sulphur and propane). The following price participation was also
agreed:
·         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/t (up to USD 3,000/t),
and 30% of the LME zinc price exceeding USD 3,000/t; and
·         thereafter, Nyrstar will pay to Talvivaara 30% of the excess of the
LME zinc price above the processing fee of EUR 350/t of zinc in concentrate.

Nyrstar also agreed to supply to Talvivaara up to 150,000 tonnes of sulphuric
acid per annum for use in Talvivaara's leaching process during the period of
supply of the zinc in concentrate.

Extraction of uranium as a by-product

Talvivaara announced in February that it is planning to initiate the recovery
and exploitation of uranium, obtained as a by-product of other metals, in the
form of a uranium intermediate, yellow cake. Talvivaara plans to recover uranium
from its main leaching process by using a safe and technically simple solvent
extraction process which is widely applied to metals recovery.

The planned investment in the solvent extraction plant is estimated at
approximately EUR 40-50 million and the annual production costs at approximately
EUR 2 million. The annual production volume is estimated at approximately 350
tonnes of uranium, or 410 tonnes of yellow cake.

The planned uranium production is subject to necessary permits, including an
approval by the Government of Finland. Talvivaara applied in April 2010 to the
Ministry of Employment and Economy for a permit to extract uranium as a by-
product, in accordance with the Nuclear Energy Act.

Negotiations for an off-take agreement for Talvivaara's planned uranium
production were carried out during 2010 and an agreement with Cameco Corporation
was completed in February 2011, as described in Events after the review period.

Expansion beyond 50,000 tpa nickel

Following the announcement in October of a 54% upgrade in total mineral
resources at Talvivaara, the Company established a project to evaluate options
for further expansion of production capacity at the Sotkamo mine. The key areas
of evaluation include product and capacity options, raw materials and supplies
availability and logistics, financial feasibility, and permitting. Scoping
studies and permitting work will be the focus areas in 2011, while it is
estimated that the initial stages of the expanded production could commence in
2015 at the earliest.

Geology

Following successful drilling campaigns at the Kuusilampi and Kolmisoppi
deposits in 2009 and 2010, Talvivaara announced an upgrade in its mineral
resources in October 2010.

The total mineral resources, as defined by the JORC code, increased by 54% to
1,550Mt from the total of 1,004Mt announced in December 2008. Measured and
Indicated Resources increased by 75% to 1,121Mt. The increased resources contain
3.4Mt of nickel and 7.6Mt of zinc, up from 2.2Mt and 5.0Mt in 2008,
respectively.

Most of the new resources were found as a result of an infill drilling campaign
at the Kolmisoppi deposit. The campaign resulted in a 270% increase in total
resources at the deposit from 178Mt to 660Mt.

At the Kuusilampi deposit, geological mapping and diamond drilling were
primarily focused on improving the classification of the orebody and resulted in
a 56% increase in Measured and Indicated Resources from 505Mt to 788Mt. The
total resource increased by some 8% to 890Mt. Metal grades in both deposits
remained unchanged at 0.22% nickel and 0.49% zinc, further reaffirming the
homogeneous nature of the ore bodies.

Significant exploration potential remains between the Kuusilampi and Kolmisoppi
deposits and to the north of the Kolmisoppi deposit.

Research and development

Talvivaara's research and development activities focused on further optimisation
of the bioheapleaching and metals recovery processes, and recovery of additional
metals from the leach solution.

Process development work in bioheapleaching included studies aimed at better
understanding of the heap behaviour, improving heap aeration concepts, and
optimising the hydrodynamics of the heap. In metals recovery, the focus was on
product quality improvement especially as regards moisture content and chemical
purity. Studies targeted at reducing operating costs were also carried out, e.g.
relating to caustic soda consumption.

The effective removal of odours caused by hydrogen sulphide emissions became one
of the most important short term development topics early on in 2010 when it
became obvious that the existing gas scrubbing capacity was not sufficient
during commercial scale operation of the metals recovery plant. Initially the
existing concept of gas scrubbing using caustic soda was developed, but other
process options were also researched. Finally hydrogen sulphide removal using
hydrogen peroxide was chosen as a method of choice and applied in production
during the fourth quarter.

Development of a solvent extraction method to recover uranium from the leach
solution continued through 2010. During the latter half of the year, the work
was increasingly focused on industrial scale development and the basic and
detailed engineering of the planned production unit.

Feasibility studies on manganese extraction from the leach solution continued.
Electrowinning technology was successfully employed to recover manganese metal,
manganese oxide and manganese sulphate. Any decisions on potential investment in
commercial scale manganese production are pending a partnering arrangement
relating to the production and marketing of the potential manganese products.

Sustainable development

Talvivaara continued to develop its operations according to its sustainable
development policy which emphasizes continuous improvement and operational
excellence.

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. As a result of the active safety work the injury
frequency in 2010 was 10.7 lost time injuries/million working hours (2009: 11
lost time injuries/million working hours).

Talvivaara is committed to continuous improvement in environmental efficiency,
operational risk management and the reduction of environmental impact. Thanks to
investments aimed at reducing emissions to air the environmental performance
improved towards the end of the year. Some further improvements in 2011 are
still necessary for the dust and hydrogen sulphide emission limits set in
Talvivaara's environmental permit to be consistently met.

During 2010 the targets relating to the implementation of new chemical
regulatory frameworks REACH (Registration, Evaluation, Authorisation and
Restriction of Chemicals) and CLP (Classification, Labeling and Packaging of
substances and mixtures) were achieved. Nickel and zinc sulphide dossiers were
submitted to authorities for registration, and the CLP-data for all of
Talvivaara's substances were gathered and compiled.

Talvivaara was one of the 26 companies in Finland who took part in the CDP
carbon footprint reporting initiative. This exercise of data gathering and
reporting will help the Company to optimize its greenhouse gas emissions in the
future.

Permitting work during the year related to uranium extraction as a by-product
and updating of the existing environmental permit for the Talvivaara mine. The
Environmental Impact Assessment for uranium extraction was carried out in 2010
and the environmental permit application for the process is expected to be
submitted during the first quarter of 2011. The existing environmental permit
will be submitted for renewal by the end of first quarter 2011. The updating
work for the submission was largely carried out in 2010.

The environmental security placed for future restoration of the area and
monitoring obligations amounted to EUR 27.0 million at the year-end (2009: EUR
15.3 million).

A major milestone in the Company's environmental management was reached in
December 2010, when Talvivaara was awarded certification for the environmental
management system ISO 14001 covering all operations of the Company. In line with
the guidelines set by the ISO 14001 system, the goals in Talvivaara's operations
in the future include continuous improvement, sustainable and economic use of
natural resources, and development of all processes in order to minimize the
environmental impact of the mine.

Risk management and key risks

In line with current corporate governance guidelines on risk management,
Talvivaara carries out an ongoing process endorsed by the Board of Directors to
identify risks, measure their impact against certain assumptions and implement
the necessary proactive steps to manage these risks.

In 2010, the Company's risk management activities were focused on developing
risk management practices within departments and functions, partly as part of
internal development programmes relating to environment, health and safety,
internal controls, and production reliability. The goal set for 2011 is to
update the Group level risk management policies to reflect Talvivaara's present
development stage as an operational rather than a project focused entity. The
planned Group level risk assessment will be based on findings from the
department level work and on experience gained from the chosen risk assessment
tools which take into account the probability and estimated impact of the
identified risks.

Talvivaara's operations are affected by risks common to the mining industry,
such as risks relating to the development of Talvivaara's mineral deposits,
estimates of reserves and resources, infrastructure , and volatility of
commodity prices. There are also risks related to currency exchange ratios,
management and control systems, historical losses and uncertainties about the
future profitability of Talvivaara, counter parties, 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 relate to the ongoing
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 reliability and
sustainable capacity of production equipment, and eventual speed of leaching and
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 approximately 90% of the Company's revenues and
variations in 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 profitably 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 materially adverse effect on the
business and financial  position 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. Talvivaara seeks to reduce
liquidity risk by close monitoring of liquidity in order to detect any threat of
adverse changes in advance so as to allow for sufficient time to secure access
to adequate credit or other funding on reasonable terms. Talvivaara also seeks
to maintain a balanced maturity profile of its long-term debt in order to
mitigate refinancing risks.

Personnel

The growth in Talvivaara's human resources remained strong during the financial
year, with the total number of employees increasing from 308 to 389. The
personnel are mostly recruited locally from the Kainuu region, where Talvivaara
is the largest provider of new job opportunities.

The average age of Talvivaara's personnel remained at 38.5 years, and the age
distribution of employees is comparable to the industry average in Finland. In
its recruitment process, Talvivaara has sought to maintain a representative
staff age structure, in spite of the exceptionally vigorous rate of recruitment.
Although the mining industry has conventionally been male-dominated, Talvivaara
seeks to hire employees representing both genders. This has however proven
difficult due to the limited number of female applicants.

Personnel turnover decreased during the reporting year. It mainly affected newly
recruited employees and did not affect the Company's operations. The personnel
turnover at Talvivaara Sotkamo Ltd was 5.1% (2009: 10.6%), and there was no
personnel turnover at Talvivaara Mining Company (2009: 10.6%).

The salaries and wages of Talvivaara's personnel are based on industry-wide
collective agreements and company-specific job grading. The total compensation
consists of base salary and short and long term incentive schemes. Annual short
term incentive metrics include personal performance based and company-wide
criteria. During the current ramp-up phase the primary criteria is Talvivaara's
production output. The Company's long term incentive schemes comprise
Talvivaara's Stock Options 2007, which are allocated to all personnel, and a
management holding company Talvivaara Management Oy, which is targeted to
executive management and requires personal investment in the Company's shares by
the participants.

Personnel development is based on annual training and development plans. All
Talvivaara personnel participate in introductory training with work safety as a
key component. The Company's target is also that all of its employees will have
first aid competence.

Additions to the Executive Committee

Eeva Ruokonen, M.Sc.(Mining), Lic.Tech.(Mineral Processing) was appointed Chief
Sustainability Officer and member of Talvivaara's Executive Committee from
February 2010.

Jari Voutilainen, M.Sc.(Tech), was appointed General Manager - Business
Development and member of the Company's Executive Committee from December 2010.

Corporate governance statement

Talvivaara will issue a Corporate Governance Statement of 2010 and publish it as
part of its Annual Report and as a separate statement on its website at
www.talvivaara.com during the week starting 28 March 2011. The Corporate
Governance Statement will not form part of the Board of Directors' Report.

Resolutions of the Annual General Meeting

The resolutions of Talvivaara's Annual General Meeting held on 15 April 2010
included:

·         that the number of Board members be changed to eight and that Mr.
Gordon Edward Haslam, Mr. D. Graham Titcombe, Ms. Eileen Carr, Mr. Eero Niiva,
Ms. Saila Miettinen-Lähde, and Mr. Pekka Perä be re-appointed as directors of
the Company, and that Mr. Roland Junck and Mr. Tapani Järvinen be appointed as
new directors of the Company;

·         that article 5 of the Company's articles of association be amended to
provide for a retirement of all the members of the Board of Directors at each
Annual General Meeting of Shareholders;

·         that article 12 of the Company's articles of association be amended so
that the shareholders are convened to the Annual or Extraordinary Shareholders'
Meeting by a notice sent at the earliest three (3) months and at the latest
twenty-one (21) days before the meeting, however, at the minimum nine (9) days
before the record date of the Shareholder's' Meeting. Further, to be allowed to
take part in a Shareholders' Meeting a shareholder must register with the
Company at the latest by the date mentioned in the notice convening the meeting
and which date may not be earlier than ten (10) days before the Shareholders'
Meeting; and

·         that the Board of Directors be authorised to decide on repurchasing a
maximum of 10,000,000 of the Company's own shares through public trading, and to
decide on conveying a maximum of 10,000,000 of the Company's own shares, each in
deviation of the pre-emptive rights of shareholders.

Shares and shareholders

The number of shares issued and outstanding and registered on the Euroclear
Shareholder Register as of 31 December 2010 was 245,316,718. Including the
effect of the convertible bond of 14 May 2008 and the Option Scheme of 2007, the
authorised full number of shares of the Company amounted to 263,669,291. At year
end, the EUR 225 million convertible bond of 16 December 2010 had not yet been
granted special rights entitling to conversion; hence the effect of the bond is
not included in the authorised full number of shares.

The share subscription period for stock options 2007A commenced on 1 April 2010
and ends on 31 March 2012. By 31 December 2010 a total of 174,378 Talvivaara
Mining Company Plc's new shares had been subscribed for under the stock option
rights 2007A and a total of 2,158,722 stock option rights 2007A remained
unexercised.

As at 31 December 2010, the shareholders who held more than 5% of the shares and
votes of Talvivaara were Pekka Perä (23.0 %), Varma Mutual Pension Insurance
Company (8.6%), and BlackRock Investment Management Ltd (6.0%).

Share based incentive plans

By resolution passed at the general meeting of shareholders on 28th February
2007, the Company resolved to issue free stock options to the key personnel of
the Company and its subsidiaries entitling them, after the split of the
Company's shares 1:70, to subscribe for a maximum of 6,999,300 new shares in the
Company (2007 Option Scheme). Pursuant to the terms and conditions of the 2007
Option Scheme, the Board of Directors shall decide upon the distribution of the
stock options.

During 2010, the Board of Directors, based on the recommendation of the
Remuneration Committee, allocated 176,600 2007A Options, 245,100 2007B options
and 663,000 2007C Options, giving an entitlement to subscribe for a total of
1,084,700 new shares in the Company, to the personnel of Talvivaara and its
subsidiaries. Of the options allocated since 2007, 72,000 2007A Options,
48,000 2007B Options and 192,000 2007C Options entitling to subscribe for
312,000 shares were returned back to the Company during 2010. In 2010, a total
of 174,378 new shares were subscribed for under the stock option rights 2007A.
At the end of 2010, the number of options available for allocation under the
2007 Option Scheme was as follows: 874,100 2007C Options. The voting rights of
the shares to be issued against the outstanding share options amount to 2.4% of
the total share capital.

In December 2010, The Board of Directors of Talvivaara decided on a new
shareholding plan directed to members of the Talvivaara Executive Management
Team (the "Participants"). The plan enables the Participants to acquire a
considerable long-term shareholding in the Company. Through this plan, the
Participants personally invested a significant amount of their own funds in
Talvivaara's shares. The Participants financed their investments partly by
themselves and partly by a loan provided by Talvivaara.

The EUR 5.7 million loan granted by the Company to Talvivaara Management Oy for
the purpose of acquiring Company shares carries an interest of 3.0% and shall be
repaid in full by 2014. The 1,104,000 shares held by Talvivaara Management Oy
have been pledged to Talvivaara as security for the loan.

Events after the review period

Uranium off-take agreement with Cameco Corporation

On 7 February 2011, Talvivaara signed a uranium off-take agreement with Cameco
Corporation ("Cameco"). Under the terms of the agreement, Cameco will provide an
up-front investment to cover the construction cost of the uranium extraction
circuit. Talvivaara will invoice the cost of investment to Cameco in euros such
that the US dollar equivalent of the investment adds up to a maximum of USD 60
million. Cameco's capital contribution will be repaid through deliveries of
uranium concentrate in the initial years of the agreement. Once the capital is
repaid, Cameco will purchase the uranium concentrate produced at Sotkamo through
a supply agreement that will be in effect until 31 December 2027. The price
Cameco will pay for the uranium is based on a formula that references market
prices at the time of delivery. Annual uranium production at Talvivaara is
estimated at 350t of uranium, corresponding to approximately 410t of yellow cake
(UO(4)).

The agreements between Talvivaara and Cameco are subject to ratification by the
Euratom Supply Agency and the approval of the European Commission pursuant to
the Euratom Treaty, as well as to permits from the appropriate Finnish
authorities. Talvivaara and Cameco expect the Euratom approval within a few
months. Talvivaara applied in April 2010 to the Ministry of Employment and
Economy for a permit to extract uranium as a by-product, in accordance with the
Nuclear Energy Act. The Environmental Impact Assessment Process as well as the
preparations for submitting the application for the Environmental Permit
relating to the uranium extraction process are ongoing at the site.

Extraordinary General Meeting to resolve on special rights in relation to the
convertible bond

On 27 January 2011, an Extraordinary General Meeting of Talvivaara resolved to
approve the proposal of the Board of Directors for the issue of special rights
in relation to EUR 225 million senior unsecured convertible bonds due 2015 which
were issued on 16 December 2010. The special rights on conversion were granted,
for no consideration, to the initial subscribers of the bonds and/or to any
subsequent purchasers of the bonds.

Assuming no adjustments to the conversion price of the bonds and following the
issue of the special rights, the bonds may be converted to up to 26,967,028 new
ordinary shares of the Company based on the initial conversion price of GBP
7.0043 (EUR 8.3435) per ordinary share, representing approximately 11% of the
currently issued and outstanding ordinary shares. The right to convert the bonds
into ordinary shares commenced after the Company had notified the bond holders
of the resolution regarding the issue of special rights and ends on 10 December
2015.

Including the effect of the convertible bonds of 16 December 2010 and 14 May
2008 and the Option Scheme of 2007, the authorised full number of shares of the
Company amounts to 296,756,846.

Fulfilment of minimum transportation requirement on Talvivaara-Murtomäki
railroad

In 2008-2009, Talvivaara constructed a 25 km railway connecting the Talvivaara
mine with the national railway grid. Subject to agreed minimum transportation
volumes on the railroad being achieved, the Finnish State agreed to reimburse
the construction expenses to Talvivaara Infrastructure Oy up to an amount of EUR
40 million (0% VAT) in two instalments and to redeem the railroad as part of the
national rail grid. The first agreed transportation milestone was reached in
2010 and the Finnish State subsequently paid EUR 20 million as a partial
reimbursement. The remaining minimum transportation volumes were reached in
January 2011 and Talvivaara expects the final redemption to take place during
the first half of 2011.

Short-term outlook

Talvivaara expects production at the Sotkamo mine to continue ramping up
according to plan and to reach the annual nickel production volume of
30,000-35,000t in 2011. The quarterly growth in production is anticipated
initially at around 20-30%, increasing to around 40% during the latter part of
the year following further process optimisation at the metals recovery plant and
increased availability of leach solution to metals recovery particularly from
secondary leaching.

The market outlook for nickel in the near term is positive with the LME nickel
price anticipated to stay considerably above USD 20,000/t and possibly testing
levels as high as USD 30,000/t. Volatility in nickel prices is however likely to
remain high, driven by investment activity, macroeconomic indicators, and
movements in the currency exchange markets.

Nickel demand from China appears to continue strong despite tightening in the
country's monetary policy. Triggered by the increased demand by stainless steel
industry in China as well as the recovering Western economies, an ongoing
deficit in the nickel market may continue in 2011 as substantial new supply is
unlikely to come on stream during the year.

Board of Directors proposal for profit distribution

The Board of Directors is proposing to the Annual General Meeting to be held on
28 April 2011 that no dividend is declared in respect of the year 2010.


Talvivaara Mining Company Plc
Board of Directors



CONSOLIDATED INCOME STATEMENT



Unaudited Unaudited Unaudited Audited
  three three  twelve twelve

  months to months to months to months to

(all amounts in
EUR '000) 31 Dec 2010 31 Dec 2009 31 Dec 2010 31 Dec 2009
---------------------------------------------------------------



Net sales         60,218           4,967       152,163 7,571



Other operating
income           3,661           5,966         20,904 43,118

Changes in
inventories of
finished goods
and work in
progress         14,003         28,410         67,100 75,587

Materials and
services        (30,745)        (24,889)        (99,029)  (65,156)

Personnel
expenses          (5,498)          (6,064)  (19,944)  (17,695)

Depreciation,
amortization,
depletion and
impairment
charges        (13,757)  (11,384)  (51,948) (37,061)

Other operating
expenses        (13,556)  (28,574)  (43,790)  (61,140)


---------------------------------------------------------------
Operating profit
(loss)         14,326  (31,568) 25,456 (54,776)




Finance income               81               82           3,477 11,526

Finance cost        (13,293)  (13,596)  (38,841)  (31,835)
---------------------------------------------------------------
Finance cost
(net)        (13,212)  (13,514)  (35,364)  (20,309)



Profit (loss)
before income tax           1,114  (45,082)  (9,908)  (75,085)



Income tax
expense          (5,823)         12,071  (3,144) 20,127


---------------------------------------------------------------
Profit (loss) for
the period          (4,709)  (33,011)  (13,052)  (54,958)



Attributable to:

Owners of the
Company          (3,869)  (26,852)  (12,953)  (45,267)

Non-controlling
interest            (840)          (6,159) (99) (9,691)
---------------------------------------------------------------
           (4,709)  (33,011)  (13,052)  (54,958)



Earnings per share for profit
(loss)
attributable to the owners of the
parent expressed in EUR per share)


Basic and diluted           (0.02)           (0.11) (0.06) (0.19)




CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Unaudited Unaudited Unaudited Audited
  three three twelve twelve

  months to months to months to months to

(all amounts in EUR '000) 31 Dec 2010 31 Dec 2009 31 Dec 2010 31 Dec 2009
------------------------------------------------


Profit (loss) for the period  (4,709)  (33,011)  (13,052)  (54,958)



Other comprehensive
income, items net of tax

Cash flow hedges  (2,769)  (5,877)  (11,341)  (69,705)


------------------------------------------------
Other comprehensive
 income, net of tax  (2,769)  (5,877)  (11,341)  (69,705)


------------------------------------------------
Total comprehensive income  (7,478)  (38,888)  (24,393)  (124,663)



Attributable to:

Owners of the Company  (6,084)  (31,553)  (22,026)  (101,031)

Non-controlling interest  (1,394)  (7,335)  (2,367)  (23,632)
------------------------------------------------
   (7,478)  (38,888)  (24,393)  (124,663)




CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Unaudited Audited
  twelve twelve

  months to months to

(all amounts in EUR '000) 31 Dec 10 31 Dec 09

ASSETS

Non-current assets

Property, plant and equipment 728,226 644,356

Biological assets 8,464 6,614

Intangible assets 7,737 7,846

Deferred tax assets 22,421 21,548

Other receivables 7,626 7,582

Available-for-sale financial assets 464                    -

  774,938 687,946

Current assets

Inventories 175,361 109,512

Trade receivables 52,354 3,913

Other receivables 8,702 15,477

Derivative financial instruments                   40 50,244

Cash and cash equivalent 165,555 11,877

  402,012 191,023

Assets held for sale 39,391                    -

Total assets 1,216,341 878,969



EQUITY AND LIABILITIES

Equity attributable to equity
holders of the parent

Share capital                   80 80

Share issue                   91                    -

Share premium 8,086 8,086

Hedge reserve 7,494 16,567

Other reserves          433,012 417,448

Retained earnings -84,322 -71,368

  364,441 370,813

Minority interest in equity 15,831 11,784

Total equity 380,272 382,597



Non-current liabilities

Borrowings 437,623 384,300

Advance payments 231,812                    -

Trade payables                   17                    -

Derivative financial instruments                      - 3,110

Provisions 3,935 1,594

  673,387 389,004

Current liabilities

Borrowings 42,934 53,811

Advance payments 35,243                    -

Trade payables 39,408 29,669

Other payables 43,820 9,875

Derivative financial instruments 1,277 14,013

  162,682 107,368

Total liabilities 836,069 496,372

Total equity and liabilities 1,216,341 878,969




CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY

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

(all amounts
in EUR '000) A B C D E F G H I J
--------------------------------------------------------------------------------
Balance at

1 Jan 09 388, 35, 423,
80 - 8,086 320,607 72,332 13,412 (26,101) 416 470 886



Profit
(loss)
for the (45, (9, (54,
period - - - - - - (45,267) 267) 691) 958)

Other
compre-
hesive
income

- Cash
flow (55, (13, (69,
hedges - - - - (55,765) - - 765) 941) 706)
------------------------------------------------------------------
Total
compre-
hesive
income (101, (23, (124,
for 09 - - - - (55,765) - (45,267) 032) 632) 664)



Transactions
with owners

Share issue 82, 82,
- - - 82,691 - - - 691 - 691



External
costs directly
attributable
to the issue