Talvivaara Mining Company Interim Report for January-March 2011

STOCK EXCHANGE RELEASE
28 April 2011


Talvivaara Mining Company Interim Report for January-March 2011
New production record despite technical challenges at the metals recovery plant


Highlights of the first quarter of 2011
·         Nickel production 4,215t, up 10% from Q4 2010 and a new quarterly
record
·         Net sales EUR 66.5m and operating profit EUR 11.6m
* Uranium off-take agreement signed with Cameco Corporation in February


Production guidance for 2011
* Production guidance for 2011 revised to 22,000-28,000t of nickel on 7 April
2011
* Zinc production expected to amount to 44,000-50,000t
* Modification and maintenance programmes at the metals recovery plant
commenced in order to improve plant availability and to remove bottlenecks



Key figures

--------------------------------------------------- ----- ------ ------- ------
EUR million | Q1| Q4| Q1| FY
| 2011| 2010| 2010| 2010
--------------------------------------------------- ----- ------ ------- ------
Net sales | 66.5| 60.2| 11.6| 152.2
--------------------------------------------------- ----- ------ ------- ------
Operating profit (loss) | 11.6| 14.3| (2.3)| 25.5
--------------------------------------------------- ----- ------ ------- ------
      % of net sales |17.5%| 23.8%|(20.2%)| 16.7%
--------------------------------------------------- ----- ------ ------- ------
Profit (loss) for the period | 12.8| (4.7)| (16.9)|(13.1)
--------------------------------------------------- ----- ------ ------- ------
Earnings per share, EUR | 0.03|(0.02)| (0.06)|(0.06)
--------------------------------------------------- ----- ------ ------- ------
Equity-to-assets ratio |33.0%| 31.3%| 42.8%| 31.3%
--------------------------------------------------- ----- ------ ------- ------
Net interest bearing debt |325.8| 315.0| 176.3| 315.0
--------------------------------------------------- ----- ------ ------- ------
Debt-to-equity ratio |81.6%| 82.8%| 45.4%| 82.8%
--------------------------------------------------- ----- ------ ------- ------
Capital expenditure | 10.4| 23.5| 19.0| 115.7
--------------------------------------------------- ----- ------ ------- ------
Cash and cash equivalents at the end of the period|144.7| 165.6| 55.9| 165.6
--------------------------------------------------- ----- ------ ------- ------
Number of employees at the end of the period | 413| 389| 336| 389
--------------------------------------------------- ----- ------ ------- ------

All reported figures in this release are unaudited.


CEO Pekka Perä comments: "I am pleased to report yet another record quarterly
nickel production, especially as it was achieved despite a series of technical
issues resulting in low availability of the metals recovery plant. Going
forward, we aim to secure successful continuation of our ramp-up through an
upgrade and maintenance programme at the plant, which has now commenced and
should boost production capacity and improve resilience during difficult weather
conditions.

We also posted record revenues in the first quarter, helped in part by the
increased product deliveries, but also by nickel prices that held up strong at
around USD 24,000-28,000 per tonne throughout the period."









Enquiries:

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

Merlin PR                                        Tel. 44 20 726 8400
David Simonson
Anca Spiridon


Webcast and conference call on 28 April 2011 at 11:00 GMT/13:00 EET

A combined webcast and conference call on the Q1 2011 result will be held on 28
April 2011 at 11:00 GMT/13:00 EET. The call will be held in English.

The webcast can be accessed through the following link:

http://qsb.webcast.fi/t/talvivaara/talvivaara_2011_0428_Q1/

A conference call facility will be available for a Q&A with senior management
following the presentation.
Finland: 358 (0)9 2313 9201
UK: 44 (0)20 7131 2799
US: 1 334 323 6201

Conference id: 891445

The webcast will also be available for viewing on the Talvivaara website from
shortly after the event until the end of December 2011.




Financial review

Financial result

Talvivaara's net sales for nickel and cobalt deliveries to Norilsk Nickel and
for zinc deliveries to Nyrstar during the three months ended 31 March 2011
increased by 10% from the previous quarter and totalled EUR 66.5 million (Q1
2010: EUR 11.6 million). The product deliveries amounted to 3,846 tonnes of
nickel, 76 tonnes of cobalt and 8,736 tonnes of zinc.

The Group's other operating income of EUR 0.3 million (Q1 2010: EUR 15.4
million) consisted mainly of fair value gains on interest rate and currency
exchange derivatives.

Materials and services amounted to EUR (36.3) million (Q1 2010: EUR (19.9)
million). The costs increased by 18% from EUR (30.7) million in the previous
quarter, reflecting the growth in production volumes and related use of
production chemicals, particularly propane. Use of maintenance services and
spare parts was also higher during the period, and the price of many high volume
process chemicals such as propane and caustic soda increased compared to Q4
2010.

Personnel expenses including the value of employee expenses related to the
employee share option scheme of 2007 were EUR (6.8) million (Q1 2010: EUR (4.9)
million). The increase was attributable to the increased number of personnel.

Other operating expenses amounted to EUR (13.7) million (Q1 2010: EUR (11.4)
million) and remained at the same level as in the previous quarter. The other
operating expenses were mainly due to accruals in maintenance costs, higher cost
and consumption of electricity during the colder winter season, and freight.

The operating profit for Q1 2011 was EUR 11.6 million (Q1 2010: loss of EUR
(2.3) million). The operating margin of 17.5% decreased from that reported for
the fourth quarter partly due to technical issues and related maintenance
expenses in materials handling and in metals recovery. The operating margin was
also negatively affected by the fact that some March production was delivered
just after the end of the reporting period and hence not included in the first
quarter revenues.

Finance income amounted to EUR 15.7 million (Q1 2010: EUR (1.2) million). It
consisted primarily of non-cash exchange rate gains of approximately EUR 14.6
million on the USD 335 million Nyrstar advance payment. Finance cost amounted to
EUR (9.4) million (Q1 2010: EUR (21.3) million). It consisted primarily of
interests on borrowings of approximately EUR (8.1) million.

Profit for the period amounted to EUR 12.8 million (Q1 2010: loss of EUR (16.9)
million).

The total comprehensive income for the first quarter of 2011 was EUR 10.2
million (Q1 2010: EUR (20.0) million), including a reduction in hedge reserves
resulting from the occurrence of the hedged sales.

Balance sheet

Capital expenditure during the first quarter totalled EUR 10.4 million (Q1
2010: EUR 19.0 million). The expenditure related primarily to dust removal
systems for crushing and screening, the secondary heap stacker and the secondary
heap foundations. On the consolidated statement of financial position as at 31
March 2011, property, plant and equipment totalled EUR 727.5 million (31
December 2010: EUR 728.2 million).

In the Group's assets, inventories amounted to EUR 190.9 million on 31 March
2011 (31 December 2010: EUR 175.4 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.

Trade receivables amounted to EUR 61.3 million on 31 March 2011 (31 December
2010: EUR 52.4 million). The increase in trade receivables reflected the ramp-up
of production and increase in nickel price compared to the previous quarter.

On 31 March 2011, cash and cash equivalents totalled EUR 144.7 million (31
December 2010: EUR 165.6 million).

In equity and liabilities, the total equity amounted to EUR 399.2 million on 31
March 2011 (31 December 2010: EUR 380.3 million), including approximately EUR
25 million from a perpetual capital loan. An equity component of EUR 9.0 million
for the senior unsecured convertible bonds issued in December 2010 and due 2015
was recognised in equity during the first quarter. At year-end 2010, the equity
component was not recognised, as the shareholder resolution allowing the
conversion of the bonds had not yet been obtained. A total of 13,000 new shares
were subscribed and paid for during the first quarter of 2011 under the
company's stock option rights 2007A and the entire subscription price was
recognised in equity.

Borrowings decreased from EUR 480.6 million on 31 December 2010 to EUR 470.5
million at the end of March 2011. The changes in borrowings during the period
included determination of the equity component for senior unsecured convertible
bonds due 2015 after an Extraordinary General Meeting of Talvivaara resolved to
approve the issue of special rights in January 2011.

Total advance payments as at 31 March 2011 amounted to EUR 257.7 million (31
December 2010: EUR 267.1 million). The changes in advance payments during the
period included non-cash exchange rate gains of approximately EUR 14.6 million
for the Nyrstar advance payment. In addition, Talvivaara received EUR 7.0
million in advance payments during the first quarter based on a uranium off-take
agreement with Cameco Corporation.

Total equity and liabilities as at 31 March 2011 amounted to EUR 1,208.0 million
(31 December 2010: EUR 1,216.3 million).

Financing

In January, a Talvivaara Extraordinary General Meeting 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 which were issued in
December 2010 and are 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.

Uranium off-take agreement with Cameco

In February, Talvivaara signed a uranium off-take agreement with Cameco
Corporation. Under the terms of the agreement, Cameco will provide an up-front
investment, up to a maximum of USD 60 million, to cover the construction cost of
the uranium extraction circuit. 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. Cameco will provide Talvivaara with payment for the uranium based
on a formula that references market prices at the time of delivery.

Annual uranium production is estimated at 350tU (ca. 770,000 pounds),
corresponding to approximately 410t (900,000 pounds) of yellow cake (UO(4)).

Cameco provides technical assistance to Talvivaara in the design, construction,
commissioning and operation of the uranium extraction circuit to be constructed
at the Sotkamo mine. Subject to receiving the necessary permits and
authorizations, Talvivaara plans to start construction in the coming months and
complete it in 2012.

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. These approvals are expected within the next few months. In
April 2010, Talvivaara applied to the Ministry of Employment and Economy for a
permit to extract uranium as a by-product, in accordance with the Nuclear Energy
Act. Talvivaara expects this permit in late 2011.

Production review
Continuation of production ramp-up at the Sotkamo mine was again confirmed by a
new quarterly production record for nickel amounting to 4,215t (Q1 2010:610t)
and representing an increase of 10% from previous quarter production. The zinc
output of 6,363t (Q1 2010: 2,960t) was however lower than in Q4 2010 due to
nickel contamination caused by a defective valve at the metals recovery plant.
As a result, non-saleable product containing more than 3,000t of zinc had to be
recycled back to bioheapleaching. The defective valve was fixed after the
incident and the problem is not expected to be a recurrent one.
The mining department produced 2.2Mt of ore (Q1 2010: 3.0Mt) and 5.2Mt of waste
(Q1 2010: 2.4Mt). The emphasis was again on waste mining to provide material for
levelling the ground for the secondary heap foundations. Ore mining had to be
restricted due to bottle-necks in materials handling.

In materials handling, the amount of crushed and stacked ore in the first
quarter was 2.2Mt (Q1 2010: 3.3Mt). Production output was negatively affected by
continued commissioning issues with the primary heap reclaiming system. Firstly,
excavation capacity was insufficient due to a contractor change and delays in
getting the planned capacity excavators in place. Secondly, the purpose-built
reclaiming equipment was not yet operational at full speed and optimization of
the system continued throughout the period.

Whilst materials handling failed to reach the budgeted production levels in the
first quarter, it should be noted that at the end of the period there was
already more than 50,000t of nickel in stacked ore under leaching. Materials
handling was thus not a critical issue in view of the current year's metals
production targets.

Bioheapleaching progressed according to expectations during the first quarter.
The average nickel grades in solution pumped to metals recovery continued to
increase and averaged 2.3 g/l in March. The main sources of leach solution were
heap sections 3 and 4, from which around 30% of the circulating solution was
continuously pumped to the metals plant. As this depletion rate is well above
the long term planned rate of 10-15%, the sustained increase in metal grades in
solution was especially encouraging and indicated good leaching in the newer
heap sections.

Leaching in the secondary heap continued well, but solution quantities were not
sufficient for metals recovery due to the start-up problems faced in primary
heap reclaiming.
In metals recovery, the first quarter ended in a promising fashion with a period
of ten days at an average annualised production rate of over 32,000t of nickel.
However, for most of the period the plant availability was lower than expected,
primarily because of blockages in pipelines due to disruptions in materials
flows or freezing, and insufficient hydrogen sulphide capacity stemming from
dust contamination in the hydrogen sulphide generators. In addition, production
capacity was at times restricted because of insufficient sulphur melting
capacity.
Whilst none of the experienced difficulties were fundamental or long-term in
nature, they led to the conclusion, as announced soon after the quarter end on
7 April 2011 (see section Events after the review period), that certain upgrades
and modifications at the plant were necessary in order to sustain the achieved
throughput rates and to ramp up production further. The maintenance and
upgrading works  were largely planned during the quarter and involve increasing
of sulphur melting and certain pumping capacities, cleaning and upgrading of
hydrogen sulphide generators, inspection and maintenance of reactors and
thickeners, and numerous small modification items, e.g. doubling up of selected
process pipelines, that help improve production reliability and sustainable
capacity.

Production key figures

-------------------------- ------ ----- ----- ----- ------
  |  | Q1| Q4| Q1| FY
| | 2011| 2010| 2010| 2010
-------------------------- ------ ----- ----- ----- ------
Mining |  |  |  |  |
-------------------------- ------ ----- ----- ----- ------
     Ore production |Mt | 2.2| 3.3| 3.0| 13.3
-------------------------- ------ ----- ----- ----- ------
     Waste production |Mt | 5.2| 4.3| 2.4| 16.7
-------------------------- ------ ----- ----- ----- ------
Materials handling |  |  |  |  |
-------------------------- ------ ----- ----- ----- ------
     Stacked ore |Mt | 2.2| 2.9| 3.3| 13.3
-------------------------- ------ ----- ----- ----- ------
Bioheapleaching |  |  |  |  |
-------------------------- ------ ----- ----- ----- ------
     Ore under leaching |Mt | 26.5| 24.3| 14.3| 24.3
-------------------------- ------ ----- ----- ----- ------
Metals recovery |  |  |  |  |
-------------------------- ------ ----- ----- ----- ------
     Nickel metal content|Tonnes|4,215|3,831| 610|10,382
-------------------------- ------ ----- ----- ----- ------
     Zinc metal content |Tonnes|6,363|9,369|2,960|25,462
-------------------------- ------ ----- ----- ----- ------

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.

Production expansion - Operation Overlord

Conceptual studies relating to production expansion beyond 50,000tpa of nickel
continued. A dedicated project team was established and strengthened to seven
members with metallurgical, infrastructure, bioheapleaching and materials
handling expertise. Recruiting to the project team continues targeting added
expertise on project coordination, environmental and water management issues,
and automation.

As permitting is one of the most critical parts of the project in view of the
overall timetable, particular emphasis was put on getting the necessary
permitting processes started as soon as possible. As a result, baseline studies
of the environment were already commenced at the end of the first quarter and
preparations were made for the Environmental Impact Assessment (EIA) to start
during the second half of  2011. The EIA will cover certain parallel process
options, as the final production processes and end products have not yet been
chosen. Following the EIA, Talvivaara expects to submit the environmental permit
application for the expansion in 2012.

Scoping studies are currently based on the target of doubling up the presently
planned production to approximately 100,000tpa of nickel. Whilst studies
relating to various processing options continue, it appears relatively likely
that a substantial part of the expanded production would be LME quality nickel
metal. Production of cobalt metal is also an option, but refining of zinc to
zinc metal is currently not within the planning scope. For certain products and
raw materials, e.g. manganese and sulphuric acid, joint ventures or other
partnering arrangements will be investigated.

Investment into the expansion project is planned to be carried out in a modular
fashion to allow stretching of the expenditure over an estimated 5-6 year period
starting in 2013. The modular approach also allows commissioning of the
equipment and processes sequentially in the order of the process stages, which
is expected to reduce the risk of serious start-up issues.

For the project to proceed to expanded production from 2016, the first
investment decisions would need to be made in 2012. The first critical items to
be ordered include a primary crusher, to be located at the Kolmisoppi pit, and
additional fine crushers. The new crushing circuit could be targeted for
commissioning in late 2014, along with mining from the Kolmisoppi deposit. Earth
works on additional heap foundations, initially within the scope of the current
environmental permit, are estimated to commence in 2013.

If the expansion project is realized to its full planned extent, it is estimated
that the Talvivaara mine will directly provide work for 1,100-1,200 employees.
Indirectly, around 2,000 new jobs are anticipated to be created. The project
phase is estimated at approximately 6,000 man years.

Sustainable development and permitting

The main achievements of the first quarter included the completion of the
Environmental Impact Assessment relating to the extraction of uranium as a by-
product. A statement to this effect was obtained from the local environmental
authority declaring the EIA sufficient.

The environmental permit application for uranium extraction was submitted to the
regional environmental permitting agency in March. Application for the renewal
of the existing environmental permit was also submitted in March.

At the end of the quarter, the injury frequency among the Talvivaara personnel
was 13.7 lost time injuries/million working hours on a rolling 12 month basis
(31 December 2010: 10.7 lost time injuries/million working hours).

In line with its sustainable development policies, Talvivaara continued its
efforts aimed at reducing the environmental effects of its operations. Concrete
measures included, among others, the installation of additional dust removal
systems in crushing and screening, and further work aimed at removing any odour
discharges from the metals recovery plant.

Risk management and principal 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.

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 counter parties,
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 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 an industrial scale, the rate of ramp-up is still subject to risk
factors, including various technical and operational risks, that may currently
be unknown or are beyond the Company's control. In order to better mitigate
operational risks going forward, Talvivaara has in place an ongoing production
reliability programme, which targets at reducing downtime and risk of accidents
through detailed evaluation of all equipment and processes and subsequent
improvement of operating procedures and maintenance. The Company has also
commenced additional maintenance and upgrading programmes at the metals recovery
plant in order to improve plant availability and capacity in the future.

The market price of nickel is, together with production volumes, the main
determinant of Talvivaara's
revenues. The volatility of nickel price has historically been high and it is in
the Company's view likely to persist also in the future. Talvivaara is unhedged
against variations in nickel prices, which means that nickel price volatility
will have a substantial effect on the Company's revenues and result. 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 also during the lows of commodity price cycles.

Talvivaara's revenues are determined mostly 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 currency
exchange risk relating to the US dollar on a case by case basis with the aim of
limiting the adverse effects of US dollar weakness as considered justified from
time to time.

Personnel

The number of personnel on 31 March 2011 was 413 (Q1 2010: 336), up by 24 from
the end of 2010.

Wages and salaries paid during the first three months of the year totalled EUR
5.9 million (Q1 2010: EUR 4.2 million).

Shares and shareholders

The number of shares issued and outstanding and registered on the Euroclear
Shareholder Register as of 31 March 2011 was 245,364,096. Including the effect
of the EUR 85 million convertible bond of 14 May 2008, the EUR 225 million
convertible bond of 16 December 2010 and the Option Scheme of 2007, the
authorised full number of shares of the Company amounted to 290,636,391.

The share subscription period for stock options 2007A is between 1 April 2010
and 31 March 2012. By 31 March 2011 a total of 187,378 Talvivaara Mining Company
Plc's new shares were subscribed for under the stock option rights 2007A and a
total of 2,145,722 stock option rights 2007A remain unexercised.

As at 31 March 2011, the shareholders who held more than 5% of the shares and
votes of Talvivaara were Pekka Perä (23.06 %), Varma Mutual Pension Insurance
Company (8.60%), and BlackRock Investment Management Ltd (5.80%).

Events after the review period

Revision of production guidance for 2011

Talvivaara revised its production target for the current year to 22,000-28,000t
of nickel on 7 April 2011. Zinc production is anticipated to amount to
44,000-50,000t.

The Company decided to lower its production target due to unsatisfactory
availability of the metals recovery plant in the first quarter and certain
capacity limiting bottle-necks identified at the plant. In order to improve
production reliability and to remove the bottle-necks, Talvivaara decided to
bring the annual maintenance break forward to April-May 2011 and to extend this
scheduled break to allow for all of the identified issues to be addressed and
for the plant to be thoroughly inspected as part of the Company's preventive
maintenance plan.

The Company anticipates scheduling a second maintenance stoppage for September
or October in order to install long lead-time equipment which is not available
during the first stoppage, and to further enhance parts of process equipment in
order to avoid potential problems caused by exceptional winter conditions.

The total duration of the maintenance and upgrading stoppages is estimated at
approximately three weeks. The impact on production output of the programmes
depends on the timing and eventual length of the production stoppages and the
resulting improvement in production reliability and capacity. Delays in
reclaiming the primary heap may also have an impact on production due to
corresponding delays in obtaining leach solution from the secondary heap to
metals recovery.

The maintenance and modification works are not anticipated to require any major
equipment additions or replacements; hence the programmes are not expected to
materially affect the Company's capital expenditure during the year.

Short-term outlook

Talvivaara expects production at the Sotkamo mine to continue ramping up in line
with the revised target and the production reliability to improve as a result of
the ongoing maintenance and upgrading programmes. The maintenance and upgrading
stoppage of April-May is likely have an impact on the second quarter production
such that the growth in production volumes will be more pronounced in the third
and fourth quarters.

The near term market outlook for nickel is relatively positive with demand
continuing strong especially from China. Overall, the market has been in a
deficit in the early part of 2011 on the back of strong stainless steel
production growth, but the supply-demand balance may be moving into surplus
towards the end of the year with increasing production projected especially in
ferronickel. This may drive nickel prices lower in the coming months from their
recent level of USD 25,000-28,000 per tonne. However, the price is not expected
to suffer a dramatic decrease but rather to potentially settle slightly lower
during the summer months. The EUR/USD exchange rate may also have an effect on
nickel price with sustained USD weakness likely to support commodity prices.



April 28, 2011



Talvivaara Mining Company Plc
Board of Directors



CONSOLIDATED INCOME STATEMENT

Unaudited Unaudited
three three
months to months to
(all amounts in EUR '000) 31 Mar 2011 31 Mar 2010
--------------------------------
Net sales 66,467 11,606

Other operating income 336 15,428

Changes in inventories of finished
goods and work in progress 12,781 19,075

Materials and services (36,310) (19,930)

Personnel expenses (6,795) (4,852)

Depreciation, amortization, depletion
and impairment charges (11,198) (12,246)

Other operating expenses (13,664) (11,425)
--------------------------------
Operating profit (loss) 11,617 (2,344)



Finance income 15,733 1,151

Finance cost (9,387) (21,328)
--------------------------------
Finance income (cost) (net) 6,346 (20,177)



Profit (loss) before income tax 17,963 (22,521)



Income tax expense (5,179) 5,585


--------------------------------
Profit (loss) for the period 12,784 (16,936)



Attributable to:

Owners of the parent 8,839 (13,861)

Non-controlling interest 3,945 (3,075)
--------------------------------
  12,784 (16,936)



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

Basic and diluted 0.03 (0.06)




CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Unaudited Unaudited
three three
months to months to
(all amounts in EUR '000) 31 Mar 2011 31 Mar 2010
------------------------
Profit (loss) for the period 12,784 (16,936)

Other comprehensive income,

items net of tax

Cash flow hedges (2,544) (3,019)

Other comprehensive income, net of tax (2,544) (3,019)
------------------------
Total comprehensive income 10,240 (19,955)



Attributable to:

Owners of the parent 6,804 (16,276)

Non-controlling interest 3,436 (3,679)
------------------------
  10,240 (19,955)




CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Unaudited Audited Unaudited
three twelve three
months to months to months to
(all amounts in EUR '000) 31 Mar 2011 31 Dec 2010 31 Mar 2010

ASSETS

Non-current assets

Property, plant and equipment 727,539 728,226 663,491

Biological assets 7,983 8,464 6,894

Intangible assets 7,620 7,737 7,745

Deferred tax assets 18,927 22,421 28,222

Other receivables 2,882 7,626 7,591

Available-for-sale
financial assets 502 464 -

  765,453 774,938 713,943

Current assets

Inventories 190,883 175,361 124,307

Trade receivables 61,311 52,354 9,142

Other receivables 6,274 8,702 5,578

Derivative financial instruments 1 40 -

Cash and cash equivalent 144,650 165,555 55,914

  403,119 402,012 194,941

Assets held for sale 39,391 39,391 -

Total assets 1,207,963 1,216,341 908,884



EQUITY AND LIABILITIES

Equity attributable to equity holders of the parent

Share capital 80 80 80

Share issue - 91 -

Share premium 8,086 8,086 8,086

Hedge reserve 5,459 7,494 14,152

Other reserves 444,046 433,012 438,603

Retained earnings (77,284) (84,322)  (85,229)

  380,387 364,441 375,692

Non-controlling interest
in equity 18,817 15,831 13,087

Total equity 399,204 380,272 388,779

Non-current liabilities

Borrowings 427,328 437,623 208,559

Advance payments 223,376 231,812 248,535

Trade payables 4 17 -

Derivative financial instruments - - 3,288

Provisions 4,893 3,935 1,804

  655,601 673,387 462,186

Current liabilities

Borrowings 43,144 42,934 23,682

Advance payments 34,337 35,243 -

Trade payables 31,082 39,408 25,389

Other payables 43,502 43,820 8,848

Derivative financial instruments 1,093 1,277 -

  153,158 162,682 57,919

Total liabilities 808,759 836,069 520,105

Total equity and liabilities 1,207,963 1,216,341 908,884




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 earning
H. Total
I. Non-controlling interest
J. Total equity

(all amounts in EUR
'000)

  A B C D E F G H I J

01 Jan 10

  80 - 8,086 401,248 16,567 16,200 (71,368) 370, 11,784 382
813 ,597

Profit - - - - - - (13,861) (13, (3,075) (16
(loss) 861) ,936)
for the
period

Other
compre-
hensive
income

- Cash flow (2, (3
hedges - - - - (2,415) - - 415) (604) ,019)

Total
compre-
hensive
income
for the (16, (19
period - - - - (2,415) - (13,861) 276) (3,679) ,955)

Transactions
 with owners

Perpetual
capital 19, 24
loan - - - - - 19,925 - 925 4,982 ,907

Employee
share
option
scheme

- value of
employee 1, 1
services - - - - - 1,230 - 230 - ,230

Total
contribution
by and
distribution 21, 26
to owners - - - - - 21,155 - 155 4,982 ,137

Total
transactions
with 21, 26
owners - - - - - 21,155 - 155 4,982 ,137

31 Mar 10 375, 388
80 - 8,086 401,248 14,152 37,355 (85,229) 692 13,087 ,779

364, 380
31 Dec 10 80 91 8,086 401,612 7,494 31,400 (84,322) 441 15,831 ,272

01 Jan 11 364, 380
80 91 8,086 401,612 7,494 31,400 (84,322) 441 15,831 ,272



Profit
(loss)
for the 8, 12
period - - - - - - 8,839 839 3,945 ,784

Other
compre-
hensive
income

- Cash flow (2, (2
hedges - - - - (2,035) - - 035) (509) ,544)

Total
compre-
hensive
income
for the 6, 10
period - - - - (2,035) - 8,839 804 3,436 ,240

Transactions
with owners

Stock options - (91) - 125 - - - 34 - 34

Perpetual
capital (1, (2
loan - - - - - - (1,801) 801) (450) ,251)

Incentive
arrangement
for Executive
Management - - - - - 23 - 23 - 23

Convertible
bond, equity 9, 9
component - - - - - 9,018 - 018 - ,018

Employee
share
option
scheme

- value of
employee 1, 1
services - - - - - 1,868 - 868 - ,868

Total
contribution
by and
distribution 9, 8
to owners - (91) - 125 - 10,909 (1,801) 142 (450) ,692

Total
transactions 9, 8
with owners - (91) - 125 - 10,909 (1,801) 142 (450) ,692

31 Mar 2011 380, 399
80 - 8,086 401,737 5,459 42,309 (77,284) 387 18,817 ,204



CONSOLIDATED STATEMENT OF CASH FLOWS

Unaudited Unaudited
three three
months to months to
(all amounts in EUR '000) 31 Mar 2011 31 Mar 2010
------------------------
Cash flows from operating activities

Profit (loss) for the period 12,784 (16,936)

Adjustments for

Tax 5,179 (5,585)

Depreciation and amortization 11,198 12,246

Other non-cash income and expenses (5,980) 139

Interest income (15,733) (1,151)

Fair value gains (losses) on financial assets at fair
value through profit or loss (145) (13,655)

Interest expense 9,387 21,328
------------------------
  16,690 (3,614)

Change in working capital

Decrease( )/increase(-) in other receivables 1,343 4,319

Decrease ( )/increase (-) in inventories (15,522) (14,795)

Decrease(-)/increase( ) in trade and other payables (14,393) (4,888)
------------------------
Change in working capital (28,572) (15,364)
------------------------
  (11,882) (18,978)

Interest and other finance cost paid (1,810) (4,401)

Interest and other finance income 269 47,116

Net cash generated (used) in operating activities (13,423) 23,737

Cash flows from investing activities

Purchases of property, plant and equipment (10,371) (18,960)

Purchases of intangible assets (23) (14)

Proceeds from sale of biological assets 184 59

Purchases of available-for-sale financial assets (38) -
------------------------
Net cash generated (used) in investing activities (10,248) (18,915)

Cash flows from financing activities

Realised stock options 34 -

Proceeds from interest-bearing liabilities - 5,000

Perpetual capital loan (3,042) 24,875

Proceeds from advance payments 7,000 243,419

Payment of interest-bearing liabilities (1,226) (234,079)
------------------------
Net cash generated (used) in financing activities 2,766 39,215

Net increase (decrease) in cash and cash
equivalents (20,905) 44,037

Cash and cash equivalents at beginning of the period 165,555 11,877
------------------------
Cash and cash equivalents at end of the period 144,650 55,914


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 2010.



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 2011 | 336,598| 21,035| 257,613| 206,227|821,473
---------------------------- --------- ------------ --------- -------- -------
Additions | 135| 10,235| 1| -| 10,371
---------------------------- --------- ------------ --------- -------- -------
Transfers | 7,637| (10,888)| 2,495| 756| -
---------------------------- --------- ------------ --------- -------- -------
Gross carrying amount | | | | |
at 31 Mar 2011 | 344,370| 20,382| 260,109| 206,983|831,844
---------------------------- --------- ------------ --------- -------- -------
Accumulated depreciation | | | | |
and impairment losses at | | | | |
1 Jan 2011 | 39,793| -| 21,150| 32,304| 93,247
---------------------------- --------- ------------ --------- -------- -------
Depreciation for the period| 5,908| -| 2,844| 2,306| 11,058
---------------------------- --------- ------------ --------- -------- -------
  |  |  |  |  |
---------------------------- --------- ------------ --------- -------- -------
Accumulated depreciation | | | | |
and impairment losses at | | | | |
31 Mar 2011 | 45,701| -| 23,994| 34,610|104,305
---------------------------- --------- ------------ --------- -------- -------
  |  |  |  |  |
---------------------------- --------- ------------ --------- -------- -------
Carrying amount | | | | |
at 1 Jan 2011 | 296,805| 21,035| 236,463| 173,923|728,226
---------------------------- --------- ------------ --------- -------- -------
Carrying amount | | | | |
at 31 Mar 2011 | 298,669| 20,382| 236,115| 172,373|727,539
---------------------------- --------- ------------ --------- -------- -------



3. Trade receivables

(all amounts in EUR '000)

  31 Mar 2011 31 Dec 2010
------------------------
Nickel-Cobalt sulphide 58,416 50,437

Zinc sulphide 2,895 1,917
------------------------
Total trade receivables 61,311 52,354




4. Inventories

(all amounts in EUR '000)

  31 Mar 2011 31 Dec 2010
------------------------
Raw materials and
consumables 11,408 8,668

Ore on leach pads 61,872 79,593

Work in progress 102,352 75,039

Finished products 15,251 12,061
------------------------
Total inventories 190,883 175,361




5. Borrowings

(all amounts in EUR '000)

Non-current 31 Mar 2011 31 Dec 2010
------------------------
Capital loans 1,405 1,405

Investment and Working Capital loan 57,362 57,324

Senior Unsecured Convertible Bonds due 2013 78,776 78,086

Senior Unsecured Convertible Bonds due 2015 212,707 219,426

Finance lease liabilities 49,941 53,018

Other 27,137 28,364
------------------------
  427,328 437,623
------------------------
Current

Railway Term Loan Facility 18,613 18,527

Finance lease liabilities 20,333 20,211

Interest Subsidy Loans 4,198 4,196
------------------------
  43,144 42,934
------------------------
Total borrowings 470,472 480,557




Talvivaara Mining Company Plc

Key financial figures of the Group Three Three Twelve
months to months to months to
  31 Mar 11 31 Mar 10 31 Dec 10
------------------------------
Net sales EUR '000 66 467 11 606 152,163

Operating profit (loss) EUR '000 11 617 (2 344) 25,456

Operating profit (loss) percentage   17.5 % -20,2 % 16.7 %



Profit (loss) before tax EUR '000 17,963 (22 521) (9,908)

Profit (loss) for the period EUR '000 12,784 (16,936) (13,052)



Return on equity   3.3 % (4.4 %) (3,4 %)

Equity-to-assets ratio   33.0 % 42.8 % 31,3 %

Net interest-bearing debt EUR '000 325,822 176,328 315 002

Debt-to-equity ratio   81.6 % 45.4 % 82,8 %



Return on investment   2.6 % 0.6 % 3,1 %

Capital expenditure EUR '000 10,394 18,974 115 658

Research &
development expenditure EUR '000 - - 365



Property, plant and equipment EUR '000 727,539 663,491 728 226

Derivative financial instruments EUR '000 (1,092) (3,287) (1 237)

Borrowings EUR '000 470,472 232,241 480 557

Cash and cash equivalents
at the end of the period EUR '000 144,650 55,914 165 555




Share-related key figures

Three Three Twelve
months to months to months to
    31 Mar 11 31 Mar 10 31 Dec 10
------------------------------------
Earnings per share EUR 0.03 (0.06) (0.06)

Equity per share EUR 1.55 1.53 1.55

Development of share price
at London Stock Exchange

Average trading price(1) EUR 6.69 4.32 4.89

  GBP 5.71 3.83 4.20

Lowest trading price(1) EUR 5.99 3.94 3.99

  GBP 5.12 3.50 3.42

Highest trading price(1) EUR 7.28 5.02 7.11

  GBP 6.22 4.45 6.10



Trading price at the
end of the period(2) EUR 6.58 5.00 6.92

  GBP 5.82 4.44 5.96

Change during the period   -2.4 % 15.0 % 54.2 %



Price-earnings ratio   194 neg. neg.



Market capitalization at
the end of the period(3) EUR '000 1,614,566 1,226,991 1,697,196

  GBP '000 1,426,792 1,089,075 1,460,861



Development in trading volume

Trading volume 1000 shares 11,420 39.105 93,802

In relation to weighted
average number of shares   4.7 % 15.9 % 38.2 %



Development of share
price at OMX Helsinki

Average trading price EUR 6.77 4.40 5.18

Lowest trading price EUR 5.91 3.99 3.99

Highest trading price EUR 7.34 5.00 7,18



Trading price at the
end of the period EUR 6.60 4.97 7.07

Change during
the period   -6.6 % 14.8 % 63.3 %

Price-earnings ratio   195 neg. neg.

Market capitalization at
the end of the period EUR '000 1,619,403 1,218,528 1,734,389

Development in trading volume

Trading volume 1000 shares 38,020 40,093 140,115

In relation to weighted
average number of shares   15.5 % 16.4 % 57.1 %

Adjusted average
number of shares   245,344,901 245,176,718 245,241,660

Fully diluted average
number of shares   245,344,901 245,176,718 245,241,660

Number of shares at the
end of the period   245,364,096 245,176,718 245,316,718


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 Twelve
months to months to months to
  31 Mar 2011 31 Mar 2010 31 Dec 2010
------------------------------------
Wages and salaries EUR '000 5,857 4,236 16,652

Average number of employees   407 325 362

Number of employees at the
end of the period   413 336 389




Other figures Three Three Twelve
months to months to months to
31 Mar 2011 31 Mar 2010 31 Dec 2010
------------------------------------
Share options outstanding at the
end of the period 5,937,822 5,421,100 5,950,822

Number of shares to be issued
against the outstanding share options 5,937,822 5,421,100 5,950,822

Rights to vote of shares to be issued
against the outstanding share options 2.4 % 2.2 % 2.4 %




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





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



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











Talvivaara Q1 Interim Report January - March 2011 28.4.2011:
http://hugin.info/136227/R/1509920/444816.pdf




This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(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#1509920]


Unternehmen: Talvivaaran Kaivososakeyhtiö Oyj - ISIN: FI0009014716