Talvivaara Mining Company Interim Report for January-September 2011

STOCK EXCHANGE RELEASE
9 November 2011


Talvivaara Mining Company Interim Report for January-September 2011
Solid financial performance whilst working to overcome operational challenges


Highlights

Q3 2011
* Nickel production of 3,153t, adversely impacted by problems in hydrogen
sulphide generators
* Net sales of EUR 60.6m
* Operating profit of EUR 5.5m


Q1-Q3 2011
* Nickel production of 11,319t, up 73% versus Q1-Q3 2010
* Net sales of EUR 164.7m (Q1-Q3 2010: EUR 91.9m)
* Operating profit of EUR 16.0m (Q1-Q3 2010: EUR 11.1m)


Highlights after the reporting period

* Full year 2011 production target revised to a minimum of 16,000t of nickel,
as announced in the Operational Update released on 7 October
* Both production lines at the metals recovery plant in uninterrupted
operation since mid-October and production on track to achieve the targeted
nickel output
* In response to the volatile and uncertain market environment and decline in
nickel prices, short term focus shifted from maximising production volume to
optimising profitability
* Pekka Perä, Talvivaara's CEO, to retire from active executive duties over
the coming months, but will retain his shareholding and an active role on
the Board; the Board has commenced the search for a new CEO
* Amendment agreement to EUR 100m revolving credit facility signed in October;
facility increased to EUR 130m and maturity extended by one year to June
2014


Key figures

-------------------------------------------------------------------------------
EUR million Q3 Q3 Q1-Q3 Q1-Q3 FY
2011 2010 2011 2010 2010
-------------------------------------------------------------------------------
Net sales 60.6 45.1 164.7 91.9 152.2
-------------------------------------------------------------------------------
Operating profit (loss) 5.5 10.9 16.0 11.1 25.5
-------------------------------------------------------------------------------
% of net sales 9.1% 24.2% 9.7% 12.1% 16.7%
-------------------------------------------------------------------------------
Profit (loss) for the period (3.4) 5.1 (8.9) (6.9) (7.7)
-------------------------------------------------------------------------------
Earnings per share, EUR (0.02) 0.01 (0.05) (0.03) (0.04)
-------------------------------------------------------------------------------
Equity-to-assets ratio 28.7% 40.1% 28.7% 40.1% 31.7%
-------------------------------------------------------------------------------
Net interest bearing debt 410.2 263.4 410.2 263.4 315.0
-------------------------------------------------------------------------------
Debt-to-equity ratio 128.1% 66.8% 128.1% 66.8% 81.7%
-------------------------------------------------------------------------------
Capital expenditure 22.0 36.9 57.6 92.2 115.7
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of the 38.6 6.0 38.6 6.0 165.6
period
-------------------------------------------------------------------------------
Number of employees at the end of the period 446 370 446 370 389
-------------------------------------------------------------------------------

All reported figures in this release are unaudited.


CEO Pekka Perä comments: "As we announced in our latest operational update, we
continued to face reliability and availability issues at our metals recovery
plant during the third quarter. Production was hurt particularly by problems in
hydrogen sulphide generators, which suffered from the lack of critical spare
parts and could only be operated at an overall capacity utilisation level of
around 35% during the quarter. While both of our hydrogen sulphide generators
have been back in operation since mid-October, we expect to keep running them
below full capacity to avoid any further disruptions until a sufficient spare
parts inventory has been received, expected by the year-end. Whilst we are
naturally disappointed by the ongoing production constraints, we are however
pleased to note that we have already demonstrated that all of our processes can
be run at design capacities.

Despite the production issues, we achieved a solid financial result for the
quarter. The significant improvement in net sales compared to the previous
quarter reflected deliveries of nickel left in inventory at the end of Q2, and
we recorded an operating profit of EUR 5.5 million. We have also strengthened
our liquidity position by signing the amended EUR 130 million revolver, as well
as establishing an up to EUR 100 million commercial paper programme.

During the third quarter, conditions in the financial and commodity markets
became increasingly volatile and challenging with the nickel price closing the
quarter at around USD 17,500 per tonne, which is its 2011 low point. While a
degree of confidence on the commodity markets has been restored in recent weeks,
we have responded to the challenges created by the market environment as well as
our own production constraints by developing a revised short term operating
plan. We are currently focusing on maximising the profitability of our
operations rather than the production volume. Our financial position remains
solid, however we have already taken action to defer some capital expenditure
into 2012 and to optimise our operations to realise operating cost savings.

Going forward, we remain as committed as ever to a successful ramp-up of our
operations. While all the processes are in place for full-scale production,
further progress is needed with optimising our operations and implementing a
robust management systems infrastructure. Already, we are seeing a clear
improvement in the personnel morale and attitude, and I can only express my
sincerest gratitude for the efforts of our employees in addressing the most
acute production issues during the last few months.

As part of Talvivaara's transformation from a project to an operating entity, I
have decided to retire from active executive duties and increasingly focus on
shaping our strategy as a member of the Board of Directors. I am also committed
to retaining my shareholding in the company. We have an experienced and
established management team in place to lead Talvivaara forward, and have
commenced the search for a new CEO."


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 9 November 2011 at 12:00 GMT/14:00 EET

A combined webcast and conference call on the January-September 2011 Interim
Result will be held on 9 November 2011 at 12:00 GMT/14:00 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_1109_Q3/


A conference call facility will be available for a Q&A with senior management
following the presentation.

Participant - Finland: 358 (0)9 2313 9201
Participant - UK: 44 (0)20 7162 0077
Participant - US: 1 334 323 6201

Conference id: 891450

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

Financial review

Q3 2011 (July-September)

Net sales and financial result

Talvivaara's net sales for nickel and cobalt deliveries to Norilsk Nickel and
for zinc deliveries to Nyrstar during the three months ended 30 September 2011
amounted to EUR 60.6 million (Q3 2010: EUR 45.1 million). Net sales increased by
61.0% compared to the previous quarter, mainly as a result of substantial nickel
and cobalt deliveries having been delayed from Q2 2011 into Q3 2011 due to a
maintenance stoppage at Norilsk Nickel Harjavalta. Product deliveries during the
period amounted to 4,586 tonnes of nickel, 126 tonnes of cobalt and 8,848 tonnes
of zinc.

Change in inventories of finished products and work in progress amounted to EUR
2.6 million (Q3 2010: EUR 20.9 million), with the small increment for the
quarter reflecting the recovery of the unusually large finished product
inventories of nickel and cobalt at the end of the previous quarter. Materials
and services during the third quarter amounted to EUR (29.1) million (Q3 2010:
EUR (26.9) million), and other operating expenses to EUR (12.3) million (Q3
2010: EUR (11.0) million). Costs were at a slightly lower level compared to the
previous quarter, reflecting the lower production volume. On the other hand, the
cost level was increased by maintenance costs relating to the issues with the
hydrogen sulphide generators as well as improvements to the primary heap
reclaiming system.

Operating profit for Q3 2011 was EUR 5.5 million (Q3 2010: EUR 10.9 million),
and loss for the period amounted to EUR (3.4) million (Q3 2010: profit of EUR
5.1 million).

Statement of financial position and financing

Capital expenditure for the quarter totalled EUR 22.0 million (Q3 2010: EUR
36.9 million). The expenditure related primarily to the construction of
secondary heap foundations and a gypsum pond, as well as to pressure filters
acquired for drying of the zinc product.

In September, the Finnish State completed the redemption of the Talvivaara-
Murtomäki railroad and reimbursed Talvivaara Infrastructure Ltd for the
construction expenses of the railroad. The total reimbursement amounted to EUR
40 million (VAT 0%), of which EUR 20 million had been paid in June 2010 and the
remaining EUR 20 million in September 2011. In conjunction with the final
reimbursement, the railroad became property of the Finnish State and part of the
national rail network. Subsequently, Talvivaara repaid the EUR 18.7 million term
loan used to finance the construction of the railroad as well as interest
subsidy loans amounting to EUR 4.2 million.

Also in September, Talvivaara entered into receivables factoring agreements
amounting to a total combined factoring credit limit of EUR 100 million.

In August, Talvivaara entered into a commercial paper notes programme of up to
EUR 100 million with Nordea Bank, Sampo Bank and Svenska Handelsbanken. On 30
September 2011, the outstanding commercial paper notes amounted to a nominal
value of EUR 10 million.

Q1-Q3 2011 (January-September)

Net sales and financial result

Talvivaara's net sales during the nine months ended 30 September 2011 amounted
to EUR 164.7 million (Q1-Q3 2010: EUR 91.9 million). Product deliveries during
the period totalled 11,136 tonnes of nickel (Q1-Q3 2010: 5,614t), 24,266 tonnes
of zinc (Q1-Q3 2010: 14,610t), and 266 tonnes of cobalt (Q1-Q3 2010: 47t).

The Group's other operating income amounted to EUR 2.6 million (Q1-Q3 2010: EUR
17.2 million), primarily relating to indemnities on a damaged drilling rig and
transformers, gain on the sale of the railroad, and fair value gains on
derivatives.

Materials and services during the nine months ended 30 September 2011 amounted
to EUR (97.3) million (Q1-Q3 2010: EUR (68.3) million). The increase reflected
the increased level of production, whilst the largest cost items were
consumables, external services and production chemicals, particularly propane
and lye (caustic soda).

Employee benefit expenses including the value of employee expenses related to
the employee share option scheme of 2007 were EUR (19.1) million (Q1-Q3 2010:
EUR (14.4) million). The increase was attributable to the increased number of
personnel.

Other operating expenses amounted to EUR (42.6) million (Q1-Q3 2010: EUR (30.2)
million). Energy and maintenance costs comprised over two thirds of the total.
The impact of maintenance costs was particularly high in the second quarter of
2011 due to the maintenance and upgrading programmes carried out in April-May.

Operating profit amounted to EUR 16.0 million (Q1-Q3 2010: EUR 11.1 million),
representing an operating margin of 9.7% for Q1-Q3 2011.

Finance income for the nine month period was EUR 1.0 million (Q1-Q3 2011: EUR
6.9 million), which mainly consisted of interests on bank accounts and exchange
rate gains. Finance costs of EUR (27.8) million (Q1-Q3 2010: EUR (27.0) million)
primarily related to interest and financing expenses on borrowings. As further
explained in Note 6 to this Q3 2011 interim report, Talvivaara has reclassified
the US dollar denominated Nyrstar advance payment as a non-monetary liability
from Q3 2011 onwards. As a result of the reclassification, foreign exchange rate
gains and losses in finance income and costs have decreased, and relevant
financial information for prior periods since Q1 2010 has been restated
accordingly.

The Company's loss for the period amounted to EUR (8.9) million (Q1-Q3 2010: EUR
(6.9) million).

Total comprehensive income for the nine month period was EUR (16.3) million (Q1-
Q3 2010: EUR (15.4) million), including a reduction in hedge reserves resulting
from the occurrence of the hedged sales.

Statement of financial position

Capital expenditure during Q1-Q3 2011 totalled EUR 57.6 million (Q1-Q3 2010: EUR
92.2 million). The expenditure primarily related to construction of secondary
heap foundations, a gypsum pond and the uranium extraction circuit. On the
consolidated statement of financial position as at 30 September 2011, property,
plant and equipment amounted to EUR 751.4 million (31 December 2010: EUR 728.2
million).

In the Group's assets, inventories amounted to EUR 225.0 million on 30 September
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 47.6 million on 30 September 2011 (31 December
2010: EUR 52.4 million). The 88% increase in trade receivables compared to EUR
25.4 million on 30 June 2011 reflected the higher level of nickel and cobalt
deliveries during the third quarter, resulting from the recovery of the
inventories accumulated at the end of Q2 2011 due to a maintenance stoppage at
Norilsk Nickel Harjavalta.

On 30 September 2011, cash and cash equivalents totalled EUR 38.6 million (31
December 2010: EUR 165.6 million).

In equity and liabilities, total equity amounted to EUR 320.2 million on 30
September 2011 (31 December 2010: EUR 385.6 million). In June, Talvivaara
acquired an additional 4% shareholding in its subsidiary Talvivaara Sotkamo Ltd
from Outokumpu Mining Oy, increasing Talvivaara's ownership in Talvivaara
Sotkamo from 80% to 84%. As a result of the acquisition, equity decreased by EUR
61.5 million as the acquisition price of EUR 60 million and the transaction
costs of EUR 1.5 million were deducted from equity under IFRS. On the other
hand, the equity component of EUR 9.0 million for the senior unsecured
convertible bonds due 2015 was recognised in equity during the period.

A total of 465,085 new shares were subscribed and paid for during Q1-Q3 2011
under the company's stock option rights 2007A and 2007B and the convertible
bonds due 2015, with the entire subscription price recognised in equity.

Borrowings decreased from EUR 480.6 million on 31 December 2010 to EUR 448.7
million at the end of September 2011. The changes in borrowings during the
period included determination of the equity component for the senior unsecured
convertible bonds due 2015, issuance of EUR 10 million of commercial paper notes
and repayment of the railroad loan and interest subsidy loans.

Total advance payments as at 30 September 2011 amounted to EUR 242.1 million (31
December 2010: EUR 259.9 million). The changes in advance payments during Q1-Q3
2011 consisted of the reclassification of the Nyrstar advance payment as a non-
monetary liability, recognition of the advance payment for the railroad as
revenue, EUR 7.0 million in advance payments from Cameco Corporation under the
uranium off-take agreement as well as amortization of the Nyrstar advance
payment. The reclassification of the Nyrstar advance payment as a non-monetary
liability better reflects the financial nature of the transaction, as the
advance payment is repaid through physical deliveries and therefore there is no
actual foreign exchange risk. The effects of the reclassification on deferred
tax assets, equity, advance payments, profit/loss, and earnings per share for
the relevant periods are further described in Note 6 to this interim report. The
restatement does not have any impact on the operating earnings or cash flows of
prior periods.

Total equity and liabilities as at 30 September 2011 amounted to EUR 1,114.4
million (31 December 2010: EUR 1,214.5 million).

Financing

In September, Talvivaara received EUR 20 million from the Finnish State as the
final redemption amount for the Talvivaara-Murtomäki railroad. Subsequently,
Talvivaara repaid the EUR 18.7 million term loan used to finance the
construction of the railroad as well as interest subsidy loans amounting to EUR
4.2 million.

Also in September, Talvivaara entered into receivables factoring agreements
amounting to a total combined factoring credit limit of EUR 100 million.

In August, Talvivaara established a commercial paper notes programme of EUR 100
million. On 30 September 2011, the outstanding commercial paper notes amounted
to a nominal value of EUR 10 million.

In February, Talvivaara signed a uranium off-take agreement with Cameco
Corporation. According to the terms set forth in the agreement, Cameco is to
provide an upfront investment of up to USD 60 million to cover the construction
costs of the uranium extraction circuit at the Talvivaara mine. Talvivaara will
repay the investment through deliveries of uranium concentrate during the
initial years of the agreement. Once the capital has been repaid, all uranium
concentrate produced thereafter until 31 December 2027 will be bought by Cameco
at a price based on market prices at the time of delivery. As at 30 September
2011, Talvivaara had received a total of EUR 7.0 million in advance payments
from Cameco.

In January, 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 in December 2010. 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.

Currency option programme

In June 2011, Talvivaara entered into a currency option programme comprising USD
options for six months from July 2011 through December 2011. The monthly
obligation amounts to USD 7.5 million and protection to USD 5.0 million. As at
30 September 2011, the remaining collar ranges from EUR/USD ratio of 1.2884 to
1.4900.

Production review

During the third quarter, Talvivaara's production was constrained by problems in
hydrogen sulphide generators. Because hydrogen sulphide is an essential reagent
in the metals recovery process, the unforeseen downtime in the generators had a
direct impact on Q3 2011 production output, which for nickel amounted to 3,153
tonnes and for zinc to 7,286 tonnes. Year-to-date production at the end of
September amounted to 11,319 tonnes (Q1-Q3 2010: 6,550 tonnes) of nickel and
21,291 tonnes (Q1-Q3 2010: 16,092 tonnes) of zinc.

In metals recovery, primary focus during the quarter continued to be on
improving the reliability and availability of the overall process, in particular
the hydrogen sulphide plants. Both of Talvivaara's hydrogen sulphide generators
were serviced and upgraded during the second quarter. Following the maintenance,
the generators functioned well, but the operating procedure followed in the
hydrogen sulphide process subsequently proved more wearing to certain heating
elements than previous experience would have suggested. Talvivaara's spare parts
inventory consequently proved insufficient, and given the long lead times of the
required specialty steels, the hydrogen sulphide generators and therefore the
entire metals recovery process had to be operated significantly below full
capacity. The overall capacity utilisation of the hydrogen sulphide generators
was only around 35% during the quarter.

The mining department continued to operate without material disturbances. The
department produced 3.0Mt of ore (Q3 2010: 3.4Mt) and 4.5Mt of waste (Q3
2010: 5.4Mt). Emphasis during the period shifted increasingly towards ore
mining, as primary heap reclaiming improved and was no longer restricting ore
production for most of the quarter.

In materials handling, the earlier commissioning issues in primary heap
reclaiming were largely addressed during the third quarter. As a result of the
modifications made to the reclaiming equipment during Q2 2011, the feeding of
ore into the system and overall availability of the process improved
significantly during the third quarter. Additionally, more of Talvivaara's own
staff and equipment as well as additional contractor resources were allocated to
the process. Due to the measures taken, reclaiming of the primary heap is no
longer a bottle-neck to the stacking of new ore and the entire materials
handling process now operates at a satisfactory level. Crushing and stacking of
ore in Q3 2011 amounted to 3.0Mt (Q3 2010: 3.4Mt), and during Q1-Q3 2011 to
7.9Mt (Q1-Q3 2010: 10.4Mt).

Bioheapleaching continued to progress according to plan during the third
quarter, with the main sources of leach solution being primary heap sections 3
and 4. Nickel recovery from heap section 3 has reached around 65% in the
slightly over a year that the heap has been in production, with heap section 4
following a similar pattern. During the third quarter, the average nickel grade
in solution pumped to metals recovery was stable between 2.0-2.5 g/l.

The newly stacked primary heap section 1 was completed in September and has,
along with the secondary heap, been taken into production during the fourth
quarter, enabling a further ramp-up of production. Leaching in both the new heap
section 1 and the secondary heap is progressing well.


Production key figures

-------------------------------------------------------------
    Q3 Q3 Q1-Q3 Q1-Q3 FY
2011 2010 2011 2010 2010
-------------------------------------------------------------
Mining
-------------------------------------------------------------
Ore production Mt 3.0 3.4 7.9 10.4 13.3
-------------------------------------------------------------
Waste production Mt 4.5 5.4 15.0 11.7 16.7
-------------------------------------------------------------
Materials handling
-------------------------------------------------------------
Stacked ore Mt 3.0 3.4 7.9 10.4 13.3
-------------------------------------------------------------
Bioheapleaching
-------------------------------------------------------------
Ore under leaching Mt 32.2 21.4 32.2 21.4 24.3
-------------------------------------------------------------
Metals recovery
-------------------------------------------------------------
Nickel metal content Tonnes 3,153 3,211 11,319 6,550 10,382
-------------------------------------------------------------
Zinc metal content Tonnes 7,286 7,557 21,291 16,092 25,462
-------------------------------------------------------------


Sustainable development and permitting

Environment

Environmental monitoring during the third quarter confirmed Talvivaara to comply
with all of its environmental permit limits for water emissions. As a result of
continued process improvements in metals recovery and other environmental
investments, sulphate, sodium and manganese discharges to nearby lakes have
continued to decrease.

Hydrogen sulphide (odour) emissions to air have also remained within the
permitted limits, apart from briefly exceeding them during the third quarter due
to the unstable running rate of the overall metals recovery process. Dust
emissions have been addressed through watering systems on mine area roads, dust
removal systems particularly in the crushing and screening areas, and
modifications to the mining process. Dust emissions have been within permitted
limits in all but one measurement point at the screening building.

Talvivaara is committed to minimizing the environmental effects of its mining
operations, and targets at setting the bar in environmentally sustainable
mining.

Permitting

Talvivaara submitted an application for the renewal of the existing
environmental permit to the regional environmental permitting agency in March.
Talvivaara continues to augment the application.

In June 2011, Talvivaara submitted to the Ministry of Employment and Economy an
application in accordance with the Mining Act (503/1965) for the expansion of
the Talvivaara mining concession area by approximately 70 km(2). Subject to
approval of the expansion, the total area of the Talvivaara mining concession
will be approximately 130 km(2). The expansion of the mining concession area
relates to the previously announced increase in the Talvivaara mineral
resources, the full exploitation of which is not possible within the existing
mining concession area.

Baseline studies of the environment and preparations for the Environmental
Impact Assessment relating to the potential production expansion (Operation
Overlord) and the expansion of the mining concession area continued during the
third quarter.

In March 2011, Talvivaara submitted the environmental permit application for
uranium extraction to the regional environmental permitting agency, with the
decision on the permit expected during Q2 2012. 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. Processing
of the permit application at the Ministry of Employment and Economy is ongoing
and Talvivaara expects to obtain this permit in early 2012.

Safety

At the end of the third quarter, the injury frequency among the Talvivaara
personnel was 13.9 lost time injuries/million working hours on a rolling 12
month basis (31 December 2010: 10.7 lost time injuries/million working hours).

Planned uranium extraction and uranium off-take agreement with Cameco
Corporation

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 costs
of the uranium extraction circuit and related facilities. 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 is providing technical assistance to Talvivaara in the design,
construction, commissioning and operation of the uranium extraction circuit to
be constructed at the Sotkamo mine.

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 in late 2011.

During the third quarter, the construction permit for the uranium recovery
facility was received, and construction work commenced. Commissioning of the
facility, subject to receiving the necessary permits and authorizations, is
expected during the second half of 2012.


Production expansion - Operation Overlord

Conceptual studies relating to production expansion beyond 50,000tpa of nickel
continued. The dedicated project team consists of nine members with
metallurgical, infrastructure, bioheapleaching, materials handling and project
coordination expertise.

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.

Acquisition of an additional 4% shareholding in the operating subsidiary
Talvivaara Sotkamo Ltd from Outokumpu Mining Oy

Talvivaara Mining Company signed an agreement on 1 June 2011 with Outokumpu
Mining Oy and its parent company Outokumpu Oyj to acquire an additional 4%
shareholding in Talvivaara Sotkamo Ltd. As a result of the acquisition,
Talvivaara's ownership in Talvivaara Sotkamo increased from 80% to 84% and
Outokumpu Mining's ownership decreased to 16%. The acquisition price for the 4%
stake was EUR 60 million.

Simultaneously, Talvivaara entered into an exclusive option agreement with
Outokumpu Mining Oy and Outokumpu Oyj (the "Option") whereby it will have the
right, at its sole discretion, in one or more installments, to acquire Outokumpu
Mining's remaining 16% shareholding in Talvivaara Sotkamo for EUR 240 million at
any time prior to 31 March 2012. Should Talvivaara choose to exercise the
Option, entirely or partially, it will consider appropriate funding arrangements
for the payment of the exercise price at that time.

Redemption of the Talvivaara-Murtomäki railroad by the Finnish State

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 Ltd 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 in June 2010 as a
partial reimbursement. The remaining minimum transportation volumes were reached
in January 2011, and the Finnish State paid the remaining EUR 20 million in
September 2011. In conjunction with the final reimbursement, the railroad became
property of the Finnish State and part of the national rail network.

Inclusion of Talvivaara Mining Company in the OMX Helsinki 25 index

Talvivaara was included in the OMX Helsinki 25 index of the Helsinki Stock
Exchange from 1 August 2011.

Annual General Meeting

Talvivaara's Annual General Meeting was held on 28 April 2011 in Sotkamo,
Finland. The resolutions of the AGM included:
* that no dividend be paid for the financial year 2010;
* that the annual fee payable to the members of the Board in 2012 be as
follows: Chairman of the Board EUR 160,000, Deputy Chairman (Senior
Independent Director) EUR 69,000, Chairman of the Audit Committee EUR
69,000, Chairman of the Nomination Committee EUR 53,000, Chairman of the
Remuneration Committee EUR 53,000, Chairman of the Sustainability Committee
EUR 53,000, other Non-executive Directors and Executive Directors EUR
48,000;
* that the number of Board members be seven and that Mr. Edward Haslam, Mr.
Eero Niiva, Ms. Eileen Carr, Mr. D. Graham Titcombe, Mr. Pekka Perä, Mr.
Tapani Järvinen and Ms. Saila Miettinen-Lähde be re-elected as Board
Members;
* that the auditor be reimbursed according to the auditor's approved invoice
and authorised public accountants PricewaterhouseCoopers Oy be elected as
the company's auditor for the financial year 2011;
* that the Board be authorised to decide on the repurchase, in one or several
transactions, of a maximum of 10,000,000 of the Company's own shares. The
repurchase authorisation is valid until 27 October 2012. The proposed
authorisation replaces the authorisation to repurchase 10,000,000 shares
granted by the Annual General Meeting of 15 April 2010; and
* that the Company shall issue stock options partly to the key employees and
partly to the personnel of the Company and its subsidiaries. The maximum
total number of stock options issued will be 5,500,000 and the stock options
entitle their owners to subscribe for a maximum total of 5,500,000 new
shares in the Company or to receive existing shares held by the Company. The
beginning of the share subscription period shall require attainment of
certain operational or financial targets determined by the Board annually.


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 counterparties,
currency exchange ratios, management and control systems, historical losses and
uncertainties about the future profitability of Talvivaara, dependence on key
personnel, effect of laws, governmental regulations and related costs,
environmental hazards, and risks related to Talvivaara's mining concessions and
permits.

In the short term, Talvivaara's key operational risks 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 is also undertaking a detailed evaluation of management
systems at the operational level and a concomitant performance improvement
programme.

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 the volatility 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 results. 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 employed by the Group on 30 September 2011 was 446 (Q3
2010: 370).

Wages and salaries paid during the three months to 30 September 2011 totalled
EUR 4.9 million (Q3 2010: EUR 3.8 million). Wages and salaries paid during the
nine months to 30 September 2011 totalled EUR 16.2 million (Q1-Q3 2010: EUR
12.2 million).

As part of the Group's long term incentive plan, the employees of Talvivaara
resolved on 18 June 2011 to establish a Group personnel fund to manage the
earnings bonuses paid by Talvivaara. In accordance with its bylaws, the fund
will invest a substantial proportion of its assets in Talvivaara Mining Company
shares. The fund is managed by personnel representatives elected by the
employees. Registration of the fund is pending at the Ministry of Employment and
Economy.

Shares and shareholders

The number of shares issued and outstanding and registered on the Euroclear
Shareholder Register as of 30 September 2011 was 245,781,803. 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 and for stock options 2007B between 1 April 2011 and 31 March
2013. By 30 September 2011 a total of 340,586 Talvivaara Mining Company's new
shares had been subscribed for under the stock option rights 2007A and a total
of 1,992,514 stock option rights 2007A remain unexercised. A total of 48,763 new
shares of Talvivaara were subscribed for under the stock option rights 2007B and
a total of 2,284,337 stock option rights 2007B remain unexercised. In addition,
a total of 214,736 new shares of the Company were subscribed for under the
convertible bonds due 2015.

As at 30 September 2011, 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%), Ilmarinen Mutual Pension Insurance Company (5.7%) and Solidium
Oy (5.1%).

Events after the review period

Operational and Management update

On 7 October 2011, Talvivaara announced a revised operating plan and strategic
decision to focus on maximising profitability of operations rather than the
production volume over the remainder of 2011, in response to the heightened
volatility and uncertainty in the commodity and financial markets. During Q4
2011, savings will be sought by deferring approximately EUR 10 million of
capital expenditure into 2012, as well as minimizing the use of contractors and
optimizing the scale of mining operations. Based on the short-term foreseen
availability of the metals recovery plant, the Company also rebased its full
year 2011 production guidance to a minimum of 16,000t of nickel.

Simultaneously, Talvivaara announced a number of measures to address the
improvement requirements of the management systems applied at the Company.
Effective as of 1 October 2011, the production organization has been
restructured into two operating divisions: the ore processes, i.e. mining and
materials handling, and the metals processes, i.e. bioheapleaching and metals
recovery. The management systems at the operational level are addressed through
a detailed evaluation and concomitant performance improvement programme
commencing in Q4 2011. All management systems are under review also on the
corporate level, including reorganisation of the Executive Committee and
redefinition of the duties within it.

Retirement from active executive duties of CEO Pekka Perä

On 7 October 2011, Talvivaara announced that CEO Pekka Perä had stated to the
Board of Directors his decision to retire from active executive duties over the
coming months. Consequently, the Company will seek to appoint a new CEO at the
earliest opportunity, and Mr Perä has agreed to continue with his current duties
until that time. Mr Perä has also confirmed that he intends to continue as an
active member of the Board and to retain his current shareholding in the
Company.

The Board has commenced the search for a new CEO and will update the market as
appropriate, to ensure a smooth handover of responsibilities and effective
transition.

Signing of the revolving credit facility amendment agreement

In October, an amendment agreement was signed by Talvivaara and the lending
banks to an originally EUR 100 million revolving credit facility agreement. In
addition to certain amendments to reflect Talvivaara's current stage of
development, the facility was expanded to EUR 130 million and the maturity was
extended by one year to June 2014. The lenders and arrangers of the facility are
Nordea Bank, Sampo Bank, Svenska Handelsbanken and Pohjola Bank. The facility,
which is currently undrawn, carries a varying margin of 1.75-3.00% depending on
the Company's leverage ratio.
The amended EUR 130 million facility replaced the EUR 80 million commitment by
Nordea Bank signed in June 2011, primarily as back-up financing relating to the
acquisition of Talvivaara Sotkamo shares from Outokumpu Mining.

Strike of the Metal Workers Union and Trade Union Pro

The Finnish Metal Workers Union and the Trade Union Pro commenced a strike on
21 October 2011 across 40 companies within the technology industries. Certain
mining companies including Talvivaara were however excluded from the scope of
the strike. The strike ended on 24 October 2011.

Environmental permitting

The Kainuu Centre for Economic Development, Transport and the Environment (the
"ELY Centre") resolved on 21 October 2011 that the increase in the annual
production rate of the Talvivaara mine from approximately 30,000t to 50,000t of
nickel will require a new Environmental Impact Assessment ("EIA"). The intended
increase in the production rate was initially part of Talvivaara's renewal
application for its existing environmental permit, submitted in March 2011.
However, subsequent to the ELY Centre's decision, the target to increase the
production rate was pulled from the renewal application in order to conduct the
required EIA and to apply for the permit to produce 50,000tpa nickel separately.

The new EIA process has commenced and discussions with the authorities for the
finalization of the programme are ongoing. The EIA relating to the 50,000tpa of
nickel production rate will be conducted simultaneously with the EIA required
for the potential increase of the production rate to up to 100,000tpa of nickel,
and for the expansion of the mining concession area to 130 km(2). The EIA's are
anticipated to be completed during the second half of 2012. Thereafter,
Talvivaara intends to first apply for a permit to produce 50,000tpa of nickel
with a separate application and, based on discussions with the authorities,
anticipates obtaining the permit around mid-year 2013. The environmental permit
application relating to the 100,000tpa of nickel production rate will also be
submitted in 2012, but it is anticipated that the processing time of the
application will be longer and that the permit can therefore only be obtained in
early 2014.

Given that the environmental permit to produce 50,000tpa of nickel is expected
to be obtained mid-year 2013, the change in the permitting agenda is not
anticipated to have a material impact on Talvivaara's ramp-up schedule.

Short-term outlook

Operational outlook

The availability and utilization rate of the hydrogen sulphide generators and
the overall metals recovery process are the critical factors in view of
Talvivaara's short term production volumes. Since mid-October, both of
Talvivaara's hydrogen sulphide generators are in production, and the entire
metals recovery process is operating as anticipated. Talvivaara however expects
to keep running the hydrogen sulphide generators below full capacity in order to
avoid any further unscheduled downtime until a sufficient spare parts inventory
has been received, expected by the year-end.

Based on current production output and the foreseen short term availability of
the metals recovery plant, Talvivaara reiterates its production target for the
current year at a minimum of 16,000 tonnes of nickel.

Production guidance for the coming year is being reassessed based on, amongst
others, anticipated reliability and availability of the metals recovery plant,
expected progress in the stacking of new ore and Talvivaara's revised short term
operating plan. Further information relating to 2012 production and financial
guidance will be released in connection with Talvivaara's Capital Markets Day on
17 November 2011.

Market outlook

The third quarter of 2011 was marked by heightened volatility and uncertainty
across financial and commodity markets, driven by escalating macroeconomic
concerns on global economic growth, Eurozone sovereign debt issues and
robustness of the European banking system. The nickel price declined from a high
of around USD 25,000 per tonne in July to a low of USD 17,570 per tonne at the
quarter end.

In terms of nickel market fundamentals, however, LME nickel stocks have
continued to decline and currently track around their lowest levels since early
2009. While a degree of new supply is expected to come on stream, the Company
does not expect a significant shift of the supply-demand balance in the near
term. Furthermore, as nickel prices declined during the quarter, a supply-side
response especially from nickel pig iron producers was reported already at price
levels around USD 19,000 per tonne. In a weaker nickel price environment, high-
cost swing capacity is thus expected to be shut down also going forward, thereby
supporting price levels.

While base metals, including nickel, have somewhat recovered during October and
early November, volatility is expected to remain at an elevated level until
there is more clarity on the growth trajectory of the global economy and on the
policymakers' ability to contain the debt crisis in Europe. Barring a severe
global recession, however, further significant downside to nickel prices would
appear to be capped by marginal costs of production. Talvivaara continues to
believe the longer term support level to be around USD 20,000 per tonne,
although shorter term, macro-economy driven declines even substantially below
this level remain possible.



9 November 2011


Talvivaara Mining Company Plc
Board of Directors






CONSOLIDATED INCOME STATEMENT

Unaudited Unaudited Unaudited Unaudited
three three nine nine

months to months to months to months to

(all amounts in EUR '000) 30 Sep 11 30 Sep 10 30 Sep 11 30 Sep 10
-------------------------------------------
Net sales 60,620 45,091 164,734 91,945

Other operating income 1,136 532 2,557 17,243

Changes in inventories of finished
goods and work in progress 2,562 20,938 42,236 53,097

Materials and services (29,131) (26,915) (97,335) (68,284)

Personnel expenses (5,708) (4,590) (19,129) (14,446)

Depreciation, amortization,
depletion and impairment charges (11,668) (13,159) (34,484) (38,191)

Other operating expenses (12,277) (10,966) (42,612) (30,234)
-------------------------------------------
Operating profit (loss) 5,534 10,931 15,967 11,130

Finance income 170 2,028 961 6,892

Finance cost (10,025) (6,137) (27,781) (27,026)
-------------------------------------------
Finance income (cost) (net) (9,855) (4,109) (26,820) (20,134)

Profit (loss) before income tax (4,321) 6,822 (10,853) (9,004)

Income tax expense 921 (1,748) 1,909 2,154
-------------------------------------------
Profit (loss) for the period (3,400) 5,074 (8,944) (6,850)
-------------------------------------------
Attributable to:

Owners of the parent (3,577) 3,576 (10,178) (7,889)

Non-controlling interest 177 1,498 1,234 1,039
-------------------------------------------
(3,400) 5,074 (8,944) (6,850)
-------------------------------------------
Earnings per share for profit (loss) attributable to the
owners of the parent expressed in EUR per share)

Basic and diluted (0.02) 0.01 (0.05) (0.03)



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Unaudited Unaudited Unaudited Unaudited
three three nine nine

months to months to months to months to

(all amounts in EUR '000) 30 Sep 11 30 Sep 10 30 Sep 11 30 Sep 10
----------------------------------------
Profit (loss) for the period (3,400) 5,074 (8,944) (6,850)



Other comprehensive income,

items net of tax

Cash flow hedges (2,506) (2,696) (7,385)  (8,572)


----------------------------------------
Other comprehensive
income, net of tax (2,506) (2,696) (7,385) (8,572)
----------------------------------------
Total comprehensive income (5,906) 2,378 (16,329) (15,422)
----------------------------------------
Attributable to:

Owners of the parent (5,682) 1,419 (16,381) (14,747)

Non-controlling interest (224) 959 52 (675)
----------------------------------------
(5,906) 2,378 (16,329) (15,422)
----------------------------------------



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Unaudited Audited Unaudited

As at As at As at

(all amounts in EUR '000) 30 Sep 11 31 Dec 10 30 Sep 10

ASSETS

Non-current assets

Property, plant and equipment 751,448 728,226 687,226

Biological assets 8,793 8,464 8,474

Intangible assets 7,485 7,737 7,758

Deferred tax assets 25,847 20,552 26,748

Other receivables 2,986 7,626 7,616

Available-for-sale financial assets 630 464 -

797,189 773,069 737,822

Current assets

Inventories 225,038 175,361 160,389

Trade receivables 47,602 52,354 33,716

Other receivables 5,806 8,702 6,189

Derivative financial instruments 237 40 -

Cash and cash equivalent 38,555 165,555 5,976

317,238 402,012 206,270

Assets held for sale - 39,391 39,391

Total assets 1,114,427 1,214,472 983,483



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 1,665 7,494 9,709

Other reserves 448,802 433,012 439,784

Retained earnings (152,646) (80,068) (79,257)

305,987 368,695 378,402

Non-controlling interest in equity 14,238 16,895 16,091

Total equity 320,225 385,590 394,493



Non-current liabilities

Borrowings 421,982 437,623 239,769

Advance payments 227,344 225,068 228,324

Trade payables - 17 29

Derivative financial instruments - - 1,553

Provisions 5,860 3,935 2,987

655,186 666,643 472,662

Current liabilities

Borrowings 26,761 42,934 29,601

Advance payments 14,800 34,800 32,658

Trade payables 35,607 39,408 31,361

Other payables 61,074 43,820 21,880

Derivative financial instruments 774 1,277 828

139,016 162,239 116,328

Total liabilities 794,202 828,882 588,990

Total equity and liabilities 1,114,427 1,214,472 983,483




CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

A. Share capital
B. Share issue
C. Share premium
D. Hedge reserve
E. Invested unrestricted equity
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
---------------------------------------------------------------
1 Jan 10 370, 11, 382,
80 - 8,086 16,567 401,248 16,200 (71,368) 813 784 597



Profit (loss)
for the (7, 1, (6,
period - - - - - - (7,889) 889) 039 850)

Other
comprehensive
income

- Cash flow (6, (1, (8,
hedges - - - (6,858) - - - 858) 714) 572)
---------------------------------------------------------------
Total
comprehensive
income for (14, (15,
the period - - - (6,858) - - (7,889) 747) (675) 422)

Transactions
with owners

Stock options - - - - 364 - - 364 - 364

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

Employee
share option
scheme

- value of 2, 2,
employee services - - - - - 2,047 - 047 - 047
---------------------------------------------------------------
Total
contribution
by and
distribution 22, 4, 27,
to owners - - - - 364 21,972 - 336 982 318

Total
transactions 22, 4, 27,
with owners - - - - 364 21,972 - 336 982 318
---------------------------------------------------------------
30 Sep 10 378, 16, 394,
80 - 8,086 9,709 401,612 38,172 (79,257) 402 091 493
---------------------------------------------------------------
368, 16, 385,
31 Dec 10 80 91 8,086 7,494 401,612 31,400 (80,068) 695 895 590
---------------------------------------------------------------
1 Jan 11 368, 16 385,
80 91 8,086 7,494 401,612 31,400 (80,068) 695 ,895 590

Profit (loss) (10, 1 (8,
for the period - - - - - - (10,178) 178) ,234 944)

Other
comprehensive
income

- Cash flow (6, (1, (7,
hedges - - - (6,203) - - - 203) 182) 385)
---------------------------------------------------------------
Total
comprehensive
income for (16, (16,
the period - - - (6,203) - - (10,178) 381) 52 329)

Transactions
with owners

Stock options - (91) - - 658 - - 567 - 567

Conversion of 1, 1
convertible bond - - - - 1,800 - - 800 - ,800

Acquisition of (59, (2, (61,
subsidiary - - - 374 - 996 (60,509) 139) 349) 488)

Perpetual (1, (2,
capital loan - - - - - - (1,891) 891) (360) 251)

Incentive
arrangement
for Executive
Management - - - - 70 - - 70 - 70

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

Employee
share option
scheme -

- value of 3, 3,
employee services - - - - 3,248 - - 248 - 248
---------------------------------------------------------------
Total
contribution
by and
distribution (46, (2, (49,
to owners - (91) - 374 14,794 996 (62,400) 327) 709) 036)

Total
transactions (46, (2, (49,
with owners - (91) - 374 14,794 996 (62,400) 327) 709) 036)
---------------------------------------------------------------
30 Sep 11 305, 14, 320,
80 - 8,086 1,665 416,406 32,396 (152,646) 987 238 225
---------------------------------------------------------------



CONSOLIDATED STATEMENT OF CASH FLOWS

Unaudited Unaudited Unaudited Unaudited
three three nine nine

months to months to months to months to

(all amounts in EUR '000) 30 Sep 11 30 Sep 10 30 Sep 11 30 Sep 10
-----------------------------------------
Cash flows from
operating activities

Profit (loss) for the period (3,400) 5,074 (8,944) (6,850)

Adjustments for

Tax (921) 1,748 (1,909) (2,154)

Depreciation and amortization 11,668 13,159 34,484 38,191

Other non-cash income and expenses (8,824) (2,060) (26,816) (4,364)

Interest income (170) (2,028) (961) (6,892)

Fair value gains (losses) on financial
assets at fair value through profit or
loss 58 (3,638) (327) (20,280)

Interest expense 10,026 6,137 27,781 27,026
-----------------------------------------
8,437 18,392 23,308 24,677

Change in working capital

Decrease( )/increase(-)
in other receivables (23,324) (10,030) 14,383 (19,774)

Decrease ( )/increase (-)
in inventories (5,934) (23,566) (49,677) (50,878)

Decrease(-)/increase( ) in
trade and other payables 30,673 (20,040) 8,026 14,253
-----------------------------------------
Change in working capital 1,415 (53,636) (27,268) (56,399)
-----------------------------------------
9,852 (35,244) (3,960) (31,722)

Interest and other finance cost paid (2,573) (3,154) (14,087) (16,364)

Interest and other finance income 716 2,002 1,055 52,820
-----------------------------------------
Net cash generated (used)
in operating activities 7,995 (36,396) (16,992) 4,734

Cash flows from investing activities

Acquisition of subsidiary, net of cash
acquired - - (61,487) -

Purchases of property, plant
and equipment (21,938) (36,721) (57,322) (91,899)

Purchases of biological assets (29) - (64) (7)

Purchases of intangible assets (71) (153) (175) (277)

Proceeds from sale of property,
plant and equipment 19,995 - 19,995 -

Proceeds from sale of biological
assets 25 - 257 76

Proceeds from sale of intangible
assets 5 - 5 -

Purchases of financial assets at
fair value through profit or loss - - (12,010) -

Purchases of available-for-sale
financial assets (39) - (167) -

Proceeds from sale of financial
assets at fair value
through profit or loss 12,022 - 12,022 -
-----------------------------------------
Net cash generated (used)
in investing activities 9,970 (36,874) (98,946) (92,107)

Cash flows from financing activities

Realised stock options 156 13 567 364

Proceeds from interest-bearing
liabilities 9,949 50,000 11,016 56,539

Perpetual capital loan - - (3,042) 24,875

Proceeds from advance payments - - 7,000 263,419

Payment of interest-bearing
liabilities (24,143) (6,198) (26,603) (263,725)
-----------------------------------------
Net cash generated (used)
in financing activities (14,038) 43,815 (11,062) 81,472

Net increase (decrease) in
cash and cash equivalents 3,927 (29,455) (127,000) (5,901)

Cash and cash equivalents at
beginning of the period 34,628 35,431 165,555 11,877
-----------------------------------------
Cash and cash equivalents
at end of the period 38,555 5,976 38,555 5,976
-----------------------------------------





NOTES


1. Basis of preparation

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 11 336,59 21,035 257,613 206,227 821,473

Additions 329 56,916 73 4 57,322

Disposals - - (66) - (66)

Transfer to assets held for
sale - - 27 1 28

Transfers 10,888 (14,228) 2,584 756 -
--------------------------------------------------------------------------------
Gross carrying amount at
30 Sep 11 347,815 63,723 260,231 206,988 878,757
--------------------------------------------------


Accumulated depreciation
and impairment losses

at 1 Jan 11 39,793 - 21,150 32,304 93,247

Depreciation for the period 19,852 - 8,571 5,639 34,062
--------------------------------------------------------------------------------
Accumulated depreciation
and impairment losses

at 30 Sep 11 59,645 - 29,721 37,943 127,309
--------------------------------------------------


Carrying amount at 1 Jan 11 296,805 21,035 236,463 73,923 728,226
--------------------------------------------------
Carrying amount at 30 Sep 11 288,170 63,723 230,510 169,045 751,448
--------------------------------------------------


3. Trade receivables

(all amounts in EUR '000)

30 Sep 11 31 Dec 10
--------------------
Nickel-Cobalt sulphide 45,690 50,437

Zinc sulphide 1,912 1,917
--------------------
Total trade receivables 47,602 52,354
--------------------




4. Inventories

(all amounts in EUR '000)

30 Sep 11 31 Dec 10
--------------------
Raw materials and consumables 16,109 8,668

Work in progress 195,453 154,632

Finished products 13,476 12,061
--------------------
Total inventories 225,038 175,361
--------------------



5. Borrowings

(all amounts in EUR '000)

Non-current 30 Sep 11 31 Dec 10
--------------------
Senior Unsecured Convertible Bonds due 2015 215,068 219,426

Senior Unsecured Convertible Bonds due 2013 80,125 78,086

Investment and Working Capital loan 57,771 57,324

Finance lease liabilities 42,953 53,018

Capital loans 1,405 1,405

Other 24,660 28,364
--------------------
421,982 437,623
--------------------
Current

Commercial papers 9,969 -

Railway Term Loan Facility - 18,527

Finance lease liabilities 16,077 20,211

Interest Subsidy Loans - 4,196

Investment and Working Capital loan 715 -
--------------------
26,761 42,934
--------------------
Total borrowings 448,743 480,557
--------------------



6. Advance payments

(all amounts in EUR '000)

Non-current 30 Sep 11 31 Dec 10
----------------------------------
Deferred zinc sales revenue 220,344 225,068

Deferred uranium sales revenue 7,000 -
----------------------------------
227,344 225,068
----------------------------------
Current

Deferred zinc sales revenue 14,800 14,800

Advance payment on railway - 20,000
----------------------------------
14,800 34,800
----------------------------------
Total advance payments 242,144 259,868
----------------------------------
Adjustments to reported financial information for prior periods


In February 2010, Talvivaara completed a long-term Zinc in Concentrate Streaming
Agreement with Nyrstar. Under the terms of the agreement, Talvivaara shall
deliver all of its zinc in concentrate production to Nyrstar until a total of
1,250,000 metric tonnes has been delivered. Talvivaara received an advance
payment of USD 335 million from Nyrstar for the agreed deliveries. The advance
payment was initially classified as a monetary liability and translated to euros
on the basis of end-of-period exchange rates. Exchange rate gains and losses
were recognised on the income statement as finance income or cost.

The Company has reclassified the advance payment as a non-monetary liability and
restated the financial statements of prior periods according to IAS 8. The
reclassification better reflects the financial nature of the transaction, as the
advance payment is repaid through physical deliveries and therefore there is no
actual foreign exchange risk. The reclassification does not have any impact on
the operating earnings or cash flows of prior periods. The adjusted amounts and
financial statement line items affected are presented below for each prior
period.


Deferred tax
assets 31 Mar 10 30 Jun 10 30 Sep 10 31 Dec 10 31 Mar 11 30 Jun 11

Initial 28,222 35,199 27,272 22,421 18,927 21,104
value

Adjustment (1,330) (7,652) (524) (1,869) 1,939 2,943

Adjusted 26,892 27,547 26,748 20,552 20,866 24,047
value

Equity 31 Mar 10 30 Jun 10 30 Sep 10 31 Dec 10 31 Mar 11 30 Jun 11

Initial 388,779 369,915 393,000 380,272 399,204 333,635
value

Adjustment 3,786 21,776 1,493 5,318 (5,516) (8,377)

Adjusted 392,565 391,691 394,493 385,590 393,688 325,258
value

Advance
payments 31 Mar 10 30 Jun 10 30 Sep 10 31 Dec 10 31 Mar 11 30 Jun 11

Initial 248,535 291,571 262,999 267,055 257,713 252,547
value

Adjustment (5,116) (29,428) (2,017) (7,187) 7,456 11,320

Adjusted 243,419 262,143 260,982 259,868 265,168 263,867
value

Profit/loss
(-) for the 1.1.-31.3. 1.4.-30.6. 1.7.-30.9. 1.10.-31.12. 1.1.-31.3. 1.7.-30.6.
period 2010 2010 2010 2010 2011 2011

Initial (16,936) (16,764) 25,357 (4,709) 12,784 (4,633)
value

Adjustment 3,786 17,990 (20,283) 3,825 (10,834) (2,861)

Adjusted (13,150) 1,226 5,074 (884) 1,950 (7,494)
value

Earnings per 1.1.-31.3. 1.4.-30.6. 1.7.-30.9. 1.10.-31.12. 1.1.-31.3. 1.7.-30.6.
share 2010 2010 2010 2010 2011 2011

Initial (0.06) (0.06) 0.08 (0.02) 0.03 (0.02)
value

Adjustment 0.02 0.06 (0.07) 0.01 (0.04) (0.01)

Adjusted (0.04) (0.00) 0.01 (0.01) (0.00) (0.03)
value

Key figures have been adjusted accordingly.




7. Changes in the number of shares issued

Number of shares
-----------------
31 Dec 10 245,316,718

Stock options 2007A and 2007B 249,349

Conversion of senior unsecured
Convertible Bonds due 2015 215,736
-----------------
30 Sep 11 245,781,803
-----------------


8. Contingencies and commitments



(all amounts in EUR '000)



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


30 Sep 11 31 Dec 10
---------------------------------------
Not later than 1 year 1,722 1,175

Later than 1 year and not later than 5
years 1,935 1,993

Later than 5 years - 11
---------------------------------------
3,657 3,179


Capital commitments

At 30 September 2011, the Group had capital commitments principally relating to
the completion of the Talvivaara mine, improving the reliability and expansion
of production capacity. These commitments are for the acquisition of new
property, plant and equipment.


Talvivaara Mining Company Plc

Key financial figures of the Three Three Nine Nine Twelve
Group months to months to months to months to months to

30 Sep 11 30 Sep 10 30 Sep 11 30 Sep 10 30 Dec 10
--------------------------------------------------
Net sales EUR '000 60,620 45,091 164,734 91,945 152,163

Operating profit
(loss) EUR '000 5,534 10,931 15,967 11,130 25,456

Operating profit
(loss) percentage 9.1 % 24.2 % 9.7 % 12.1 % 16.7 %

Profit (loss) before
tax EUR '000 (4,321) 6,822 (10,853) (9,004) (2,722)

Profit (loss) for the
period EUR '000 (3,400) 5,074 (8,944) (6,850) (7,734)

Return on equity -1.1 % 1.3 % -2.5 % -1.8 % -2.0 %

Equity-to-assets
ratio 28.7 % 40.1 % 28.7 % 40.1 % 31.7 %

Net interest-bearing
debt EUR '000 410,188 263,394 410,188 263,394 315,002

Debt-to-equity ratio 128.1 % 66.8 % 128.1 % 66.8 % 81.7 %

Return on investment 0.9 % 1.7 % 2.3 % 2.7 % 2.8 %

Capital expenditure EUR '000 22,038 36,874 57,561 92,183 115,658

Research &
development
expenditure EUR '000 - - - 63 365

Property, plant and
equipment EUR '000 751,448 687,226 751,448 687,226 728,226

Derivative financial
instruments EUR '000 (537) 2,381 (537) 2,381 (1,237)

Borrowings EUR '000 448,743 269,370 448,743 269,370 480,557

Cash and cash
equivalents
at the end of the
period(1) EUR '000 38,555 5,976 38,555 5,976 165,555

'
1) including financial assets at fair value through profit or loss


Share-related key figures

Twelve
Three Three Nine Nine months
months to months to months to months to to

30 Sep 11 30 Sep 10 30 Sep 11 30 Sep 10 30 Dec 10
----------------------------------------------------------
Earnings per
share EUR (0.02) 0.01 (0.05) (0.03) (0.04)

Equity per
share EUR 1.25 1.54 1.25 1.54 1.50

Development of
share price
at London Stock
Exchange

Average trading
price(1) EUR 3.95 4.98 5.19 4.59 4.89

GBP 3.44 4.15 4.56 3.94 4.20

Lowest trading
price(1) EUR 2.89 4.32 2.87 3.99 3.99

GBP 2.52 3.60 2.52 3.42 3.42

Highest trading
price(1) EUR 5.24 5.90 7.09 5.74 7.11

GBP 4.57 4.92 6.22 4.92 6.10

Trading price
at the
end of the
period(2) EUR 2.91 5.72 2.91 5.72 6.92

GBP 2.52 4.92 2.52 4.92 5.96

Change during
the period -45.8 % 34.7 % -57.7 % 27.3 % 54.2 %

Price-earnings
ratio  neg. 392    neg.  neg.  neg.

Market
capitalization
at
the end of the EUR 1,697,
period(3) '000 714,672 1,402,951 714,672 1,402,951 196

GBP 1,460,
'000 619,370 1,206,468 619,370 1,206,468 861

Development in
trading volume

1000
Trading volume shares 15,709 11,247 42,056 77,074 93,802

In relation to
weighted
average number
of shares 6.4 % 4.6 % 17.1 % 31.4 % 38.2 %

Development of
share
price at OMX
Helsinki

Average trading
price EUR 3.87 5.09 5.46 4.66 5.18

Lowest trading
price EUR 2.97 4.35 2.97 3.99 3.99

Highest trading
price EUR 5.11 5.72 7.34 5.72 7.18

Trading price
at the
end of the
period EUR 2.97 5.68 2.97 5.68 7.07

Change during
the period -42.4 % 27.6 % -58.0 % 31.2 % 63.3 %

Price-earnings
ratio neg. 389  neg. neg. neg.

Market
capitalization
at
the end of the EUR 1,734,
period '000 730,464 1,392,829 730,464 1,392,829 389

Development in
trading volume

1000 140,
Trading volume shares 34,256 21,058 116,983 97,450 115

In relation to
weighted
average number
of shares 14.0 % 8.6 % 47.6 % 39.7 % 57.1 %

Adjusted
average
number of 245,241,
shares 245,540,343 245,216,366 245,540,343 245,216,366 660



Fully diluted
average
number of 245,241,
shares 244,436,343 257,969,064 244,436,343 257,969,064 660

Number of
shares at
the end of the 245,316,
period 245,781,803 245,316,718 245,781,803 245,316,718 718



(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 Nine Nine Twelve
months to months to months to months to months to

30 Sep 11 30 Sep 10 30 Sep 11 30 Sep 10 30 Dec 10
--------------------------------------------------
Wages and salaries EUR '000 4,927 3,828 16,189 12,209 16,652

Average number of
employees 471 379 443 356 362

Number of employees
at the end of the
period 446 370 446 370 389






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


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







Talvivaara Interim Report Jan-Sep 2011 9.11.2011:
http://hugin.info/136227/R/1562278/483941.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#1562278]


Unternehmen: Talvivaaran Kaivososakeyhtiö Oyj - ISIN: FI0009014716