Talvivaara Mining
Talvivaara Mining's primary activity is the development and commercial exploitation of two polymetallic deposits, Kuusilampi and Kolmisoppi, in Sotkamo, Eastern Finland.
The Talvivaara deposits comprise one of the largest known sulphide nickel resources in Europe with 336 million tonnes of ore in measured and indicated categories. The mine is also expected to produce copper, zinc and cobalt as by-products of the process
Talvivaara Mining to place up to 22.28 million shares to fund nickel mine capacity expansion
FTSE 250 nickel producer, Talvivaara Mining, said it would place up to 22.28 million shares representing approximately 10 per cent of the issued capital to both new and existing institutional shareholders. The placing will be completed through an accelerated book-building process by Merrill Lynch and Liberum Capital.
The additional capital raised will be used to expand and increase the capacity of the company’s metal processing facility, to and general working capital. Though the metal processing expansion will take until 2012 to complete, Talvivaara said that it need to fund the purchase of long lead items required to meet the timetable. One the expansion is complete, production will rise from approximately 33,000 tonnes of nickel per annum to 50,000 tonnes.
“Talvivaara's total resource base of more than one billion tonnes of ore corresponds to over 40 years' mine-life at the expanded capacity, which contributes to the Company's intention to pursue expansion,” the company stated.
Ramping up production at the company’s only asset hasn’t been as smooth as hoped. Issues with the crushing circuit have curtailed production. Today Talvivaara confirmed that the performance of the crushing circuit continues to be “erratic”, but reported a improved performance in the secondary and tertiary crushing circuits. The company is expecting to make up for lost time by upgrading its crushing capacity to increase the materials handling capacity from 15 million tonnes to 22 million tonnes. A new agglomeration drum and modifications to the stacking system are also expected to improve performance.
“Although these short term crushing problems have affected the 2009 production targets as previously referred to in the [Interim Management Statement], the Company's nickel production target for 2010 of 30,000 tonnes remains unchanged.”
On a more positive note, Bioheapleaching is “preceding according to expectations” with metal recoveries showing “promising results”. Talvivaara is planning to change its primary heap pad by stacking a second layer on the heap starting in summer 2010. Also, to manage the increased capacity and metals recovery processes, a new hydrogen plant will be commissioned in Q4 2010.
“The capital expenditure for the year is estimated at €85-95 million providing the expansion project is pursued.”
Analysts were mostly positive on the book building announcement, noting that Talvivaara’s commodity hedge book is thought to be well in the money giving the company greater financial flexibility.
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Other Talvivaara Mining news
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28/04/09 Talvivaara Mining cuts nickel production guidance as crushing system underperforms
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04/03/09 Talvivaara secures €50 million funding for draw-down in 2009
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19/02/09 Talvivaara Mining delivers first nickel to Norilsk Nickel refinery
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14/10/08 Talvivaara Mining Chairman shells out £118,000 on share purchase
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29/08/08 Talvivaara Mining on track for nickel production this year