Talvivaara posts operating loss, lower production guidance

Tavivaara Mining Company has maintained that its full year nickel production will be at the lower end of its guidance of 25,000-30,000 tonnes after its output was adversely affected by downtime at the metals recovery plant, resulting from environmental investments and unscheduled occupational safety-related improvements.

During the first quarter of 2012 the firm produced 3,374 tonnes on nickel, which, combined with a negative nickel price of around $17,000-18,000 per tonne during February and March, will result in an operating loss for the first three months of the year.

Production was also affected by a fatal incident at the Sotkamo mine site in mid-March which led to a lowered solution flow into metals recovery and also started an unscheduled stoppage with focus on preventative occupational safety-related modifications and improvements.

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In January, Talvivaara commissioned a new water recycling system reducing raw water intake by around 65-75%, which forms part of the company's sustainability strategy. However, the installation caused downtime at the metals recovery plant and thereby affected first quarter production volumes.

In a statement the firm said: "Regardless of the short-term shortage in metals recovery output, the underlying development in the company's operations has continued positively. Recent analysis of ore samples taken from heap section 3 indicates nickel recoveries of up to 85% in less than two years of leaching, which exceeds the company's expectations.

"Run-rate crushing and primary heap reclaiming performance has also improved allowing the Company to accelerate the stacking of new ore. Progress in bioheapleaching and crushing puts Talvivaara in the position to offset the recent issues and to achieve the 2012 guidance and ramp up towards full capacity."

NR