BMO Global Metals & Mining Conference 2 March 2010
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BMO Global Metals & Mining Conference 2 March 2010
DISCLAIMER
The following information contains, or may be deemed to contain, “forward-looking statements” (as defined in the U.S. Private Securities Litigation
Reform Act of 1995). These statements relate to future events that involve known and unknown risks and other uncertainties. By their nature,
forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in
the future. All forward-looking statements made in this presentation based on information presently available and Talvivaara Mining Company Plc.
assumes no obligation to update any forward-looking statements.
Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or the solicitation of an offer to buy
any securities or otherwise to engage in any investment activity.
1
Talvivaara
• Significant base metals producer utilizing
advanced proven technologies
• Primary focus on nickel and zinc
Sotkamo
• Targeted full scale production from 2012
TALVIVAARA
– Nickel 50,000 tonnes p.a. Oslo
Helsinki
Stockholm
– Zinc 90,000 tonnes p.a.
– Copper 15,000 p.a.
– Cobalt 1,800 tonnes p.a. Copenhagen
London
• Estimated mine life approx. 46 years Hamburg
Berlin
2
Corporate structure and shareholding
Talvivaara Mining Company
• Talvivaara Mining Company
(TALV:LN)
established in 2003
• Listed on the LSE Main Outokumpu
80% 100%
Board since June 2007 20% Talvivaara Talvivaara
(LSE: TALV) Sotkamo Ltd Infrastructure Oy
• FTSE 250 since September
1,600,000
2007
Ave. number of shares per month
London
1,400,000 Top ten shareholders(1)
Helsinki
• Listed on Nasdaq OMX 1,200,000
Helsinki since May 2009 1,000,000
(Nasdaq OMX: TLV) 800,000
• Market capitalisation 600,000
€1 billion / £ 930 million 400,000
200,000
• Free float approx. 70%
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
09 09 09 09 09 09 09 09 09 09 09 09 10 10
3
A world-class asset
• One of the largest known sulphide nickel Talvivaara mineral resources
deposits in Europe and a major poly-metallic
resource Category Mt Nickel%
• Easy and cost-effective to mine as large open
pits; minimal overburden Measured 364 0.23
• Favourable waste-to-ore ratio at 1:1 Indicated 278 0.22
• Commercially significant amounts of copper, Subtotal 642 0.23
cobalt and zinc Inferred 362 0.20
• Uranium and manganese extraction being Total 1,004 0.22
evaluated
3km untested ground
Kuusilampi Kolmisoppi
? ?
? ? ?
?
?
?
1 Nickel cut-off 0.07%
4
Process flow sheet
Open Pit Mining Bio Heap Leach Crushing Metals Recovery
Primary Crushing
TertiaryCrushing
Cu Sulphide
H2S Copper
Secondary Crushing Precipitation
Sulphide
Screen Zn Sulphide H2S Zinc
Precipitation Sulphide
PLS
Uranium Extraction
Yellow
Agglomeration Pre cake
Ore Storage
Neutralisation
H2SO4 Screen Limestone Gypsum
Ni Co Precipitate
Sulphide
Precipitation
H2S Nickel
Cobalt
Limestone Sulphide
Stacker Iron
Reclaim stacker Precipitation
Primary O2
Secondary
Heaps Heaps
Bacteria H2SO4
Lime
Air Air Total
Precipitation
PLS Pond Effluent
Raffinate Pond
Gypsum Pond
5
A mine of vast dimensions
C on or 800 m
veyo r ey
veyo
v
r on m
Con Agglomeration
C
400
Ore stockpile 2
Agglomeration
Conveyor 400 m
Fine Crushers
Thickners
Overview of mining infrastructure
• Operational surface area 61 km2 • Bioheapleaching irrigation and recycling
pipelines 6,700 km
• Surface area of construction 20 km2
• Circulated solutions 30,000 m3/h
• Mine area roads 25 km
• Buildings 770,000 m3
• Mine area pipelines 100 km
6
Bioheapleaching
• A natural, cost-effective and
environmentally friendly process utilising
locally occurring bacteria
• Key process parameters include particle
size, aeration, irrigation and acid
consumption
• Process run in two stages
– Primary leaching for 15-18 months;
expected nickel recovery approx.
80%
– Secondary leaching for additional
3.5 years; total expected nickel
recovery >90%
7
First industrial scale nickel bioheapleach operation
Heap at -20°C Aeration
Irrigation Pregnant Leach Solution
8Environment, Health and Safety – a priority for Talvivaara
Environment
• Environmental processes being prepared for ISO
14001 certification; audit of environmental system
targeted for Q4 2010
Personnel
• Current number of personnel 308
• Training programmes and recruiting continuing
Talvivaara personnel 2003-2010e
Safety 450
400
• Launch of successful Work Group Safety 350
Number of personnel
300
Challenge in February 2009 250
• 6 minor LTI’s recorded in 2009 200
150
• 11 LTIs/million man hours safety rating- 100
50
significantly below industry average 0
2003 2004 2005 2006 2007 2008 2009 2010
January 2010
9Recent highlights
• Zinc streaming agreement with Nyrstar NV; USD 335m purchase price received
• Plans to recover uranium as a by-product of leaching process announced;
350 tpa estimated production
• Ramp-up progressing; bioheapleaching performing above budgeted levels
• Early repayment in full of USD 320m Project Term Loan Facility
• Closing of all nickel, zinc and foreign exchange risk hedging positions with EUR 45m
net proceeds
10Zinc streaming agreement with Nyrstar
• Talvivaara to deliver 1.25 million tonnes of zinc in concentrate to Nyrstar
• Expeceted duration of agreement 10-15 years
• Initial purchase price of USD 335m paid by Nyrstar
• Nyrstar to pay to Talvivaara an extraction and processing fee of EUR 350 per tonne of
zinc in concentrate delivered
• Price participation:
– first 7 years at LME zinc prices above
USD 2,500/t
– thereafter, at LME zinc prices above
the processing fee of EUR 350/t
• Option to buy 150,000 tpa sulphuric acid
11A technically simple and safe uranium extraction process
Crushing Metals Recovery
• Solvent extraction unit to be added to Talvivaara’s
metals recovery plant TertiaryCrushing
Cu Sulphide
H2S Copper
• Planned production approx. 350 tpa ng Precipitation
Sulphide
• Estimated capital expenditure approx. EUR 30m
Zn Sulphide H2S Zinc
• Production costs estimated at approx. EUR 2m pa PLS
Precipitation Sulphide
Uranium Extraction
• Permit applications under preparation Pre
Yellow
cake
Neutralisation
Screen Limestone Gypsum
Ni Co Precipitate
Price of yellow cake 2005-2010 (USD/lb) Sulphide
Precipitation
H2S Nickel
140
Cobalt
120 Limestone Sulphide
Iron
Precipitation
100 O2
USD/lb
80 a H2SO4
Lime
60 Total
Precipitation
40 Effluent
20
0 e Pond
PLS Pond Gypsum Pond
5
5
/0 06
6
/0 07
7
/0 08
/0 08
9
/0 09
10
31 200
00
31 200
31 200
31 200
0
0
0
20
20
20
2
2
2
2
1/
7/
1/
7/
1/
7/
1/
7/
1/
7/
1/
/0
/0
/0
/0
/0
/0
31
31
31
31
31
31
31
12Bioheapleaching performing above budgeted levels...
Ni in solution Dec’09 - Feb ’10
2,500
Ni in solution (mg/l)
Early re-precipitation
phase over
2,000
Section 2 stacking
completed
1,500
1,000
Ni in solution Jun ’09-Feb ’10
2500
Ni Budget Ni Heap #1 (Act.)
500 Ni Heap #2 (Act.) Ni Heap #1 (Adj.)
2000
Ni Heap #2 (Adj.)
Nickel (m g/l)
1500
-
01/12/2009 01/01/2010 01/02/2010 04/03/2010
1000
500
Heap 2
Heap 1
0
9
9
9
9
9
9
9
9
0
0
/0
/0
/0
/0
/0
/0
/0
/0
/1
/1
6
7
8
9
0
1
2
2
1
2
/0
/0
/0
/0
/1
/1
/1
/1
/0
/0
16
14
11
08
06
03
01
29
26
23
13... supporting production targets for 2010
• Mining
Annualised production level of nickel in 2010(t)
– Ore 24 mt
50000
– Waste 16 mt 2nd hydrogen
40000 2nd production plant
– Stripping ratio 0.6 line at metals plant
30000
• Metals recovery
20000
– Nickel: approx. 30,000 t
10000
– Zinc: approx. 50,000 t
0
– Insignificant amounts of
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
copper and cobalt
14Talvivaara in a strong position going into 2010
Enhanced financial and operational flexibility
• Early full repayment of USD 320 million Project Term Loan Facility with proceeds
from the Nyrstar agreement
• Closing of all nickel, zinc and foreign exchange risk hedging positions with
EUR 45 million net proceeds
Cash position and net debt
• Cash at year end EUR 12 million
• Cash at the date of reporting (24 February 2010) EUR 80 million
• Net debt excluding lease liabilities and railroad loan1 EUR 55 million
1
Railroad loan to be repaid by the reimbursement from the State of Finland in 2010-2011
15Operating and capital expenditure 2010
• Estimated cash cost of operation EUR 170-180 million
• Leasing costs approx. EUR 12 million
• Capex 2010 estimated at EUR 90-100 million, mainly
– Secondary heap pad, ground works for waste rock area
– Secondary stacker, reclaiming equipment
– Metals recovery (second production line, hydrogen plant, hydrogen sulphide plant)
General and
Maintenance Contracting administration
12% 14% 5%
Mining
Electricity Labour 29%
12% 8%
Metals recovery
Fuel Consumables 38%
8% 9%
Materials handling
Chemicals Bioheapleaching 17%
37% 11%
16Competitive cash cost of production
Cash cost of production (USD/lb nickel)(1,2)
• Estimated cash cost at year end: (1,2)
– 2010: EUR 2.5/lb nickel (USD 3.1/lb) 12
– 2011: EUR 1.6/lb nickel (USD 2.0/lb)
• Higher unit cost in 2009 due to
9
– Disproportionately high mining and materials handling
cost due to technical issues in crushing and ramp -up
– Learning curve in operations
6
(1) By-product credits with the following assumptions for average cost
between H2 2009 – 2014: 3
- Zn €350/t
- Cu € 1.27/lb ($ 1.59/lb); net smelter return to Talvivaara 75%
- Co € 5.44/lb ($ 6.80/lb); net smelter return to Talvivaara 59%
0
- U € 36/lb ($ 45/lb)
H2 2010 2011 2012 2013 2014
- €/$ 1.25 2009
(2) After by-product credits and based on current estimates for Cash Cost $/lb
long term chemicals, power and consumables prices
17Market outlook
Nickel price and LME stock level 2009-Feb 2010
• Demand in Western markets not
yet recovered 25000 190000
• Some uncertainty in base metals 170000
prices in the short term remains 20000
150000
Ni stock level (t)
15000
Ni (USD/t)
130000
110000
10000
90000
5000
Ni cash price (USD/t)
70000
Ni LME stock level (t)
0 9 50000
/0 09
9
/0 09
9
/0 09
9
/1 09
9
10
13 2 00
13 2 00
06 2 00
30 2 00
27 2 00
0
0
0
0
20
2
2
2
2
1/
2/
3/
5/
6/
8/
9/
0/
2/
1/
/0
/0
/0
/0
/1
/0
Source: Reuters
02
27
25
18
11
18Market outlook continued
• Positive long term Indexed nickel consumption growth 2000-2013
outlook in base
metals intact with
China driving the
growth
19Thank you!
www.talvivaara.com
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