How To Report On The Nickel And Zinc Plant

Transcription

1 TALVIVAARA 2013 RESULTS 24 APRIL 2013

2 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, forwardlooking 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.

3 TALVIVAARA 2013 RESULTS 1. Highlights 2. Operational review 3. Safety, sustainability and permitting 4. Financial review 5. Outlook 3

4 HIGHLIGHTS FINANCING TRANSACTIONS Financing arrangements completed to de-risk balance sheet and secure liquidity - Fully underwritten EUR 261m rights issue was oversubscribed - Renegotiated EUR 100m revolving credit facility - Increase of advance payment from Cameco by USD 10m to USD 70m - EUR 12m additional up-front payment from Nyrstar Largest shareholders as at 22 April 2013* Shareholder Shares % Solidium ,7 % Varma ,7 % Perä Pekka ,5 % Nordea Life Assurance Finland ,0 % Mandatum Life Unit-Linked ,6 % Norilsk Nickel ,6 % Sundholm Göran ,5 % Sijoitusrahasto Taaleritehdas Arvo ,5 % Salo Olli ,4 % Savings Bank Finland Fund ,4 % Nominee registered ,5 % Total shares * Excluding breakdown of nominee registered shareholders 4

5 HIGHLIGHTS OPERATIONS Nickel and zinc production (t) 2013 Q4 FY Nickel 2,732 2,317 3,374 12,916 Zinc 3,128 4,106 7,890 25,867 Metals production largely in line with expectations considering water balance Operational focus on achieving a sustainable water balance - Purification and discharge of excess water commenced in March Re-start of ore production brought forward to May; improves water balance and supports ramp-up 2013 full-year nickel production guidance of 18,000t re-iterated 5

6 HIGHLIGHTS FINANCIALS Financial result reflects production volumes and a depressed nickel price environment - The LME nickel price has declined below USD 16,000/t in April Costs related to water management and November gypsum pond leakage amounted to EUR 5.9m in 2013; corresponding provisions de-recognized EUR million 2013 Q4 FY Net sales EBITDA* (6.9) (41.6) 1.2 (29.9) EBITDA* margin (25.0)% (161.8)% 3.2% (20.9)% Operating profit (loss) (20.0) (57.0) (11.4) (83.6) Operating profit (loss) margin (72.4)% (221.9)% (29.3)% (58.5)% Capital expenditure Net interest-bearing debt Cash and cash equivalents * Operating profit before depreciation, amortization, depletion and impairment charges. 6

7 TALVIVAARA 2013 RESULTS 1. Highlights 2. Operational review 3. Safety, sustainability and permitting 4. Financial review 5. Outlook 7

8 METALS RECOVERY CONTINUED STABLE PLANT PERFORMANCE Significant progress continued to be made in improving and maintaining plant stability and availability Average hourly leach solution flow rate through the plant of approximately 1,300 m3/h in Zinc production impacted by technical issues resulting in zinc being lost in thickener overflows Nickel production (t) Monthly average flow rate to the plant (m 3 /h) 1,600 avg. avg. 1, avg Zinc production (t) 3,374 3,194 4,030 2,317 2,732 7,890 6,686 7,184 4,106 3,128 01/11 03/11 05/11 07/11 09/11 11/11 01/12 03/12 05/12 07/12 09/12 11/12 01/13 03/13 Q2 Q3 Q Q2 Q3 Q

9 BIOHEAPLEACHING LEACHING PERFORMANCE IMPACTED BY EXCESS WATER Nickel grade in solution feed to plant (g/l) Excess water and reduced evaporation diluted metal grades 01/11 03/11 05/11 07/11 09/11 11/11 01/12 03/12 05/12 07/12 09/12 11/12 01/13 03/13 High water content in heaps also negatively affected leaching performance by reducing the efficiency of aeration Significant emphasis on improving the leaching process - Maintenance and modification of irrigation and aeration systems - Extensive development work to increase overall understanding of the process - Increased attention on the properties of ore under leaching 9

10 BIOHEAPLEACHING GRADES HAVE STARTED TO SHOW MATERIAL IMPROVEMENT Nickel grade in solution by heap section (g/l) Ca. 1 month /01 15/01 29/01 12/02 26/02 12/03 26/03 09/04 23/04 Heap 1 Heap 2 Heap 3 Heap 4 Sec. heap 1 Sec. heap 2 10

11 ORE PRODUCTION RE-START BROUGHT FORWARD TO MAY Ore production operations remained suspended during 2013 due to excess water being stored in the Kuusilampi open pit - De-watering of the pit commenced Reclaiming continued and a new jaw crusher was commissioned to ensure sufficient reclaiming capacity Termination of temporary layoffs and re-start of ore production ~1.5 months ahead of earlier plans in May - Improves overall water balance as newly crushed ore absorbs a substantial amount of water - Supports ramp-up and achievement of production targets 11

12 TALVIVAARA 2013 RESULTS 1. Highlights 2. Operational review 3. Safety, sustainability and permitting 4. Financial review 5. Outlook 12

13 SAFETY, SUSTAINABILITY AND PERMITTING Safety A safe and healthy working environment is a first priority LTIs at 15.7 / million working hours at the end of 2013 Sustainability Current primary focus on water balance management and discharge of purified excess waters Water quality consistent and metal contents within permitted limits; some sulphate content remains Historical issues with odour and dust resolved Permitting Renewed environmental permit anticipated to be received in Q Decision on environmental permit for uranium extraction before or concurrently with renewed general permit 13

14 OPERATION OTTER TOWARDS AN EFFICIENT AND SUSTAINABLE WATER BALANCE Discharge of purified excess waters Target to reach a sustainable water balance and lower risk levels Approx. 3.8 million m3 need to be purified and discharged Old catchment area New catchment area Currently allowed discharge volume at 1.8 million m million m3 Decision on additional water discharge quota expected in the spring Sustainable long-term water balance Technical prerequisites for closed water circuit in place Ceased or materially reduced raw water intake Successful implementation of additional separation and treatment of waters 14

15 TALVIVAARA 2013 RESULTS 1. Highlights 2. Operational review 3. Safety, sustainability and permitting 4. Financial review 5. Outlook 15

16 FINANCIAL RESULTS Results reflect production levels and a depressed nickel price environment 2013 key financials 39.0 Net sales (EURm) Sales: EUR 27.6m - EBITDA: EUR (6.9)m - Operating loss: EUR (20.0)m Q2 Q3 Q4 Operating profit (EURm) Capex: EUR 17.3m Provisions decreased from EUR 27.5m at the end of to EUR 21.8m at the end of Change in work in progress impacted by suspension of ore production Q2 Q Q

17 LIQUIDITY POSITION AND BALANCE SHEET Significant improvement to balance sheet structure and liquidity position as a result of completed financing transactions Cash at EUR 68.7m at the end of - Reflects EUR 54.8m of gross proceeds from rights issue received by 31 March EUR 100m bank facility amended - Maturity in October EUR 70m currently drawn Debt maturity profile (EURm) Other Finance lease liabilities Corporate revolver Senior unsecured bond Convertible bonds* WC (Finnvera) loans * 2015 convertible bond maturity reflects accreted principal Net interest-bearing debt (EURm) Maturity of remaining EUR 76.9m convertible bond in May No material maturity until December 2015 (excluding bank facility) Q2 Q3 Q

18 TALVIVAARA 2013 RESULTS 1. Highlights 2. Operational review 3. Safety, sustainability and permitting 4. Financial review 5. Outlook 18

19 OPERATIONAL OUTLOOK Production guidance for 2013 re-iterated: - ~18,000t of nickel - ~39,000t of zinc Metals production will continue to be impacted by water balance issues in the first half of the year Nickel and zinc production (t) Nickel Zinc 25,462 31,815 25,867 ~ Return to a clear ramp-up during H Re-start of ore production in May, approx. 1.5 months earlier than previously anticipated 10,382 16,087 12,916 ~ E 19

20 NICKEL MARKET SHORT-TERM WEAKNESS CONTINUES Continued depressed price environment - LME nickel price recovered to USD 18,000-19,000/t in January and early February - Price has declined below USD 16,000/t in April - LME nickel inventories reached a record high of around 170,000t in April Short-term outlook: - Visibility is low and volatility is likely to remain elevated - Current high inventory levels and global economic uncertainty limiting price upside in the near term Longer-term outlook: - Fundamentals supporting favourable nickel price development - Price support level at around USD 20,000/t LME nickel price USD/t and EUR/t 30,000 25,000 20,000 15,000 10,000 01/11 05/11 09/11 01/12 05/12 09/12 01/13 LME nickel price (USD/t) LME nickel price (EUR/t) LME nickel price (USD/t) and nickel stocks (kt) 30,000 25,000 20,000 15,000 10,000 5, LME nickel stocks (t) LME nickel price (USD/t) 20

21 THANK YOU! Q & A 21