Talvivaara Mining Company Plc - Production Update October 2012

Stock Exchange Release
Talvivaara Mining Company Plc
15 October 2012


                          Talvivaara Production Update

                    Improved production in the third quarter
  Challenging water balance impacting ability to deliver full year production
                                     target


Highlights

  * Nickel production of 4,030t in Q3 2012 and 10,598t year to date
  * Zinc production of 7,184t in Q3 2012 and 21,760t year to date
  * Continued progress in equipment availabilities and run rates
  * Heavy rains impacted solution grades; some effect likely to persist through
    year-end
  * Q4 2012 nickel production anticipated to improve over Q3, but challenging
    water balance has impacted ability to deliver the full year 2012 production
    target of approximately 17,000t of nickel


Production update

Metals recovery

Talvivaara  produced 4,030t of nickel and 7,184t of zinc in the third quarter of
2012, which  represents a clear improvement  over 3,194t of nickel and 6,686t of
zinc  in the  previous quarter.  Metals production  in the  first nine months of
2012 amounted to 10,598t of nickel and 21,760t of zinc.

The  Company continued to achieve stable  operation of the metals recovery plant
for  most of the third quarter. Deviations  from stable operation were caused by
two  brief  power  outage  -related  stoppages  in  late July and an unscheduled
downtime  of 8 days  in late  September due  to problems in re-starting hydrogen
sulphide production following a planned 4-hour stoppage for piping installations
to enable de-watering of the open-pit mine.

Leach  solution flow rate through the  plant improved throughout the quarter and
reached  an  average  of  1,447 m(3)/h  in  September  excluding the unscheduled
stoppage.  Flow rates exceeding  1,500 m(3)/h have again  been reached following
the stoppage and the Company expects a gradual increase in the flow rate towards
previously tested 1,800 m(3)/h during the fourth quarter, enabling a sustainable
step-up of the metals production rate.

Bioheapleaching and water management

Continued historically heavy rainfall throughout the third quarter has prolonged
water  balance issues at the Sotkamo mine. In the first nine months of the year,
the  total rainfall in  the area amounted  to 710mm, which exceeds the long-term
average  of 489mm by 45%. During most of the  spring and summer, rainfall in the
area  exceeded the long-term  average by 50-100%. As  a result, some 1.7Mm(3) of
excess water has accumulated at the mine site and been temporarily stored in the
open  pit. De-watering of the pit  started in September following the completion
of  an expansion of the gypsum pond  and piping installations noted above and is
anticipated to take 2-3 months.

The  planned commissioning of two reverse  osmosis plants for water purification
during  the fourth quarter is  further expected to improve  the water balance by
enabling  Talvivaara to  increase recycling  of purified  process waters  and to
reduce  raw water intake.  A third reverse  osmosis unit will  be installed next
spring.

The  excess water in circulation  has continued to dilute  metal grades in leach
solution. During the quarter, the average nickel grade in solution pumped to the
metals  recovery plant was  1.5-1.6 g/l compared to  slightly below 2 g/l at the
start of the year.

The  unusually high  water content  in the  heaps has  also been found to impact
leaching  by reducing the  efficiency of aeration.  Measures to improve aeration
are being taken and include accelerated reclaiming of the existing primary heaps
as  well  as  improving  the  overall  water  balance,  which  over time enables
reduction  of  the  amount  of  water  in  circulation. Development work is also
ongoing  to  improve  the  design  of  future primary heaps for optimal aeration
efficiency.

As  a result  of the  ongoing efforts  to reduce  the impact  of excess water on
leaching  performance,  Talvivaara  expects  to  see moderate improvement in the
leach solution grades during the remainder of 2012. However, a complete reversal
of the impact is unlikely to be achieved before the year-end.

Ore production

Because water in the open pit prevented mining in accordance with original plans
in  the third  quarter, the  mining department  sourced ore  from a more distant
location at the Southern end of the Kuusilampi pit. Despite this, a record level
of  1.5Mt of  ore  was  mined  and  subsequently  crushed  in July and equipment
availabilities  in  materials  handling  approached  the  required  steady state
levels.

As  announced in  connection with  the Company's  second quarter  results on 16
August   2012, Talvivaara   has  decided  to  discontinue  mining  and  crushing
operations for a period of 3-4 months from the beginning of September due to the
prevailing water balance situation. Discontinuing mining and crushing operations
is carried out without lay-offs or redundancies. The temporary production scheme
alteration  is proceeding  as planned  and, as  a result,  Talvivaara expects to
realize operating cost savings of approximately EUR 20 million during the fourth
quarter  of 2012 and first quarter of 2013. The altered production scheme is not
anticipated  to  negatively  impact  metals  production  during the remainder of
2012. Because  of the large nickel inventory already under leaching in the heaps
and  the long leaching times that in total extend over several years, the impact
on 2013 production is also anticipated to be minor.

Permitting

The  authorities responsible  for Talvivaara's  environmental permit renewal and
the  environmental permit  for uranium  recovery have  informed the Company of a
delay  in processing the applications. Decisions  on the permits were previously
expected  by  year-end  2012, but  will  now  be postponed until late January or
February  2013. Talvivaara  continues  to  operate  under the Company's existing
environmental  permit  until  the  renewal  process  is  completed  and does not
anticipate  the delay  having any  material impact  on its  production output or
financial results.

Production guidance

Talvivaara anticipates its Q4 2012 production to improve over the level attained
in  Q3 2012. However, due to the challenging water balance situation the Company
considers it unlikely that its full year 2012 production target of approximately
17,000t of nickel will be achieved.

Reporting and upcoming events

Talvivaara  will announce  its January-September  interim results  on 8 November
2012.

Talvivaara's  Capital Markets Day  will be held  in London on 20 November 2012.
Further  details  of  the  event  and  its  video  cast will be available on the
Company's web site approximately one week prior to the event.


Enquiries:

Talvivaara Mining Company Plc Tel: +358 20 7129 800
Harri Natunen, Chief Executive Officer
Saila  Miettinen-Lähde, Deputy CEO and CFO  (available from 9:30 GMT / 11:30 EET
onwards)


Talvivaara Mining Company Plc
Talvivaara Mining Company is an internationally significant base metals producer
with  its  primary  focus  on  nickel  and  zinc  using  a  technology  known as
bioheapleaching  to extract metals out  of ore. Bioheapleaching makes extraction
of  metals  from  low  grade  ore  economically  viable. The Talvivaara deposits
comprise  one of the largest known sulphide  nickel resources in Europe. The ore
body  is  estimated  to  support  anticipated  production  for  several decades.
Talvivaara has secured a 10-year off-take agreement for 100 per cent of its main
output  of nickel and cobalt to Norilsk Nickel and entered into a long-term zinc
streaming  agreement with Nyrstar  NV. Talvivaara is  listed on the London Stock
Exchange  Main Market and NASDAQ  OMX Helsinki and is  included in the FTSE 250
index. Further information can be found at www.talvivaara.com.



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