03.04.2014

Nyrstar agrees on EUR 20 million loan to Talvivaara mine in Finland

Agreement secures Talvivaara’s short-term future as it looks for more investors amid company reorganisation.

Belgian mining company Nyrstar has entered into a loan and streaming holiday agreement with the Finnish company Talvivaara Mining Company Plc and its operating subsidiary Talvivaara Sotkamo Limited (collectively referred to as 'Talvivaara'). Nyrstar will make available to Talvivaara a loan facility up to a maximum amount of EUR 20 million, which addresses Talvivaara's current financing needs and reduces the overall funding gap of the company prior to reaching sustainable positive cash flow.

The Talvivaara polymetallic deposits comprise one of the largest known sulphide nickel resources in Europe with 1,121 million tonnes of ore in measured and indicated categories. The mining operation has been troubled by production problems, however, and in November 2013 the companies applied for corporate reorganisation.

New investors sought

Talvivaara produced 8,662 tonnes of nickel and 17,251 tonnes of zinc in 2013. According to Nystar, the new agreement enables the continuation of Talvivaara's corporate reorganisation and the process whereby Talvivaara explores the options of identifying potential investors to participate in a long-term, overall financial solution for the group.

Subject to Talvivaara securing a mutually beneficial financial solution, Nyrstar has agreed to provide Talvivaara with an option to enter into a streaming holiday based on volumes of zinc in concentrate up to the amount of 80,000 tonnes.

Sources: Nyrstar, Talvivaara Mining Company