Quarterly Interim Results for the period ending 30 September 2009

Talvivaara Mining Company Plc

Stock Exchange Release 11 November 2009

Talvivaara Mining Company Plc ("Talvivaara" or the "Company") today announces its unaudited Interim Results for the three and nine month periods ended 30 September 2009.

Pekka Perä, CEO of Talvivaara commented: "We are pleased that our decision to proceed with the installation of an upgraded fine crushing circuit has enabled us to overcome the most challenging hurdles in the way of achieving full production. The end of the quarter saw all processes at the mine operating as planned. After a modification of the primary crusher at the end of October to allow crushing rates at the level of 60,000 tonnes per day, we remain confident that the ramp up towards production levels of approximately 30,000 tonnes of nickel per annum in 2010 remains on track."

Talvivaara Mining Company Plc Tel. +358 20 712 9800
Pekka Perä, CEO
Saila Miettinen-Lähde, CFO

Merlin Tel. +44 207 726 8400
Tom Randell
Anca Spiridon

A conference call to discuss the Third Quarter 2009 Results will be held at 12:00 UK time / 14:00 Finnish time on 11 November 2009. Details to access the conference call are as follows:

UK Free Call: 0800 694 0257

UK Standard International: +44 (0) 1452 555 566

USA Free Call: 1866 966 9439

Finland Free Call: 0800 112 363

The conference ID is 40892036

A replay facility will be available on the following numbers until 17 November 2009:

Replay Access Number: 40892036#

International Dial in: +44 (0) 1452 55 0000

UK Free Call Dial In: 0800 953 1533

UK Local Dial In: 0845 245 5205

USA Free Call Dial In: 1866 247 4222

Our operations during the third quarter progressed as expected, with focus for much of the period on the installation and commissioning of the upgraded crushing circuit. The installation took place, as anticipated, during the latter half of August, followed by start-up of the redesigned circuit in the beginning of September. The budgeted levels of crushing at around 40,000 tonnes per day were first achieved in October, and with all assembly work now complete we are looking forward to progressing towards the planned full capacity of 60,000 tonnes per day during the remainder of the year.

We have made considerable progress in improving the materials handling processes to a level that now allows the overall process to achieve the planned volumes of production. I am pleased to report that in early September we concluded that the amount of leach solution was sufficient for continuous operation of the metals recovery plant. The plant was subsequently re-started on 14 September, and the quality of the metal sulphide output since then has again been better than before and is getting close to the final targeted specifications. Production volumes during the fourth quarter are anticipated to be commercially significant, although some modifications at the plant will still be necessary to allow a further increase in volumes in 2010.

The capacity expansion project is proceeding on target, and all major orders for new equipment have been placed following the successful EUR 82.7 million equity placing in July. These include the second hydrogen plant and additional mining fleet to serve the increasing mining capacity.

Health and safety continues to be one of our key focus areas and I am proud to report that our safety record remains good with just one Lost Time Injury to our own personnel since we launched our Work Group Safety Challenge in February. We also remain committed to responsible conduct in environmental matters and strive to maintain a good record in terms of our operational impact on the surrounding areas.

The commodities markets have remained surprisingly strong throughout the third quarter and into the fourth despite the continued lack of industrial demand particularly in the developed nations. We continue to expect that commodities prices will retract somewhat from their present levels in the short term. However, this may at least in part be countered by the weakness of the US dollar. Our long term view remains very positive with the developing economies and potential supply-demand disparities as the key drivers.

All in all, our outlook remains positive for the remainder of the year, with the most challenging production problems now behind us. While sustained ramp-up of crushing according to plan continues to be critical, we remain confident that our 2010 production target of approximately 30,000 tonnes of nickel is achievable.

Pekka Perä

CEO

Talvivaara's sales during the three and nine month periods ended 30 September 2009 amounted to EUR 0.8 million (Q3 2008: 0) and EUR 2.6 million (Q1-Q3 2008: 0), respectively. The sales volumes remained below budgeted levels due to limited crushing capacity resulting from technical design issues in the crushing circuit. The crushing circuit was redesigned in the spring, and the upgraded system was installed and commissioned during Q3 2009.

The Company's other operating income, amounting to EUR 11.6 million in Q3 2009 (Q3 2008: EUR 3.4 million) and EUR 37.2 million for Q1-Q3 2009 (Q1-Q3 2008: EUR 12.6 million), consisted of realised (EUR 21.1 million) and unrealised (EUR 15.6 million) gains on nickel, zinc and USD forwards. Other operating expenses, which in Q3 2009 amounted to EUR (17.0) million (Q3 2008: EUR (4.3) million) and in Q1-Q3 2009 to EUR (32.6) million (Q1-Q3 2008: EUR (12.3) million), included unrealised fair value losses on biological assets (trees) and nickel and zinc forwards held for trading.

Employee benefit expenses, including the value of employee expenses related to the employee share option scheme of 2007, were EUR (3.6) million in Q3 2009 (Q3 2008: EUR (3.2) million) and EUR (11.6) million for the nine months from January to September (Q1-Q3 2008: EUR (7.3) million). The increase was attributable to increased number of personnel.

Operating loss for Q3 2009 amounted to EUR (15.3) million (Q3 2008: EUR (5.0) million) and was EUR (23.2) million for the nine months from January to September (Q1-Q3 2008: EUR (9.6) million).

Finance income in Q3 2009 of EUR 8.0 million (Q3 2008: EUR 0.5 million) and in Q1-Q3 2009 of EUR 15.0 million (Q1-Q3 2008: EUR 2.8 million) included exchange rate gains on the USD 320 million project loan facility and on bank accounts. Finance costs of EUR (8.0) million in Q3 2009 (Q3 2008: EUR (4.6) million) and EUR (21.8) million in Q1-Q3 2009 (Q1-Q3 2008: EUR (6.7) million) related mostly to the Company's borrowings, in particular to the project loan facility and the EUR 85 million convertible loan, as well as exchange rate losses.

Loss for the period in Q3 2009 amounted to EUR (10.7) million (Q3 2008: EUR (9.4) million) and totalled EUR (21.9) million for the nine months from January to September (Q1-Q3 2008: EUR (15.3) million).

The Company's total comprehensive income in Q3 2009 was EUR (27.2) million (Q3 2008: EUR 23.0 million) and in Q1-Q3 2009 EUR (85.8) million (Q1-Q3 2008: EUR 26.8 million), reflecting primarily a decrease in hedge reserves brought about by the increase in nickel price during 2009.

On the consolidated statement of financial position as at 30 September 2009, property, plant and equipment totalled EUR 615.2 million (31 December 2008: EUR 552.5 million), with the increase since the 2008 year end attributable to expenditure on and capitalisation of mine related assets according to plan. Other notable changes in the Company's assets include the substantial decrease in the fair value of derivative financial instruments, in particular nickel and zinc forward swaps. The change was caused by increase in nickel and zinc prices during the reporting period as well as the maturity of some of the forward contracts. As at 30 September 2009, the derivative financial instruments were valued at EUR 65.0 million (31 December 2008: EUR 152.5 million).

Deferred tax assets were EUR 7.4 million (31 December 2008: liabilities of EUR 23.1 million). The change was caused by the decrease in fair value of derivative financial instruments during the reporting period and the tax losses of 2009.

Inventories amounted to EUR 82.1 million (31 December 2008: EUR 31.7 million), with the increase relating mostly to ore on leach pads and work in progress, both valued at cost. Cash and cash equivalents totalled EUR 68.6 million (31 December 2008: EUR 82.7 million). Talvivaara's cash position was improved from Q2 2009 as a result of an equity placing with gross proceeds of EUR 82.7 million.

In equity and liabilities, the invested unrestricted equity increased from EUR 320.6 million on 31 December 2008 to EUR 401.3 million on 30 September 2009 due to the equity placing in July. The hedge reserve related to nickel cash flow hedges decreased from EUR 72.3 million on 31 December 2008 to EUR 21.3 million on 30 September 2009 due to the increase in the market price of nickel. Borrowings increased from EUR 368.2 million to EUR 422.8 million, reflecting drawdown of the EUR 45 million investment and working capital loan from Finnvera Plc.

Total equity and liabilities as at 30 September 2009 amounted to EUR 879.9 million (31 December 2008: EUR 874.0 million).

As at 30 September 2009, the Company had 13,547 tonnes of nickel and 33,579 tonnes of zinc forward swaps remaining of its commodity hedge programme executed in 2007 and 2008 and extending through 2011. The volume weighted average prices of the outstanding positions are USD 23,452 per tonne for nickel and USD 1,949 per tonne for zinc. Talvivaara applies hedge accounting to nickel hedges maturing in Q1 2010 - Q4 2011.

The Company has entered into a currency hedging programme comprising USD forwards for seven quarters from Q2 2009 through Q4 2010. The hedged amount is EUR 175 million in total, with EUR 25 million maturing each quarter. The forwards were executed in April 2009 at EUR/USD rates ranging from 1.26 to 1.28. The realized gain from these hedges was EUR 4.4 million during the reporting period.

In addition, the company has outstanding currency option contracts amounting to USD 64 million. The EUR/USD rate of the option contracts is 1.60. The options will mature during Q4 2009.

In July, the Company successfully closed an equity placing of 22,280,000 shares, representing approximately 10 per cent of the number of the existing shares, to institutional investors. The placing was conducted through an accelerated book-building process and priced at EUR 3.70 (GBP 3.20) per share, raising gross proceeds of EUR 82.7 million (GBP 71.3 million). The share issue was approved by the shareholders of the Company in the Extraordinary General Meeting on 6 July 2009.

In August, Talvivaara entered into an agreement with a Finnish financial institution for the factoring of sales receivables from the Company's nickel and cobalt products.

During Q2, Talvivaara drew down EUR 45 million of a EUR 50 million investment and working capital loan granted by Finnvera Plc. The remaining EUR 5 million of the total commitment is used for capitalisation of interest. The loan carries an interest of EURIBOR 6 months + 3.00% and is due to be repaid over a five-year period of 2013 to 2018.

In June, the Company received a EUR 5 million reimbursement from the Finnish Government for infrastructure investments relating to power supply and electrification. The subsidy was part of the overall decision by the Finnish Parliament in 2007 to grant EUR 52 million to support the construction of necessary infrastructure for the Talvivaara mine.

The key task in production during the third quarter was the installation and commissioning of the upgraded crushing circuit to enable a significant increase in production volumes going forward. While corrective measures to alleviate the crushing problems were being taken, all other processes continued to perform well.

The mining department blasted 2.0 million tonnes of ore and excavated 1.0 million tonnes of waste during the third quarter, while the corresponding figures for the first nine months were 7.3 million tonnes and 2.9 million tonnes. The period was uneventful for the mining department and optimisation of the operating procedures continued. Running of the operations at full capacity remained untested due to the bottleneck in crushing. Ore hauling capacity also continued to limit the throughput for the time being, but Talvivaara is confident the upgraded target for the mining volumes can be achieved following the commissioning of additional mobile gear towards the end of 2009 and early 2010.

The third quarter performance in materials handling reflected firstly the limited capacity of the old crushing circuit in July and early August and secondly the production stoppage for the installation of the upgraded system from 12 August until the end of the month. The redesigned circuit started operation, as planned, in the beginning of September, after which production volumes have been gradually increased. The volume of ore crushed and stacked in Q3 2009 amounted to 1.4 million tonnes, while the corresponding figure for the first nine months of the year was 5.5 million tonnes.

The Company's primary crusher also continued to experience technical problems and performed at less than budgeted capacity during the third quarter. Further modifications to improve the crusher's performance were agreed with the supplier, but delivery and installation of new components could only be arranged for October. Problems in primary crushing are not a rate-limiting factor for overall production, as contractor capacity is readily available and was used to complement Talvivaara's own capacity throughout the reporting period.

In bioheapleaching, heat generation throughout the summer months was high. In such circumstances, some of the nickel precipitated back into the heap. However, the re-precipitated nickel in the heap is in readily soluble form and can be returned to circulation by flushing the heap with water. It has also been seen that despite continuous bleeding of more than 15% of the circulating solution to metals recovery and/or storage ponds since mid September, nickel grades in the solution have continued to increase. As the long term planned bleeding rate, as based on earlier experience from the pilot heap, is only 10%, this indicates promising development in the leaching process. Some further increase in leach solution metal grades is still expected and will be important in order to reach the targeted full scale production levels in mid 2011 and beyond, but until then the existing reactor capacity is sufficient to treat even lower grade solutions.

The metals recovery process was re-started in mid September, once the volume of leach solution was estimated to be sufficient to support continuous production. Due to the short operating time in the third quarter, the production volumes remained limited, at 101 tonnes of contained nickel and 114 tonnes of contained zinc in sulphide concentrate. The quality of the products was again good and approached target specifications set for steady state operation.

Similarly to the first half of 2009, the operating cost of materials handling relative to metals recovery continued to be disproportionately high during the third quarter. Hence, the unit cost of production during the period was not representative of the estimated production costs in steady state operation.

Talvivaara continued active studies relating to manganese recovery from the leach solution. Other ongoing research and development projects related to optimisation of the bioheapleaching technology, and chemical and biological iron removal from leach solution.

The Company continued its environmental management and monitoring programme in accordance with the requirements set out in its Environmental Permit. Some temporarily decreased pH levels and increases in suspended solids and metal contents in downstream waters have been detected and such deviations have been reported to the environmental authorities. Any deviations have been followed by increased level of monitoring until all parameters have returned to permitted levels.

Dust emissions from the mining area have also occasionally exceeded permitted levels. Since the discontinuation of contractor fine crushing at the end of March the dust emissions have substantially decreased, but the Company continues to focus on decreasing the dust levels.

Talvivaara is preparing its environmental processes to meet the ISO 14001 environmental standard. Audit of the environmental system is targeted for Q4 2010.

No environmental compensation was paid during the reporting period. The environmental security placed for future rehabilitation of the area amounted to EUR 13.8 million on 30 September 2009. Of the total, EUR 9 million was covered by bank guarantees and guarantee insurance, and EUR 4.8 million was deposited in escrow accounts.

Occupational safety is one of Talvivaara's key focus areas. The safety record remained good during the reporting period with three relatively minor Lost Time Injuries (LTI's) reported among the Company's personnel in January and one in September. The overall safety rating at the end of the period was 11 LTI's per million man hours.

Talvivaara Infrastructure Oy, a wholly-owned subsidiary of the Company constructing the new railhead connecting the mine site with the national railway grid, received the operating permits from the Finnish Rail Agency on 15 September 2009. Regular train traffic started on 16 September with limestone deliveries from the Kokkola port located in the west coast of Finland.

Talvivaara employed an average of 266 employees during the first nine months of 2009 (Q1-Q3 2008: 158). At the end of September 2009 the number of employees was 283, while the corresponding number was 239 at the end of 2008 and 229 at the end of September 2008. Wages and salaries paid during the period totalled EUR 9.9 million (Q1-Q3 2008: EUR 6.2 million).

The issued share capital of the Company on 30 September 2009 was 245,176,718 and (assuming share issues in relation to the convertible bond of May 2008 and option scheme of 2007) the fully diluted issued share capital of the Company was 263,669,291.

As at 30 September 2009, the shareholders who held more than 5% of the shares and votes of the Company were Pekka Perä (23.3%), Varma Mutual Pension Insurance Company (8.6%) and Capital Research and Management (5.0%).

Talvivaara carries out an ongoing process endorsed by the Board of Directors to identify risks, measure their impact against certain assumptions and implement the necessary proactive steps to manage these risks. The Company's operations are affected by various risks common to the mining industry, such as risks relating to the development of Talvivaara's mineral deposits, and volatility of commodities prices and currency exchange ratios.

In the short term, Talvivaara's operational risks relate to the ongoing ramp-up of operations. Because of uncertainties relating to the materials handling processes, Talvivaara has previously withdrawn its production targets for the current year and continues to take measures to secure 2010 production at the targeted level of approximately 30,000 tonnes of nickel.

The market price of nickel has remained relatively stable at USD 17,000-19,000 per tonne since early August. In light of the relatively modest industrial demand of nickel in the Western economies for the time being, there may in the Company's view still be downward pressure on the prices in the short term. Talvivaara has executed significant hedges against low nickel and zinc prices in the short to medium term. In the long term, Talvivaara believes its operations to also be profitable at substantially lower nickel prices than the present market prices.

Talvivaara's revenues are almost entirely in US dollars, whilst the majority of the Company's costs are incurred in Euro. Potential strengthening of the Euro against the US dollar could thus have a material adverse effect on the business and financial condition of the Company. Talvivaara's existing currency hedges have been executed to partly mitigate this through the end of 2010 and the Company anticipates hedging against currency exchange volatility also going forward.

The redesigned and upgraded crushing circuit has been in operation since the beginning of September, and its overall production rate on a weekly basis has reached an average of over 40,000 tonnes per day in October. Volumes in excess of 50,000 tonnes per day have been reached on individual days. The achieved volumes have recently exceeded the budgeted volumes so that the year-to-date actual vs. budgeted ratio of 47% following the production stoppage in August has increased to 53% by early November. While further optimisation and capacity testing of the process remains to be done, the production volumes achieved so far indicate the circuit to be capable of the targeted production rate of 60,000 tonnes per day, corresponding to 22 million tonnes per annum.

In late October, the Company's primary crusher was fitted with a new mantle reducing the crusher's nib angle from 23° to 19°. Current performance of the primary crusher is satisfactory with rates of approximately 60,000 tonnes per day being achieved. This has allowed discontinuation of contractor crushing. However, formal capacity tests are yet to be carried out.

Mechanical failure in certain parts of the metals plant reactors was detected in mid October and the plant was subsequently turned off while the reactors were relined and the plant equipment was inspected to rule out any other potential damage. The failure appears to have been caused by human error during commissioning and is not believed to be an inherent problem in the process or the reactor linings. Production at the plant has since resumed and it is not anticipated that the Company will incur any material loss from the incident, which was covered by insurance.

Following the commissioning of the expanded crushing circuit and restart of the metals precipitation processes in September, Talvivaara expects to continue its production ramp-up targeted at eventually achieving up to 50,000 tonnes in annual nickel production in 2012. Since the re-start, stepwise increases in metals precipitation volumes have already commenced in line with the increasing size of the heap and the trend is anticipated to continue during the remainder of the year and into 2010. While sustained ramp-up of crushing according to plan also continues to be a critical prerequisite for next year's production, the Company remains confident that its 2010 production target of approximately 30,000 tonnes of nickel is achievable.

The Company does not anticipate its production plans to be affected by commodity prices. Following the successful closing of its equity placing in July, Talvivaara believes it has sufficient liquidity to cover the cost of capacity expansion, expected to be incurred mostly in 2009 and 2010.

1) Trading price is calculated on the average of EUR/GBP exchange rates published by the European Central Bank during the period

2) Trading price is calculated on the EUR/GBP exchange rate published by the European Central Bank at the end of the period

3) Market capitalization is calculated on the EUR/GBP exchange rate published by the European Central Bank at the end of the period