Stock Exchange Release
Talvivaara Mining Company Plc
7 December 2015
Nyrstar has assigned its receivables from Talvivaara to Terrafame Group
Talvivaara Mining Company Plc ("Talvivaara" or "Company") has been informed by Nyrstar Sales & Marketing AG ("Nyrstar") that Nyrstar has assigned all its rights, title, benefit and interest under the Zinc in Concentrate Purchase Agreement ("Streaming Agreement") and the Loan and Streaming Holiday Agreement ("Streaming Holiday Agreement") to Winttal Oy, a company fully owned by Terrafame Group Ltd ("Terrafame Group"), under an assignment deed dated 30 November 2015. Terrafame Group is a special-purpose company wholly owned by the State of Finland. It manages the state ownership and exercises the owner's power at Terrafame Ltd. Terrafame Ltd acquired the business operations and assets of Talvivaara Sotkamo Ltd ("Talvivaara Sotkamo") from its bankruptcy estate in August 2015 and is operating the Sotkamo mine.
The liability of the Company under the Streaming Agreement is based on the guarantee issued by the Company for the due payment by its former subsidiary Talvivaara Sotkamo of the termination sum amounting to EUR 203.4 million and payable upon premature termination of the Streaming Agreement. However, due to inter-creditor arrangements, the view of Talvivaara and the administrator of the corporate reorganisation proceedings of Talvivaara is that the Company cannot make any payments in relation to the termination sum if full payment has not been made to the Company's lenders having receivables with a higher ranked priority.
Furthermore, upon the bankruptcy of Talvivaara Sotkamo, Nyrstar has been entitled to declare that all or part of the loans drawn by Talvivaara Sotkamo from Nyrstar under the Streaming Holiday Agreement (in total ca. EUR 12.8 million) shall be payable on demand by Talvivaara in its capacity as the guarantor. If the new holder of the receivable under the Streaming Holiday Agreement was to demand immediate repayment of such loans guaranteed by the Company, the Company would not currently have sufficient cash reserves or access to additional liquidity to make the required payment.
Currently Talvivaara finances its operations by providing administrative and technical services and by leasing machinery and equipment to Terrafame Ltd. Talvivaara continues its negotiations with Terrafame Group and prospective investors with a target of being able to invest in the Sotkamo mining operations or to secure a different financial and/or operative arrangement that will enable the continuance of the Company's viable business. The Company will update the market about the outcome of such discussions in due course.
The change of creditor of the above-referenced receivables does not have an immediate impact on the Company or its corporate reorganisation proceedings.
Enquiries
Talvivaara Mining Company Plc Tel +358 20 7129 800
Pekka Perä, CEO
Pekka Erkinheimo, Deputy CEO
HUG#1971706
