Talvivaaran Kaivososakeyhtiö Oyj : Talvivaara is implementing several development projects as a result of the gypsum pond

    Talvivaaran Kaivososakeyhtiö Oyj : Talvivaara is implementing several
  development projects as a result of the gypsum pond leakage investigation
                               conducted by VTT

Stock Exchange Release
Talvivaara Mining Company Plc
29 April 2013

    Talvivaara is implementing several development projects as a result of
            the gypsum pond leakage investigation conducted by VTT

VTT Technical Research Centre  of Finland ("VTT")  carried out an  independent 
investigation, commissioned by  the Board  of Directors  of Talvivaara  Mining 
Company Plc ("Talvivaara" or the "Company"), on the reasons and  circumstances 
which led  to the  gypsum pond  leakage in  November 2012.  The  investigation 
resulted in several  recommendations for corrective  and development  actions. 
The Company  had  initiated  the  implementation  of  the  majority  of  these 
recommendations immediately following  the leakage in  November 2012, and  the 
Board has  requested  action plans  from  the Company's  operative  management 
regarding the remaining recommendations.

Objectives of the investigation

The objectives of VTT's investigation were to study the direct reasons of  the 
incident and to analyze  the root causes leading  into the realization of  the 
risks. Additionally, the investigation included  a general risk assessment  of 
other pond structures. VTT's  investigation team consisted  of experts on  dam 
and pond structures,  water management,  safety culture  and management,  risk 
management and environmental legislation. The Company's Board commissioned the
investigation in order  to be able  to ensure that  similar risks are  managed 
better in the future and safety at the Company develops to a level  consistent 
with the standards of sustainable production.

Results of the investigation



VTT's experts state  that the  original design of  gypsum pond  section 1  was 
vulnerable. The insulating  structure of the  pond section was  a 1.5 mm  HDPE 
membrane and, based on the  knowledge available and authority requirements  at 
the time, the water  conductivity or erosion stability  of the soil below  had 
not been  paid sufficient  attention  to during  the design  and  construction 
phases. The pond structure was designed on the presumption that the pond would
predominantly contain relatively solid gypsum waste and any water accumulating
in the pond in conjunction with effluent  pumping would be pumped out, due  to 
which the  risk of  a major  leakage  would not  exist. However,  contrary  to 
original plans, water had to be stored in the gypsum ponds as the accumulation
of water in the  area was more  than the Company's 1.3  Mm^3 annual quota  for 
discharging purified  waste waters  into  the environment.  The  investigation 
suggested that in the early years  of operation the water management  measures 
were not  sufficiently  holistic  and systematic  as  many  other  development 
projects  and  challenges   consumed  resources.  Even   though  the   Company 
implemented several steps to improve  the water balance, especially from  late 
2011 onwards, all ponds filled up during  the 2012 spring melt and water  from 
the gypsum pond was temporarily pumped into the open pit. A decision was  made 
to raise  the banks  of gypsum  pond 1  in order  to create  additional  water 
storage volume. The elevation was completed at the end of September, and  more 
than 1 Mm^3 of solution was pumped into the pond before the leakage in section
1 started on 4 November.

VTT's experts state that small seeps always occur in HDPE membrane structures.
Even small, seeping leakages can start eroding the soil beneath and result  in 
fracturing of the insulating membrane  if the structures beneath the  membrane 
have not been designed in view of leakages. The likely mechanism resulting  in 
the leakage in  November was such  a seeping leakage,  which escalated as  the 
hydraulic pressure increased  due to  filling up  of the  pond beyond  earlier 
water levels. Earlier leakages in the same pond section have also very  likely 
resulted in latent damages in the pond foundations as water flowed through the
soil beneath the  membrane in  the pond  dam and at  the bottom  of the  pond. 
Supervised repairs of  the pond had  been carried  out in 2008  and 2010.  The 
November 2012 leakage started at the  point where the 2010 repairs had  ended. 
Due to potential  similar latent  damages, VTT's experts  identified the  wall 
between gypsum pond  sections 1  and 2  as a high  risk area.  The April  2013 
leakage occurred in  section 2 in  the immediate vicinity  of this  separating 
barrier.

Following the  leakages in  the  earlier years,  the Company  had  proactively 
altered the structure of new gypsum pond sections (3-6) such that a  bentonite 
liner had been  placed beneath the  HDPE membrane. The  risk of an  escalating 
fracture caused by a seep leakage  is therefore highly unlikely in these  pond 
sections and a seep as such does not constitute an environmental hazard.

The investigation also found  that after the elevation  of the gypsum pond  in 
the autumn of 2012, so called raffinate had been pumped into the pond from the
metals recovery  plant.  Raffinate is  process  solution from  which  valuable 
metals have been precipitated and recovered,  but which has not been  purified 
at the post-neutralization phase at the metals plant. The water quality in the
gypsum pond deteriorated as  a result of this  pumping arrangement. The  water 
quality did not have any impact on the occurrence of the November leakage, but
to the extent the  leakage waters had to  be discharged into the  environment, 
raffinate may have had  a more acidifying impact  on the environment than  the 
waters otherwise stored in the gypsum pond.

In addition to recommendations pertaining to water management, pond usage  and 
leakage risk  management,  VTT  also gave  recommendations  on  the  long-term 
development of the  Company's safety culture.  Certain project-phase  legacies 
remain in the Company's operational culture, due to which it is important  for 
the Company's  Board and  operative  management to  work together  to  clarify 
management principles  in  order  to align  operational  procedures  with  the 
requirements of the ongoing production phase. VTT recommends sustained actions
to  further  improve   the  technical  requirements   of  production  and   to 
continuously  assess  and  improve  the  safety  culture.  In  addition,   VTT 
recommends that the  Company further  strengthens its  internal resources,  in 
particular as they pertain to safety and environmental matters.

Measures taken by the Company on the basis of VTT's recommendations

The Company's Board and operative management have familiarized themselves with
VTT's  report  and  recommendations.  The   Board  is  satisfied  with   VTT's 
investigation, which  diligently  studied  the reasons  of  the  incident  and 
provides valuable input for the  development of the Company's risk  management 
and organization.

Water management



Since the November 2012 leakage, a key area of development for the Company has
been the mitigation of risks related  to water management and the  achievement 
of a sustainable water  balance. In order to  achieve these goals,  Talvivaara 
has established a separate organization focusing on water management, which is
responsible for  the  overall water  balance  management and  the  design  and 
implementation  of  necessary  short-term   and  long-term  water   management 
measures.

Talvivaara commenced immediate actions following the November 2012 gypsum pond
leakage to reduce the water volume in all bioheapleaching safety ponds, gypsum
ponds and safety dams such that the safe treatment of spring melt waters could
be ensured and sufficient  safety capacity in view  of potential new  leakages 
could be created. As the gypsum pond  section 2 had been identified as a  high 
risk area, but it was not possible to empty the pond section into other  ponds 
in the mining area  due to the prevailing  water balance situation,  immediate 
measures were in particular aimed at ensuring sufficient volume in safety dams
for the water contained  in this pond section.  This approach was  successful, 
and all waters from the  7 April 2013 leakage in  section 2 were contained  in 
the safety dams located in the Southern  part of the mining area. The  leakage 
waters will  be  purified  and  discharged into  the  environment  within  the 
schedule allowed by discharge quotas and neutralization capacity.

Water purification capacity has during the  early part of 2013 been  increased 
materially above the 1.3 Mm^3  annual discharge quota allowed by  Talvivaara's 
environmental permit. Further purification  capacity will be constructed  such 
that by the end of 2013 the total treatment capacity exceeds 6 Mm^3 per annum.
This capacity is expected to be sufficient for water purification requirements
even during intense flooding and other exceptional circumstances.

At present Talvivaara is purifying and discharging into the environment excess
waters stored in  the mining  area within  the 1.8  Mm^3 additional  discharge 
quota granted in February 2013 by the Kainuu Centre for Economic  Development, 
Transport and the Environment. However,  the Company considers this  discharge 
quota insufficient for lowering risks  related to water balance management  to 
an acceptable level,  and therefore the  Company has applied  to the  Northern 
Finland Regional State Administrative  Agency ("AVI") for  an increase of  the 
additional discharge quota. In  its report, VTT also  states that attaining  a 
safe  operational  level  requires  a  material  increase  in  the  quota  for 
discharging waters.

In addition to the temporary discharge quotas, the Company has applied to  AVI 
for a permanent removal of the annual water discharge quota from the Company's
environmental permit in order to sustainably manage the overall water balance.
No changes  have been  applied  for the  discharge limits  of  environmentally 
harmful substances,  and  therefore  no  additional  environmental  burden  is 
expected.

Talvivaara is currently preparing a holistic long-term water management  plan, 
which is expected to be completed by the end of June 2013. Central elements of
the plan comprise a  nearly closed process water  circuit, and separation  and 
separate treatment of natural  run-off waters and  waters accumulating in  the 
open pit. The technical prerequisites for  a closed process water circuit  are 
already largely in place due to investments in reverse osmosis technology  and 
other process alterations. Significant  progress has also  been made in  water 
separation in early 2013, and  the water catchment area  at the mine has  been 
materially reduced as a result of new dam structures. These structures largely
prevent run-off waters from mixing with metal-containing waters.

Pond usage

The gypsum ponds are to  be returned to their  original planned usage as  soon 
possible, such that the excess water volume  in the ponds is low at all  times 
and water quality  is monitored  on an ongoing  basis. Bioheapleaching  safety 
ponds should also normally be empty. Both targets require the purification and
discharge of excess waters from the mine site in the near term and maintenance
of a sustainable water balance in the long term.



Safety culture



In the future Talvivaara will pay increasing attention on risk management  and 
active development  of the  Company's  safety culture  with  the help  of  its 
internal organization  and, as  required, external  consultants. In  order  to 
ensure this  development the  Company's  sustainability organization  will  be 
strengthened by 1-3 people  during the current year  and a person  responsible 
for safety will be nominated  for each production department. Required  safety 
training will  be arranged  for all  levels of  the organization  in order  to 
permanently  establish  best  industry  practices  as  part  of   Talvivaara's 
day-to-day operations.

The Company's Board further states that the purpose of this announcement is to
publish the central  observations and recommendations  of VTT's  investigation 
and the measures taken by the  Company on the basis of VTT's  recommendations. 
There are ongoing investigations  by the police  and the Safety  Investigation 
Authority relating to the gypsum pond leakage that include questions  relating 
to environmental permitting  mechanics and judicial  processes. The  Company's 
Board does not comment on such questions at this stage.

Enquiries
Talvivaara Mining Company Plc Tel +358 20 7129 800
Tapani Järvinen, Chairman of the Board of Directors
Kirsi Sormunen, Member of the Board of Directors

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.  Further 
information can be found at www.talvivaara.com.

Talvivaara implementing projects as a result of VTT investigation

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