Talvivaara Mining Co. (TALV), the Finnish nickel miner selling shares to repay debt, said it will meet a 2013 output goal in the second half after resolving operational issues at its main mine.
The company’s production goal of 18,000 metric tons of nickel will be achieved when excess water at its Sotkamo mine is cleared up, Chief Executive Officer Pekka Perae said yesterday in an interview in Helsinki.
“I’m almost happy if we reach 1,000 tons a month in the early part of the year,” Perae said. “Water balance is the key issue and we’ll get it solved by summer, through one plan or another.”
Excess water at its open-pit mine site, an 11-day leak of waste water that caused operations to be temporarily shut in November and low nickel prices have hurt the Espoo, Finland- based mine owner, which has a 76.9 million-euro ($99.4 million) convertible bond maturing May 20.
The stock declined for the third day, losing as much as 7.9 percent in Helsinki. It retreated 6.7 percent to 30.5 euro cents at 11:01 a.m. Volume was about a fifth of its three-month daily average.
Talvivaara cut its production forecast three times last year to about 13,000 tons on Nov. 28 from an initial estimate of as much as 30,000 tons. Output was 12,916 tons in the full year, compared with 16,087 tons in 2011. Talvivaara plans to restart ore production in July.
Ramping up output to 50,000 tons a year is “technically feasible,” SRK Consulting said in a technical review report published Feb. 21. Talvivaara yesterday began trading subscription rights in a 261 million-euro rights offer that will enable the Finnish nickel producer to stave off default and bankruptcy.
“Next year’s cash flow won’t yet solve the whole maturity profile,” Chief Financial Officer Saila Miettinen-Laehde said in an interview. “We believe it will show the direction and prove we’ll be able to make this into a business yet.”
Talvivaara is targeting regaining the trust of international investors before a 225 million-euro bond matures in December 2015, according to Miettinen-Laehde.
“It’s a clear goal for us, but it won’t happen overnight,” she said. “If we aren’t able to handle the maturity with our own cash flow, we’ll at least be able to refinance.”
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