Talvivaara Mining Co. (TALV), the Finnish nickel miner that suffered stoppages from waste-water leaks, rose the most in two weeks in London on record production.
Talvivaara jumped 10 percent, the biggest gain since July 30, to 11 pence by 9:10 a.m. in the city. The company resumed ore production in May, seven weeks before schedule and its metals plant reached a record “flow rate” in June, it said.
“Management believe they are turning a corner, with the plant working at record flow rates and mining work recommencing in May,” Liberum Capital Ltd. said in a note to investors. “The second half should be better operationally but nickel prices are not expected to rebound anytime soon.”
Talvivaara, which produced 4,508 metric tons of nickel in the first half, withdrew its output estimate of 18,000 tons for this year after a slow restart of metal extraction. The miner, which had an 11-day leak of waste water in November and cut its output forecast three times last year to about 13,000 tons from as much as 30,000 tons, in April completed a 261 million-euro ($347 million) rights offer to stave off default and bankruptcy.
“Operational improvement has continued in July and August with record level mine and materials handling production, accelerated de-watering of old heaps and promising early leaching results from newly stacked ore,” it said today.
The company reported a net loss of 28.3 million euros in the first half after a 16 million-euro loss a year earlier. Net sales declined to 13 million euros from 33.4 million euros a year earlier on low nickel production and prices.
While the near-term market outlook “remains challenging,” prices are below marginal production costs for a large part of the nickel industry, which combined with economic improvements, may lead to higher prices, Talvivaara said in today’s statement.
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