Talvivaaara acquires additional stake in Talvivaara Sotkamo for €60 million

Talvivaara Mining announced today that it has signed an agreement with Outokumpu Mining Oy and its parent company Outokumpu Oyj to acquire agear system in grinding mill for analysisn additional 4% shareholding in Talvivaara Sotkamo Ltd, the primary operating subsidiary of Talvivaara.

As a result of this acquisition, Talvivaara's ownership in Talvivaara Sotkamo increases from 80% to 84% and Outokumpu Mining's ownership decreases to 16%. The acquisition price for the 4% stake is €60 million, and will be funded from Talvivaara's existing cash resources and available financing facilities. Simultaneously, Talvivaara has entered into an exclusive option agreement with Outokumpu Mining and Outokumpu Oyj whereby it will have the right, at its sole discretion, in one or more instalments, to acquire Outokumpu Mining's remaining 16% shareholding in Talvivaara Sotkamo for €240 million at any time prior to 31 March 2012.

Talvivaara has been informed that, in connection with this transaction, Solidium Oy has agreed to purchase Outokumpu Oyj's shareholding in Talvivaara representing 4.3% of all Talvivaara shares outstanding.

Pekka Perä, Talvivaara's CEO commented: "This transaction provides Talvivaara with improved access to the cash flows generated by Talvivaara Sotkamo through the increased ownership in the operating subsidiary. This is increasingly important as we continue our production ramp-up and consider further expansion in the future. Moreover, we are simplifying the corporate structure further. This is truly excellent news for Talvivaara shareholders. Outokumpu has been a valuable partner and a supportive shareholder in Talvivaara and Talvivaara Sotkamo since the inception of the company, and throughout its development into a producing mining operation."

"We are pleased that they have been able to participate in the considerable value creation that has resulted from the ongoing successful development of the operation. Based on the currently prevailing circumstances, we believe that the exercise of the option to acquire Outokumpu Mining's remaining 16% stake would be beneficial for Talvivaara as it would enable further integration of our corporate structure. As a result, we would expect to exercise the option, in one or more instalments, by 31 March 2012, subject to prevailing market conditions at the time and availability of financing at attractive terms. "