Talvivaara’s estimate on mineral resources rises by more than 50 per cent
According to estimates, nickel deposits will be sufficient for 52 years
The nickel deposits in the Talvivaara mine located in Sotkamo, in Eastern Finland, are sufficient to support anticipated production for the next 52 years, according to the mining company’s production update released on Wednesday.
The Talvivaara Mining Company announced that they have increased their estimate of the total mineral resources by 54 per cent to 1,550 million tonnes from the total of 1,004mt announced in December 2008.
The upgrade is based on the results of drilling campaigns at its deposits in Sotkamo.
The investors’ reactions to the upgraded deposits were rather moderate: The price of the Talvivaara stock went up by 3.6 per cent on the Helsinki Stock Exchange on Wednesday.
The previous estimates on the Talvivaara mineral resources were from 2008. On the basis of that information, the anticipated production would have been sufficient to cover the next 29 years.
According to the update announced on Wednesday, Talvivaara’s nickel deposits increased by 55 per cent while the zinc resources grew by 52 per cent from the previous estimate.
The value of Talvivaara’s nickel and zinc deposits can be evaluated roughly by linking them with the world prices of metals.
On the basis of the London Metal Exchange, the current value of Talvivaara’s nickel deposits is approximately EUR 56 billion, while the value of the mine’s zinc resources is EUR 14 billion.
The imputed value of the nickel deposits is more than 10 per cent higher than the expenses of the state of Finland in 2011.
According to the 2011 budget proposal, the expenses of the state will be EUR 50.3 billion.
When evaluating the size of the figures, one has to remember that Talvivaara is anticipated to operate for several decades and that there are many factors contributing to the extent to which the mine will be able to tap into all its imputed reserves.
In its production update on Wednesday, Talvivaara also announced that because of technical problems, the company’s production output failed to meet the targets set for the third quarter.
By the end of September, cumulative production for the year had reached 6,550 tons for nickel and 16,092 tons for zinc, Talvivaara announced.
By the end of the year, Talvivaara anticipates reching the production rate of 80 to 85 tons of nickel per day that is required for an annualised production rate of 30,000 tons.
From 2012 onward, the mining company’s production target will be 50,000 tons of nickel per year.
The value of one ton of nickel has recently been approximately USD 23,000 while one ton of zinc has been worth around USD 2,500.
Previously in HS International Edition:
Value of Talvivaara shares linked with world price of nickel (28.9.2010)
Environment Minister Lehtomäki´s husband has major interest in mining company (22.9.2010)
Talvivaara Mining Company stock exchange release 27.10.2010
Talvivaara production update 27.10.2010