Talvivaara and Nyrstar in zinc streaming agreement

Finance

Publishing Date: 25 Jan 2010 4:30pm GMT
Author: Mining Journal

Talvivaara Mining Co has agreed to deliver zinc production up to 1.25Mt (2Mt in concentrate) to Nyrstar NV, the Belgian-based smelting and mining company for an up-front payment of US$335 million.

The deal allows the Finnish miner to completely refinance its existing term-loan facility.

“This agreement results in a materially enhanced capital structure for the company, providing us greater flexibility and an outstanding platform from which to develop the company further,” said Talvivaara’s chief executive, Pekka Pera.

Nyrstar has also agreed, amongst other terms, to pay Talvivaara an extraction and processing fee of €350/t (US$495/t) of zinc in concentrate, with escalators for certain raw materials, as well as a price participation formula.

The company will also provide Talvivaara with up to 150,000t/y of sulphuric acid for use in the leaching process during the period of supply of the zinc concentrate.

First deliveries will start in February and by 2012 the mine is expected to ramp-up to 90,000t/y of zinc in concentrate.

Talvivaara has an existing nickel and cobalt off-take agreement with Norilsk Nickel Harjavalta Oy.

The company plans to produce 30,000t of nickel in 2010, and expects to reach full-scale production of 50,000t from 2012. The Talvivaara mine has an estimated life of 46 years.