The ramp-up of the Terrafame mine continued strong in April 19.5.2016

The ramp-up of the Terrafame mine proceeded according to plans throughout the early 2016. The ramp-up progressed in line with the key targets set for the ramp-up also in April.

 

  • The amount of ore stacked on the primary heaps in January–April totalled 3.5 million tonnes (target 3.7 million tonnes). The amount was slightly below the target, because mining was transferred earlier than planned in April to the middle quarry of the mine, where operations are more efficient and the ore has better quality than in the north quarry.
  • The ore reclaimed from primary heaps to secondary heaps totalled 3.3 million tonnes (target 3.6 million tonnes). There were some technical challenges related to the reclaiming of ore in the beginning of the year that have now been resolved.
  • The bioleaching recovery rates have been better than expected in the beginning of the year. The recovery of the bioleaching heaps has progressed close to a recovery rate of 75 per cent throughout the early 2016.
  • A total of 2,145 tonnes of nickel and 4,665 tonnes of zinc were produced during the January–April period. The production surpassed the amounts budgeted for the time period by 344 tonnes for nickel and by 783 tonnes for zinc.
  • The net sales of the January–April period were EUR 22.1 million, surpassing the amount budgeted for the period by EUR 4.0 million. In April, the net sales amounted to EUR 8.0 million, and most of the amount exceeding the target was accrued in April.
  • EBITDA was negative EUR 67.6 million, which was EUR 9.3 million less negative than budgeted for the period. During the first months of the year, the sales of zinc products have exceeded the set targets. In addition, the chemical efficiency of the metals recovery plant has been excellent during the early 2016, which has contributed positively to EBITDA. In April, EBITDA was EUR -14.5 million, which was EUR 5.9 million better than budgeted.
  • At the end of April, the Vaasa Administrative Court issued its decision regarding the appeals made on the discharge pipe into Lake Nuasjärvi and other issues related to Terrafame’s environmental permits. Terrafame will appeal the decisions of the Vaasa Administrative Court to the Supreme Administrative Court.

Terrafame Ltd.’s Chairman of the Board Lauri Ratia:

“I am very pleased with the results of the ramp-up of the mine. The ramp-up has continued strong throughout the beginning of the year, and we reached or surpassed nearly all of our key targets also in April. Our EBITDA was EUR 5.9 million less negative than budgeted, which was mostly due to the higher than expected sales volumes of nickel-cobalt products and zinc products. The mining was transferred to the middle quarry in April earlier than planned and successfully, enabling improved cost-efficiency: in the middle quarry, the nickel content is higher and the mining costs lower than in the northern quarry where we operated earlier.

The signs of recovery in the metals market continued in April, and the nickel price increased to USD 8,853 per tonne and the zinc price to USD 1,852 per tonne at the end of the month.

The functioning of the bioleaching process is vital for the successful ramp-up of the mine. The recovery rate of the bioleaching process is still promising, and nickel dissolution has progressed faster than expected in the first primary heap. The second heap will be completed by the end of May, and the temperature of the heap is already rising promisingly.

The decision regarding the discharge pipe into Lake Nuasjärvi, issued by the Vaasa Administrative Court in April, does not directly hinder the ramp-up. However, the decision means that achieving water balance in the mining area will take several years longer than the three years originally planned. We will appeal the decision to the Supreme Administrative Court. In addition, we are preparing to start environmental impact assessment procedures as well as the application process for a new environmental permit, as the Vaasa Administrative Court converted the permits into temporary permits.

Several different avenues of solving the water problem at the mine are being investigated. The parent company Terrafame Group Ltd. has launched a development project with experts in the field of water and chemicals, looking for solutions for reducing the sulphate concentration in the waters discharged from the mine. During the spring of 2016, the project has progressed to demonstration phase where eight of the proposed solutions will be tested in practice.

The conditions are good for Terrafame’s mining operations to become profitable in the long-term, and the results of year 2015 and the early 2016 support this. The company estimates that the ramp-up will also continue to proceed according to plan during the rest of 2016.”

 

Further information and interview requests:
Terrafame Ltd. Chairman of the Board Lauri Ratia, Tel. +358 50 2922

 

Terrafame Ltd. is a Finnish mining company producing primarily nickel and zinc by bioheapleaching at its mine located in Sotkamo. The aim is environmentally sustainable, safe and economically viable mining operations. Terrafame is owned by Terrafame Group Ltd., which is wholly owned by the State of Finland.

Article subjects: Interim reportsTerrafame