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Shares of nickel and zinc producer, Talvivaara Mining Company plc (LSE:TALV), recovered a few pence earlier today after the firm said the leakage in its Sotkamo mine in Finland has stopped but were still down by more than a fourth of their value before the leakage happened 10 days ago.
At 11:45 AM GMT, Talvivaara’s share price was up 17.5% to 98 pence but was 37.4 pence short of its 135.4 pence market value on 2nd November 2012 , the last trading day prior to the announcement of the leakage that happened two days after trading closed for the week.
The recovery seemed to signal investors’ confidence but the company also divulged the metal concentrations from water bodies on the southern side of the mine are harmful to life forms, according to Finland’s environmental administration.
“The Environmental administration continues to simulate the effects of the discharge as analytical data from water samples accumulates and informs of any effects in downstream water,” Talvivaara said in a statement.
However, the metals recovery plant was not permitted to resume operations by the Kainuu Centre for Economic Development, Transport, and the Environment, which awaits further clarification due to be submitted by the company today in support of the re-start.
The company indicated in its previous statements that the re-start of the plant is essential to the overall environmental risk management of the mine.
Talvivaara shut its metals recovery plant down to avoid further pumping of tailings into the said pond while the leakage was being repaired.
New Production Low?
The suspension of the metals recovery plant, however, further endangers the company’s full year nickel production, already reduced from the original 25,000 to 30,000 tonnes it projected in July of this year to only about 17,000 tonnes a month after.
Heavy rains during the spring resulted in the company exerting its resources in draining the open pit mine and diluting ore concentration, prompting the management to revise its guidance.
Talvivaara, at this time, said it will have to wait for Kainuu’s decision for the start-up date of the plant before it could provide a rational production estimate, earlier announced to be over the 4,000 tonnes produced during the third quarter of the year.
Meanwhile, the company’s loss for the period January to September 2012 is at €44.5 million, over eight times more than the loss it suffered for the whole 2011 financial year.
