TALV.L Regulatory News (TALV)

13 May 2008 06:00



13 May 2008

Talvivaara Mining Company Plc 

("Talvivaara" or the "Company")

Talvivaara launches an offering of approximately €85 million 

of convertible bonds due 2013

Additional financing to facilitate broader metals processing capability

THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW

Talvivaara announced today the commencement of an offering (the "Offering") of approximately EUR 85 million of senior unsecured convertible bonds due 2013 (the "Securities") to international institutional investors. The Securities will be convertible into fully paid ordinary shares of Talvivaara (the "Shares").

The Securities, the final size of which will be determined at the time of pricing, will be convertible into approximately 11.5 million Shares or 5% of Talvivaara's outstanding share capital.

The Securities have a five-year maturity and will carry a coupon of between 4.75% and 5.25% per annum, payable semi-annually in arrears, with a conversion price expected to be set at a premium of between 38% and 48% above the volume weighted average price of the Shares from launch to pricing. The Securities will be issued at par and will redeem at par on maturity. The Securities are expected to price today and closing is expected to occur on or about 20 May 2008.

The net proceeds of the Offering will be used to realize Talvivaara's further strategic goals, in particular to enhance Talvivaara's metals processing facility in order to accommodate a broader range of raw material streams and end products. This could include additional polymetallic intermediates from other sources as well as being able to recover manganese, which is present in the Talvivaara leach solution. In addition, the proceeds will be used for general corporate purposes, providing additional financial flexibility.

The Company's main activity, the construction of the Talvivaara mine in Sotkamo, Finland (the "Project"), is proceeding according to plan with anticipated production start-up in Q4 2008. Talvivaara expects to draw down on its committed project term loan facility (the "Facility"), in the near future to complete the funding of the Project through to full scale production. 

In this context, the Company is in the process of ensuring that the remaining conditions precedent to drawdown are in place, including the completion of hedging programmes for nickel and zinc as required by certain provisions of the Facility agreement. 

Talvivaara's CEO, Mr Pekka Perä commented: "This offering gives Talvivaara a great opportunity to invest in a broadening of our processing capabilities at Sotkamo, which could allow us to recover additional and highly sought after metals such as manganese, which are already present in the Talvivaara leach solution. The construction of the main mine facilities is proceeding according to plan, with first leaching in July and first production in October of this year."

The Offering, execution of certain agreements in relation to the Offering and the closing of the Offering are expected to take place in advance of the expiry on 1 June 2008 of the Company's lock-up agreed at the time of admission of the Shares on the London Stock Exchange's main market for listed securities in June 2007 (the "Lock-up"). In accordance with Listing Rule 9.6.17, the Company hereby announces that JPMorgan Cazenove Limited has consented to waive the Lock-up in order to permit the Company to offer and issue the Securities and to authorise, execute and deliver all such documentation that will be required in connection with the Offering.

No application has been made to list the Securities.

Merrill Lynch International is Sole Bookrunner and Sole Lead Manager of the Offering.

STABILISATION/FSA.

THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES (AS DEFINED IN REGULATION S UNDER THE US SECURITIES ACT OF 1933, AS AMENDED ("REGULATION S"). THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF ANY OFFER TO BUY SECURITIES, NOR SHALL THERE BE ANY OFFER OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL. THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED IN THE UNITED STATES UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES IN THE UNITED STATES.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY CONVERTIBLE BONDS. 

THIS ANNOUNCEMENT IS DIRECTED AT AND IS ONLY BEING DISTRIBUTED IN THE UNITED KINGDOM TO (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), (II) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED FALLING WITHIN ARTICLE 49 OF THE ORDER, AND (III) PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS COMMUNICATION MUST NOT BE READ, ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. BY READING THIS ANNOUNCEMENT, THE READER ACKNOWLEDGES THAT IT IS A PERSON EITHER (I) OUTSIDE THE UNITED KINGDOM OR (II) FALLING WITHIN ONE OF THE FOREGOING CATEGORIES.

IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA"), THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"). ANY PERSON IN THE EEA WHO ACQUIRES THE SECURITIES IN ANY OFFER (AN "INVESTOR") OR TO WHOM ANY OFFER OF THE SECURITIES IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT IS A QUALIFIED INVESTOR. 

THIS ANNOUNCEMENT IS A SUMMARY ONLY, AND DOES NOT PURPORT TO IDENTIFY OR SUGGEST THE RISKS (DIRECT OR INDIRECT) WHICH MAY BE ASSOCIATED WITH YOUR INVESTMENT IN THE SECURITIES.

MERRILL LYNCH INTERNATIONAL IS ACTING FOR TALVIVAARA IN CONNECTION WITH THE OFFERING, AND FOR NO-ONE ELSE AND WILL NOT BE RESPONSIBLE TO ANYONE OTHER THAN TALVIVAARA FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF MERRILL LYNCH INTERNATIONAL OR FOR PROVIDING ADVICE IN RELATION TO THE OFFERING, AND MERRILL LYNCH INTERNATIONAL MAKES NO REPRESENTATIONS AS TO THE ACCURACY OF AND TAKE NO RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT OR ANY MATTERS REFERRED TO HEREIN.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT TO BE RELIED UPON IN SUBSTITUTION FOR THE EXERCISE OF INDEPENDENT JUDGEMENT. IT IS NOT INTENDED AS INVESTMENT ADVICE AND UNDER NO CIRCUMSTANCES IS IT TO BE USED OR CONSIDERED AS AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OR A RECOMMENDATION TO BUY OR SELL ANY SECURITIES. NEITHER MERRILL LYNCH INTERNATIONAL NOR ITS RESPECTIVE AFFILIATES ACCEPTS ANY LIABILITY ARISING FROM THE USE OF OR MAKES ANY REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF THIS ANNOUNCEMENT. 

EACH PERSON READING THIS ANNOUNCEMENT SHOULD CONSULT HIS/HER PROFESSIONAL ADVISER TO ASCERTAIN THE SUITABILITY OF THE SECURITIES AS AN INVESTMENT. IN ADDITION, HAVING READ THIS ANNOUNCEMENT, EACH PROSPECTIVE INVESTOR SHOULD PROCEED ON THE ASSUMPTION THAT IT MUST BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE SECURITIES FOR AN INDEFINITE PERIOD. TALVIVAARA NOR MERRILL LYNCH INTERNATIONAL MAKES ANY REPRESENTATION AS TO (I) THE SUITABILITY OF THE SECURITIES FOR ANY PARTICULAR INVESTOR, (II) THE APPROPRIATE ACCOUNTING TREATMENT AND POTENTIAL TAX CONSEQUENCES OF INVESTING IN THE SECURITIES OR (III) THE FUTURE PERFORMANCE OF THE SECURITIES EITHER IN ABSOLUTE TERMS OR RELATIVE TO COMPETING INVESTMENTS. 

IN CONNECTION WITH THE OFFERING, MERRILL LYNCH INTERNATIONAL AND ITS RESPECTIVE AFFILIATES MAY, FOR THEIR OWN ACCOUNT, ENTER INTO ASSET SWAPS, CREDIT DERIVATIVES OR OTHER DERIVATIVE TRANSACTIONS RELATING TO THE SECURITIES AND/OR THE SHARES AT THE SAME TIME AS THE OFFER AND SALE OF THE SECURITIES OR IN SECONDARY MARKET TRANSACTIONS. MERRILL LYNCH INTERNATIONAL OR ANY OF ITS RESPECTIVE AFFILIATES MAY FROM TIME TO TIME HOLD LONG OR SHORT POSITIONS IN OR BUY AND SELL SUCH SECURITIES OR DERIVATIVES OR THE SHARES. NO DISCLOSURE WILL BE MADE OF ANY SUCH POSITIONS. THE AMOUNT OF ANY SUCH PURCHASES WILL BE DETERMINED AT THE TIME OF PRICING OF THE SECURITIES AND WILL BE SUBJECT TO TOTAL DEMAND RECEIVED AND FINAL ALLOCATIONS. IN ADDITION, MERRILL LYNCH INTERNATIONAL AND ITS AFFILIATES MAY PERFORM SERVICES FOR, OR SOLICIT BUSINESS FROM THE TALVIVAARA, MAY MAKE MARKETS IN THE SECURITIES OF THE TALVIVAARA AND/OR HAVE A POSITION OR EFFECT TRANSACTIONS IN SUCH SECURITIES.