“In the absence of any additional financing, Talvivaara [Mining Co] has been informed that the board of directors of Talvivaara Sotkamo have decided to apply [to put] Talvivaara Sotkamo into a bankruptcy, and that the administrator of the corporate reorganisation proceedings has given his consent to this decision,” the company said.
The Talvivaara Sotkamo nickel mine is in eastern Finland, about 35km from the town of Kajaani, and consists of two low-grade nickel ore bodies, about 3km apart.
Talvivaara Mining Co will provide services for the bankruptcy estate of Talvivaara Sotkamo and will carry on its operations for now with the aim of bringing in financing to purchase the mining operations and related assets and rights from it.
“Talvivaara expects that the application for bankruptcy by Talvivaara Sotkamo will be filed with the district court of Espoo, Finland, during today [November 6],” it added.
Parent company Talvivaara began a corporate reorganisation process at the end of 2013 and has been looking for a solution to its financing needs, both in the short and long term.
In its first-half report for 2014, Talvivaara stated that the implementation of the proposed restructuring for it and Talvivaara Sotkamo was subject to adequate creditor support and a suitable financing solution, and that it was still exploring “all possible sources of finance”.
Talvivaara has also said that while it believed an adequate financing solution was possible, it recognised that coming to a “positive outcome” was not guaranteed.
It stated that it could give no assurance that the restructuring programmes put forward would be approved or that the reorganisation process would be successful.
“The financing discussions with the key stakeholders, potential new investors and the Republic of Finland have continued intensely throughout the past months, and as of the date of this announcement, negotiations for a long-term solution are already far advanced,” Talvivaara said.
“However, Talvivaara has today been informed that short-term financing to meet the company’s immediate working capital needs will not be available in the required timeframe, which makes concluding the long-term solution unachievable.”
The management of Talvivaara has said that, with the right financing, progress in operations and environmental risk management would have provided a “good basis for future success” once the proposed restructuring
and the new corporate structure were in place.