Nyrstar Still Standing by Talvivaara

Bloomberg reported that Nyrstar NV (EBR:NYR) has offered short-term support to Finnish nickel miner Talvivaara Mining Company plc (LSE:TALV); it also will not “breach financing agreements in the event of an impairment.”

Talvivaara filed for a corporate reorganization in order to raise money and avoid going bankrupt on November 15. The two companies have an offtake agreement under which Nyrstar is to pay $335 million for all of Talvivaara’s zinc concentrate until it receives 1.25 million metric tons.

As quoted in the market news:

‘Talvivaara’s filing for corporate restructuring created a lot of speculation on its sustainability and the impact for Nyrstar,’ Wouter Vanderhaeghen, an analyst at KBC Securities NV in Brussels, wrote today in a note. ‘In a worst case scenario where Talvivaara goes bankrupt, we believe that Nyrstar would lose around 10 percent to 15 percent of its’ earnings before interest, tax, depreciation and amortization.

Talvivaara, which has suffered from weakening nickel prices and a slow production ramp-up at its mine in northern Finland, failed to raise additional cash from investors for a voluntary reorganization, it said last week. Some investors declined to provide more funds and others decided to wait until a corporate reorganization is completed, Talvivaara said.

Click here to read the full Bloomberg report.