October 27, 2010 / 7:58 AM / 9 years ago

UPDATE 1-Talvivaara boosts resources by 54 pct, shares up

* Boosts nickel resource to 3.4 mln tonnes

* Extends mine life to 53 years from 30 years

* London shares rise 3.8 pct, outperform sector

(Adds details, analyst comment, shares)

LONDON, Oct 27 (Reuters) - Finnish nickel producer Talvivaara TALV.L TLV1V.HE said it had discovered 54 percent more metal in its deposits, lifting its shares after a slow ramp-up of production at the mine.

Talvivaara Mining Co Plc’s London-listed shares gained 3.8 percent to 552.5 pence by 0745 GMT on Wednesday, outperforming a 1.7 percent decline in the British mining index .FTNMX1770.

“Underwhelming 3Q 2010 production is outweighed by a 54 percent resource increase to 3.4 million tonnes of contained nickel,” said analyst Dominic O’Kane at Liberum Capital in London. “At planned capacity of 50,000 tonnes nickel per annum this increases Talvivaara’s mine life from 30 years to 53 years.”

The larger resource may allow the company to later boost annual output to 80,000 tonnes, which would make the mine one the world’s three biggest, he added.

The news about expanding the size of the deposit comes after the company faced struggles to get the mine to full production. In May, Talvivaara slashed its 2010 output target to between 15,000 and 25,000 tonnes from a previous forecast of 30,000 tonnes after a series of technical problems. [ID:nLDE64508R] (Reporting by Eric Onstad; Editing by David Holmes)

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