In January 2014, the management of Stefan Company concludes that it has sufficie

Question

In January 2014, the management of Stefan Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the following transactions occurred. Feb. 1 Purchased 500 shares of Superior common stock for $26,000, plus brokerage fees of $530. Mar. 1 Purchased 650 shares of Pawlik common stock for $15,600, plus brokerage fees of $330. Apr. 1 Purchased 60 $1,200, 7% Venice bonds for $72,000, plus $1,200 brokerage fees. Interest is payable semiannually on April 1 and October 1. July 1 Received a cash dividend of $0.60 per share on the Superior common stock. Aug. 1 Sold 150 shares of Superior common stock at $65 per share less brokerage fees of $160. Sept. 1 Received a $1 per share cash dividend on the Pawlik common stock. Oct. 1 Received the semiannual interest on the Venice bonds. Oct. 1 Sold the Venice bonds for $72,000 less $1,200 brokerage fees. At December 31, the fair value of the Superior common stock was $54 per share. The fair value of the Pawlik common stock was $23 per share. Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Use the T-account form.)

Explanation / Answer

EO Harri Natunen comments: "In the third quarter, we continued our consistent work to gradually ramp up production, enhance stability and availability of processes and improve our environmental performance. Across all of these areas, we have seen continued positive development which gives us a high degree of confidence for the future. In July, we achieved a record level of ore production despite the mining department sourcing ore from a more distant location than planned. The metals recovery plant operated steadily throughout most of the third quarter, and in September reached an average monthly flow rate of 1,447 m(3)/h excluding an unscheduled stoppage towards the end of the month. Our environmental track record continued to improve in the third quarter and, for example, no odour complaints from nearby residents were received in September. Whilst I am pleased to report these underlying supportive trends, we have continued to face water balance challenges and consequential effects on metals production. Historically heavy rainfall has continued in Sotkamo since the spring, and during the summer months rainfall exceeded the long-term average by 50-100%. Excess water in circulation has diluted metal grades in leach solution, and the high water content in heaps has also impacted leaching performance by reducing the efficiency of aeration. We are implementing a number of measures to improve the water balance and the leaching performance, including the commissioning of reverse osmosis technology for water purification, accelerated reclaiming of primary heaps, and development work on the design of future primary heaps. As a result, we expect some improvement in the metal grades towards the year-end, but a complete reversal is unlikely to be achieved until next year. Whilst we expect production in the fourth quarter to be higher than in the third quarter, the water balance challenges have led us to conclude that we are unlikely to achieve our full year nickel production target of 17,000t. Because of the challenging water balance and temporary storage of water in the open pit we also decided to alter our production scheme for 3-4 months starting September. During this time we will not mine and crush new ore, but rather concentrate on primary heap reclaiming and removal of water from the open pit. To date, implementation of the scheme has progressed well and is expected to result in cost savings amounting to around EUR 20 million during the remainder of 2012 and the first part of 2013. Our third quarter financial result was impacted by the LME nickel price declining to its lowest levels since mid-2009, recording an average of approximately USD 15,700/t in August. Although the price recovered somewhat towards the quarter-end, the market outlook for nickel remains quite cautious and uncertain in the coming months. In order to ensure Talvivaara's financial flexibility in this environment, we are focusing on attaining the targeted savings from the temporary alteration of our production scheme as well as assessing options for additional funding. As announced in our previous releases on 5 and 7 November 2012, we detected a leakage in the mine's gypsum pond on 4 November 2012. Ever since then, our own and our contractors' personnel have worked day and night to locate and stem the leakage and to minimize its environmental impact. At the time of this announcement, we have managed to locate the damaged area and materially reduce the leakage, but work to repair the pond still continues. We have also built and are building more safety dams, which have enabled us to contain most of the leaked water within the mining concession area. I take this opportunity to thank our own and our contractors' personnel for their tireless work on resolving this issue, and I wish them further strength as we now continue our work on minimizing the environmental impact and normalizing our production." Enquiries: Talvivaara Mining Company Plc. Tel. +358 20 712 9800 Harri Natunen, CEO Saila Miettinen-Lähde, Deputy CEO and CFO College Hill Tel. +44 20 7457 2020 David Simonson Anca Spiridon Webcast and conference call on 8 November 2012 at 12:00 GMT / 14:00 EET A combined webcast and conference call on the January-September 2012 Interim Result will be held on 8 November 2012 at 12:00 GMT / 14:00 EET. The call will be held in English. The webcast can be accessed through the following link: http://qsb.webcast.fi/t/talvivaara/talvivaara_2012_1108_q3/ A conference call facility will be available for a Q&A with senior management following the presentation. PARTICIPANT AUDIO ACCESS - CONNECTION DETAILS Participant - UK: +44 (0)20 7162 0025 Participant - US: +1 334 323 6201 Participant - Finland: +358 (0)9 2313 9201 Conference ID: 914121 The webcast will also be available for viewing on the Talvivaara website shortly after the event.

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