Nyrstar : Nyrstar announces 2012 Full Year Results

              Nyrstar : Nyrstar announces 2012 Full Year Results

Regulated Information

7 February 2013


Contribution from Mining segment continues to grow in line with strategy;
group underlying EBITDA and PAT adversely impacted by macro-economic

  *Group underlying EBITDA of EUR 220 million, down (17)% on 2011 (EUR 265

       *Mining EUR 129 million, up 79%, in line with strong production growth
       *Smelting EUR 135 million, down (43)%, impacted by lower treatment
         charges and reduced contribution from silver bearing material at Port
         Pirie of EUR 24 million compared to EUR 78 million in 2011

  *Mining underlying EBITDA per tonne[1] EUR 413, up 19% on 2011 (EUR 348)
  *Smelting underlying EBITDA per tonne[2] EUR 125, down 40% on 2011 (EUR
  *EPS of EUR(0.57) (PAT EUR (95) million) impacted by one-off impairments of
    non-core assets and restructuring expenses
  *Proposed distribution of EUR0.16 per share via a share capital reduction

Growth in production of all metals; full year guidance delivered

  *Mining production of 312kt of zinc in concentrate, up 105kt (51%) on 2011

       *Own mine production (excluding deliveries under Talvivaara zinc
         stream) of 282kt, up 172kt (64%)
       *Langlois ramp up completed in line with management expectations with
         production of 39kt
       *Tennessee Mines delivered significantly improved performance with
         production of 109kt, up 36%
       *Talvivaara deliveries of 30kt, down 5kt (14%)

  *Mining production guidance achieved for lead (16.2kt actual), copper
    (13.0kt) and silver (5,517ktoz) and all significantly up on 2011, by 108%,
    69% and 50% respectively; gold production slightly below guidance
    (94.6ktoz actual) but again significantly up on 2011 (90%)
  *Zinc metal production of 1,084kt at smelters, in line with guidance

Challenging trading environment with downward movements in commodity prices
and treatment charges

  *Commodity prices remained volatile throughout 2012, with zinc, lead,
    copper and silver prices all down in 2012
  *Zinc price averaged USD 1,946/t, down 11% on 2011 (USD 2,191/t), and 14%,
    10% and 11% declines in the average lead, copper and silver prices
  *2012 zinc benchmark treatment charge (TC) significantly below 2011 terms,
    with realised TC declining 15%
  *Partly benefited from weaker Euro, however smelting cost base challenged
    due to strength of the Australian Dollar, averaging 0.81 against the Euro
    (up 8% compared to 2011)

Improving the Nyrstar cost base and maintaining capital discipline

  *Average zinc mining C1 cash cost[3] of USD 1,154/t of payable zinc in H2
    2012 (USD 1,255/t in H1 2012)

       *Tennessee Mines C1 cash cost significantly improved 20% in H2 2012 to
         USD 1,705/t (USD 2,143/t in H1 2012) due to increased volumes and
         unit cost reduction following optimisation programme

  *Smelting operating cost per tonne of EUR 577 in 2012 impacted by strength
    of Australian dollar and production issues in H2 2012 at Port Pirie
  *Implemented comprehensive group wide review of operating costs, Project
    Lean, identifying to date EUR 50 million in incremental annualised
    sustainable savings and a reduction in employee and contractor headcount
    of 15-20% across smelting, mining and corporate; expect full benefit to be
    realised by end of 2014

       *First phase implemented in Q4 2012 through optimisation of Peruvian
         operations, with reduction in employee and contractor headcount by
         approximately 1,000

  *Planned reduction in capital expenditure to EUR 200-230 million in 2013
    (including growth spend of EUR 35-55 million), compared to EUR 248 million
    spent in 2012 which was in line with guidance

Continued roll-out of optimisation programme (Mining for Value) across Mining

  *A back-to-basics, systematic analysis of processes and capabilities to
    develop an optimal, sustainable operating model for each mine,
    incorporating standardised operating systems, life of mine planning and
    optimised capital allocation
  *Successful implementation at Tennessee Mines in H1 2012 resulting in
    increased zinc in concentrate production and significant (20%) improvement
    in C1 cash cost in H2 2012
  *Implemented at Campo Morado in H2 2012, with tangible benefits expected to
    start materialising in H1 2013, and to be rolled out at other mines during
    course of 2013

Strong financial position with a high quality portfolio of long-term debt

  *Successfully refinanced EUR 400 million structured commodity trade finance
  *Significant cash inflow from operating activities due to working capital
  *Net debt of EUR 681 million at the end of 2012, compared to EUR 718
    million at the end of 2011
  *Gearing[4] maintained at 37.0% at the end of 2012, compared to 35.0% at
    the end of 2011

Delivering on Strategy into Action

  *Reached in-principle agreement to transform the Port Pirie smelter into an
    advanced poly-metallic processing and recovery facility, through an
    innovative financing and support package, providing an opportunity to
    strengthen and further diversify group earnings and preserving capacity to
    continue execution of mining strategy
  *Unlocked untapped value through the successful commissioning of the indium
    metal plant at Auby smelter, realisation of operational synergies at
    Clarksville with production of germanium residue from Tennessee Mine zinc
    concentrates and production of tellurium concentrate at Port Pirie smelter
  *Increased focus on core mining and smelting businesses with divestments of
    non-core assets; ARA Sydney (Australia) and Galva 45 (France)
  *Commenced Smelting Strategic Review aimed at identifying opportunities to
    sustainably improve profitability of zinc smelting business
  *Continue to explore value accretive M&A opportunities

Commenting on the 2012 full year results, Roland Junck, Chief Executive
Officer of Nyrstar, said,

"During 2012 we completed a major step in the long term strategic
repositioning of Nyrstar from a pure smelting business to integrated mining
and metals company. Through the execution and implementation of our strategy
we have transformed the composition of our result, with mining EBITDA
surpassing smelting EBITDA in H2 2012; a result achieved with zinc mining
volumes approximately three times lower than zinc smelting volumes. This
structural shift is further evident in the EBITDA contribution per tonne from
the Mining segment which, despite a decline in commodity prices, was up 23% in
H2 2012 to EUR 456 compared to H1 2012, while EBITDA per tonne in the Smelting
segment continued to come under pressure with a decline of 29% to EUR 104 over
the same period. This reinforces our backward integration strategy as mining
is proven to be structurally more profitable per tonne than smelting.

The improvement in mining profitability was driven by considerable growth in
the production of all metals. Zinc in concentrate production of 312kt in 2012,
was 51% higher than in 2011, with own mine production up 64%. Lead, copper,
silver and gold production was also significantly up on 2011, by 108%, 69%,
50%, and 90% respectively. Production guidance was achieved for all metals,
except for gold which was slightly below due to temporary operational
interruptions experienced in H1 2012 at El Toqui and Coricancha.

These improvements were delivered in a challenging trading environment, with
zinc, lead, copper and silver prices all down in 2012 and all remained
volatile throughout the year. The zinc price averaged USD 1,946/t, down 11% on
2011, while there were 14%, 10% and 11% declines in the average lead, copper
and silver prices respectively. This negatively impacted mining C1 cash costs,
through the reduction in by-product credits. That said, due to improving the
quality of our mining portfolio we still delivered an improvement in the
average zinc mining C1 cash cost, down 5% in 2012 compared to 2011. This
included a significant improvement in the C1 cash cost at Tennessee Mines to
USD 1,705/t in H2 2012, down 20% compared to H1 2012, due to increased volumes
and a unit cost reduction following an optimisation programme. The lower price
environment also impacted smelting gross profit, which was additionally
affected by lower 2012 zinc benchmark treatment charge (TC) terms, with
realised TCs down 15% on 2011. Nyrstar did partly benefit from a weaker Euro
although this did not offset the decline in commodity prices. The other
currency impacting our results in 2012 was the Australian dollar, which
continued its strong performance averaging 0.81 against the Euro, up 8%
compared to 2011. While the zinc smelters maintained their cost in local
currency, given approximately 40% of our smelting costs are denominated in
Australian dollars, the average smelting operating cost per tonne in Euro
terms increased to EUR 577.

Due to this unfavourable trading environment, in absolute terms our results
declined in 2012 compared to 2011. Group underlying EBITDA of EUR 220 million,
declined by 17% on 2011, with smelting underlying EBITDA, down 43%, also
impacted by the reduced contribution from silver bearing material at Port
Pirie (EUR 24 million in 2012 compared to EUR 78 million in 2011). Loss after
tax of EUR (95) million was also impacted by increased depreciation and
depletion charges in our Mining segment, the latter a non-cash item related to
the accounting treatment of the Breakwater Resources and Farallon Mining
acquisitions, higher finance expenses, and one-off charges for impairment of
EUR 17 million against non-core assets and restructuring expenses of EUR 17
million mainly in relation to our announced cost savings programme, Project

At our 2012 Half Year results, we announced that we had commenced a group wide
review of our corporate offices, mining operations and smelting operations to
identify opportunities to sustainably reduce our operating costs, and that we
were taking measures to reduce sustaining capital expenditure in H2 2012,
whilst retaining our ability to invest in organic growth opportunities. Both
initiatives are core elements of our strategy to achieve excellence in
everything we do and we are pleased to announce we have made significant
progress in both areas. We have identified to date EUR 50 million in
incremental annualised sustainable operating cost savings, and have developed
a detailed plan to implement this programme, known internally as Project Lean,
by the end of 2014. We have already executed a first phase of this project
through the optimisation of Peruvian mining operations, reducing employee and
contractor headcount by approximately 1,000. With a significant portion of
savings expected to be delivered within the Mining segment, we expect Project
Lean to enable us to deliver on our medium term average mining C1 cash cost
target of less than USD1,000/t. With regards to capital expenditure, we
contained spend in H2 2012 and so total spend in 2012 was EUR 248 million, in
line with our 2012 guidance and for 2013 we are guiding to a reduced level of
full year spend of EUR 200-230 million.

Maintaining the strength of our balance sheet was of critical importance
during 2012, as commodity price conditions remained volatile and we continued
to invest in organic growth opportunities. A key cornerstone in achieving this
aim was our ability to successfully refinance our EUR 400 million structured
commodity trade finance facility. In addition, we took a number of measures to
improve our management of working capital that enabled us to deliver a
year-on-year reduction in our net debt position, and we took the step of
writing down a number of non-core businesses.

Entering 2013, Nyrstar is a stronger company, with a larger and more
diversified mining and metals footprint. Coupled with our focus on improving
the Nyrstar cost base, through the implementation of Project Lean, our
targeted reduction in capital expenditure and the development and execution of
organic growth opportunities, we will be in a more robust position to deal
with the possibility of continued short term volatility in our markets. We
continue to plan on a prudent basis to ensure our operations and commercial
department maintain a sharp focus on maximising profitability and free cash
performance even at constant prices. That said, we remain confident in the
medium and long term fundamentals of the zinc and other related commodity
markets. We continue to explore value accretive M&A opportunities, and will
ensure our, balance sheet continues to support our growth strategy."


Management will discuss this statement in a conference call with the
investment community on 7 February 2012 at 09:00am Central European Time. The
presentation will be webcast live on the Nyrstar website, www.nyrstar.com, and
will also be available in archive. The webcast can be accessed via:

[1] Mining segment underlying EBITDA per tonne of zinc in concentrate produced
[2] Smelting segment underlying EBITDA per tonne of zinc metal produced
[3] C1 cash costs are defined by Brook Hunt as: the costs of mining, milling
and concentrating, on-site administration and general expenses, property and
production royalties not related to revenues or profits, metal concentrate
treatment charges, and freight and marketing costs less the net value of
by-product credits.
[4] Gearing: net debt to net debt plus equity at end of period


This release includes forward-looking statements that reflect Nyrstar's
intentions, beliefs or current expectations concerning, among other things:
Nyrstar's results of operations, financial condition, liquidity, performance,
prospects, growth, strategies and the industry in which Nyrstar operates.
These forward-looking statements are subject to risks, uncertainties and
assumptions and other factors that could cause Nyrstar's actual results of
operations, financial condition, liquidity, performance, prospects or
opportunities, as well as those of the markets it serves or intends to serve,
to differ materially from those expressed in, or suggested by, these
forward-looking statements. Nyrstar cautions you that forward-looking
statements are not guarantees of future performance and that its actual
results of operations, financial condition and liquidity and the development
of the industry in which Nyrstar operates may differ materially from those
made in or suggested by the forward-looking statements contained in this news
release. In addition, even if Nyrstar's results of operations, financial
condition, liquidity and growth and the development of the industry in which
Nyrstar operates are consistent with the forward-looking statements contained
in this news release, those results or developments may not be indicative of
results or developments in future periods. Nyrstar and each of its directors,
officers and employees expressly disclaim any obligation or undertaking to
review, update or release any update of or revisions to any forward-looking
statements in this report or any change in Nyrstar's expectations or any
change in events, conditions or circumstances on which these forward-looking
statements are based, except as required by applicable law or regulation.

About Nyrstar

Nyrstar is an integrated mining and metals business, with market leading
positions in zinc and lead, and growing positions in other base and precious
metals; essential resources that are fuelling the rapid urbanisation and
industrialisation of our changing world. Nyrstar has mining, smelting, and
other operations located in Europe, the Americas, China and Australia and
employs over 7,000 people. Nyrstar is incorporated in Belgium and has its
corporate office in Switzerland. Nyrstar is listed on NYSE Euronext Brussels
under the symbol NYR. For further information please visit the Nyrstar
website, www.nyrstar.com

For further information contact:
Jaideep Thatai  Manager Investor Relations  T: +41 44 745 8103  M: +41 79
722 3089 jaideep.thatai@nyrstar.com
Geert Lambrechts  Manager Corporate Communications  T: +32 14 449 646  M:
+32 473 637 892  geert.lambrechts@nyrstar.com

The full press release can be downloaded from the following link:

Press Release (French)
Press Release (Dutch)
Press Release (English)


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Source: Nyrstar via Thomson Reuters ONE
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