Nyrstar: Outcome of the Smelting Strategic Review and update on the Port Pirie Redevelopment

Nyrstar: Outcome of the Smelting Strategic Review and update on the Port Pirie

Regulated Information

29 October 2013


  *Nyrstar'sindustrial footprint of mining and smelting assets provides an
    unique opportunity to capture non-realised value and deliver its strategic
  *Requires investments in the Metals Processing segment through:

       *The Port Pirie Redevelopment which will convert the primary lead
         smelter into an advanced metals recovery and refining facility, and;
       *Across the zinc smelting network through a Metals Processing
         Transformation, as defined through the Smelting Strategic Review

  *Investments have a compelling business case:

       *Port Pirie Redevelopment: capital investment of approximately EUR 270
         millionexpected to generate a post-tax IRR of 25-30%[1], using
         internal economic assumptions; and
       *Metals Processing Transformation (in addition to Port Pirie
         Redevelopment): capital investment of approximately EUR 280 million
         (approximately 25 projects)expected to generate a post-tax IRR of
         25-30%[2], using internal economic assumptions

  *Aligned with Marketing, Sourcing and Sales strategy
  *Innovative financing and support package in place for the Port Pirie
    Redevelopment and assessing funding options for the Metals Processing

Nyrstar today announced  that it hascompleted  the Smelting Strategic  Review 
("SSR") and the pre-feasibility study of the proposed Port Pirie Redevelopment
("Redevelopment").  The  SSR   hasidentified  an   attractive  portfolio   of 
investments  in  multi-metals  recovery  and  an  overall  Metals   Processing 
Transformation  ("Transformation")  blueprint  that  provides  a  unique   and 
compelling business case.The  redevelopment of  the Port  Pirie primary  lead 
smelter (South  Australia)  into  an advanced  metals  recovery  and  refining 
facility is  expected  to fundamentally  transform  the site's  operating  and 
business model. The pre-feasibility study ("PFS") has confirmed the  technical 
and environmental capability of the Redevelopment.

Smelting Strategic Review

Nyrstar commenced athorough review of its  zinc smelting business in Q4  2012 
in order to identify opportunities  to sustainably improve its  profitability. 
The SSR systematically challenged how Nyrstar views and operates its  smelters 
and the smelting  network. Led  by a dedicated  project team  of internal  and 
external  multi-disciplinary  professionals,   thousands  of  scenarios   were 
modelled using different  technologies, feed  mixes, macroeconomic  parameters 
and capacities to arrive at a final Transformation blueprint.

The SSR identified a significant amount of non-realised value in feed material
that Nyrstar controls via the concentrates its mines produce, the residues its
zinc smelters produce and historical  ponds at the smelters. Nyrstar's  unique 
asset footprint of zinc mines, poly-metallic  mines, zinc smelters and a  lead 
smelter provides  Nyrstar with  an opportunity  to capture  this  non-realised 
value, through an investment in technical modifications at Port Pirie (through
the  Redevelopment)   and   across   the   smelting   network   (through   the 
Transformation). The  Transformation blueprint  consists of  approximately  25 
projects which are categorised under debottlenecking smelters, building fuming
capacity  and  minor  metals   extraction.  Both  theoverall   Transformation 
blueprint and project portfolio have been assessed by two external specialists
with a focus on technology risk, capital and operating cost estimates and risk

The Transformation provides  a unique and  compellingbusiness case.  Earnings 
and free cash  flow are expected  to be driven  by significantly higher  gross 
profit, partially offset by  a relatively modest  increase in operating  costs 
and sustaining  capital spend  and higher  working capital  requirements.  The 
expected capital  investment  for the  entire  blueprint of  approximately  25 
projects is approximately EUR 280 million, with no single investment exceeding
EUR 50  million.Asequencing  of investments  starting  in early  2014  could 
result in incremental earnings starting to be generated in late 2014 with  the 
competition of the full  Transformation by early 2017.  Based on this  capital 
investment and timeline, the Transformation is expected to generate a post-tax
IRR of  25-30%,  using internal  economic  assumptions. Nyrstar  is  currently 
assessing funding options such as metal streaming arrangements, metal  prepay, 
industrial partnerships, hybrid bond and/or other stakeholder participation.

Nyrstar's first investment into the  Transformation, and first project  within 
the blueprint, will be the  acquisition of ERAS Metal,  the owner of a  fuming 
plant  in  Hoyanger,  Norway,  which   Nyrstar  has  agreed  to  acquire   for 
approximately EUR  5  million. The  plant  operates a  fumer  which  currently 
produces zinc oxides from  processing electric arc furnace  dust, a feed  from 
the  steel  industry.  Nyrstar  will  invest  an  additional  EUR  2  million, 
approximately, to  upgrade  the  plant  to  process  alternate  valuable  feed 
materials such as  Nyrstar smelters'  residues and ponds.  Nyrstar expects  to 
complete the acquisition by the end of November.

Port Pirie Redevelopment

In December 2012Nyrstar  announced it had  reached an in-principle  agreement 
with the Australian  Federal Government  and the  South Australian  Government 
with respect  to the  funding of  a redevelopment  of the  Port Pirie  smelter 
primary lead smelter into an  advanced metals recovery and refining  facility. 
During 2013  Nyrstar  has  progressed the  final  investment  case,  including 
detailed engineering studies, and has now completed the pre-feasibility study.

The PFS has confirmed thefollowing:

  *The technical feasibility of a new oxidation furnace to replace the
    existing Sinter Plant, which will enable the processing of Nyrstar's zinc
    smelter residues and an increased range of other metal-bearing feed
  *Theoxidation furnace technology is proven and has successfully operated
    at other industrial installations and is highly flexible in processing
    different raw materials
  *TheRedevelopment addresses the environmental needs at the site, including
    a significant reduction in lead in air emissions achieved through the
    replacement of the sinter plant, and
  *Theschedule for construction during 2014 and 2015, with commissioning in
    Q1 2016 is viable

The business case for the Redevelopment is driven by a substantial increase in
free metal, with higher margins expected to  be earned on every unit of  metal 
produced through the processing of internal zinc smelter residues, which could
account for approximately 50% of feed material requirements. The Redevelopment
will also enable an  increase in the production  of metals. Earnings and  free 
cash flow are expected to be driven by a significant increase in gross  profit 
and lower  working  capital requirements,  partially  offset by  a  relatively 
modest  increase  in  operating  costs  and  sustaining  capital  expenditure. 
Combined with the higher working capital requirements for the  Transformation, 
the net working capital impact for Nyrstar is expected to be neutral. The base
case project capital investment is estimated  at EUR 270 million, compared  to 
the original target capital cost  of EUR 280 million.  Based on this level  of 
investment the proposed Redevelopment is  expected to generate a post-tax  IRR 
of 25-30%, using internal economic assumptions.

Thefunding package for the  Redevelopment, announced in  December 2012, is  a 
critical enabler for the investment. It comprises a EUR 120 million structured
investment by  third party  investors, benefiting  from a  guarantee  fromthe 
Australian Export  Finance  and  Insurance  Corporation  ("EFIC")  (theexport 
credit agency of the Australian Federal Government), a EUR 80 million  forward 
sale of incremental silver produced at the redeveloped Port Pirie and a EUR 80
million direct investment from Nyrstar. During 2013 Nyrstar progressed various
components  of  the  funding  package  including  signing  an   implementation 
agreement with EFIC for the structured  investment and sold forward 5  million 
troy ounces  of  silver at  a  price of  approximately  USD 28/toz,  with  the 
intention to roll  the position  into the  silver forward  sale. Nyrstar  also 
progressed support elements of the  Redevelopment including the project  being 
awarded major  developmentstatus by  the South  Australian Government,  which 
also confirmed its AUD 5 million funding towards the final investment case. In
addition the South  Australian State Parliament  passed legislation  providing 
Nyrstar with regulatory certainty for the Redevelopment.

Nyrstaris proceeding with the final feasibility  study, with a report due  to 
the board in Q1 2014.


Nyrstar  Management   will  host   a  conference   callwith  the   investment 
communityto discuss the Company's continuing strategic journey including  the 
proposed transformation of its Metals  Processing businesson 29 October  2013 
at 11.00am 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:http://www.media-server.com/m/p/kjn8xgrz

The call can also be accessed using the following dial-in numbers:

Country         Toll Number
UK              +44(0)20 3427 1911
Belgium         +32(0)2 402 3092
France          +33(0)1 76 77 22 22
Germany         +49(0)30 3001 90539
Switzerland     +41(0)22 592 7953
USA             +1 212 444 0895
Canada          +1 416 216 4141
Australia       +61(0)2 8223 9222
The Netherlands +31(0)20 716 8257

If  your  country  is   not  listed  above   please  dial  the   international 
number:+44(0)20 3427 1911.

1. Please dial in 5 minutes prior to the call

2. Ask for the Nyrstar call (confirmation code 1827883), and advise your  name 
and company name

3. You will then be placed on hold until the conference starts

                                   -End -


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 

For further information contact:

Jaideep Thatai      Manager Investor Relations      T: +41 44 745
8103   M: +41 79 722 3089   jaideep.thatai@nyrstar.com
Sheela Pawar de Groot  Group Manager Corporate Affairs   T: +41 44 745
8154  M:+41 79 722 6917  sheela.pawar@nyrstar.com
Geert Lambrechts  Manager Corporate External Communications T: +32 14 449
646 M: +32 473 637 892 geert.lambrechts@nyrstar.com

[1] Internal Rate of Return (IRR) calculated over 30 years and does not
include a terminal value. Includes cash flow impacts from the Port Pirie
financing package and a 10% capital charge on Nyrstar's direct investment.

[2] IRR  calculated over  30 years  and  does not  include a  terminal  value. 
Assumes a 10% capital charge on the investment.

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

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


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Source: Nyrstar via Thomson Reuters ONE
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