Nyrstar: 2015 Full Year Results

Regulated Information

4 February 2016

HIGHLIGHTS:

• Group Underlying EBITDA of EUR 256 million for 2015, an increase of EUR 19 million on 2014^[1], supported by strong Metals Processing performance with zinc metal production above the top end of guidance and the strengthening of the USD/EUR, whilst impacted by a sharp decline in commodity prices in H2 2015
  • Metals Processing EBITDA, up 41% year-on-year at EUR 336 million
  • Mining EBITDA loss of EUR (41) million, down 193% year-over-year
• Net debt (excluding other non-current financial liabilities) of EUR 761 million at year end, an increase of EUR 323 million on 2014 driven by Metals Processing growth capex (primarily the Port Pirie Redevelopment) and poor performance of the Mining segment 
• Net loss of EUR 432 million for 2015, primarily as a result of an impairment charge of EUR 564 million primarily related to the Mining segment assets (comprising of EUR 418 million at 30 June 2015 and EUR 146 million at 31 December 2015)
• Decisive Balance Sheet Strengthening Measures announced and being implemented to enhance Nyrstar's financial and operational flexibility in a challenging near-term commodity price environment:
  • Annualised cashflow savings of EUR 65 million achieved in Q4 against Q3 2015 run rate
  • Funding of a USD 150 million zinc metal prepay completed
  • Formal process launched for the sale of all or the majority of the Mining segment assets
• Port Pirie Redevelopment continues to be on schedule with first tranche of equity accounted perpetual notes issued in November 2015 and ramp-up expected in H2 2016 and H1 2017 with total project cost forecast to be approximately AUD 563 million

Commenting on the 2015 full year results, Bill Scotting, Chief Executive Officer said:

"Despite the tough operating environment that was experienced in the second half of 2015, Nyrstar was able to provide a robust set of results from its Metals Processing segment. EBITDA for Metals Processing increased by EUR 96 million year-on-year. The Mining segment has clearly suffered from the sharp deterioration in commodity prices, with the positive EBITDA of EUR 6 million in the first half of 2015 declining to an EBITDA loss of EUR 46 million in the second half of the year.

Prudent cash management is the key focus in the current market environment and significant steps have been taken to minimize the cash consumption of the Mining segment while the divestment process is progressed. The suspensions and headcount reductions that have been made over the past quarter are providing a cash flow saving in the Mining segment of EUR 65 million on an annualized basis compared to Q3 2015.

On November 9, 2015 we announced a robust plan to strengthen the Company's balance sheet to enable the Company to withstand the challenging near-term commodity prices and financing markets while giving it the necessary operational flexibility to deliver shareholder returns.

In line with this plan, at the end of 2015, a USD 150 million funding of a zinc metal prepayment financing was completed. Furthermore, the Company expects to shortly launch a EUR 250 - 275 million rights offering. Through the rights offering and other financial initiatives, including the USD 150 million pre funding of the zinc metal pre-pay, Nyrstar's balance sheet has strengthened and will continue to strengthen, thereby better positioning the Company to deal with the current commodity price environment.

Group Underlying EBITDA of EUR 256 million increased by EUR 19 million from 2014, excluding the non-cash EUR 43 million gain from the settlement of the Campo Morado silver stream with Silver Wheaton in 2014. Despite the sharp deterioration in commodity prices in H2 2015 and the disappointing performance of the Mining segment, the Metals Processing segment continued its strong operational and financial performance with zinc metal production exceeding the top end of guidance. The fall in commodity prices in 2015 reduced EBITDA by approximately EUR 151 million year-on-year; however, this was more than offset by favourable foreign exchange movements, including a devaluation of the Euro, Canadian dollar and Australian dollar against the US dollar, which resulted in a year-on-year EBITDA gain of approximately EUR 170 million.

Metals Processing segment EBITDA was up EUR 96 million on 2014 at EUR 336 million. This was driven by strong operational performance, a continued weakening of the Euro against the US dollar, higher zinc treatment charges and lower operating costs primarily due to a decline in energy prices.

The Port Pirie Redevelopment is continuing to progress on schedule with the total cost to complete expected to be AUD 563 million. During 2015, all major engineering work, together with fabrication of the furnace, process equipment and major concrete works were completed. The Port Pirie Redevelopment is central to Nyrstar's mission to capture the maximum value inherent in mineral resources and remains on track to commence commissioning at the end of H1 2016 with ramp-up through H2 2016 and H1 2017. Once ramped-up, the redeveloped Port Pirie is forecast to generate an EBITDA uplift of approximately EUR 80 million, applying 31 December 2015 pricing and foreign exchange parameters.

Mining segment EBITDA was down 193% on 2014, adjusted for the non-cash silver stream settlement gain, at negative EUR 41 million due to lower base and precious metal prices, higher treatment charges, operational challenges and the suspension of the Campo Morado, Myra Falls and Middle Tennessee mines. These issues have been considered as part of the impairment testing that was conducted in 2015.

We strongly believe that our mining assets have significant inherent value, which can be generated through the implementation of identified developmental and growth initiatives. Operational progress has been made in the past year with the appointment of a new senior mining leadership team focused on mine development and life of mine planning. However, it is clear that the segment as a whole will continue to underperform without an injection of additional capital. Our current strategy is to focus allocation of available capital to growth projects in the Metals Processing segment and, as such, we have retained BMO Capital Markets and Lazard to assist with a process to pursue a sale of all or the majority of our mining assets. This divestment process is expected to require a period of several months and, if successful, will eliminate the short-term cash burden of supporting the Mining assets.

Safety remains an essential part of the way we do business and is a core element of the Nyrstar culture. We made substantial improvements on a number of key safety performance metrics in 2015 with days lost or under restricted duties declining by 31% compared to 2014. Tragically, and despite the improvements that have been made in safety in our Mining segment over recent years, we had one fatality during 2015.  We have also been greatly saddened by two further fatalities in January 2016, at El Mochito in Honduras and at Langlois in Canada.  These fatalities have had a major impact on the family, friends and colleagues of these employees. We will learn from the tragedies to make further improvements in both Mining and Metals Processing to prevent future ones.   

With lower commodity prices and uncertain economic conditions, the operating environment remains challenging. However, with the decisive actions that we are taking through our balance sheet strengthening measures, capital discipline and operational improvements, we are confident that Nyrstar will be well positioned to benefit from the expected strengthening in the underlying fundamentals of the zinc market

The completion of the fully underwritten EUR 250 - 275 million rights offering as part of the balance sheet strengthening measures in Q1 2016 will substantially improve the Company's financial flexibility and position it to maximize latent value to shareholders. Looking further ahead, we continue to expect the on-time ramp-up of the Port Pirie Redevelopment which together with the ongoing and future upgrading of Nyrstar's zinc smelter network, known as the Metals Processing Growth Pipeline Projects, will allow Nyrstar to leverage the forecasted strong zinc market fundamentals."

CONFERENCE CALL
Management will discuss this statement in a conference call with the investment community on 4 February 2016 at 09:00 am Central European Time. The presentation will be webcast live and will also be available in archive. The webcast can be accessed via: http://edge.media-server.com/m/p/umicf4qn

FORWARD-LOOKING STATEMENTS
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 a global multi-metals business, with a market leading position in zinc and lead, and growing positions in other base and precious metals, which are 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 and Australia and employs approximately 5,000 people. Nyrstar is incorporated in Belgium and has its corporate office in Switzerland. Nyrstar is listed on Euronext Brussels under the symbol NYR. For further information please visit the Nyrstar website: www.nyrstar.com.

Important information
This announcement is for general information only. It does not constitute, or form part of, an offer or invitation to sell or issue, or any solicitation of an offer to purchase or subscribe for, nor shall there be any sale or purchase of, the securities referred to herein.  In particular, this announcement is not an offer of securities for sale in the United States. Any such securities may not be sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. The Company does not intend to register any part of any offering in the United States or to conduct a public offering of securities in the United States.  Any offering of securities will be made by means of an offering document that will contain detailed information about the company and management as well as financial statements. This announcement is not a prospectus within the meaning of Directive 2003/71/EC of the European Parliament and the Council of November 4th, 2003, as amended and as implemented respectively in each member State of the European Economic Area (the "Prospectus Directive"). This announcement does not, and shall not, in any circumstances constitute a public offering nor an invitation to the public in connection with any offer to buy or subscribe for securities in any jurisdiction.

For further information contact:
Anthony Simms Group Manager Investor Relations   T: +41 44 745 8157     M: +41 79 722 2152      anthony.simms@nyrstar.com
Greg Morsbach    Group Manager Corporate Communications     T: +41 44 745 8295    M:+41 79 719 2342    gregory.morsbach@nyrstar.com