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Nyrstar (0JNH)

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Thursday 01 October, 2009

Nyrstar

Nyrstar agrees to acquire an 85% interest in Co...





Balen, Belgium (1 October 2009) - Nyrstar NV today announced that  it
has agreed to acquire an 85% interest in the Coricancha mine in  Peru
for US$15 million in  cash from Gold  Hawk Resources Inc  (TSX-V:CGK)
(Gold Hawk).   Gold Hawk,  a publicly  listed Canadian  based  mining
company, will retain a 15% interest.

The Coricancha mine is a poly-metallic  mine with more than 60  years
of operating history and currently comprises a 600-tonne per day  ore
processing facility,  underground  mine and  reserves  and  resources
containing zinc, lead, copper, gold and silver.  The mine is  located
(approximately) 90 kilometres east of  Lima, Peru in close  proximity
to a number  of other significant  mining operations and  exploration
properties.  Operations at  the mine  have been  suspended since  May
2008 (see further below).

Once operations are recommenced, the expanded operations (see further
below) are expected  to produce annually  (approximately) 20,000  dry
metric  tonnes  (dmt)  of  zinc  concentrate,  15,000  dmt  of   lead
concentrate, 45,000  troy oz  of  gold and  2.4  million troy  oz  of
silver[1].  In addition, it is  estimated that the existing  tailings
facility contains (approximately) 35,000 troy oz of recoverable gold.
The zinc  concentrate will  be suitable  for treatment  at  Nyrstar's
Hobart (AUS)  and  European  smelters.  The  lead  concentrate  is  a
complex concentrate high in precious metals and therefore well suited
for treatment at Nyrstar's Port Pirie (AUS) lead smelter.

Exploration at the mine by previous owners has been limited, with  no
modern exploration  having been  undertaken (e.g.  diamond  drilling,
geochemical and/or  geophysical  exploration).   Nyrstar  intends  to
pursue an  exploration  program  that is  expected  to  significantly
increase mineral resources and reserves  and also move a  significant
portion of mineral resources into the proven and probable  categories
as development continues.

The acquisition remains subject  to Gold Hawk shareholder  approval.
Gold Hawk intends to convene  a shareholders' meeting during  October
2009 seeking the requisite approvals.  Subject to Gold Hawk receiving
shareholder approval, completion  of the acquisition  is expected  to
occur during H2  2009.  The  Board of  Gold Hawk  will recommend  the
transaction to its shareholders.

Commenting on the acquisition, Roland Junck, chief executive  officer
of Nyrstar, stated:

"Consistent with our  strategy, once  the mine  is operational,  this
transaction enables us to expand our multi-metals business in markets
where we have  expertise and  proven capability,  namely zinc,  lead,
copper, gold and silver.

We believe that  the mine offers  significant potential for  improved
and expanded production.  To date this potential has remained largely
unexplored due to restricted access to capital and limited historical
exploration programs.

Our strong financial  position has  enabled us to  take advantage  of
this opportunity  and  we  continue to  actively  explore  additional
opportunities."

The mine  has a  strong  and experienced  management team  that  will
continue to  manage  the  day-to-day  operations  of  the  mine.  The
acquisition was funded from existing cash reserves.

Background

Gold Hawk  acquired the  mine in  March 2006  for US$12  million  and
subsequently invested  (approximately)  US$28  million  on  mine  and
processing plant rehabilitation and improvements. Gold Hawk commenced
commercial production at the mine in October 2007 although operations
were suspended in May 2008 following localized ground displacement at
the mine caused by a  third party irrigation system.  Whilst  further
ground displacement  was  stabilized  in July  2008,  the  mine  will
require a new tailings facility prior to recommencing operations.  In
the current credit environment Gold Hawk has experienced difficulties
in securing  the  necessary  funding  to  construct  a  new  tailings
facility.  Accordingly, as part of the transaction, Nyrstar has  also
agreed to provide a  three (3) year commercial  loan facility of  (up
to) US$20  million  to  provide  funding  for  this  purpose  and  to
recommence the operations at the  mine.   Nyrstar will also assume  a
parent company guarantee provided by Gold Hawk in relation to a US$13
million debt  facility related  to the  mine.  The  debt facility  is
currently fully drawn and expires in February 2010.

In addition, Nyrstar intends  to expand the  scope of the  operations
(e.g. by the addition of a copper circuit to capture unrealized value
from copper contained in the ore) and the scale of operations at  the
mine in  order  to  (approximately) double  the  existing  production
capacity.  The costs associated with doing so are currently estimated
at (approximately) US$15 million.  It is expected that a new tailings
facility  could  be  constructed  within  (approximately)  6  months,
thereby allowing operations to recommence during H1 2010 and  ramp-up
to expanded production levels by 2011.


Resources and Reserves

The following is a  summary of the most  recent reserve and  resource
statement for the Coricancha mine prepared on behalf of the Gold Hawk
in March 2009 pursuant to NI 43-101:


+-------------------------------------------------------------------+
|         Total Proven and Probable Diluted Mineral Reserve         |
|-------------------------------------------------------------------|
|  Resource Class    | Tonnes  |  Au   |  Ag   |  Pb  |  Zn  |  Cu  |
|                    |         | (g/t) | (g/t) | (%)  | (%)  | (%)  |
|--------------------+---------+-------+-------+------+------+------|
|  Proven            | 325,157 | 4.83  | 166.8 | 2.18 | 2.72 | 0.34 |
|--------------------+---------+-------+-------+------+------+------|
|  Probable          | 133,277 | 4.73  | 180.4 | 2.10 | 3.19 | 0.35 |
|--------------------+---------+-------+-------+------+------+------|
|  Total     Mineral | 458,434 | 4.80  | 170.7 | 2.16 | 2.86 | 0.34 |
| Reserve            |         |       |       |      |      |      |
+-------------------------------------------------------------------+



+-------------------------------------------------------------------+
|          Total Measured and Indicated Mineral Resources           |
|-------------------------------------------------------------------|
|  Resource Class    | Tonnes  |  Au   |  Ag   |  Pb  |  Zn  |  Cu  |
|                    |         | (g/t) | (g/t) | (%)  | (%)  | (%)  |
|--------------------+---------+-------+-------+------+------+------|
|  Measured          | 486,582 | 6.43  | 187.9 | 2.50 | 3.27 | 0.39 |
|--------------------+---------+-------+-------+------+------+------|
|  Indicated         | 211,736 | 6.35  | 191.5 | 2.28 | 3.48 | 0.42 |
|--------------------+---------+-------+-------+------+------+------|
|  Total Mineral     | 698,318 | 6.41  | 189.0 | 2.43 | 3.33 | 0.40 |
| Resource           |         |       |       |      |      |      |
+-------------------------------------------------------------------+



+-------------------------------------------------------------------+
|                 Total Inferred Mineral Resources                  |
|-------------------------------------------------------------------|
|  Resource Class  |  Tonnes   |  Au   |  Ag   |  Pb  |  Zn  |  Cu  |
|                  |           | (g/t) | (g/t) | (%)  | (%)  | (%)  |
|------------------+-----------+-------+-------+------+------+------|
|  Total  Inferred | 3,911,200 | 6.50  | 261.2 | 2.56 | 3.12 | 0.35 |
| Resources        |           |       |       |      |      |      |
+-------------------------------------------------------------------+


                                          [1 troy oz = 31.1035 grams]
Note:  NI  (National   Instrument)  43-101   is  an   internationally
recognised Canadian mineral resource  classification scheme used  for
the public disclosure of information relating to mineral properties.


                               - end -

About Nyrstar
The partner of choice in essential resources for the development of a
changing world.  Nyrstar is a leading global multi-metals'  business,
producing significant quantities of  zinc and lead  as well as  other
products (including silver, gold and  copper).  Nyrstar is listed  on
NYSE Euronext Brussels under the symbol NYR. For further  information
visit the Nyrstar website, www.nyrstar.com.

[1] For comparison, in  2008 Nyrstar produced (approximately)  16,000
troy oz of gold and 14 million troy oz of silver.


Contacts

Michael Morley
Director, Legal and
External Affairs
T: +44 20 7408 8120
michael.m[email protected]

Investors

Chris James
Group Manager,
Investor Relations
T: +44 20 7408 8161
M: +44 7912 269 497
[email protected]

Media

Geert Lambrechts
Manager,
Corporate Communications
T: +32 14 449 646
M: +32 473 637 892
[email protected]


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


This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.




                          

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