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Nyrstar (0JNH)

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Wednesday 28 October, 2009

Nyrstar

Nyrstar Second 2009 Interim Management Statement





Balen, Belgium (28 October 2009)


HIGHLIGHTS

Actively pursuing announced strategy

  * Announced agreements to acquire East Tennessee Zinc mine complex
    (US), 85% interest in Coricancha mine (Peru) and 19.9% interest
    in Ironbark (owner of the world class Citronen zinc-lead deposit,
    Greenland)

On track to deliver transformational changes

  * On track to deliver sustainable annual costs savings of ¤75
    million by end 2010 (compared to 2008)
  * On track to reduce headcount by 500 by end 2010 (435 reductions
    completed at 30 September 2009)
  * Continuing to target underlying operating costs per tonne of
    primary metal of ¤500/tonne in 2009[1]

Production responding to market conditions

  * Zinc market metal production up 6% in Q3 2009 compared with Q2
    2009.
  * Full production resumed at Budel (Netherlands) and Clarksville
    (US) in July, and limited production restarted at Balen smelter
    (Belgium) at the end of September

Strong financial position

  * ¤120 million convertible bond offering (due 2014) completed
    during July
  * Strong financial position with gross cash of approximately ¤198
    million (including net proceeds of convertible bond), and net
    cash of approximately ¤89 million at 30 September 2009
  * New dividend policy announced to align with strategy



                                           9 months 9 months
                                                 to       to
Production [2]           Q3    Q2            30 Sep   30 Sep
('000 tonnes)          2009  2009 Change %     2009     2008 Change %
Zinc market metal       207   195       6%      580      781     -26%
Lead market metal        59    60      -2%      170      179      -5%
Copper cathode          1.1   1.0       5%      3.1      2.6      21%
Silver ('000 troy     3,775 4,325     -13%   12,294   10,316      19%
ounces)
Gold ('000 troy         7.4   5.1      45%     17.8     11.7      52%
ounces)
Market
Average LME zinc      1,757 1,476      19%    1,472    2,099     -30%
price (US$/t)
Average exchange rate  1.43  1.36              1.37     1.52
(¤/US$)                                 5%                       -10%


COMMENT
The Company made significant progress in implementing its strategy
during Q3 2009, announcing agreements to acquire the East Tennessee
Zinc mine complex (US), an 85% interest in the Coricancha mine (Peru)
and a 19.9% interest in Ironbark (owner of the world class Citronen
zinc-lead deposit).

In combination with the Gordonsville mine purchased in May, when
ramped up to full production the Tennessee mines will be capable of
providing more than 100% of the concentrate requirements for the
Clarksville smelter, and delivering significant synergies to the
Group as previously announced.

The Company's investment in Ironbark provides exposure to one of the
world's largest undeveloped zinc resources (Citronen) and a life of
mine off-take agreement for 35% of production once commercial
production commences, which could occur in the next 3-5 years.

The expanded Coricancha mine is also expected to provide a valuable
contribution to the Group's earnings in the future through its
production of zinc, lead, gold and silver.

The Company continues to explore other opportunities in line with its
strategy.

The Company continues to make significant progress in pursuing
transformational changes to create a lean, efficient, dynamic and
flexible business. The restructuring program is on track to deliver
sustainable annual cost savings of ¤75 million and reduce headcount
across the existing business by 500 by the end of 2010. Through these
and other cost reduction initiatives, the Company is continuing to
target underlying operating costs per tonne of primary market metal
of ¤500/t in 2009.

The market for zinc is showing signs of recovery, driven by rising
demand from the steel industry led by China and more recently, Europe
and the US. Consequently the Company has seen some improvement in
demand for its galvanising and speciality alloys, however premiums
continue to remain under pressure.

The average zinc price rose 19% in Q3 2009 compared to Q2 2009,
contributing positively to Treatment Charges and Free Metal, and
rising commodities prices have also contributed to earnings from the
Company's other metals. In contrast, sulphuric acid prices continue
to face significant pressure and have declined in all world markets,
particularly Europe.

The Company maintains a strong financial position with a gross cash
position of approximately ¤198 million at 30 September, and a net
cash position of approximately ¤89 million, lower than H1 2009
predominately due to increased working capital requirements as a
result of rising metal prices.

Roland Junck, chief executive officer of Nyrstar, said,

"We have made significant progress in executing our announced
strategy this quarter, and we believe the Tennessee mines and the
multi-metal Coricancha mine have the potential to make significant
contributions to our earnings in coming years. Our financial position
remains strong, and we will continue to explore opportunities to
deliver on our strategy.

Meanwhile we continue to pursue transformational changes across our
business to create a lean, efficient, dynamic and flexible business,
and we are on track to deliver on our commitments.

The market for zinc is showing signs of recovery, and we were pleased
to re-start production at the Balen smelter. Whilst in the short term
markets are likely to remain volatile, we continue to believe that
the outlook for zinc and other resources in the medium to long-term
is positive and will provide further opportunities for growth."


CONFERENCE CALL AND PRESENTATION

Management will discuss these results in a conference call and
presentation with the investment community on 28 October at 9:00am UK
Time, 10:00am Central European Time. The conference call will be
webcast live on the Nyrstar website, www.nyrstar.com, and will also
be available in archive.


[1] Total group underlying operating cost per tonne of primary market
metal (zinc and lead, excludes ARA and new mines)
[2] Includes production from primary and secondary smelters only
(Auby, Balen/Overpelt, Budel, Clarksville, Hobart, Port Pirie, ARA
(50%)). Internal transfers of cathode for subsequent melting and
casting are excluded (approximately 28,000 in Q3 2009 and 32,000 in
Q2 2009). Lead production at ARA reflects Nyrstar's ownership at 30
September 2009. Production at Föhl, Galva 45, Genesis and GM Metal
are not included.


NYRSTAR NV
ZINKSTRAAT 1
B-2490
BALEN
BELGIUM

[email protected]
www.nyrstar.com


Contacts

Michael Morley
Director, Legal and
External Affairs
T: +44 20 7408 8120
[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:


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