Nyrstar NV

Published : April 24th, 2013

2013 First Interim Management Statement

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Published: 07:00 CEST 24-04-2013 /Thomson Reuters /Source: Nyrstar /XBRU: NYR /ISIN: BE0003876936

Nyrstar: 2013 First Interim Management Statement

Regulated Information

24 April 2013

HIGHLIGHTS

Zinc in concentrate production impacted by temporary suspension of mining activities at Campo Morado; full year guidance for all metals maintained

  • Own mine production of zinc in concentrate of 68,000 tonnes, down 8% on Q4 2012
  • Mining operations temporarily suspended at the Campo Morado mine during February and March due to administrative issue; operations restarted in early April with results achieved in-line with improvements of December and January, following Mining for Value programme. Recovery plan in place to catch-up on production during 2013
  • Low delivery volumes from Talvivaara; resulted in total zinc in concentrate down 15% on Q4 2012
  • Full year mining production guidance for all metals maintained

Zinc metal production was 263,000 tonnes in Q1 2013; full year zinc metal guidance maintained

  • Solid performance in Q1 2013, down 6% from a strong Q4 2012
  • Maintain full year 2013 zinc metal guidance of 1.0 - 1.1 million tonnes

Reported 2013 benchmark zinc treatment charge terms up 10%; Nyrstar continues to negotiate

  • Significant volumes of zinc concentrates already settled by Nyrstar at improved terms compared to reported settlement
  • Lead concentrate negotiations also continue and are at a less advanced stage

 

'000 tonnes unless otherwise indicated

Q1 2013

Q4 2012

D %

Mining

 

 

 

Total Zinc in concentrate[1]

70

82

(15)%

Own mine zinc in concentrate[2]

68

74

(8)%

Gold ('000 troy ounces)

10.0

26.5

(62)%

Silver ('000 troy ounces)[3]

1,094

1,385

(21)%

Copper in concentrate

2.8

3.3

(15)%

Smelting

 

 

 

Zinc metal

263

281

(6)%

Lead metal (Port Pirie)

40

45

(11)%

Market

 

 

 

Average LME zinc price (USD/t)[4]

2,033

1,947

4%

Average EUR:USD

1.32

1.30

2%

 

Zinc in concentrate production from Nyrstar's own mining operations in Q1 2013 was 8% down on Q4 2012. This was primarily due to the suspension of mining activities at the Campo Morado mine during February and March, caused by the temporary cancellation of the site's explosives permit. In early April, a new permit was issued and mining activities recommenced at the site with a recovery plan in place to catch-up on production throughout the remainder of 2013. Confidence in the recovery plan is in part based on the significant improvements in zinc, copper and gold grades and recoveries during December 2012 and January 2013 following the Mining for Value (optimisation) programme at Campo Morado in H2 2012. Results achieved in April are in-line with that trend. While not expected to have a material impact on full year mining segment performance, the suspension has had an impact on Q1 2013 mining production volumes and is expected to impact the H1 2013 average zinc mining C1 cash cost and mining segment financial performance.

Zinc in concentrate production at Nyrstar's other operated mines in Q1 2013 was largely comparable with Q4 2012. The El Toqui mine switched its focus from mining high gold to mining high zinc/lead ore faces, leading to a significant improvement in zinc in concentrate volumes. At the Langlois mine following the successful ramp-up of operations in H1 2012, the focus at site is now on optimisation. After the implementation of Nyrstar's Mining for Value at the Tennessee Mines and Campo Morado in 2012, the programme was rolled-out at Langlois at the end of Q1 / start Q2 2013. The main focus area identified is to increase the number of available ore faces for production and development, with a four part action plan in place to achieve that goal. The Tennessee mines continued to perform well in Q1 2013 on the back of significant improvements made in H2 2012.

Total zinc in concentrate volumes, down 15% in Q1 2013, were also impacted by low delivery volumes under the Talvivaara zinc stream. Production of other metals in concentrate in Q1 2013 was also impacted by the Campo Morado suspension, namely copper in concentrate, silver and gold production. In addition, gold production was also impacted by El Toqui firstly switching its focus to zinc production, and secondly stockpiling the majority of its gold as an intermediate product so that it can be processed into a higher margin dor� product in H2 2013, when a new gravitational flotation plant is commissioned.

Nyrstar maintains its 2013 full year guidance for all metals for the mining segment.

Nyrstar's smelters delivered a solid result in Q1 2013 with zinc metal production of approximately 263,000 tonnes, 6% lower compared to a strong performance achieved in Q4 2012. The Balen/Overpelt smelter had a strong first quarter, increasing zinc metal output from Q4 2012. Production at the Auby and Clarksville smelters were impacted by announced planned maintenance shuts, while record temperatures in Tasmania, Australia constrained production at the Hobart smelter due to power reductions.. Nyrstar maintains its 2013 full year zinc metal guidance

In the production of other metals in the smelting segment, Auby indium metal production has now stabilised at planned levels following the successful ramp up of operations in H2 2012. The Clarksville smelter increased the production of high margin germanium leach product by exclusively processing Middle Tennessee mine concentrate during a Q1 2013 campaign. Lead metal production at the Port Pirie smelter declined 11% in Q1 2013 due to an unplanned shut of the blast furnace following the installation of new equipment. Copper cathode and gold production at the site were both higher in Q1 2013, up 67% and 38% respectively, while silver production was 11% down due to the blast furnace shutdown.

During Q1 2013 Nyrstar entered into short-term strategic hedging arrangements with respect to zinc prices. The rationale for doing so is to improve the profitability of the business by, for example, providing targeted financial support for Nyrstar's assets or to take advantage of price conditions in the market. All hedge arrangements are compliant with a robust risk-reward framework. Nyrstar does not intend to enter into medium to long term structural hedges of the zinc price, thereby reducing its exposure to the medium to long term changes in the zinc price.

Following a strong opening to the year, the zinc and other metal prices declined sharply during March. The relatively high price environment at the start of the year led to a 4% higher than average zinc price in Q1 2013 compared to Q4 2012, however since the middle of March the price has traded between USD 1,800 to USD 1,900 per tonne. Other metal prices have also traded downwards, in particular the silver and gold price which have fallen sharply in April. The Euro strengthened against the US dollar during Q1 2013, with the average rate 2% compared to Q4 2012. As Nyrstar's earnings are largely denominated in US dollars, whereas it reports its earnings in Euros, a stronger Euro against the US dollar negatively impacts reported earnings. Due to the high sensitivity of Nyrstar's earnings to the zinc price, and increasingly with the gold and silver prices, and the Euro to US dollar exchange rate, its financial performance in 2013 will be impacted if this low metal price environment continues.


CONFERENCE CALL
Management will discuss this statement in a conference call with the investment community on 24 April 2013 at 9:00am 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/kvnupy67

[1]Includes production from Nyrstar operated mines and deliveries under the Talvivaara streaming agreement
[2]Includes production from Nyrstar operated mines only
[3]75% of the silver produced by Campo Morado is subject to a streaming agreement with Silver Wheaton Corporation whereby only USD 3.90/oz is payable. In Q1 2013, Campo Morado produced approximately 145,000 troy ounces of silver
[4]Zinc price is average of LME daily cash settlement prices
 
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
Sheela Pawar de Groot   Group Manager Corporate Communications T: +41 44 745 8154 M: + +41 79 722 6917 sheela.pawar@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 (English)
Press Release (Dutch)
Press Release (French)



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Data and Statistics for these countries : Australia | Belgium | China | Switzerland | Tasmania | All
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Nyrstar NV

PRODUCER
CODE : NYR.BE
ISIN : BE0003876936
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Nyrstar is a zinc and silver producing company based in Belgium.

Nyrstar produces zinc, silver, copper, gold and lead in Mexico and in Peru, and holds various exploration projects in Mexico.

Its main assets in production are CORICANCHA in Peru and G-9 CAMPO MORADO in Mexico and its main exploration properties are CAMPO MORADO, EAST TENNESSEE and MIDDLE TENNESSEE in Mexico.

Nyrstar is listed in Germany. Its market capitalisation is €UR 459.4 millions as of today (US$ 588.4 millions, € 400.0 millions).

Its stock quote reached its highest recent level on June 24, 2005 at €UR 2.70, and its lowest recent point on November 28, 2008 at €UR 0.38.

Nyrstar has 935 640 000 shares outstanding.

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BERLIN (NYR.BE)
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