Nyrstar produced a quarterly record of approximately 80,000 tonnes of zinc in concentrate from its mining segment in Q3 2012, in line with management expectations and full year guidance. This volume represents a 5% improvement on Q2 2012, with a 9% increase in zinc in concentrate production at Nyrstar operated mines, which excludes the Talvivaara zinc stream, over the same period. The production result reflects improved operating performance at East and Middle Tennessee Mines following the optimisation programme of H1 2012, an improvement in the zinc mill head grade at El Mochito and the increase in zinc in concentrate production at El Toqui following the gold campaign of Q2 2012. Deliveries under the Talvivaara streaming agreement declined by 1,000 tonnes in Q3 2012 compared to Q2 2012, while production at Campo Morado declined by 3kt due to a decline in the average zinc mill head grade.
The production of other metals in Q3 2012 was also in line with full year guidance, with a 14% and 26% increase in silver and lead in concentrate production respectively and copper in concentrate production down slightly quarter on quarter. There was an 11% decrease in gold production in Q3 2012; however, this is primarily due to the El Toqui mine switching its focus to maximising zinc in concentrate production following the gold campaign of Q2 2012. As previously announced, the suspension order on milling operations at the Coricancha mine was lifted during July and the Coricancha mine successfully recommenced milling operations in the second half of the month. Production of approximately 3,000 troy ounces of gold and 112,000 troy ounces of silver in Q3 2012 was in line with management's expectations, with production reaching full production capacity during August 2012 as indicated in the 2012 Half Year Results.
Zinc metal production at Nyrstar's smelters in Q3 2012 was approximately 266,000 tonnes, a decrease of 5% from Q2 2012. The Auby and Balen/Overpelt smelters delivered strong operational performances in Q3 2012, with production up 5% at both sites whilst production at the Clarksville smelter was relatively flat quarter on quarter. Production at the Budel smelter was impacted by both a lightning strike and a transformer fire during August, leading to the smelter running at reduced capacity for the remainder of the quarter. The smelter returned to full production capacity at the start of October when the damaged transformer was replaced. Production of zinc metal at Hobart returned to a normalised level in Q3 2012, following record production in Q2 2012, with year to date performance in 2012 in line with 2011.
The production of indium metal continued to ramp up at the Auby smelter with a 3-fold increase in Q3 2012 to 3 tonnes compared to Q2 2012. The production of all metals at the Port Pirie smelter was impacted by an unplanned shut of the blast furnace, leading to a decrease in lead metal production of 39%, and an unplanned shut of the copper drossing furnace which further impacted copper, silver and gold production.
As announced in the 2012 Half Year Results, Nyrstar had commenced a group wide review of its corporate offices, mining operations and smelting operations with the intent to identify opportunities to sustainably reduce its operating costs. During Q3 2012 Nyrstar continued the review process and is expected to provide an update at its 2012 Full Year Results.
The zinc price continued to be volatile in Q3 2012, trading within a wide range of USD 1,759/t to USD 2,105/t. The average zinc price in Q3 2012 of USD 1,885/t was 2% lower compared to Q2 2012. However, this was partially offset by the euro depreciating against the dollar by 2% to average 1.25 during the quarter. While the zinc price, as well as other commodity prices, rose sharply towards the end of Q3 2012, the likelihood of short term volatility in our markets remains given the current challenging macroeconomic conditions.
CONFERENCE CALL
Management will discuss this statement in a conference call with the investment community on 24 October 2012 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/ozhqv9o8
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