Nyrstar: 2016 Second Interim Management Statement

2 november 2016

Regulated Information - Inside Information

2 November 2016 at 07:00 CET

HIGHLIGHTS:

• Further progress made in Q3 2016 on the key strategic initiatives to turnaround the business: balance sheet strengthened with completion of a EUR 115 million convertible bond in July 2016; mining divestment advanced with the sale of El Mochito announced in September 2016 and further divestments expected in H2 2016; Mining segment close to cashflow neutral and group cost reductions ahead of plan
• Group Underlying EBITDA ^[1] of EUR 123 million for the first nine months of 2016, approximately 43% down period-on-period  primarily due to reductions in zinc prices and treatment charge terms and impact of planned and unplanned volume losses, partially offset by cost reductions
  • Metals Processing EBITDA of EUR 143 million, down EUR 115 million period-on-period, driven primarily by a reduction in the zinc benchmark treatment charge and average discount to treatment charge, lower zinc price and planned and unplanned production outages
  • Significantly improved Mining EBITDA of EUR 5 million, up EUR 23 million period-on-period, driven by the suspension and care & maintenance of the Myra Falls and Middle Tennessee mines respectively and other cost reductions
• Net debt excluding zinc metal prepay reduced period-on-period at EUR 766 million with the completion of the EUR 274 million rights offering in February 2016 and movements in borrowings with the repayment of the EUR 415 million retail bond in May 2016 and drawings on the revolving working capital facilities
• Pro-forma liquidity at the end of Q3 2016 of approximately  EUR 480 million which includes an extension and upsizing of the Trafigura working capital facility from USD 150 million to USD 250 million ^[2]
• The Port Pirie Redevelopment remains on budget and schedule, with AUD 145 million drawn from the Australian government backed perpetual notes by the end of Q3 2016

Commenting on the third quarter 2016 interim management statement, Bill Scotting, Chief Executive Officer said:
"The operational and financial performance of the group was materially impacted during Q3 2016 with a number of exceptional operational outage issues. Despite these issues which are reflected in the production and earnings results for the quarter, Nyrstar has continued to make good progress against the clear set of strategic priorities that were communicated in November 2015.

We remain focused on our cash flow improving strategic priorities for the remainder of 2016 and into 2017 with the continued advancement of the mining divestment, delivering on the Port Pirie Redevelopment with its substantial forecast earnings uplift, and making continued operational improvements and cost savings to benefit from the strengthening of zinc market fundamentals."

9 Month 2016 Performance Update
Although zinc prices over the first 9 months of 2016 were still 4% lower than the same period of 2015, Zinc has been the standout performer amongst the base metals year to date in 2016. The zinc price has climbed strongly through the first nine months of 2016 to close up 53% at USD 2,378 per tonne and has averaged USD 1,955 per tonne. In the medium term, the strengthening of the zinc price on the back of improving supply-demand fundamentals and an expected weakening Euro against the US dollar, should further support Nyrstar's financial performance.

As previously communicated, on the back of the tightening availability of zinc concentrate supply, the annual 2016 benchmark treatment charge terms were settled in the first quarter of 2016 at approximately 17% below the 2015 terms. In addition, the average discount to the benchmark treatment charge realized by Nyrstar in 2016 has been slightly larger than in the past several years. In Q3 2016, the average discount to the realized treatment charge achieved by Nyrstar's Metals Processing segment was approximately USD 40-50 per tonne and is in-line with the discount realized in Q2 2016. The same discount is expected to be realized in Q4 2016.

The liquidity headroom at the end of September 2016 was EUR 384 million and the balance sheet maturity profile of the Company has been greatly improved over the first nine months of 2016. During this period, the Company has completed a EUR 274 million rights offering, finalised a USD 75 million short term silver prepay, repaid the EUR 415 million retail bond that was due in May, issued a EUR 115 million convertible bond due in 2022, increased the USD 150 million zinc metal prepay that was issued in December 2015 to USD 175 million and in October 2016 extended and upsized the Trafigura working capital facility.

The Metals Processing production performance and earnings were adversely impacted during the quarter with two fires in Balen, strong winds in Hobart causing damage to the electrolysis department and record high temperatures at Clarksville impacting electrolysis efficiency. At the end of September 2016, the Port Pirie smelter also suffered from a storm related electricity outage in the state of South Australia which caused an outage of the entire plant. These production issues in Metals Processing have now been resolved and we expect a much stronger operating result for the segment in Q4 2016.

Mining segment performance in Q3 2016 showed further signs of improvement with the segment moving to positive EBITDA of EUR 5 million versus negative EUR 18 million in Q3 2015. The cash consumption of the Mining segment has been substantially reduced since the announcement on 9 November 2015 of EUR 60 million in targeted cashflow savings for the segment compared to the annualised Q3 2015 cash outflow of approximately EUR 128 million ^[3] . This target has been exceeded, with the annualized run rate of cash consumption for the mining segment having been reduced to approximately EUR 12 million on the basis of the annualized Q3 2016 Mining segment EBITDA and capex. These savings have to date been achieved by placing Myra Falls on indefinite suspension, the Middle Tennessee and Campo Morado mines on care & maintenance, reducing cash consumption across the other mining assets and improving the earnings of the mines. El Toqui's positive contribution to cashflow and El Mochito's negative contribution to cashflow have been eliminated as they are now classified as discontinued operations due to their announced divestment.

Tragically the Mining segment experienced a further fatality in Q3 2016 with an underground incident at the El Mochito mine in Honduras. This was the fourth fatality this year, all of which have occurred in the Mining segment with three at El Mochito. We are committed to ensuring a safe workplace at all Nyrstar operations and despite the sale of the El Mochito mine, announced in September 2016, we are continuing to make improvements to the safety culture at the mine.  

The Port Pirie Redevelopment commenced initial commissioning activities towards the end of H1 2016 and in Q3 2016 substantial progress has been made on site with the delivery and installation of a number of large modular components. The project is continuing to progress in line with its budgeted cost to complete of AUD 563 million and its schedule with commissioning and ramp-up activities to continue through Q4 2016 and into 2017. Once fully ramped-up over the course of 2017, the Port Pirie Redevelopment will allow Nyrstar to capture a greater proportion of the value contained within the feed material consumed by Metals Processing's global network of smelters.

CONFERENCE CALL

Management will discuss this statement in a conference call with the investment community on 2 November 2016 at 10:00 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/6nyhw3yg .

KEY FIGURES

EUR million [4]	9m	9m	%		Q3	Q3	%
(unless otherwise indicated)	2016	2015	Change		2016	2015	Change
Metal Processing Revenue	1,978	2,321	(12%)		648	848	(24%)
Mining Revenue	131	201 3	(34%)		44	50 3	(12%)
Other and Eliminations Revenue	(104)	(231)	55%		(33)	(40)	18%
Group Revenue	2,005	2,292 3	(13%)		659	858 3	(22%)
Metal Processing EBITDA	143	258	(45%)		39	75	(48%)
Mining EBITDA	5	(18) 3	128%		3	(13) 3	123%
Other and Eliminations EBITDA	(25)	(26)	4%		(10)	(6)	(67%)
Group Underlying EBITDA	123	214 3	(43%)		32	56 3	(43%)
EBITDA margin (%)	6%	9%	(33%)		5%	7%	(29%)
Capex
Metals Processing	166	201	(17%)		49	76	(36%)
Mining	15	46 3	(67%)		6	20 3	(70%)
Group Capex	184	250 3	(26%)		56	98 3	(43%)
Debt and cash
Loans and borrowings, end of period	913	871	5%		913	871	5%
Cash and cash equivalents, end of period	147	30	390%		147	30	390%
Net Debt Exclusive of Zinc Prepay
Net debt, end of period	766	841	(9%)		766	841	(9%)
Net debt to LTM EBITDA ratio	4.5	2.5	80%		4.5	2.5	80%
Net Debt Inclusive of Zinc Prepay
Net debt, end of period	918	841	9%		918	841	9%
Net debt to LTM EBITDA ratio	5.4	2.5	116%		5.4	2.5	116%
Metals Processing Production
Zinc metal ('000 tonnes)	752	835	(10%)		245	275	(11%)
Lead metal ('000 tonnes)	143	133	8%		48	48	0%
Mining Production [5]
Zinc in concentrate ('000 tonnes)	80	134	(40%)		24	39	(38%)
Lead in concentrate ('000 tonnes)	0.7	0.8	(13%)		0.2	0.3	(33%)
Gold ('000 troy ounces)	1.4	5.5	(75%)		0.4	0.5	(20%)
Silver ('000 troy ounces)	816	1,046	(22%)		242	300	(19%)
Copper in concentrate ('000 tonnes)	5.4	4.6	17%		1.6	1.4	14%
Market [6]
Zinc price (USD/t)	1,955	2,035	(4%)		2,253	1,844	22%
Lead price (USD/t)	1,780	1,818	(2%)		1,872	1,712	9%
Silver price (USD/t.oz)	17.12	15.99	7%		19.62	14.91	32%
Gold price (USD/t.oz)	1,260	1,178	7%		1,335	1,124	19%
EUR/USD average exchange rate	1.12	1.11	1%		1.12	1.11	1%
EUR/AUD average exchange rate	1.50	1.46	3%		1.47	1.53	(4%)

GROUP FINANCIAL AND MACRO OVERVIEW

Revenue for the first nine months of 2016 of EUR 2 billion was down 13% period-on-period, driven by decreased zinc and lead prices and lower production volumes in both the Metals Processing and Mining segments.  The average zinc price in the first 9 months of 2016 was $1,955/t compared to an average of $2,035/t in the first nine months of 2015. Zinc metal and zinc in concentrate production were lower by 10% and 40% respectively.

Group underlying EBITDA (continuing operations) of EUR 123 million for the first nine months of 2016, a decrease of 43% period-on-period, driven by lower commodity prices, lower treatment charges and lower production from Metals Processing and Mining, partially offset by cost reductions across Metals Processing and Mining.

Capital expenditure (continuing operations) was EUR 184 million in the first nine months of 2016, representing a decrease of 26%  period-on-period driven by a EUR 31 million capex decrease in the Mining segment with zero growth capex and a 17% reduction in total capex spend in the Metals Processing segment compared to the first nine months of 2015 at EUR 166 million, including EUR 84 million on the Port Pirie Redevelopment funded by the Australian Government backed perpetual notes.

Net debt  at the end of September 2016, excluding the Zinc metal prepay,  was 9% lower compared to September 2015 at EUR 766 million (EUR 841 million at the end of September 2015).  Cash on hand at the end of September 2016 was EUR 147 million compared to EUR 30 million at the end of September 2015.

SAFETY, HEALTH AND ENVIRONMENT

"Prevent Harm" is a core value of Nyrstar. The Company is committed to maintaining safe operations and to proactively managing risks including with respect to people and the environment. At Nyrstar, we work together for creating a workplace where all risks are effectively identified and controlled and everyone goes home safe and healthy each day of their working life.

Tragically, the Company had a further fatal incident at the EL Mochito mine on 6 August  2016.  This was the fourth fatality this year, all of which have occurred in the Mining segment. The other fatal incidents occurred on 18 January 2016 at the Langlois mine in Canada and the El Mochito mine in Honduras on 21 January 2016 and 8 February 2016.

Following the fatality at El Mochito in August 2016, operations were suspended to allow for a full assessment of the critical risks and procedures at the mine. Operations were restarted during the second week of September 2016 with a number of changes made to the site's operating procedures and management.

The lost time injury rate (LTIR) for the Company in Q3 2016 was 2.1, a decrease of 25%  compared to a rate of 2.8 in Q3 of 2015. Year to date, LTIR remains at 1.7, this is a 32% reduction compared to 2.5 at the same time of 2015. Year to date, the frequency rate of cases with time lost or under restricted duties (DART) and the frequency rate of cases requiring at least a medical treatment (RIR) decreased by 13% and 18% compared to the same time of 2015.

No environmental events with material business consequences or long-term environmental impacts occurred during the period.

OPERATIONS REVIEW: METALS PROCESSING

EUR million	9m	9m	%		Q3	Q3	%
(unless otherwise indicated)	2016	2015	Change		2016	2015	Change
Revenue	1,978	2,321	(12%)		648	848	(24%)
Underlying EBITDA	143	258	(45%)		39	75	(48%)
Sustaining	62	52	19%		20	18	11%
Growth	20	35	(43%)		10	12	(17%)
Port Pirie Redevelopment	84	114	(26%)		19	46	(59%)
Metal Processing Capex	166	201	(17%)		49	76	(36%)

The Metals Processing segment delivered an underlying EBITDA result of EUR 143 million in the first nine months of 2016, a decrease of 45% over the first nine months of 2015 due to decreased zinc prices, lower treatment charges and lower zinc metal production volume across all of the smelters due to planned maintenance shutdowns and a number of unplanned outages related to weather events and two exceptional fires.

Sustaining capital spend in the first nine months of 2016 increased by 19% period-on-period due to a number of large planned maintenance shuts occurring during the first half of 2016 and the various unplanned outages that occurred during Q3 2016 due to weather and fire related events. The Port Pirie Redevelopment project capex is currently fully funded by the drawing of the perpetual notes which will cover the full remaining cost to complete up to AUD 563 million. As at 30 September 2016, a running total of AUD 496 million of capex had been incurred on the Port Pirie Redevelopment and AUD 528 million had been committed (i.e. order values placed).

	9m	9m	%		Q3	Q3	%
	2016	2015	Change		2016	2015	Change
Zinc metal ('000 tonnes)
Auby	107	127	(16%)		38	42	(10%)
Balen/Overpelt	175	192	(9%)		51	62	(18%)
Budel	212	221	(4%)		71	74	(4%)
Clarksville	81	93	(13%)		25	29	(14%)
Hobart	177	202	(12%)		60	69	(13%)
Total	752	835	(10%)		245	275	(11%)
Lead metal ('000 tonnes)
Port Pirie	143	133	8%		48	48	0%
Other products
Copper cathode ('000 tonnes)	3.6	2.7	33%		1.2	0.9	33%
Silver (million troy ounces)	12.3	10.4	18%		3.6	3.7	(3%)
Gold ('000 troy ounces)	39.8	43.3	(8%)		7.9	16.7	(53%)
Indium metal (tonnes)	-	28	(100%)		-	8	(100%)
Sulphuric acid ('000 tonnes)	1,018	1,093	(7%)		327	360	(9%)

The Metals Processing segment produced approximately 752,000 tonnes of zinc metal in the first 9 months of 2016, in-line with the lower end of full year 2016 guidance, representing a 10% decrease on the same period in 2015. As communicated by the Company on 3 October 2016 a number of extraordinary operational issues arose in the Metals Processing segment in Q3 2016 which adversely impacted zinc metal production.

Production at Auby was down 16% as a result of planned roaster and cellhouse shutdown; Balen was down 9% due to a planned cellhouse and leaching shutdown, a hydrogen fire in the electrolysis department and an electrical cabinet fire at one the roasters; Clarksville was down 13% due to the processing of lower grade zinc concentrates following the suspension of the Middle Tennessee mines and record high temperatures at Clarksville impacting electrolysis efficiency; and Hobart was down 13% primarily due to structural damage to the electrolysis department at Hobart caused by strong winds and issues with stability in the leaching department. The unplanned, one-off production outages and operational issues in Metals Processing experienced during Q3 2016 related to weather and fire events have negatively impacted the Company's reported third quarter operational and financial performance. These issues have now been resolved with the sites having returned to normal operational production levels.

Lead market metal production at Port Pirie of 143kt was 8% higher compared to the first nine months of 2015 due to production in April 2015 having been impacted by a disruption to the natural gas supply to the region of Port Pirie that extended for almost the entire month and July 2015 by a leaking cooling water jacket requiring replacement. At the end of Q3 2016, production at Port Pirie was suspended due to a storm related electricity failure across the state of South Australia, which caused an outage of the entire plant. This mostly impacted the blast furnace, which was down for approximately 11 days for repairs necessitated by the power outage and will have an impact on Q4 2016 production.  Copper and silver production was higher in the first nine months of 2016 by 33% and 18% respectively period-on-period whilst gold production was down 8%. The variance in the production of copper, silver and gold is mainly due to a different feed mix consumed with higher copper and silver and lower gold contained.

The lost time injury rate (LTIR) for Metals Processing in Q3 2016 was 2.1, consistent with that achieved in Q3 2015. In the first nine months of 2016, LTIR remains at 1.3, a 41% reduction compared to 2.2 during the same period in 2015. The frequency rate of cases with time lost or under restricted duties (DART) and the frequency rate of cases requiring at least a medical treatment (RIR) declined by 11% and 26% respectively in the first nine months of 2016 compared to the same period in 2015. In Q3 2016, Port Pirie achieved the milestone of one million working hours Lost Time Injury free.

OPERATIONS REVIEW: MINING

EUR million	9m	9m	%		Q3	Q3	%
(unless otherwise indicated)	2016	2015	Change		2016	2015	Change
CONTINUING OPERATIONS
Revenue	131	201	(34%)		44	50	(12%)
EBITDA	5	(18)	128%		3	(13)	123%
Sustaining capex	7	17	(59%)		3	8	(63%)
Exploration and development capex	8	22	(64%)		3	11	(73%)
Growth capex	-	8	(100%)		-	2	(100%)
Mining Capex	15	46	(67%)		6	20	(70%)
DISCONTINUED OPERATIONS
EBITDA	1	6	(83%)		2	(8)	125%
Capex	(11)	(27)	59%		(4)	(7)	43%

Despite the average period-on-period zinc price being 4% lower in the first nine months of 2016, the Mining segment EBITDA of EUR 5 million was EUR 23 million higher than in the first nine months of 2015 due to the suspension of operations at Middle Tennessee Mines since December 2015 and operational improvements which reduced the direct operating costs. The Mining segment result also excludes the positive EBITDA impact of El Toqui and the negative EBITDA of El Mochito, which have been eliminated as a discontinued operation due to their announced divestment. During the first nine months of 2016, the two discontinued mining operations generated a combined EBITDA of EUR 1 million, comprising of EUR 10 million at El Toqui and negative 9 million at El Mochito.

Mining capital expenditure in the first nine months of 2016 was EUR 15 million, down 67% period-on-period, due to the postponement of non-essential sustaining capital projects across all mining operations, the cancellation of non-committed growth capex in the mining segment since November 2015 and the suspension of operations at Middle Tennessee.  The Mining segment capex excludes the El Toqui and El Mochito operations which have been eliminated from the results as discontinued mining operations. During the first nine months of 2016, the two discontinued mining operations incurred capex of EUR 11 million, comprising of EUR 3 million at El Toqui and EUR 8 million at El Mochito.

'000 tonnes	9m	9m	%		Q3	Q3	%
unless otherwise indicated	2016	2015	Change		2016	2015	Change
Total ore milled [7]	2,026	3,510	(42%)		621	1,034	(40%)
Zinc in Concentrate
Contonga	9	9	0%		3	3	0%
Langlois	25	29	(14%)		7	11	(36%)
Myra Falls	-	9	(100%)		-	-	-
East Tennessee	46	48	(4%)		15	15	0%
Middle Tennessee	-	37	(100%)		-	11	(100%)
Total	80	134	(40%)		24	39	(38%)
Other metals
Lead in concentrate	0.7	0.8	(13%)		0.2	0.3	(33%)
Copper in concentrate	5.4	4.6	17%		1.6	1.4	14%
Silver ('000 troy oz)	816	1,046	(22%)		242	300	(19%)
Gold ('000 troy oz)	1.4	5.5	(75%)		0.4	0.5	(20%)

Excluding 38kt of zinc in concentrate production from El Toqui and El Mochito which have now been classified as discontinued operations due to their sales, in the first nine months of 2016, Nyrstar's mines produced approximately 80kt of zinc in concentrate, a decrease of 40% compared to the first nine months of 2015. Production in the Mining segment was impacted due to the suspension of operations at Campo Morado,  Myra Falls and Middle Tennessee, reduced grade at Contonga and reduced ore throughput at Langlois and East Tennessee. The reduced ore throughput was predominantly experienced during Q3 2016 and amounted to approximately 4,000 tonnes of lost zinc in concentrate production. At Langlois, ground control issues temporarily restricted access to two high-grade Alimak stopes, leading to an approximate 60% reduction in zinc in concentrate production during September 2016 and the East Tennessee Mines, suffered issues due to equipment and stope availability. These issues have largely been resolved during October 2016. At the end of September 2016, the Middle Tennessee mine commenced actions to restart operations with ore production to commence during Q1 2017, and mill processing operations to commence in Q2 2017. Full capacity of 50,000 tonnes per annum of zinc in concentrate is expected to be reached by November 2017.

Mining safety in Q3 2016 was impacted by the fourth fatal incident in 2016. The fatality occurred at the El Mochito mine on 6 August 2016 with a fall from height. The lost time injury rate (LTIR) for the Mining segment in Q3 2016 was 2.1, a decrease of 38% compared to Q3 of 2015. In the first nine months of 2016, LTIR was 2.2, representing a 21% reduction compared to 2.8 for the same period in 2015. The frequency rate of cases with time lost or under restricted duties (DART) and the frequency rate of cases requiring at least a medical treatment (RIR) declined by 13% in the first nine months of 2016 compared to the same period of 2015. In Q3 2016, the East Tennessee mines achieved the milestone of one million working hours DART free.

OTHER DEVELOPMENTS

Mining Segment Divestment Process
On 7 January 2016, Nyrstar formally launched the mining divestment process with its financial advisers BMO Capital Markets and Lazard. Indicative non-binding phase one bids were received in the first quarter and in the second quarter of 2016, Nyrstar continued its negotiations with potential buyers that were moved into the second phase and had been undertaking due diligence and site visits.

At the end of June 2016, Nyrstar entered into a share purchase agreement to sell the El Toqui mine in Chile to Laguna Gold Limited, an Australian based mining company, for a total cash consideration of USD 25 million, plus future proceeds through a price participation agreement. The consideration payable to Nyrstar consists of USD 12 million payable in cash by the closing of the transaction, expected in Q4 2016, and USD 13 million in milestone cash payments over a four year period following the closing of the transaction. In addition, Nyrstar retains upside exposure to an improving commodity price environment by receiving additional cash proceeds through a price participation agreement with Laguna on the first 7.9 million tonnes of ore processed at El Toqui. The price participation commences above a zinc price of USD 2,100 per tonne and is applicable at set zinc prices. As part of the transaction, Nyrstar and Laguna have also agreed to enter into an off-take agreement pursuant to which Laguna will sell to Nyrstar 100% of the zinc concentrate production from El Toqui for the initial four year period following the closure of the transaction and 85% of the zinc concentrate production thereafter.

In September 2016, the Company entered into a share purchase agreement to sell the El Mochito mine in Honduras to Morumbi Resources Inc., a Canadian based mining company, for a cash consideration of USD 0.5 million. As part of the transaction, Nyrstar and Morumbi have also agreed to enter into an off-take agreement pursuant to which Morumbi will sell to Nyrstar 100% of the zinc and lead concentrate production from El Mochito for a ten year period, with treatment charges to be set at benchmark terms following the closure of the transaction which is expected to close before the end of the year.

With prices having risen considerably in the year to date, a number of new parties have expressed an interest in the mines and have since joined the divestment process. Coupled with longer than expected due diligence and negotiation timing, the process has thus been extended versus the original timeframe. Nyrstar expects to announce the divestment of additional mines in Q4 2016, but with the possibility that some mines will be held into 2017. If so, limited additional capex will be utilized to prove up additional reserves and strengthen mine plans to facilitate sales.  The Company remains committed to its strategy to divest the Mining segment.

Port Pirie Redevelopment
During H1 2016 all major engineering work, demolition, major civils and piling work were completed. In Q3 2016 there has been a continued ramp up in the output of the Chinese module yards, allowing a steady stream of modules and equipment to be delivered to Port Pirie during the quarter. Fabrication of all components is now complete and assembly of the remaining modules is in progress. The first large module for the TSL Furnace Building structure has been shipped and was installed on site at the end of Q3 2016 with the remaining modules being delivered by the end of Q4 2016. The final shipment of equipment for the acid plant is expected to be delivered to site at the start of Q4 2016. The supply of equipment from vendors has been progressing well and by the end of Q3 2016, all vendor supplied equipment has either being installed in the Chinese module yard or already delivered to site. The most significant of these equipment supplies has been the 532 tonne Electro Static Precipitator (ESP) module which was succesfully installed on site in August 2016.

Structural, mechanical, piping and electrical work on site is progressing well with the coal grinding plant, offgas system, acid plant wet gas system, acid storage tank, cooling water system, bullion handling and slag caster areas started in Q3 2016. This work will continue into Q4 2016 as the remaining modules and equipment arrive. The new oxygen plant (built, owned and operated by Air Liquide) has been completed in Q3 2016 and is also undergoing commissioning.

As previously communicated, asbestos fibres were discovered in the insulation beneath the cladding of some of the acid plant vessels in August 2016 and reported to the Australian regulatory bodies. A remediation plan was agreed and formally approved at the start of October 2016 with the asbestos to be removed in Q4 2016 with no impact to the cost or schedule of the Port Pirie Redevelopment project. 

Production Guidance, Capital expenditure guidance and Planned Shuts
Nyrstar has reduced its zinc metal and zinc in concentrate production guidance in-line with the one-off exceptional operational issues experienced in Q3 2016 at the Balen, Hobart and Clarksville smelters and Langlois and East Tennessee mines announced at the start of October 2016, the sale of the El Toqui mine which was announced in June 2016 and the sale of the El Mochito mine which was announced in September 2016.  All other aspects of the production, capex and planned maintenance shut guidance for 2016 has been maintained.

Production	Initial Guidance	Guidance adjusted at H1 2016 results	Guidance adjusted 3 October 2016
Metals Processing
Zinc (kt)	1,000 - 1,100	1,000 - 1,100	Approx. 1,000
Mining - metal in concentrate
Zinc (kt)	180 - 210	130 - 160	90-110
Lead (kt)	12 - 15	7 - 10	-
Copper (kt)	5 - 7	6 - 8	-
Silver (k toz)	2,000 - 2,500	1,800 - 2,300	-
Gold (k toz)	14 - 18	1 - 3	-

Capex (EURm)	Initial Guidance	Guidance adjusted at H1 2016 results
Metals Processing	240 - 260	-
Sustaining	95 - 105	-
Growth	35 - 45	-
Port Pirie Redevelopment	110	-
Mining	40 - 55	35 - 50
Sustaining	20 - 25	15 - 20
Exploration and Development	20 - 30	-
Growth	-	-
Group capex	280 - 315	275 - 310

Adjusted Planned maintenance shuts

Smelter & production step impacted	Timing and duration	Estimated impact
Auby - roaster, leaching, cellhouse, indium	Q1:  3 weeks	7,600 tonnes
Balen - cellhouse, leaching	Q2:  1 week	4,000 tonnes
Balen - roaster F4	Q1-2:  6 weeks	nil
Balen - roaster F5	H2 2017 [8]   2 weeks	nil
Clarksville - roaster	Q3:  2 weeks	3,400 tonnes
Hobart - roaster	Q2:  2 weeks	nil
Port Pirie - lead plant	H1 2017 [9]   4 weeks	16,600 tonnes

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 .

For further information contact:
Anthony Simms Group Manager Investor Relations   T: +41 44 745 8157     M: +41 79 722 2152
anthony.simms@nyrstar.com
Franziska Morroni  -  Group Manager Corporate Communications T: +41 44 745 8295  M: +41 79 719 2342
franziska.morroni@nyrstar.com

---