25 April 2012
Zinc in concentrate production in line with management expectations and full year market guidance
Production of zinc in concentrate of 75,000 tonnes consistent with Q4 2011
Langlois mine ramping-up in line with expectations, with commercial production anticipated to commence in Q2 2012
Milling operations temporarily suspended at the Coricancha mine since earlier this month
Full year mining production guidance for all metals maintained
Zinc metal production was 258,000 tonnes in Q1 2012
| '000 tonnes unless otherwise indicated
|| Q1 2012
|| Q4 2011
|| D% |
| Zinc in concentrate
|| (1)% |
| Gold ('000 troy ounces)
|| (26)% |
| Silver ('000 troy ounces)
|| (2)% |
| Copper in concentrate
|| 7% |
| Zinc metal
|| (19)% |
| Lead metal (Port Pirie)
|| (13)% |
| Average LME zinc price (USD/t)
|| 7% |
| Average exchange rate (EUR/USD)
|| (3)% |
Zinc in concentrate production from Nyrstar's mining operations in Q1 2012 was at similar level to the record level of production achieved in Q4 2011, and in line with management expectations and full year market guidance. Zinc in concentrate production at Nyrstar operated mines, which excludes the Talvivaara zinc stream, was 3% higher in Q1 2012 compared to Q4 2011. This reflects improved operating performance at Middle Tennessee Mines, the Contonga mine successfully obtaining its permit to expand milling capacity from 660 to 990 tonnes per day and the ramp-up of the Langlois mine, which is progressing in line with management expectations. Deliveries under the Talvivaara streaming agreement were down 27% in Q1 2012 compared to Q4 2011. Production was adversely impacted by downtime at the Talvivaara metals recovery plant due to the commissioning of a new water recycling system in January and an unscheduled stoppage following a fatality at the Talvivaara operation in March.
Production of other metals in concentrates in Q1 2012 was also in line with full year market guidance, with a 7% increase in copper in concentrate production and silver and lead in concentrate production maintained at similar levels to Q4 2011. Gold production in Q1 2012 was 26% lower than in Q4 2011, mainly due to mechanical issues with the filter press at the Coricancha mine and temporary access issues experienced at the El Toqui mine which resulted from demonstrations in relation to social conditions by communities across the region of Chile in which the mine is situated.
During April 2012, the Coricancha mine, Peru, received a suspension order from the Peruvian mining authority (the Supervising Organisation of Investment in Energy and Mining (OSINERGMIN)) to temporarily cease its milling operations. The order concerns the storage and planned movement of legacy tailings to a new facility which has been constructed by Nyrstar. In accordance with the cessation order, activities were suspended at the Coricancha mill. Nyrstar is pursuing several courses of action to minimize the impact of the suspension and to recommence milling operations as soon as possible. Mining operations, exploration and development activities are not impacted and are currently continuing as normal. The impact on production at Coricancha cannot yet be reliably ascertained. A best estimate would indicate milling operations could be suspended until late Q2 2012; however, this is subject to a number of factors. Although the suspension of milling operations at Coricancha will impact the site's performance, the impact on Nyrstar's operational and financial performance is not expected to be material.
Zinc metal production at Nyrstar's smelters in Q1 2012 was approximately 258,000 tonnes, 19% lower than the record performance achieved at the smelters in Q4 2011. Production at the Balen/Overpelt smelter was impacted by national industrial action and an unplanned shut in Q1 2012, with the shortfall expected to be recovered during the remainder of 2012. Clarksville operations were disrupted by the need to temporarily shut the roaster to remove a frozen section of the roaster bed, while temporary issues with furnace inductors at Hobart limited production during Q1 2012.
Lead metal production at Port Pirie in Q1 2012 was 13% lower than Q4 2011, primarily due to the planned three week shut of the slag fumer which was announced in the full year 2011 results. Gold production at Port Pirie was approximately 16,000 troy ounces in Q1 2012, an increase of 129% compared to Q4 2011.
Financial performance in Q1 2012, relative to Q4 2011, benefited from the average zinc price increasing by 7% to USD 2,025/t and the euro depreciating against the dollar by 3% to average 1.31 during the quarter (impacting Nyrstar's earnings as they are largely denominated in US dollars, whereas a substantial proportion of operating costs are denominated in euros).
In February Nyrstar and Sims Metal Management successfully completed the sale of Australian Refined Alloys' secondary lead producing facility in Sydney, Australia (ARA Sydney) to companies associated with Renewed Metal Technologies for a total sale price of approximately EUR 60 million.
Management will discuss this statement in a conference call with the investment community on 25 April 2012 at 2:00pm 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/4n6hygcj
 Includes production from Nyrstar operated mines and deliveries under the Talvivaara streaming agreement
 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 2012, Campo Morado produced approximately 460,000 troy ounces of silver
 Zinc price is average of LME daily cash settlement prices
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
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The full press release can be downloaded from the following link:
Press Release (English)
Press Release (Dutch)
Press Release (French)