Nyrstar NV

Annual Report • Apr 21, 2017

Annual Report 2016

Annual Report 2016

About Nyrstar	01
Key figures	03
Chairman & CEO Statement	04
Nyrstar Board of Directors	06
Nyrstar Management Committee	07
Facts & Figures 2016	09
Management Report	10
Corporate Governance	34
Remuneration Report	54
Report of the Board of Directors	64
Consolidated Financial Statements	78
Statutory Auditors Report	173
Nyrstar NV summarised (non-consolidated) financial statements as at 31 December 2016	176
Glossary	178

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 and smelting operations located in Europe, the Americas and Australia and employs approximately 4,300 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

KEY SHARE FACTS

FOR THE YEAR ENDED 31 DECEMBER	2016	2015
Market capitalisation	EUR 729,331,068	EUR 544,072,141
Ordinary shares	93,563,960	340,045,088
Treasury shares	Nil	12,571,225
Free float	72%	76%
Gross capital distribution	EUR 0	EUR 0
Closing share price	EUR 7.79	EUR 1.60
Intra day high share price	EUR 9.59	EUR 3.93
Intra day low share price	EUR 4.64	EUR 1.23
Average daily number of shares	339,711	1,598,469

Key figures 20161

METALS PROCESSING PRODUCTION	2016	2015
Zinc metal ('000 tonnes)	1,015	1,115
Lead metal ('000 tonnes)	187	185
MINING PRODUCTION
Zinc in concentrate ('000 tonnes)	96	161
Copper in concentrate ('000 tonnes)	2.1	2.8
Silver ('000 troy ounces)	554	872
Gold ('000 troy ounces)	1.8	6.1

MARKET

Zinc price (USD/t)2	2,095	1,928
EUR/USD average exchange rate	1.11	1.11

KEY FINANCIAL DATA (EUR MILLION)

Group Revenue	2,763	3,020
Group Underlying EBITDA3	193	267
Metals Processing Underlying EBITDA	222	336
Mining Underlying EBITDA	6	(31)
Other and Eliminations Underlying EBITDA	(35)	(38)

FINANCIAL CALENDAR

22 February 2017	2016 Full Year Results
20 April 2017	Annual General Meeting
4 May 2017	2017 First Interim Management Statement
2 August 2017	2017 Half Year Results
31 October 2017	2017 Second Interim Management Statement

Dates are subject to change. Please check the Nyrstar website for financial calendar updates.

KEY FINANCIAL DATA	2016	2015
Loss for the period	(414)	(432)
Basic Loss per share from continuing operations (EUR)	(3.16)	(4.66)
Group Capital Expenditure (CAPEX)	261	379
CASH FLOW
Cash flow from operating activities before working capital changes	113	222
Working capital and other changes	(195)	(249)

NET DEBT EXCLUSIVE OF ZINC PREPAY AND PERPETUAL SECURITIES

Net debt, end of period	865	781
Net debt/EBITDA ratio	4.5	2.9

NET DEBT INCLUSIVE OF ZINC PREPAY AND PERPETUAL SECURITIES

Net debt, end of period	1,163	937
Net debt/EBITDA ratio	6.0	4.9

NON-FINANCIAL KPIs

RIFR	7.6	9.2
LTIFR	1.9	2.5

¹ FY 2016 and FY 2015 numbers exclude El Toqui, El Mochito, Contonga and Coricancha as the mines are sold or reclassified as discontinued operation Zinc prices are average of LME daily cash settlement prices

2

³ Underlying EBITDA is a non-IFRS measure of earnings, which is used by management to assess the underlying performance of Nyrstar's operations and is reported by Nyrstar to provide additional understanding of the underlying business performance of its operations. Nyrstar defines "Underlying EBITDA" as profit or loss for the period adjusted to exclude loss from discontinued operations (net of income tax), income tax (expense)/benefit, share of loss of equity-accounted investees, gain on the disposal of equity-accounted investees, net finance expense, impairment losses and reversals, restructuring expense, M&A related transaction expenses, depreciation, depletion and amortization, income or expenses arising from embedded derivatives recognised under IAS 39 "Financial Instruments: Recognition and Measurement" and other items arising from events or transactions clearly distinct from the ordinary activities of Nyrstar. For a definition of other terms used in this document, please see Nyrstar's glossary of key terms available at: http://www.nyrstar. com/investors/en/Pages/investorsmaterials.aspx or at the back of this document.

HILMAR RODE CHIEF EXECUTIVE OFFICER

HILMAR RODE

postponement of the hot commissioning by 6 months to rework the fabrication of key module components and further reduce ramp-up risk. The project remains the right strategic decision for Nyrstar and will have a significant positive long-term effect on our operations and deliver a substantial earnings uplift in the region of EUR 130 million per annum (from 2020), maximising returns to our stakeholders.

OUTLOOK & 2017 FOCUS AREAS

Nyrstar is supported by a robust industry backdrop. Even though zinc price started the year at a depressed level of USD 1,554 per tonne and moved down to a 6 year low of USD 1,444 per tonne in mid-January 2016, since then, on a relative basis, zinc outperformed the rest of the base metals complex and was one of the best performing commodities during 2016. In the medium term, we expect the bullish trend for the zinc price to continue on the back of supportive supply and demand fundamentals which will have a positive impact on our financial performance.

Looking ahead, Nyrstar's key focus areas for 2017 are:

• 1. Continuing the commissioning and optimised ramp-up of the Port Pirie Redevelopment;
• 2. Progressing the divestment of the cash flow positive mining assets for value and reviewing the potential re-start of the Myra Falls mine;
• 3. Delivering a step change in operational performance across all operations to unlock the full potential of the existing asset base, including further corporate and operational cost savings; and

Our strategy is aimed at positioning the business for a sustainable future as a top performing zinc and lead business. As part of the Company's drive to deliver this, the Nyrstar Board and senior management team was strengthened over the last 12 months with a focus on operational and commercial expertise to bolster our performance.

In addition, we have performed a review of our operations and identified three main streams that offer opportunities for substantially increasing Nyrstar's profitability:

• 1. Operating performance improvements across our already robust zinc smelter network;
• 2. Optimization, de-risking and additional earnings uplift from the Port Pirie Redevelopment; and
• 3. Extraction of maximum value from our now cash flow positive North American mining portfolio.

The health and safety of our employees is our first priority at Nyrstar. We are committed to maintaining safe operations and proactively managing risks with respect to people and the environment. Tragically, 2016 was marked by four fatalities in Mining, three at the El Mochito mine in Honduras which has been divested, and one at the Langlois mine in Canada. We consistently reinforced our strong safety first commitment during the course of the year and have since seen a large improvement in our lagging safety indicators. In addition, no environmental events with material business consequences or long-term environmental impacts occurred during the period.

PROGRESS ON STRATEGIC PRIORITIES

Over the course of 2016, Nyrstar made strong progress on the clear strategic priorities that were announced in November 2015.

Our balance sheet has been substantially strengthened with the completion of a number of financing initiatives, including a rights offering, convertible bond, upsizing of the zinc metal prepay and upsizing of the Trafigura working capital facility on a committed basis. In March 2017, the balance sheet was further strengthened with the issuance of EUR 400 million of senior unsecured notes with a 7 year tenor which improved our liquidity and extended our average bond maturity from 2.5 years to 4 years. We will continue to monitor the market for additional opportunistic financings in order to further strengthen the balance sheet and extend our existing maturity profile and improve liquidity.

Significant progress was also made towards streamlining the mining portfolio which resulted in sustainable cost savings. We completed the sale of two mines (El Toqui and El Mochito) and entered into share purchase agreements for two other mines (Coricancha and Contonga). Nyrstar's remaining mining operations consumed EUR 15 million of cash in 2016 versus EUR 74 million in 2015.

During 2016, the Port Pirie Redevelopment saw the delivery and installation of a number of large modular components and the commencement of cold commissioning activities. A comprehensive review of the project was concluded in February 2017 and resulted in the

Chairman & CEO Statement

Dear Shareholders,

In 2016, Nyrstar remained the second largest zinc metal producer globally with a geographically diverse smelter network delivering production in line with guidance. We completed a challenging year with a robust operational and sales performance in the fourth quarter of 2016 and are confident that this is a strong platform to build on for a successful 2017. We also progressed our mining divestment with the remaining assets now in a cash flow positive position.

MARTYN KONIG CHAIRMAN OF THE BOARD OF DIRECTORS

MARTYN KONIG CHAIRMAN OF THE BOARD OF DIRECTORS

4. Maintaining a strong balance sheet and liquidity profile utilising a diverse range of funding opportunities.

We are confident that we have the right strategy, asset base and people with the necessary technical, operational and commercial expertise to create value for our stakeholders and in particular shareholders.

On behalf of the Board of Directors we would like to express our thanks to all Nyrstar employees for their continued commitment and dedication. We would also like to express our gratitude to our customers, suppliers and shareholders for your on-going support and confidence in Nyrstar.

Nyrstar Board of Directors The Nyrstar Management Committee

Hilmar Rode, Executive Director

Hilmar was appointed Executive Director in December 2016, having been appointed Chief Executive Officer of Nyrstar in the same month. He brings more than 20 years of experience in the metals, paper & packaging and chemicals industries to Nyrstar (see Nyrstar Management Committee for further details).

Hilmar Rode, Chief Executive Officer

Hilmar Rode was appointed Chief Executive Officer of Nyrstar in December 2016. He has more than 20 years of experience in the metals (zinc, copper, coal and diamonds), paper & packaging and chemicals industries. Hilmar has worked at BHP Billiton, Glencore, Mondi, Anglo American and Praxair in senior management roles spanning operations, strategy, business development and R&D. Most recently, he led the successful transformation of Minera Escondida in Chile operated by BHP Billiton. Prior to BHP Billiton, Hilmar led a restructuring and business optimisation project at Glencore's Kazzinc operation in Kazakhstan.

Willie Smit, Senior Vice President, Corporate Services

Willie was appointed as Senior Vice President Corporate Services in January 2016. Prior to Nyrstar, Willie was Senior Vice President & Group Head of Human Resources at the Swiss-based cement producer Holcim Ltd. During his 30 year career, he held several senior management positions in HR including Executive Vice President and Head of HR at ArcelorMittal and Vice President HR Europe and Africa at the Siberian-Urals Aluminium Company (SUAL).

Christopher Cox, Non-Executive Director

Christopher Cox, Non-Executive Director, currently serves on the Trafigura Supervisory Board. He was also formerly the Head of the Non-ferrous and Bulk trading division at Trafigura and a member of the Trafigura Management Board between March 2004 and December 2011 as well as a member of their Board of Directors from October 2013 until early September 2014. Prior to working for Trafigura, Christopher was employed by Gold Fields of South Africa holding positions in mine and project evaluations and marketing of base metal concentrates and refined metals.

Anne Fahy, Non-Executive Director

Anne Fahy, Non-Executive Director, currently sits on the Boards of Interserve Plc and SThree Plc, and Chairs the Audit Committees of both companies. Prior to joining the board of SThree in October 2015, Anne was Chief Financial Officer of BP's Aviation Fuels business, having worked in a variety of finance and finance-related roles in her 27 years at the company. Anne is a Fellow of the Institute of Chartered Accountants in Ireland and worked at KPMG in Ireland and Australia prior to joining BP in 1988.

Jesús Fernandez, Non-Executive Director

Jesús Fernandez, Non-Executive Director, is currently Head of M&A at Trafigura Group Pte. Ltd. and sits on the board of their mining division. Jesús is a board member of a number of companies including Bowie, Atalaya Mining and Mawson West and is a Principal of the Galena Private Equity Resources Fund. He has more than 15 years of experience in corporate finance, having previously worked for International Power PLC in its project finance division.

Carole Cable, Non-Executive Director

Carole Cable, Non-Executive Director, is currently a Partner of the Brunswick Group, an international communications firm, where she is the joint head of the energy and resources practice specialising in the metals and mining sector. Prior to her current position, she worked at Credit Suisse and JPMorgan where she was a mining analyst and then moved into institutional equity sales covering the global mining sector as well as Asia ex Japan.

Martyn Konig, Chairman

Martyn Konig was appointed Chairman in April 2016, having previously been Non-Executive Director on the Board since April 2015. He is currently the Chief Investment Officer for T Wealth Management SA, the private family office for partners and senior management of the Trafigura Group, as well as Non-Executive Chairman at Euromax Resources and Director at Newgold. Mr Konig has over 35 years of experience in investment banking and the commodity markets as well as extensive experience in the natural resource sector.

Christopher Eger, Chief Financial Officer

Chris was appointed Chief Financial Officer in November 2015. He has extensive financial, M&A and commercial expertise related to the Metals and Mining sector, gained over a 15-year career in investment banking, metals trading and private equity. Previously, Chris was at Trafigura where he was a senior member of the Mergers and Acquisitions team. Prior to that, he was a member of the investment banking group of Bank of America Merrill Lynch, where he worked with metals and mining companies on debt and equity financing and M&A. He also worked as a Director in the Global Metals and Mining Group at BMO Capital Markets.

Frank Rittner, Chief Operating Officer

Frank was appointed Chief Operating Officer of Nyrstar in January 2017. He has almost two decades of experience in the metals and mining sector, holding senior positions in the industry as well as international consulting companies, such as PwC and McKinsey & Co. Prior to joining Nyrstar, Frank was Chief Operating Officer at Glencore's Kazzinc operations in Kazakhstan. Before this, he was a partner at PwC, leading Advisory Services for Metals and Mining clients in Central and Eastern Europe. He was also a Management Board Member at Interpipe Group, a vertically integrated producer of steel and steel pipes.

Sebastião Balbino, Chief Commercial Officer

Sebastião was appointed Chief Commercial Officer of Nyrstar in January 2017. He has 35 years of experience in the metals and mining sector, holding senior commercial and management positions in the industry. Sebastião joined Nyrstar in May 2016 as Vice President Commercial. Before this, he was the country manager for Angola for DT Group. Sebastião spent over two decades in senior commercial roles, including General Manager Commercial at Votorantim Metais Zinco, a global metals and mining company. He was also the Production Manager for Companhia Paraibuna de Metais.

010	Management Report
034	Corporate Governance Statement
054	Remuneration Report
078	Statement of Responsibility
	as at 31 December 2016
	as at 31 December 2016
178	Glossary

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• Report of the Board of Directors ex article 119 Company Code
  -
• Consolidated Financial Statements for the year ended 31 December 2016
• Notes to the Consolidated Financial Statements
• Statutory auditor's report on the consolidated financial statements
• Nyrstar NV summarised (non-consolidated) financial statements

Facts & figures 2016

Management report Management Report

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, such as copper, gold and silver. Nyrstar has six smelters, one fumer and seven mining operations, located in Australia, the Americas and Europe and employs approximately 4,300 people. Nyrstar's global operations are located close to key customers and major transport hubs to facilitate delivery of raw materials and distribution of finished products. The Company is incorporated in Belgium and has its corporate office in Zurich, Switzerland. Nyrstar is listed on Euronext Brussels under the symbol NYR. For further information, please visit the Nyrstar website: www.nyrstar.com

Management Report

Locations

Primary Products

Zinc

A global leader in zinc: Nyrstar is one of the world's largest zinc smelting companies based on production volumes. Nyrstar produces zinc in concentrate from its mining operations and a variety of refined market zinc products including special high grade zinc (SHG), zinc galvanising alloys, and zinc die-casting alloys as an outcome of its zinc smelting process. Zinc has diverse applications and uses, from construction and infrastructure, to transport, industrial machinery, communications, electronics and consumer products. This makes it an essential and highly sought-after resource.

Lead

Nyrstar produces lead in concentrate and refined market lead (99.9%). Lead's primary usage is for the production of batteries. In fact, more than 80% of world production goes into the manufacture of lead acid batteries which continue to play an important part in the starter mechanism for automobiles as well as in batteries for ebikes where demand from developing economies remains significant. Other end uses for lead include underwater cable sheathing, glassware, solder and roof sheeting.

Copper

Nyrstar produces copper in concentrate and copper cathode. Copper is predominantly used in building construction. Other significant end-use markets include electrical and electronic products, transportation equipment, consumer products and industrial machinery and equipment.

Gold

Gold is produced in concentrate from our mining operations. Nyrstar also recovers gold in the lead refining process.

Silver

Silver is produced in concentrate from our mining operations. Nyrstar also recovers silver from the lead refining process as a silver doré and as a by-product from the zinc refining process into various leach products.

Strategy

Nyrstar's management has a strategy aimed at positioning the business for a sustainable future as a leading metals processing business. Through its deep market insight and unique processing capabilities, Nyrstar aims to generate superior returns by extracting the maximum value inherent in the mineral resources and by-products it processes.

Accordingly, Nyrstar has developed a coordinated approach to redeveloping and operating its asset portfolio to optimize the concentrate feed into its smelters, maximize minor and precious metal extraction, and enhance the margins of its end-product mix. To realize its strategy, management has determined the following strategic priorities:

• Selectively invest in existing smelter network to allow the processing of higher margin feeds
• Redevelop Port Pirie metal recovery and refining facility to maximize the value from concentrates and residues
• Streamline the asset base with a focus on smelting operations
• Strengthen and maintain a more conservative balance sheet
• Optimize the feed book of raw materials
• Improve end product mix and integration with key end users

* Sale purchase agreements signed and completion expected in H1 2017

Balance Sheet Strengthening Measures

Nyrstar's balance sheet has been substantially strengthened in 2016 with the completion of a number of financing initiatives. During 2016, the Company completed a EUR 274 million rights offering; repaid the EUR 415 million retail bond that was due in May 2016; and introduced an uncommitted USD 150 million revolving working capital facility with Trafigura which in November 2016 was upsized to USD 250 million and extended to the end of 2017 on a committed basis. Furthermore, in July 2016, the Company issued a EUR 115 million convertible bond due in 2022; in August and November 2016 increased the USD 150 million zinc metal prepay that was issued in December 2015 to USD 175 million and USD 185 million respectively; and finalised a USD 75 million short term silver prepay in April 2016 and a further short term silver prepay of USD 50 million in December 2016.

In March 2017, Nyrstar issued EUR 400 million of senior unsecured notes due in March 2024 with a coupon of 6.875% per annum. The proceeds of these notes are to be used by the Company to refinance amounts outstanding under the convertible bonds due 2018 issued by Nyrstar in an original aggregate principal amount of EUR120 million, and to pay down indebtedness under, but not cancel, existing revolving facility agreements. Nyrstar will continue to monitor the market for additional opportunistic financings in order to further strengthen the balance sheet and extend its existing maturity profile and improve liquidity.

Mining 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 which occurred on the closing of the transaction on 3 November 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 entered 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 also entered 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 occurred on 21 December 2016.

In December 2016, the Company entered into share purchase agreements to sell the Contonga mine in Peru and various mineral claims located in Quebec, Canada to subsidiaries of Glencore plc, a global diversified natural resources company, for a total cash consideration of USD 26 million. The total cash consideration for the transactions is made up of USD 21 million for the Contonga mine and USD 5 million for the mineral claims. Closing of the transactions are subject to customary closing conditions and are expected to occur in the first half of 2017.

The Company also in December 2016 entered into a share purchase agreement to sell the Coricancha mine in Peru to Great Panther Silver Limited, a primary silver mining and exploration company listed on the Toronto Stock Exchange, for a total cash consideration of USD 0.1 million plus earn-out consideration of up to USD 10 million. Under the earn-out, Nyrstar will be paid 15% of the free cash-flow generated by the Coricancha mine during the 5-year period after which the Coricancha mine is cumulative free cash-flow positive from closing of the transaction. Closing of the transaction is subject to customary closing conditions and is expected to occur in H1 2017.

With zinc prices having risen considerably over the course of 2016, a number of new parties have expressed an interest in the remaining 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 2017 and will utilize limited additional capex to prove up additional reserves and strengthen mine plans to facilitate sales. The Company remains committed to its strategy to divest its Mining assets for value.

The cash consumption of Mining has been substantially reduced with the divestment or agreed divestment of the majority of the Latin American mining operations and operational improvements at the continuing operations during 2016. Nyrstar's continuing mining operations consumed EUR 15 million of cash in 2016 versus EUR 74 million in 2015. In 2017, Nyrstar will continue to make operational improvements to the continuing mining operations and expects that at current zinc prices the segment will be cash flow positive. Limited additional exploration capex will be deployed to further enhance the mine plans, convert resources into reserves and make operational improvements to maximize the free cash flow generating potential and facilitate the best possible sale proceeds for the remaining mining assets.

Port Pirie Redevelopment

During 2016 all major engineering work, demolition, major civils and piling work were completed at the Port Pirie Redevelopment. In the second half of 2016, fabrication of all components in the Chinese module yards was completed and the final modules were shipped to site for installation. Assembly of the remaining modules is now in progress.

In August 2016, asbestos fibres were discovered in the insulation beneath the cladding of some of the acid plant vessels and reported to the Australian regulatory bodies. A remediation plan was agreed and formally approved at the start of October 2016 with the asbestos removed in Q4 2016 and January 2017 with no impact to the cost or schedule of the Port Pirie Redevelopment project.

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 has continued into Q4 2016 and Q1 2017. The new oxygen plant (built, owned and operated by Air Liquide) was completed in Q3 2016 and is currently undergoing commissioning.

As at 31 December 2016, capex incurred at Port Pirie was AUD 512 million with AUD 549 million committed, AUD 208 million drawn under the perpetual securities and AUD 83 million remaining to be drawn.

As communicated by the Company on 9 February 2017, a comprehensive review of the Port Pirie Redevelopment project has been undertaken and completed to ensure that the scope, flow sheet and commissioning will provide Port Pirie with industry leading performance.

Management's review has confirmed that the Port Pirie Redevelopment is the right strategy for the Company as it will have a significant positive long-term effect on Nyrstar's operations and deliver a substantial earnings uplift. However, the review also identified that rework is required to the fabrication of key module components, delaying the start of hot commissioning. Also as part of the review, a number of engineering improvements have been identified that will unlock additional value. Port Pirie is at a stage where the identified improvements can still be implemented effectively ahead of the hot commissioning milestone.

Consequently, the TSL furnace hot commissioning will be postponed by 6 months to September 2017. This time will be primarily used to do the rework referred to above and to enhance the slag tapping process on the TSL furnace. Ancillary benefits include the completion of further advanced training of plant personnel as well as improved start-up sequencing of the TSL furnace and tie-in to the existing operations. To further reduce ramp-up risk, the Company intends to continue operating the existing sinter and acid plants in parallel with the ramp-up of the TSL furnace and new acid plant. The total estimated cost to complete the project is expected to increase from AUD 563 million to AUD 660 million.

The review has confirmed that the incremental EBITDA uplift from the redevelopment, using 2016 as a basis, will increase from the previous full ramp-up guidance of EUR 80 million per annum and is expected to be in the region of EUR 40 million in 2018, EUR 100 million in 2019 and EUR 130 million per annum from 2020. The modelling specifics for the Port Pirie Redevelopment EBITDA uplift are disclosed in the Company's "Introduction to Modelling" presentation available on the Company's website.

Changes to the Nyrstar Management Committee

As part of the Company's drive to execute the current strategy, a number of changes have been made to the senior management structure to further bolster performance. On 13 December 2016, Nyrstar's Chief Executive Officer was replaced with the departure of Bill Scotting and commencement of Hilmar Rode.

Since joining in 2015, Bill Scotting led Nyrstar and was instrumental in implementing the change in strategy to strengthen the balance sheet, divest the Mining assets, deliver substantial cash and cost savings and progress the Port Pirie Redevelopment.

Hilmar Rode has an extensive background in the metals industry and specifically his experience and technical knowledge of the smelting business will be an asset for the Metals Processing transformation strategy. He has demonstrated experience through his involvement with the construction and commissioning of an ISA smelt furnace and acid plant at the Kazzinc project in Kazakhstan, and his extensive experience at the Skorpion zinc project in Namibia which produces special high grade zinc.

On 13 January 2017, Frank Rittner was appointed as Chief Operating Officer and Sebastião Balbino as Chief Commercial Officer, both reporting to Chief Executive Officer Hilmar Rode.

In his role, Frank is responsible for the development and performance of all of Nyrstar's Metals Processing and Mining operations. Frank has almost two decades of experience leading global operational improvement projects in metals and mining. Most recently, he was the Chief Operating Officer at Kazzinc Limited where he steered the implementation of best practices and technological innovations in metallurgy and mining, energy efficiency, optimization of maintenance and investments, along with a roll-out of continuous improvement projects delivering increased production. Prior to this role, Frank was a Partner at PricewaterhouseCoopers, leading metals and mining Advisory across Central and Eastern Europe.

Sebastião joined the Company in May 2016 as VP Commercial. In his new position, Sebastião will continue to oversee the commercial sales and marketing teams and focus on the Company's concentrate procurement strategy.

As a consequence of the restructure, Michael Morley, SVP, Metals Processing, has left the Company during Q1 2017.

Relationship Agreement with Trafigura

In connection with Trafigura's commitment to support the 2016 rights offering, Nyrstar has executed a Relationship Agreement with Trafigura Group Pte. Ltd and its affiliated persons to govern its relationship and ensure that all business transactions are conducted at arm's length and on normal commercial terms. The Relationship Agreement will have effect for as long as Trafigura holds at least 20% but less than 50% of the shares in Nyrstar. Key elements of the Relationship Agreement include:

• All business dealings to continue on arm's length basis and on normal commercial terms
• Trafigura will not acquire any shares or voting rights in the Company beyond a 49.9% stake
• Trafigura does not intend to and will not solicit, launch or publicly announce the solicitation or launching of a private or public offer or any proxy solicitation that is not recommended or otherwise supported by the Company's board (subject to no other person holding 10% or more of the shares in the Company)

In addition to the Relationship Agreement, Nyrstar has negotiated strategic commercial agreements with Trafigura comprising of zinc and lead concentrate and finished refined aluminum metal purchase agreements, and finished refined zinc and lead and finished refined copper cathodes metal sales agreements. The key aspects of the strategic commercial agreements include:

• Long term contracts, commencing 1 January 2016
• Extending the frame purchase agreements for lead and zinc concentrates
• The sale of certain available quantities of commodity grade zinc and lead metal produced by Nyrstar
• Market-based prices with annually agreed premiums and treatment charges

These agreements provide Nyrstar with additional certainty of supply of concentrate in a market expected to remain tight in the medium term, and leverage Trafigura's strong marketing presence for product sales.

Termination of European marketing agreement for commodity grade zinc metal with Noble

In April 2016 Nyrstar announced that it terminated the offtake and marketing agreement with Noble Group Limited ("Noble") to market and sell 200,000 tonnes per annum of commodity grade zinc metal produced at its European smelters. Nyrstar has included the zinc metal volumes that were previously to be provided to Noble until the end of 2016 into the zinc metal offtake agreement with Trafigura entered into on 9 November 2015 with market based terms and a prepayment mechanism.

Outlook 2017

Nyrstar remains positive about the fundamentals of the zinc market. Following a review of the business, a number of opportunities were identified for operational improvements aimed at ensuring the long-term viability of the Company and delivering increased production and earnings.

Looking forward to the rest of 2017, Nyrstar's key focus areas are:

• Continuing the commissioning and optimised ramp-up of the Port Pirie Redevelopment
• Progressing the divestment of the cashflow positive Mining segment at appropriate values and reviewing the potential re-start of the Myra Falls mine
• Maintaining a strong balance sheet and liquidity profile utilising a diverse range of funding opportunities
• Deliver a step change in operational performance across all operations to unlock the full potential of the existing asset base; further corporate and operational sustainable cost savings to be achieved

Nyrstar is confident that, with the balance sheet strengthening measures, ongoing capital discipline and operational improvements, the Company is taking the right steps to benefit from the continuous strengthening of the zinc market.

SHARES Share Price Development

The Nyrstar share price decreased during 2016 by 15%, compared to a 54% increase in the MSCI World Metals and Mining Index, over the same period, and a 9% increase in the average annual zinc price. The average traded daily volume was approximately 339,711 shares in 2016 compared to 278,162 in 2015 (adjusted for the 1 for 10 reverse stock split that became effective on 9 June 2016), an increase of 22%.

Management report Management report

Share Capital

Nyrstar ordinary shares have been admitted to trading on Euronext® Brussels (symbol NYR BB) since 29 October 2007. As at 31 December 2016, the registered share capital amounted to EUR 97,192,929.19 represented by 93,563,960 ordinary shares with a fractional value of (rounded) EUR 1.04. The Company's shares do not have a nominal value.

Convertible Bonds

As at 31 December 2016, the Company had on issue EUR 120 million of senior unsecured convertible bonds due 2018 and EUR 115 million of senior unsecured convertible bonds due 2022.

The bonds due in 2018 were issued in September 2013 at 100 per cent of their principal amount (EUR 100,000 per bond) and have a coupon of 4.25% per annum. The conversion price as at 31.12.2016 was EUR 21.63 per share with EUR 120 million of senior unsecured convertible 2018 bonds outstanding and, if all of the bonds were to be converted into new ordinary shares at the above conversion price, 5,547,850 new ordinary shares would be issued. The bonds are listed and admitted to trading on the Frankfurt Stock Exchange's Open Market segment.

The bonds due in 2022 were issued in November 2016 at 100 per cent of their principal amount (EUR 100,000 per bond) and have a coupon of 5.00% per annum. The conversion price as at 31.12.2016 was EUR 9.60 per share with EUR 115 million of senior unsecured convertible 2022 bonds outstanding and, if all of the bonds were to be converted into new ordinary shares at the above conversion price, 11,979,166 new ordinary shares would be issued. The bonds are listed and admitted to trading on the Frankfurt Stock Exchange's Open Market segment.

Shareholder Structure

Pursuant to applicable Belgian legislation on the disclosure of significant shareholdings and the Company's articles of association, any person who acquires at least 3% of the total existing voting rights of the Company must notify both the Company and the Belgian Financial Services and Markets Authority (the FSMA, which is the successor to the Banking, Finance and Insurance Commission, the CBFA, since April 1, 2011).

A notification is also required when a person acquires at least 5%, 7.5%, 10%, 15%, 20% or any further multiple of 5% of the total existing voting rights of the Company, or when, due to disposals of securities, the number of voting rights falls below one of these thresholds. A list as well as a copy of such notifications can be obtained from the Company's website (www.nyrstar.com). As at 31 December 2016, on the basis of the notifications received by the Company, the major shareholders of the Company (i.e. holding more than 3% of the total voting rights) were:

Shareholder's Name	Shareholder's Address	Date of Notification	Number of	Voting Rights Shareholding
Urion Holdings (Malta) Ltd, a subsidiary of Trafigura B.V.	Leicester Court, Suite 2, Edgar Bernard Street, Griza GZR 1702, Malta	1 September 2015	23,055,662	24.64%
BlueMountain Capital Management LLC	280 Park Ave, 12 FL, New York, NY 10017, USA 1 March 2016		4,250,000	4.54%
BlackRock	55 East 52nd Street, New York, NY 10055, USA 22 November 2016		5,332,033	5.70%
Umicore NV	Broekstraat 31, 1000 Brussels, Belgium	23 March 2011	3,003,403	3.21%

Shareholder Profile

The Company has a wide shareholder base, mainly composed of institutional investors in the United Kingdom, the United States, Belgium and other European countries, but also comprising Belgian retail investors. Retail shareholders represent approximately 30 percent of the Nyrstar shareholder base.

KEY SHARE FACTS

For the year-ended 31 December	2016	2015
Number of issued ordinary shares	93,563,960	340,045,088
Number of treasury shares	Nil	12,571,225
Market capitalisation (as at 31/12)	EUR 729,331,068	EUR 544,072,141
Earnings/(Loss) per Share (12 months to 31/12)	EUR (3.16)	EUR (1.32)
Gross Capital Distribution (proposed)	EUR 0	EUR 0
Share price (closing as at 31/12)	EUR 7.79	EUR 1.60
Year high (intra-day)	EUR 9.59	EUR 3.93
Year low (intra-day)	EUR 4.64	EUR 1.23
Average volume traded shares per day (12 months to 31/12)	339,711	1,598,469
Free float (as at 31/12)	72%	76%

Dividend Policy

The Company's dividend policy aims to maximise total shareholder return through a combination of share price appreciation and dividends, whilst maintaining adequate cash flows for growth and the successful execution of the Company's strategy. The Board of Directors have taken the decision not to propose to shareholders a distribution for the financial year 2016. This reflects the Board's commitment to maintain a sustainable capital structure.

Disclosure Policy

As a Belgian listed company and with a view to ensuring that investors in Nyrstar shares have all information necessary to ensure the transparency, integrity and good functioning of the market, Nyrstar has established an information disclosure policy.

This policy is aimed at ensuring that material information of which Nyrstar is aware is immediately disclosed to the public. In addition, the policy is aimed at ensuring that information which is disclosed is fair and accurate, and so will enable the holders of shares in Nyrstar, and the public, to assess the impact of the information on Nyrstar's position, business and results.

Presentations to Investors, Analysts and Media

Nyrstar's reputation is greatly influenced by its ability to communicate in a consistent and professional manner with all our stakeholders.

A core Nyrstar value is to be open and honest and accordingly we strive to provide clear, open and transparent communications to all our stakeholders. Nyrstar regularly organises presentations to investors, analysts and the media to provide strategic, operational and financial updates, and to build strong relationships.

Management report Management report

To provide financial analysts, investors and media with a greater insight into our business, we organised or participated in several events during the year.

To engage with its institutional shareholders Nyrstar presented the Company at events organised by Bank of America Merrill Lynch, BMO Capital Markets, Citi, Deutsche Bank, Exane BNP Paribas, Goldman Sachs, HSBC, ING, KBC Securities, Macquarie, Morgan Stanley, Bank Degroof Petercam, Oddo Securities and Royal Bank of Canada (RBC). In addition Nyrstar also participated in numerous investor roadshows in Europe and North America.

Brokerages

The following brokerages published research on Nyrstar in 2016:

ABN Amro	Deutsche Bank	Macquarie
Bank Degroof Petercam	Exane BNP Paribas	Morgan Stanley
Bank of America Merrill Lynch	Goldman Sachs	Oddo Securities
Berenberg	ING	RBC
Citi	KBC Securities

Proposed Distribution

The Board of Directors has decided not to propose to shareholders a distribution for the financial year 2016.

FINANCIAL AND OPERATIONAL REVIEW

GROUP FINANCIAL REVIEW

KEY DATA

EUR million	FY	FY	%	H2	H1	%
unless otherwise indicated 1	2016	2015	Change	2016	2016	Change
Income Statement Summary
Revenue	2,763	3,020	(9%)	1,443	1,321	9%
Gross Profit	981	1,225	(20%)	509	472	8%
Direct operating costs	(790)	(948)	17%	(403)	(387)	(4%)
Non-operating and other	2	(10)	120%	(2)	3	(167%)
Metal Processing U. EBITDA	222	336	(34%)	118	104	13%
Mining U. EBITDA	6	(31)	119%	6	-	100%
Other and Eliminations U. EBITDA	(35)	(38)	8%	(20)	(15)	(33%)
Group Underlying EBITDA2	193	267	(28%)	104	89	19%
Underlying EBITDA margin	7%	9%	(22%)	7%	7%	0%
Embedded derivatives	(5)	13	(138%)	(1)	(4)	75%
Restructuring expense	(9)	(12)	25%	(8)	(1)	(700%)
M&A related transaction expense	(5)	-	-	(4)	(1)	(300%)
Underlying adjustments	(19)		2 (1,050%))	(13)	(7)	(86%)
Group unadjusted EBITDA	174	268	(35%)	91	82	11%

EUR million	FY	FY	%	H2	H1	%
unless otherwise indicated 1	2016	2015	Change	2016	2016	Change
Depreciation, depletion, amortisation	(179)	(196)	9%	(91)	(89)	(2%)
Impairment loss	(133)	(442)	70%	(75)	(58)	(29%)
Result from operating activities	(139)	(370)	62%	(75)	(65)	15%
Net finance expense	(123)	(111)	(11%)	(65)	(57)	(12%)
Income tax (expense) / benefit	(16)	215	(107%)	3	(19)	116%
Loss from continuing operations	(277)	(266)	(4%)	(136)	(141)	4%
Loss from discontinued operations	(137)	(166)	17%	(37)	(100)	63%
Loss for the period	(414)	(432)	4%	(173)	(241)	28%
Basic Loss per share from continuing operations(EUR)	(3.16)	(4.66)	32%	(1.55)	(1.61)	4%
Cash Flow
Cash flow from operating activities before working change	236	322	(27%)	118	118	0%
Working capital and other changes	21	52	(60%)	15	6	150%
Group Capex	261	379	(31%)	135	126	7%
Cash Flow
Cash flow from operating activities before working capital changes	113	222	(49%)	60	54	11%
Working capital and other changes	(195)	(249)	22%	(126)	(69)	(83%)
Net Debt Exclusive of Zinc Prepay
and Perpetual Securities	865	781	11%	865	689	26%
Net Debt Inclusive of Zinc Prepay and Perpetual Securities	1,163	937	24%	1,163	887	31%
Metals Processing Production
Zinc metal ('000 tonnes)	1,015	1,115	(9%)	508	507	0%
Lead metal ('000 tonnes)	187	185	1%	92	95	(3%)
Mining Production
Zinc in concentrate ('000 tonnes)	96	161	(40%)	46	50	(8%)
Copper in concentrate ('000 tonnes)	2.1	2.8	(25%)	1.0	1.1	(9%)
Silver ('000 troy ounces)	554	872	(36%)	247	307	(20%)
Gold ('000 troy ounces)	1.8	6.1	(70%)	0.8	1.0	(20%)
Market2
Zinc price (USD/t)	2,095	1,928	9%	2,386	1,799	33%
Lead price (USD/t)	1,872	1,784	5%	2,011	1,731	16%
Silver price (USD/t.oz)	17.14	15.68	9%	18.40	15.82	16%
Gold price (USD/t.oz)	1,250	1,159	8%	1,276	1,221	5%
EUR/USD average exchange rate	1.11	1.11	0%	1.10	1.12	(2%)
EUR/AUD average exchange rate	1.49	1.48	1%	1.45	1.52	(5%)

1 FY 2015 and H1 2016 numbers were adjusted to exclude El Toqui, El Mochito, Contonga and Coricancha as the mines are sold or reclassified as discontinued operation 2 Zinc, lead and copper prices are averages of LME daily cash settlement prices. Silver/Gold price is average of LBMA daily fixing / daily PM fixing, respectively

1 FY 2015 and H1 2016 numbers were adjusted to exclude El Toqui, El Mochito, Contonga and Coricancha as the mines are sold or reclassified as discontinued operation

² Underlying EBITDA is a non-IFRS measure of earnings, which is used by management to assess the underlying performance of Nyrstar's operations and is reported by Nyrstar to provide additional understanding of the underlying business performance of its operations. Nyrstar defines "Underlying EBITDA" as profit or loss for the period adjusted to exclude loss from discontinued operations (net of income tax), income tax (expense)/benefit, share of loss of equity-accounted investees, gain on the disposal of equity-accounted investees, net finance expense, impairment losses and reversals, restructuring expense, M&A related transaction expenses, depreciation, depletion and amortization, income or expenses arising from embedded derivatives recognised under IAS 39 "Financial Instruments: Recognition and Measurement" and other items arising from events or transactions clearly distinct from the ordinary activities of Nyrstar. For a definition of other terms used in this document, please see Nyrstar's glossary of key terms available at: http:// www.nyrstar.com/investors/en/Pages/investorsmaterials.aspx or at the back of the 2016 Annual Report

Group gross profit for 2016 of EUR 981 million was down 20% on 2015, driven by lower production volumes in both Metals Processing and Mining and deteriorating benchmark zinc treatment charge terms which were partially offset by higher zinc, lead, silver and gold prices which were up 9%, 5%, 9% and 8% respectively.

Direct operating costs for 2016 of EUR 790 million improved 17% on 2015, due to lower production volumes in both Metals Processing and Mining, significantly lower mining costs as a result of the suspension of operations at Myra Falls and Middle Tennessee and the delivery of sustainable cost saving measures within Metals Processing and at the Corporate level through reduced employee headcount and consultancy spending.

Group underlying EBITDA (continuing operations) of EUR 193 million in 2016, a decrease of 28% on 2015, due to lower treatment charges and lower production from Metals Processing and Mining, partially offset by cost reductions across Metals Processing and Mining. Underlying adjustments in 2016 were a total of EUR (19) million, comprising EUR (5) million of embedded derivatives, EUR (9) million of restructuring expense and EUR (5) million of M&A related transaction expenses. This compares to a total of EUR 2 million in 2015, comprising of EUR 13 million embedded derivatives and EUR (12) million restructuring expenses.

Depreciation, depletion and amortisation expense for 2016 of EUR 179 million was down 9% year-on year.

Non-cash, pre-tax impairment losses of EUR 266 million net were recognised in 2016 (2015: EUR 564 million) comprising of EUR 133 million of impairment losses recognized for continuing operations and EUR 133 million for discontinued operations. These impairment losses relate fully to pre-tax impairment charges on Nyrstar's Mining assets (2015: EUR 564 million comprising of EUR 442 million of impairment losses for continuing operations and EUR 122 million for discontinued operations).

In 2016, Nyrstar conducted impairment testing for all of its mining assets and recognised a non-cash, pre-tax impairment loss of EUR 133 million on its continuing mining operations. At the end of 2016, the carrying values of the continuing operations in Mining were a full write down of Campo Morado, EUR 19 million at Myra Falls, EUR 27 million at Middle Tennessee Mines, EUR 101 million at East Tennessee Mines, negative EUR 13 million at Pucarrajo and EUR 91 million at Langlois.

Net finance expense for 2016 of EUR 123 million was up EUR 12 million on 2015 primarily due to net debt exclusive of zinc prepay and perpetual securities increasing by 11% and net debt inclusive of zinc prepay and perpetual securities increasing by 24%. During 2016, EUR 110 million of perpetual securities were drawn compared to EUR 22 million net drawn in 2015. At the end of 2016, an aggregate total net of debt issue costs of EUR 132 million (AUD 208 million) of perpetual securities had been drawn for the Port Pirie Redevelopment funding.

Income tax benefit for 2016 of EUR 16 million (2015: income tax benefit of EUR 215 million) representing an effective tax rate of -10.6% (2015: 16.6%). The effective tax rate for 2016 was impacted by losses incurred by the Group for which no tax benefit has been recognised.

Loss after tax result in 2016 of EUR 414 million, compared to a net loss of EUR 432 million in 2015, mainly as a result of the impairment charges related to Mining assets in 2016 and 2015. Impairment charge of EUR 266 million in 2016 comprised of EUR 133 million for continuing operations and EUR 133 million for discontinued operations.

Capital expenditure (continuing operations) was EUR 261 million in 2016, representing a decrease of 31% year-on-year driven by a EUR 31 million capex decrease in Mining with zero growth capex and a 27% reduction in total capex spend in Metals Processing compared to 2015 at EUR 322 million.

Cash flow from operating activities before working capital changes of EUR 113 million in 2016 was down 49% compared to EUR 222 million in 2015 and cash out-flow from changes in working capital and other balance sheet movements in 2016 of EUR (195) million was down 22% compared to an out-flow of EUR (249) million in 2015, resulting in total cash out-flow from operating activities for 2016 of EUR 81 million compared to EUR 27 million outflow for 2015. The increase in net working capital levels was driven primarily by an increase in inventory valuation due to higher commodity prices, including the effect on inventory balance from zinc price increases of approximately EUR 158 million for 2016.

Net debt at the end of 2016, excluding the zinc metal prepay and perpetual securities, was 11% higher compared to the end of 2015 at EUR 865 million (EUR 781 million at the end of 2015). The net debt inclusive of the zinc metal prepay and perpetual securities at the end of 2016 was EUR 1,163 billion, up 24% compared to the end of 2015. Cash balance at the end of 2016 was EUR 127 million compared to EUR 96 million at the end of 2015. During 2016, EUR 20 million was reclassified from restricted cash to other financial assets. This reclassification represents a minimum cash balance that the Company agreed to keep in the Nyrstar Port Pirie bank account until the Perpetual Securities are fully redeemed.

Operations Review: Metals Processing

EUR million	FY	FY	%	H2	H1	%
unless otherwise indicated	2016	2015	Change	2016	2016	Change
Treatment charges	370	460	(20%)	181	189	(4%)
Free metal contribution	263	266	(1%)	154	109	41%
Premiums	156	171	(9%)	79	77	3%
By-Products	143	211	(32%)	64	79	(19%)
Other	(89)	(105)	15%	(43)	(46)	7%
Gross Profit	843	1,003	(16%)	435	408	8%
Employee expenses	(219)	(217)	(1%)	(107)	(112)	4%
Energy expenses	(195)	(233)	16%	(106)	(89)	(19%)
Other expenses /income	(205)	(198)	(4%)	(103)	(102)	(1%)
Direct Operating Costs1	(619)	(648)	4%	(316)	(303)	(4%)
Non-operating and other	(2)	(19)	90%	(1)	(1)	0%
Underlying EBITDA	222	336	(34%)	117	104	13%
Sustaining	97	92	5%	55	42	31%
Growth	44	54	(19%)	34	10	240%
Port Pirie Redevelopment	95	176	(46%)	29	66	(56%)
Metal Processing Capex	236	322	(27%)	118	118	0%

Metals Processing delivered an underlying EBITDA result of EUR 222 million in 2016, a decrease of 34% over 2015 due to 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 in Q3'16 related in particular to weather events and two exceptional fires. The earnings performance of Metals Processing showed substantial improvement in Q4 2016, generating underlying EBITDA of EUR 79 million compared to EUR 39 million in Q3 2016, in-line with management expectations.

Weaker year-over-year gross profit (down 16%) at EUR 843 million in 2016 was mainly driven by lower zinc metal production volumes (down 9%) and a 17% decrease in the annual zinc benchmark treatment charge.

The total Premium gross profit contributions decreased by 9% compared to 2016, largely driven by lower volumes and relatively flat average realised premia rates.

By-product gross profit contributions were positively impacted by higher production volumes of copper and silver, offset by lower production volumes of gold and sulphuric acid compared to 2015. There was no indium production included in Metals Processing By-Products gross profit in 2016 due to the fire at the indium cement plant that occurred in Q4 2015. The indium plant is currently being re-built and is expected to resume production by the end of Q1 2017.

Management report Management report

Direct Operating Costs were reduced in 2016 (down 4% compared to 2015) at EUR 619 million due to reduced energy prices, ongoing efficiency improvements across the Metals Processing sites and lower production.

Sustaining capital spend in 2016 increased by 5% on 2015 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 in particular to weather and fire related events. As at 31 December 2016, a running total of AUD 512 million of capex had been incurred on the Port Pirie Redevelopment and AUD 549 million had been committed (i.e. orders placed).

	FY	FY	%	H2	H1 2016	% Change
	2016	2015	Change	2016
EUR DOC/tonne
Auby	442	499	(11%)	388	504	(23%)
Balen/Overpelt	483	478	1%	493	474	4%
Budel	361	370	(2%)	376	345	9%
Clarksville	501	502	(0%)	531	470	13%
Hobart	448	426	5%	458	437	5%
Port Pirie1	681	656	4%	758	607	25%
DOC/tonne2	515	513	0%	528	503	5%

	FY	FY	%	H2	H1	%
	2016	2015	Change	2016	2016	Change
Zinc metal ('000 tonnes)
Auby	149	169	(12%)	79	70	13%
Balen/Overpelt	236	260	(9%)	112	124	(10%)
Budel	283	291	(3%)	143	140	2%
Clarksville	111	124	(10%)	55	56	(2%)
Hobart	236	271	(13%)	119	117	2%
Total	1,015	1,115	(9%)	508	507	0%
Lead metal ('000 tonnes)
Port Pirie	187	185	1%	92	95	(3%)
	FY	FY	%	H2	H1	%
	2016	2015	Change	2016	2016	Change
Other products
Copper cathode ('000 tonnes)	4.9	3.9	26%	2.5	2.4	4%
Silver (million troy ounces)	14.8	14.6	1%	6.2	8.6	(28%)
Gold ('000 troy ounces)	46.2	77.3	(40%)	14.3	31.9	(55%)
Indium metal (tonnes)	-	41	(100%)	-	-

Sulphuric acid ('000 tonnes) 1,356 1,451 (7%) 664 692 (4%)

Metals Processing produced approximately 1,015,000 tonnes of zinc metal in 2016, in-line with the lower end of full year 2016 guidance, representing a 9% decrease on 2015. As previously communicated by the Company, a number of extraordinary operational issues arose in Metals Processing in Q3 2016 which adversely impacted zinc metal production. Production of 263kt of zinc metal in Q4 2016 was a substantial improvement on Q3 2016 and was in-line with management expectations.

1

Per tonne of lead metal and zinc contained in fume

2 DOC/tonne calculated based on segmental direct operating costs and total production of Zinc and Lead Market Metal Production at Auby was down 12% as a result of planned roaster and cellhouse shutdowns; 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 10% due to the processing of lower grade zinc concentrates following the suspension of the cashflow negative 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 were fully resolved at the beginning of Q4 2016 with the sites returning to normal operational production levels.

Lead market metal production at Port Pirie of 187kt was 1% higher compared to 2015. Copper and silver production was higher in 2016 by 26% and 1% respectively whilst gold production was down 40%. 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.

For the second consecutive year, Metals Processing finished the year with the best safety performance since Nyrstar was founded in 2007. The lost time injury rate (LTIR) for Metals Processing in 2016 was 1.6, an improvement of 30% compared to a rate of 2.3 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 18% and 30% respectively compared to 2015.

Operations Review: Mining

Mining

EUR million	FY	FY	%	H2	H1	%
unless otherwise indicated1	2016	2015	Change	2016	2016	Change
CONTINUING OPERATIONS
Treatment charges	(32)	(49)	35%	(17)	(15)	(13%)
Payable metal contribution	160	244	(34%)	88	72	22%
By-Products	18	32	(44%)	9	9	0%
Other	(9)	(7)	(29%)	(5)	(4)	(25%)
Gross Profit	137	220	(38%)	75	62	21%
Employee expenses	(63)	(110)	43%	(31)	(32)	3%
Energy expenses	(15)	(27)	44%	(8)	(7)	(14%)
Other expenses	(55)	(104)	47%	(29)	(26)	(12%)
Direct Operating Costs	(133)	(241)	45%	(68)	(65)	(5%)
Non-operating and other	2	(10)	120%	(1)	3	(133%)
EBITDA	6	(31)	119%	6	-	100%
Sustaining	11	21	(48%)	8	3	167%
Exploration and development	10	23	(57%)	7	3	133%
Growth	-	8	(100%)	-	-
Mining Capex	21	52	(60%)	15	6	150%
DISCONTINUED OPERATIONS
Underlying EBITDA	1	(5)	120%	0	1	100%
Capex	19	40	(53%)	9	10	(10%)

1 FY 2015 and H1 2016 numbers were adjusted to exclude El Toqui, El Mochito, Contango and Coricancha as the mines are sold or reclassified as discontinued operation Mining underlying EBITDA of EUR 6 million in 2016 was EUR 37 million higher than in 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 result also excludes the positive underlying EBITDA impact of El Toqui and, Contonga and the negative underlying EBITDA of El Mochito and Coricancha, which have been eliminated as discontinued operations due to their announced divestment. During 2016, the discontinued mining operations generated a combined underlying EBITDA of EUR 1 million, comprising of EUR 10 million at El Toqui, EUR 10 million at Contonga, negative EUR 15 million at El Mochito and negative EUR 4 million at Coricancha.

Mining capital expenditure in 2016 was EUR 21 million, down 60% year-on-year, due to the postponement of non-essential sustaining capital projects across all mining operations and the cancellation of non-committed growth capex in Mining since November 2015. Mining capex excludes the El Toqui, El Mochito, Contonga and Coricancha operations which have been eliminated from the results as discontinued mining operations. During 2016, the discontinued mining operations incurred capex of EUR 19 million, comprising of EUR 3 million at El Toqui, EUR 9 million at El Mochito, EUR 6 million at Contonga and EUR 0.5 million at Coricancha.

	FY	FY	%	H2	H1	%
DOC USD/tonne ore milled	2016	2015	Change	2016	2016	Change
CONTINUING OPERATIONS
Langlois	93	88	6%	102	86	19%
East Tennessee	38	42	(10%)	41	36	14%
Average DOC/tonne ore milled	49	48	2%	52	45	16%
'000 tonnes	FY	FY	%	H2	H1	%
unless otherwise indicated	2016	2015	Change	2016	2016	Change
CONTINUING OPERATIONS
Total ore milled1	2,253	4,140	(46%)	1,072	1,181	(9%)
Zinc in Concentrate
Langlois	34	40	(15%)	15	19	(21%)
Myra Falls	-	9	(100%)	-	-	-
East Tennessee	62	64	(3%)	31	31	0%
Middle Tennessee	-	48	(100%)	-	-	-
Total	96	161	(40%)	46	50	(8%)
Other metals
Copper in concentrate	2.1	2.8	(25%)	0.9	1.1	(18%)
Silver ('000 troy oz)	554	872	(36%)	247	307	(20%)
Gold ('000 troy oz)	1.8	6.1	(70%)	0.8	1.0	(20%)

Excluding 54kt of zinc in concentrate production from El Toqui, El Mochito and Contonga which have now been classified as discontinued operations due to their sales, in 2016, Nyrstar's mines produced approximately 96kt of zinc in concentrate, a decrease of 40% compared to 2015. Production in Mining at the continuing operations was impacted due to the suspension of operations at Middle Tennessee 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 Q4 2016. At the end of September 2016, the Middle Tennessee mine commenced actions to restart operations with ore

1 Mining production for both years was adjusted to exclude El Toqui and El Mochito production volumes as both mines are reclassified as discontinued operation. For production at discontinued operations refer to annex

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 2016 was impacted by three fatal incidents that occurred at El Mochito and one at Langlois. As result of the poor safety performance at the start of 2016, a "Visible Safety Leadership" program involving all management levels across Nyrstar Mining was initiated in March 2016. This program provides a foundation for reinforcing safety as a personal and organisational value throughout the Company.

The lost time injury rate (LTIR) for Mining in 2016 was 2.3, a decrease of 14% compared to a rate of 2.6 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 3% respectively compared to 2015. In 2016, the East Tennessee mines achieved the milestone of one million working hours DART free and Contonga achieved its best safety performance since it is being operated by Nyrstar.

MINING PRODUCTION ANNEX

		Ore milled
Period	Production KPI by Site	('000 Mill head grade tonnes)								Recovery						Concentrate Metal in concentrate
			Zinc	Lead	Copper	Gold	Silver	Zinc	Lead	Copper	Gold	Silver	Zinc	Lead	Copper	Zinc	Lead	Copper	Gold	Silver
			(%)	(%)	(%)	(g/t)	(g/t)	(%)	(%)	(%)	(g/t)	(g/t)	(%)	(%)	(%)	(%)	(%)	(%)	(g/t)	(g/t)
	CONTINUING OPERATIONS
	Campo Morado	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
	Langlois	424	8.40%		- 0.68% 0.17 48.15 95.0%						- 71.5% 76.4% 84.5%		64	-		8.2 33.8	-		2.1 1.8 554
	Myra Falls	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
FY 2016	East Tennessee	1,829 3.61%		-	-	-		- 94.3%	-	-	-		- 101	-		- 62.3	-	-	-	-
	Middle Tennessee	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
	Mining Total	2,253 4.51%			- 0.68% 0.17 48.15 94.4%						- 71.5% 76.4% 84.5% 165			-		8.2 96.1	-		2.1 1.8 554
	Campo Morado	17			3.99% 0.01 0.67% 1.27 122.22 72.9%						- 61.3% 19.5% 30.9%		1	-		0.5 0.5	-		0.1 0.1	21
	Langlois	511	8.28%		- 0.56% 0.16 47.66 94.4%						- 72.9% 72.6% 82.1%		74	-		8.3 39.9	-		2.1 1.9 642
	Myra Falls	145									0.07 0.00 0.01 1.24 51.94 0.90 0.23 0.63 0.70 0.86			17 0.46		2.7 9.0 0.16			0.6 4.0 209
FY 2015	East Tennessee	1,985 3.57%		-	-	-		- 91.0%	-	-	-		- 104	-		- 64.4	-	-	-	-
	Middle Tennessee	1,482 3.25%		-	-	-		- 98.1%	-	-	-	-	74	-		- 47.2	-	-	-	-
	Mining Total	4,140 4.15% 0.60% 0.59% 0.42 50.47 93.8% 23.5% 70.5% 70.6% 81.6% 270 0.5 11.5 161.0 0.2																	2.8 6.1 872
	Campo Morado	(100)%	-		- (100)% (100)% (100)% (100)%				-	-	-		- (100)%		- (100)% (100)%			- (100)% (100)% (100)%
	Langlois	(17)%	1%		- 21% 6% 1% 1%					- (2)%	5%		3% (14)%		- (1)% (15)%		-		- (5)% (14)%
	MyraFalls	(100)%	-		- (100)% (100)% (100)% (100)%				-	-	-		- (100)%		- (100)% (100)%			- (100)% (100)% (100)%
% Change	East Tennessee	(8)%	1%	-	-	-		- 4%	-	-	-		- (3)%	-		- (3)%	-	-	-	-
	Middle Tennessee	(100)%	-	-	-	-		- (100)%	-	-	-		- (100)%	-		- (100)%	-	-	-	-
	Mining Total	(46)%	9%		- 15% (60)% (5)% 1%				-	1%	8%		4% (39)%		- (29)% (40)%			- (25)% (70)% (36)%

24 25 NYRSTAR NYRSTAR Annual Report 2016

Management report Management report

Period Production KPI by Site	Ore milled ('000 tonnes)			Mill head grade					Recovery								Concentrate Metal in concentrate
		Zinc (%)	Lead (%)	Copper (%)	Gold (g/t)	Silver (g/t)	Zinc (%)	Lead (%)	Copper (%)	Gold (g/t)	Silver (g/t)	Zinc (%)	Lead (%)	Copper (%)	Zinc (%)	Lead (%)	Copper (%)	Gold (g/t)	Silver (g/t)
DISCONTINUED OPERATIONS
El Toqui	520		6.03% 0.23%			- 0.78 15.33 90.7% 29.1%				- 69.6% 69.1%			58 0.9		0.0 28.4 0.3			- 9.06 177
FY 2016 El Mochito	470		3.42% 1.16%	-		- 46.34 90.7% 73.1%			-		- 81.0%		27 6.0		- 14.5 4.0		-		- 567
Contonga	450			2.94% 0.32% 1.40%					- 41.68 84.1% 63.2% 77.0%		- 85.3%			24 1.5 18.4 11.1 0.9			4.9		- 514
El Toqui	583		6.91% 0.64%			- 0.83 18.10 93.9% 0.57				- 64.0% 78.3%			82 3.53		0.0 37.9 2.13			- 10.0 266
FY 2015 El Mochito	756		3.52% 1.70%	-		- 51.79 86.4% 76.6%			-		- 87.8%		45 15.2		- 23.0 9.8		-		- 1,105
Contonga	434			3.21% 0.34% 1.15%					- 40.34 86.3% 60.1% 74.1%		- 85.5%			26 1.5 14.7 12.0 0.9			3.7		- 481
El Toqui	(11)% (13)% (64)%					- (6)% (15)% (3)% (49)%			-		9% (12)% (29)% 100%				- (25)% 100%			- (9)% (33)%
% Change El Mochito	(38)%		(3)% (32)%	-		- (11)% 5% (5)%			-		- (8)% (40)% (61)%				- (37)% (59)%		-		- (49)%
Contonga	4%			(8)% (6)% 22%		- 3% (3)% 5%			4%	-		0% (8)%		- 25% (8)%			- 32%		- 7%

MINING PRODUCTION ANNEX

Period	Production KPI by Site	Ore milled ('000 tonnes)			Mill head grade					Recovery								Concentrate Metal in concentrate
			Zinc (%)	Lead (%)	Copper (%)	Gold (g/t)	Silver (g/t)	Zinc (%)	Lead (%)	Copper (%)	Gold (g/t)	Silver (g/t)	Zinc (%)	Lead (%)	Copper (%)	Zinc (%)	Lead (%)	Copper (%)	Gold (g/t)	Silver (g/t)
	CONTINUING
	Langlois	202	7.86%		- 0.64% 0.17 46.91 94.7%					- 72.1% 73.9% 81.1%			28	-		3.7 15.0	-		0.9 0.8 247
	East Tennessee	870	3.74%	-	-	-		- 95.5%	-	-	-	-	51	-		- 31.1	-	-	-	-
H2 2016	Middle Tennessee	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
	Mining Total	1,072 4.52%			- 0.64% 0.17 46.91 95.4%					- 72.1% 73.9% 81.1%			79	-		3.7 46.1	-		0.9 0.8 247
	Langlois	222	8.89%		- 0.72% 0.18 49.28 95.2%					- 71.1% 78.5% 87.4%			36	-		4.5 18.8	-		1.1 1.0 307
	East Tennessee	959	3.49%	-	-	-		- 93.1%	-	-	-	-	51	-		- 31.2	-	-	-	-
H1 2016	Middle Tennessee	-	0.00%	-	-	-		- 0.0%	-	-	-	-	-	-	-	-	-	-	-	-
	Mining Total	1,181 4.51%			- 0.72% 0.18 49.28 93.5%					- 71.1% 78.5% 87.4%			86	-		4.5 49.9	-		1.1 1.0 307
% change	Langlois	(9)%	(12)%		- (11)% (6)% (5)% (1)%				-		1% (6)% (7)% (22)%				- (18)% (20)%			- (18)% (20)% (20)%
	East Tennessee	(9)%	7%	-	-	-		- 3%	-	-	-	-	-	-		- 0%	-	-	-	-
	Middle Tennessee	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
	Mining Total	(9)%	0%		- (11)% (6)% (5)% 2%				-		1% (6)% (7)% (8)%				- (18)% (8)%			- (18)% (20)% (20)%
	DISCONTINUED OPERATIONS
	El Toqui	202			5.75% 0.32% 0.00 0.82 15.93 87.6% 34.8%						- 67.3% 74.5%			20 0.6		0.0 10.2 0.2			- 3.59	77
H2 2016	El Mochito	164		3.33% 1.07%	-			- 49.47 92.1% 69.8%		-		- 78.7%		10 1.9		- 5.0 1.2		-		- 206
	Contonga	224			2.78% 0.32% 0.01					- 40.30 84.6% 67.3% 0.75		- 84.6%			11 0.8 8.06 5.3 0.5 2.16					- 246
	El Toqui	317
	El Mochito	305			6.21% 0.17% 0.00 0.75 14.95 92.5% 0.22						- 71.2% 65.5%			38 0.30		0.0 18.2 0.12			- 5.5 100
H1 2016	Contonga	225		3.46% 1.20%	-			- 44.66 89.9% 74.7%		-		- 82.4%		17 4.0		- 9.5 2.7		-		- 361
					3.09% 0.32% 0.02					- 43.07 83.6% 59.2% 0.79		- 85.8%			13 0.7 10.36 5.8 0.4 2.70					- 268
	El Toqui	(36)%			(7)% 88% (7)% 9% 7% (5)% 55%						- (5)% 14% (47)% 100%					- (44)% 100%			- (35)% (23)%
% change	El Mochito	(46)%		(4)% (11)%	-			- 11% 2% (7)%		-		- (4)% (41)% (53)%				- (47)% (56)%		-		- (43)%
	Contonga	0%	(10)%		- (15)%					- (6)% 1% 14% (5)%		- (1)% (15)% 14% (22)% (9)% 25% (19)%								- (8)%

PRODUCTION GUIDANCE, CAPITAL EXPENDITURE GUIDANCE AMD PLANNED SHUTS

Nyrstar expects to produce 1.0 – 1.1 million tonnes of zinc metal in 2017. This level of production is based on maximising underlying EBITDA and free cash flow generation in Metals Processing by targeting the optimal balance between production and sustaining capital expenditure.

Production	2017 Guidance
Metals Processing
Zinc (kt)	1,000 – 1,100
Mining - metal in concentrate

Metals Processing
Zinc (kt)	1,000 – 1,100
Mining - metal in concentrate
Zinc (kt)	115 – 135

The guidance above reflects Nyrstar's current expectation for 2017 production from Mining. The guidance for the volume of production from Mining will be impacted by any further divestments of all or some of the mines. Revised updates may be issued by Nyrstar in subsequent trading updates during 2017, if it is expected that there will be material changes to the above guidance.

Capital expenditure guidance for 2017 across Nyrstar's assets is as per the table below.

Capex (EURm)	2017 Guidance
Metals Processing	205 – 255
Sustaining	100 – 135
Growth	25 – 35
Port Pirie Redevelopment	80 - 85
Mining	35 – 50
Group capex	240 – 305

The capital expenditure guidance provided above for Mining will be impacted by the timing of the divestment process which is currently underway and the possibility of additional mine suspensions in the event of a further deterioration in the zinc price.

Planned maintenance shuts

During 2017 there are a number of scheduled maintenance shuts at the smelters, which will have an impact on production. These shuts will enable the smelters to continue to operate within internal safety and environmental standards, comply with external regulations/ standards and improve the reliability and efficiency of the production process, and will allow the sites to make improvements to critical production steps. All efforts are made to reduce the production impact of these shuts by building intermediate stocks prior to the shut and managing the shut in a timely and effective manner. The estimated impact of these shuts on 2017 production, which has been taken into account when determining zinc metal guidance for 2017, is listed in the table below.

Smelter & production step impacted	Timing and duration	Estimated impact
Auby – roaster, acid plant	Q3: 2 weeks	Nil
Balen – cellhouse	Q2: 3 weeks	11,000 tonnes
Balen – roaster F5	Q3: 4 weeks	nil
Budel – roaster N1, roaster N2, acid plant	Q2: 4 weeks	4,000 tonnes
Budel – HV Transformer 1 & 2	Q2 & Q4: 1 week (each)	2,500 tonnes (each)
Clarksville – roaster, acid plant, cellhouse	Q3: 1 week	3,000 tonnes
Hobart – roaster, acid plant	Q2: 5 weeks	5,500 tonnes
Port Pirie – lead plant	Q2: 6 weeks	22,000 tonnes

Market review

	FY	FY
Average prices	2016	2015	% Change
Exchange rate (EUR/USD)	1.11	1.11	-
Exchange rate (EUR/AUD)	1.49	1.48	1%
Zinc price (USD/tonne)	2,095	1,928	9%
Lead price (USD/tonne)	1,872	1,784	5%
Copper price (USD/tonne)	4,867	5,494	(11%)
Silver price (USD/t.oz)	17.14	15.68	9%
Gold price (USD/t.oz)	1,250	1,159	8%

Zinc, lead and copper prices are averages of LME daily cash settlement prices. Silver/Gold price is average of LBMA daily fixing / daily PM fixing, respectively

Exchange rates

Nyrstar's earnings and cash flows are influenced by movements in exchange rates of several currencies, particularly the U.S. Dollar, the Euro, the Australian Dollar and the Swiss Franc. Nyrstar's reporting currency is the Euro. Zinc, lead and other metals are sold throughout the world principally in US Dollars, while the costs of Nyrstar are primarily in Euros, US Dollars, Australian Dollars and Swiss Francs.

Currency markets started 2016 largely bearish on the Euro due to the policy divergence between the European Central Bank and the US Federal Reserve, with anemic growth and low inflation numbers impacting the Eurozone economy. The second half of the year was one of political changes with the United Kingdom voting to leave the European Union and the US Presidential elections. This led to a stronger US dollar into the year-end as markets expected a Trump presidency to boost fiscal spending, increasing inflation, leading to a rate hike by the US Federal Reserve in December. The Australian dollar largely traded in a 0.72 to 0.78 range, however ended weakly tracking commodity prices of key exports lower.

Zinc

The zinc price started the year at a depressed level of USD 1,554 per tonne and moved down to a 6 year low of USD 1,444 per tonne in mid-January 2016. Since then, on a relative basis, zinc outperformed the rest of the base metals complex and was one of the best performing commodities during 2016. The average zinc price increased by 9% in 2016 to USD 2,095/t. The rise in zinc prices has primarily been due to zinc concentrate shortages, coupled with robust consumption of zinc metal. While the concentrates shortage has garnered most of the attention, galvanised steel output posted strong gains throughout the year. Stronger Purchase Managers Indices, coupled with improved auto sales and production rates have provided support to demand. At the same time, the emerging markets of Brazil and Russia have shown improvements, while the Indian market has continued to grow. While 2016 has seen large price increases for zinc, the underlying causes of this are unlikely to disappear in the short-term. Indeed, early 2017 has seen some Chinese smelters announce production cuts, as the lack of zinc concentrate continues to place pressure on zinc smelters. As such, price increases for zinc are expected to continue, particularly as there is unlikely to be a surge in mine production in 2017. Overall, the outlook for the zinc market remains positive, with prices continuing to rise, with the USD 3,000/t mark expected to be breached at some point during the year, according to forecasts from metals consultancy, Wood Mackenzie.

Lead

Tightness in concentrate supply during the second half of 2016 was the key driver for the lead market. The fall in concentrate supply saw treatment charges fall sharply, highlighting the tightness in primary supply. A milder winter in the Northern Hemisphere resulted in slower demand for replacement batteries at the beginning of 2016. However, an increase in global auto output did help see an increase in buying from original equipment manufacturers. However, while the demand outlook remains robust, the continuing tightness in concentrates is likely to be the primary driver for lead prices in 2017.

Copper

Chinese consumption surprised on the positive side, while demand for consumer products rebounded strongly relative to earlier in the year, when destocking was a key issue. The second half of the year saw supply side issues. Mines such as Escondida and Grasberg saw decreasing output figures for the second half of the year. As a result, Chinese smelters received lower treatment charges and refinement charges with their suppliers during the second half of the year. Despite the fact that annual average prices have fallen in 2016 relative to 2015, copper prices exhibited a degree of volatility during the fourth quarter, with prices trading above USD 5,000/t.

Gold & Silver

Political uncertainty during 2016, particularly in Europe and the United States, saw an increase in precious metal prices, with the average price for gold and silver rising by 8% and 9% respectively over 2016.

Sulphuric Acid

The price of sulphuric acid in the North West European domestic market was stable in Euro terms; however, it was positively impacted by the slight strengthening of the Euro against the US Dollar. During the second half of 2016, acid prices were marginally stronger and the average achieved prices rose slightly. In 2016, prices have reflected a balanced European domestic market and less volatile export environment than previous years.

Zinc Concentrates

The annual benchmark treatment charge for zinc concentrates in 2016 was settled at USD 203 per tonne of concentrate basis a zinc price of USD 2,000/t with a 9% escalator to USD 2,500/t, 8% to \$3,000/t, 5% to USD 3,750/t and zero above that, and de-escalator of 3% to USD 1,500/t and zero below that. This represented a decrease from the previous year in favour of miners on the headline treatment charge of approximately 17%. Several miners implemented production cuts in 2016 following lower zinc prices and the prices of the main by-products of zinc mines in H2 2015. Mine production decreased in 2016 as a result of these price related mine reductions and scheduled closures of large mines such as Century and Lisheen. This led to a tighter concentrates market in 2016 with spot treatment charges decreasing throughout the year.

Lead Concentrates

The annual treatment charge terms for high silver lead concentrates in 2016 were concluded at USD 170 per tonne of concentrate with a silver refining charge of USD 1.50 per troy ounce.

Management report Management report

OTHER SIGNIFICANT EVENTS IN 2016

27 April – at the Annual General Meeting (AGM), Ms. Anne Fahy was appointed as independent non-executive Director and Mr. Jesús Fernandez was appointed as non-executive Director. Immediately following the AGM, a meeting of the Board of Directors was held during which Martyn Konig was elected as new Chairman of the Company.

20 May - A share consolidation with respect to all outstanding shares of the Company by means of a 1-for-10 reverse stock split was initiated. This was approved at the Extraordinary shareholder's meeting on 19 May 2016. The last trading day of the existing shares of the Company was 6 June 2016 with the reverse stock split effective as of 9 June 2016.

27 September - Actions for the restart of the Middle Tennessee mining operations commenced. The mining complex was put into care and maintenance in early December 2015.

28 September - Severe storms experienced in South Australia on 28 September 2016 caused a state-wide power loss which led to an outage of the entire Port Pirie smelter including the blast furnace.

30 September - Given the progress of the mining divestment process, John Galassini, Senior Vice President of Mining, left Nyrstar.

SENSITIVITIES

Nyrstar's results continue to be significantly affected during the course of 2016 by changes in metal prices, exchange rates and treatment charges. Sensitivities to variations in these parameters are depicted in the below table, which sets out the estimated impact of a change in each of the parameters on Nyrstar's 2016 underlying EBITDA based on the actual results and production profile for the year ending 31 December 2016.

			Estimated annual 2016 underlying EBITDA impact (EURm)
Parameter	2016 Annual Average price/rate Variable		Metals Processing	Mining	Group
Zinc price	\$2,095/t	-/+ 10%	(39)/+53	(15)/+15	(54)/+68
Lead price	\$1,872/t	-/+ 10%	(1)/+1	-	(1)/+1
Copper price	\$4,863/t	-/+ 10%	(2)/+2	(1)/+1	(3)+3
Silver Price	\$17.14/oz	-/+ 10%	(4)/+4	(1)/+1	(5)+5
Gold Price	\$1,250/oz	-/+ 10%	(1)/+1	-	(1)+1
EUR:USD	1.11	-/+ 10%	+97/(79)	+5/(4)	+102/(83)
EUR:AUD	1.49	-/+ 10%	(28)/+23	-	(28)/+23
EUR:CHF	1.09	-/+ 10%	-	-	(5)/+4
Zinc TC	\$203/dmt	-/+ 10%	(28)/+28	+3/(3)	(25)/+25
Lead TC	\$165/dmt	-/+ 10%	(4)/+4	-	(4)/+4

The above sensitivities were calculated by modelling Nyrstar's 2016 underlying operating performance. Each parameter is based on an average value observed during that period and is varied in isolation to determine the full-year underlying EBITDA impact.

Sensitivities are:

• Dependent on production volumes and the economic environment observed during the reference period.
• Not reflective of simultaneously varying more than one parameter; adding them together may not lead to an accurate estimate of financial performance.
• Expressed as linear values within a relevant range. Outside the range listed for each variable, the impact of changes may be significantly different to the results outlined.

These sensitivities should not be applied to Nyrstar's results for any prior periods and may not be representative of the underlying EBITDA sensitivity of any of the variations going forward.

In H1 2016, Nyrstar entered into a series of foreign exchange options to hedge the Company's monthly exposure related to the direct operating costs denominated in Australian dollars (AUD) and in Euro (EUR) utilising put and call collar structures. For the EUR/USD transactional exposure, various collars were executed resulting in a weighted average collar of 1.08 to 1.15 for approximately 75% of the total transactional expenses for 2016; a weighted average collar of 1.05 to 1.14 for approximately 100% of the total transactional expenses for H1 2017; and a weighted average collar of 1.00 to 1.10 for approximately 100% of the total transactional expenses for H2 2017. For the AUD/USD transactional exposure, various collars have been executed resulting in a weighted average collar of 0.68 to 0.83 for approximately 100% of the total transactional expenses for 2016 and a weighted average collar of 0.62 to 0.81 for approximately 50% of H1 2017.

NON-FINANCIAL KEY PERFORMANCE INDICATORS

Nyrstar is committed to responsible and sustainable business practices. This protects and enhances our global license to operate and helps to make our business more resilient and competitive. Nyrstar's approach to managing sustainability issues and risks focuses on integrating sustainability considerations into company values, business strategies and day-to-day operational management decisions.

The following text provides an introduction to key sustainability topics to the financial condition and operating performance of Nyrstar. Further information on sustainability risks of importance to Nyrstar's operations, the strategies we deploy to manage those risks, and our performance throughout the year are provided in our Sustainability Report which can be downloaded at: http://www.nyrstar.com/ sustainability.

Health and Safety

Safety and health is the first priority at Nyrstar. We believe that every work-related illness and injury is preventable and our ambition is for every employee to return home safe and healthy at the end of their shift, every day. Maintaining the safety and health of our people is not only a moral obligation but also helps to improve our productivity and attract a talented workforce.

Our health and safety strategy is built around four focus areas which together form a roadmap on our journey towards zero harm. Everything we do to improve the safety and health of our people fits into one of these focus areas which include: Fatality Prevention, Safety Maturity, Health and Safety Management Systems, and Health & Wellness.

Safety performance in 2016 was tragically marked by four fatalities that occurred in Mining. We are deeply saddened by the tragic loss of three colleagues at the El Mochito mine in Honduras and one colleague at the Langlois mine in Canada. The four fatalities occurred underground. Each fatality was rigorously investigated to identify root causes, actions required to prevent reoccurrence and lessons learned to be shared with other Nyrstar operations.

Throughout 2016, Nyrstar consistently reinforced its strong commitment to putting safety first and saw a large improvement in its lagging safety indicators during the course of the year. We continued to focus our safety efforts on the critical hazards that present the principal sources of serious incidents in our operations. In particular, company-wide safety campaigns were rolled out in relation to three of the critical hazards including working at heights, mobile equipment and energised equipment. Additionally, all facilities were audited against the Nyrstar standards and procedures that are established for each of the critical hazards.

Our lost time and recordable injury frequency rates continued to improve in 2016, solidifying the trend experienced in recent years. The lost time injury rate (LTIR) for the Company in 2016 was 1.9, an improvement of 24% compared to a rate of 2.5 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) decreased by 16% and 17% compared to 2015.

Our People

Our people are the foundation of everything we do and providing a workplace that is safe, engaging and rewarding is at the heart of our success as a company.

The value proposition to our employees centres around four key pillars, namely: A Value-Based Culture; A Safe and Healthy Work Environment; Providing Opportunities for Training and Development; and Recognising and Rewarding Performance. Supporting the value proposition, in 2016 we developed and began the implementation of a comprehensive human resource strategy aimed at building a talented, engaged and high-performing workforce. Key components of the strategy that were initiated during the year include strategic workforce planning, organisation structure development, talent mapping, succession planning, top leadership assessment, and performance & reward management. The strategy implementation will continue in 2017 alongside an organisational review. The main objectives of this review are to align the structure of the organisation with the company's operating model, to clarify roles and responsibilities and to ensure we have the right people in the right roles.

At the end of 2016, Nyrstar's worldwide workforce totalled 4,262 employees which compares to the 5,259 employed at the start of the year. The reductions primarily concerned the El Toqui and El Mochito mines which were divested during the year. The 2016 workforce at remaining assets and operations was relatively similar to 2015 employee totals.

Environmental Stewardship

The metals we produce are essential to modern life and to a sustainable development of our society. As responsible environmental stewards, Nyrstar is committed to conducting our mining and smelting operations in a way that minimises natural resource use, prevents environmental damage and meets society's expectations on responsible resource development. From a strategic perspective, our approach to improving environmental performance and reducing impacts is focused on: maintaining and driving operational excellence, underpinned by effective management systems, clear accountabilities and purposeful performance tracking; investing in environmental abatement technologies, such as air emission control equipment and effluent treatment plants; and engaging with key stakeholders to understand their perspectives and develop a shared understanding or environmental objectives and priorities.

In 2016, our smelting operations continued to demonstrate operational excellence with few significant incidents and upsets causing environmental impacts. In the Mining segment, operational excellence efforts remained focused on protecting and improving the integrity of our assets and on securing compliance with environmental requirements specified by permits and regulations. Of particular note, the dam safety improvement projects at Myra Falls initiated in 2015 were finalised at a total cost of CAD 10 million. Also at Myra Falls, substantial upgrades to the site's effluent treatment system were undertaken during the year and contributed to a significantly improved compliance record relative to 2015. Other asset integrity projects with environmental implications included the modification of a tailing storage facility at the Campo Morado mine to secure it for current care and maintenance conditions and sealing of basement floors in the Hobart cell house to prevent soil and groundwater contamination.

Our performance on environmental incidents can be directly linked to our ability to maintain process control and achieve operational excellence. In regards to the environmental incident types monitored at Group level (Critical Environmental Incidents and Recordable Non-Compliance Incidents), no Critical Environmental Incidents occurred in 2016 and the performance on Recordable Non-Compliance incidents improved from 10 incidents in 2015 to 6 incidents in 2016. The main driver for the improved incident record relates to the strengthened effluent controls at Myra Falls mentioned above.

11 environmental fines totalling approximately USD 900,000 were paid in 2016, representing a small reduction relative to the USD 1,040,000 paid in 2015. Seven of the fines, at a combined amount of around USD 750,000, related to non-compliances at Nyrstar's Peruvian mining assets.

Several projects involving investments in environmental abatement and improvement technologies were advanced during the year. Of most significance to our overall environmental footprint, construction of the Port Pirie Redevelopment project continued with commissioning of the new project installations scheduled to occur in 2017. The new processing and environmental control equipment provided by the project are designed to deliver a step change reduction in the emission of lead and SO2 to air and will also allow for increased reprocessing of residue materials. In combination with the community lead exposure reduction activities delivered through the Targeted Lead Abatement Program (TLAP), the emission reductions will help achieve further improvements in community health in terms of blood lead levels amongst the local population, especially children.

During the year we continued to implement our stakeholder engagement plans and to develop productive relationships with local communities and other stakeholders. Proactively engaging with and listening to stakeholders with an interest in our operations allows us to shape operational strategies and activities with a view to protecting our social license to operate and delivering shared value.

Corporate Governance Statement Corporate Governance Statement

Nyrstar NV (the 'Company') has prepared this Corporate Governance Statement in accordance with the Belgian Code on Corporate Governance of 12 March 2009. This Corporate Governance Statement is included in the Company's report of Board of Directors on the statutory accounts for the financial year ended on 31 December 2016 dated 21 February 2017 in accordance with article 96 of the Belgian Companies Code.

The Company applies the nine corporate governance principles contained in the Belgian Code on Corporate Governance. The Company complies with the provisions set forth in the Belgian Code on Corporate Governance.

Corporate Governance Charter

The Company adopted a Corporate Governance Charter in line with the Belgian Code on Corporate Governance of 12 March 2009. The Company applies the nine corporate governance principles contained in the Belgian Code on Corporate Governance. The Company also complies with the corporate governance provisions set forth in the Belgian Code on Corporate Governance.

As an exception to the foregoing, the general shareholders' meeting held on 27 April 2016 approved that certain non-executive directors would be remunerated fully or partly in deferred Shares units, and not in cash (see further in the Remuneration Report). This is a deviation from the provisions of section 7.7 of the Belgian Code on Corporate Governance, which provides that non-executive directors should not be entitled to performance-related remuneration such as bonuses, stock related long-term incentive schemes, fringe benefits or pension benefits. The Board of Directors sought the approval from the general shareholders' meeting for such remuneration in deferred shares, as it believes that granting non-executive directors the opportunity to be remunerated in whole or in part in deferred Shares of the Company rather than in cash enables the non-executive directors to link their effective remuneration to the future performance of Nyrstar and to strengthen the alignment of their interest with the interest of the Company's shareholders. The board of directors seeks a similar resolution by the general shareholders' meeting to be held on 20 April 2017.

The Corporate Governance Charter describes the main aspects of the corporate governance of the Company including its governance structure, the terms of reference of the Board of Directors and its Committees and other important topics.

What constitutes good corporate governance will evolve with the changing circumstances of a company and with the standards of corporate governance globally and must be tailored to meet those changing circumstances. The Board of Directors intends to update the Corporate Governance Charter as often as required to reflect changes to the Company's corporate governance.

The Corporate Governance Charter is available, together with the articles of association, on the Company's website, within the section About Nyrstar (http://www.nyrstar.com/about/Pages/corporategovernance.aspx). The Board of Directors approved the initial charter on 5 October 2007. There were updated versions approved on several occasions. The current version was approved by the Board of Directors on 13 December 2016. A copy of the Belgian Code on Corporate Governance can be found on www.corporategovernancecommittee.be.

Code of Business Conduct

Nyrstar has adopted a code of business conduct for all of Nyrstar's personnel and sites. The code of business conduct is based on the Nyrstar Way. The code also provides a frame of reference for Nyrstar sites to establish more specific guidelines to address local and territorial issues. Nyrstar also introduced a code of business conduct development program which supports the code of business conduct and aims to increase awareness in relation to some key risks to Nyrstar's business. The development program includes specially designed training modules for Nyrstar employees. The training modules are conducted by Nyrstar's Compliance Officer with the assistance of local expertise (where required). If employees have issues or concerns (for example, they are concerned that others are not complying with the letter and the spirit of the code of business conduct), they may raise the issue or concern with their supervisor or manager or Nyrstar's Compliance Officer. The code of business conduct is available on Nyrstar's website (www.nyrstar.com).

Board of Directors and Management Committee

Board of Directors

The table below gives an overview of the current members of the Company's Board of Directors and their terms of office:

Name	Principal Function within the Company Nature of Directorship		Start of Term	End of Term
Martyn Konig	Chairman	Non-Executive, Independent	2015	2019
Hilmar Rode(1)	Chief Executive Officer, Director	Executive	2016	2017
Carole Cable	Director	Non-Executive, Independent	2013	2017
Christopher Cox	Director	Non-Executive	2015	2019
Anne Fahy(2)	Director	Non-Executive, Independent	2016	2020
Jesús Fernandez(2) Director		Non-Executive	2016	2020

(1) On 13 December 2016, Hilmar Rode was appointed by the board of directors to temporarily fill the vacancy left by the resignation of William A. Scotting on 13 December 2016. The board of directors will submit to the annual general meeting the proposal to appoint Hilmar Rode as executive director of the Company for a term until the annual general shareholders' meeting to be held in 2021. (2) Appointed on 27 April 2016

Martyn Konig, Non-Executive Chairman, was appointed chairman in April 2016. He is also non-executive chairman of Euromax Resources (since 2009) and an independent director of TSX-listed New Gold (since 2009), sitting on the Audit Committee and Chair of the Remuneration Committee. He is also a consultant chief investment officer for T Wealth Management, a private multi-family office for partners and senior management of the Trafigura group based in Geneva. Previously, from 2008, he was Executive Chairman and President of European Goldfields until its friendly takeover by Eldorado Gold Corp for US\$ 2.5 billion in 2012. He has also been a main board director of NM Rothschild and Sons Ltd. for 15 years and held senior positions at Goldman Sachs and UBS and other companies including FSA regulated Blackfish Capital Group, Resourceworks and Aim-listed Latitude Resources. Mr. Konig is a barrister and also a Fellow of the Chartered Institute of Bankers.

Hilmar Rode, Chief Executive Officer, was appointed chief executive officer and executive director in December 2016. Prior to Nyrstar, he has worked at BHP Billiton, Glencore, Mondi, Anglo American and Praxair in senior management roles spanning operations, strategy, business development and R&D. At Glencore and Anglo American he accumulated extensive experience in zinc and lead mining and smelting. Most recently, he led the successful transformation of Minera Escondida, the largest copper mining and processing project in Chile operated by BHP Billiton. Prior to BHP Billiton, Hilmar led a restructuring and business optimization project at Glencore's Kazzinc operation in Kazakhstan for two years. While at Anglo American, Hilmar worked on the Skorpion zinc project in Namibia for four years from pre-feasibility through to commissioning. He holds a PhD in Chemical Engineering and a Masters in Environmental Engineering from the State University of New York at Buffalo, United States, and a first-class degree in Chemical Engineering from the University of Stellenbosch, South Africa. He also completed the Advanced Management Programme at Harvard Business School.

Carole Cable, Non-Executive Director, is currently a Partner of the Brunswick Group, an international communications firm, where she is the Joint Head of the energy and resources practice specialising in the metals and mining sector. Prior to her current position, she worked at Credit Suisse and JPMorgan where she was a Mining Analyst and then moved into institutional equity sales covering the global mining sector as well as Asia ex Japan. Before that, she worked for an Australian listed mining company. She is a Member of the Nomination and Remuneration Committee and the Health, Safety, Environment and Community Committee. Ms. Cable holds a Bachelor of Science degree from the University of New South Wales, Australia and is currently on the Board of Women in Mining UK.

Christopher Cox, Non-Executive Director, currently serves on the Trafigura Supervisory Committee. He was also formerly the Head of the non-ferrous and bulk trading division at Trafigura and a member of the Trafigura Management Board between March 2004 and December 2011 as well as a member of the Trafigura Board of Directors from October 2013 until early September 2014. Prior to working for Trafigura, he was employed by Gold Fields of South Africa holding positions in mine and project evaluations and marketing of base metal concentrates and refined metals. He is a Member of the Nomination and Remuneration Committee and the Health, Safety, Environment and Community Committee. Mr. Cox was educated in South Africa and holds a Bachelor of Science degree (Hons) in Geology and an MBA from University of Cape Town Graduate School of Business, South Africa.

Corporate Governance Statement Corporate Governance Statement

Anne Fahy, Non-Executive Director, currently sits on the boards of Interserve Plc and SThree Plc, and chairs the Audit Committees of both companies. Prior to joining the board of SThree in October 2015, she was chief financial officer of BP's Aviation Fuels business, having worked in a variety of finance and finance-related roles in her 27 years at the company. She is a Fellow of the Institute of Chartered Accountants in Ireland and worked at KPMG in Ireland and Australia prior to joining BP in 1988. She holds a Bachelor of Commerce from the University College Galway, Ireland.

Jesús Fernandez, Non-Executive Director, is currently head of M&A at Trafigura Group Pte. Ltd. and sits on the board of their mining division. He is a board member of a number of companies including Bowie, Atalaya Mining and Mawson West and is a principal of the Galena Private Equity Resources Fund. He has more than 15 years of experience in corporate finance, having previously worked for International Power PLC in its project finance division. He holds a Masters in Finance and Investment from Exeter University, and an Honours Degree in Economics from the University of Cantabria, Spain.

Virginie Lietaer, was appointed Company Secretary to the Company effective 10 March 2008.

The business address of each of the Directors is for the purpose of their directors' mandate, Zinkstraat 1, 2490 Balen, Belgium.

Management Committee

The Company's Management Committee consists of five members (including the Chief Executive Officer), as further set forth hereinafter:

Name	Title
Hilmar Rode(1)	Chief Executive Officer
Christopher Eger	Chief Financial Officer
Frank Rittner(2)	Chief Operating Officer
Sebastião Balbino(2)	Chief Commercial Officer
Willie Smit	Senior Vice President, Corporate Services

(1) Appointed on 13 December 2016, following the resignation of William A. Scotting on 13 December 2016. (2) Appointed on 1 February 2017, as Michael Morley left the Management Committee in January 2017.

Hilmar Rode is the Chief Executive Officer of the Company. See his biography above under "—Board of Directors".

Christopher Eger, Chief Financial Officer was appointed in November 2015. Prior to Nyrstar he was at Trafigura where he was a senior member of the mergers and acquisitions team. Prior to that he was a member of the investment banking group of Bank of America Merrill Lynch, where he worked with metals and mining companies on debt and equity financing and M&A. He also worked as a director in the global metals and mining group at BMO Capital Markets. He holds an MBA from Kellogg School of Management at Northwestern University, United States.

Frank Rittner, Chief Operating Officer, was appointed in January 2017. In his role as Chief Operating Officer, Frank is responsible for Nyrstar's Metals Processing and Mining operations and production value chains. Frank has almost two decades of experience in the metals and mining sector, holding senior positions in the industry as well as international consulting companies, such as PwC and McKinsey & Co. Prior to joining Nyrstar, he was Chief Operating Officer at Glencore's Kazzinc operations in Kazakhstan. Before this, he was a partner at PwC, leading Advisory Services for Metals and Mining clients in Middle and Eastern Europe. He was also a Management Board Member at Interpipe Group, a vertically integrated producer of steel and steel pipes, responsible for strategic development and the implementation of continuous improvement in production. At McKinsey & Co, he was part of the global mining leadership team, specializing in profitability improvement and operations. Frank received a PhD in Physical Chemistry from the Technical University of Dortmund, Germany and was a Feodor-Lynen research fellow at Columbia University, New York, United States.

Sebastião Balbino, Chief Commercial Officer, was appointed in January 2017. In his role as Chief Commercial Officer, Sebastião focuses on Nyrstar's concentrate procurement strategy and oversees the commercial sales and marketing teams. He has 35 years of experience in the metals and mining sector, holding senior commercial and management positions in the industry. Sebastião joined Nyrstar in May

2016 as Vice President Commercial. Before this, he was the country manager for Angola for DT Group, a joint venture between Trafigura and Cochan Ltd. Sebastião spent over two decades in senior commercial roles, including General Manager Commercial at Votorantim Metais Zinco, a global metals and mining company and one of the largest conglomerates in Latin America. He was also the Production Manager for Companhia Paraibuna de Metais. Sebastião started his career as a petroleum drilling engineer for Petrobras. Sebastião holds a degree in Metallurgical Engineering from the UFF, Brazil as well as an MBA from the FDC, Brazil.

Willie Smit, Senior Vice President, Corporate Services, was appointed in January 2016. Prior to joining Nyrstar, he was a Senior Vice-President and Global Head of HR at Swiss-based cement producer Holcim Ltd. Before that, he held a number of increasingly senior positions with ArcelorMittal, including Executive Vice President and Head of HR, where he was in charge of the global HR function for the Group. Before joining Mittal Steel in 2005, he worked for the Siberian-Urals Aluminium Company (SUAL) as Vice President HR Europe and Africa. He started his career in South Africa where he first worked as an HR graduate trainee at East Rand Proprietary Mines (ERPM Ltd.) and then joined the construction and infrastructure company Group Five. He holds a Bachelor of Educational Science Degree in Clinical Psychology from the University of Johannesburg, South Africa (formerly Rand Afrikaans University).

The business address of the Management Committee is Tessinerplatz 7, 8002 Zurich, Switzerland.

General Information on Directors and Management Committee

No Director or member of the Management Committee has:

• (a) any convictions in relation to fraudulent offences or any offences involving dishonesty;
• (b) except in the case of compulsory liquidations, at any time in the previous five years, been associated with any bankruptcy, receivership or liquidation of any entity in which such person acted in the capacity of a member of an administrative, management or supervisory body or senior manager:
• (c) been declared bankrupt or has entered into an individual voluntary arrangement to surrender his or her estate;
• (d) been a director with an executive function of any company at the time of, or within twelve months preceding, any receivership, compulsory liquidation, creditors' voluntary liquidation, administration, company voluntary arrangement or any composition or arrangement with that company's creditors generally or with any class of its creditors;
• (e) been a partner in a partnership at a time of, or within twelve months preceding, any compulsory liquidation, administration or voluntary arrangement of such partnership;
• (f) been a partner in a partnership at the time of, or within twelve months preceding, a receivership of any assets of such partnership; or

(g) had any of his or her assets subject to receivership; or

(h) received any official public incrimination and/or sanctions by any statutory or regulatory authorities (including designated professional bodies) or ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company.

Other Mandates

Other than set out in the table below, no Director or member of the Management Committee has, at any time in the previous five years, been a member of the administrative, management or supervisory body or partner of any companies or partnerships. Over the five years preceding the date of this report, the Directors and members of the Management Committee hold or have held in addition to their function within Nyrstar, the following main directorships or memberships of administrative, management or supervisory bodies and/or partnerships:

Name	Current	Past
Martyn Konig	Euromax Resources Newgold	European Goldfields
Carole Cable	Brunswick Group Women in Mining UK	N/A
Christopher Cox	Trafigura Beheer B.V.	N/A
Anne Fahy	Interserve Plc SThree Plc Save The Children Inc	Air BP Ltd.
Jesús Fernandez	Atalaya Mining PLC Bowie Resource Partners Cadillac Ventures Co Mawson West Ltd. TM Ventures Terrafame Ltd Various subsidiaries of Trafigura	Anvil Mining Limited Tiger Resources Limited Various subsidiaries of Trafigura
Hilmar Rode	N/A	Consejo Minero de Chile AG Minera Escondida Ltda. Fundación Minera Escondida Centro de Entrenamiento Industrial y Minero – CEIM
Sebastião Balbino	N/A	AEMR S.A. Angobetume, Lda Angofret, Lda Angorecycling, Lda DT Agro, Lda DT Fundação DTS Imobiliária, Lda DTS Serviços, Lda Errangol, Lda Freemine, Lda Pumangol Bunkering Pumangol Industrial Pumangol Lda Transfuel, Lda Transpuma, Lda DT Ferrovias, Lda
Christopher Eger	N/A	Mawson West
Frank Rittner	N/A	N/A
Willie Smit	Tenon Engineering	Subsidiaries of ArcelorMittal

Board of Directors

The Company has opted for a "one-tier" governance structure whereby the Board of Directors is the ultimate decision-making body, with the overall responsibility for the management and control of the Company, and is authorised to carry out all actions that are considered necessary or useful to achieve the Company's purpose. The Board of Directors has all powers except for those reserved to the shareholders' meeting by law or the Company's articles of association.

Pursuant to Section 1.1 of the Company's Corporate Governance Charter, the role of the Board of Directors is to pursue the long-term success of the Company by providing entrepreneurial leadership and enabling risks to be assessed and managed. The Board of Directors decides on the Company's values and strategy, its risk appetite and key policies.

The Board of Directors is assisted by a number of committees to analyse specific issues. The committees advise the Board of Directors on these issues, but the decision-making remains with the Board of Directors as a whole (see also "—Committees of the Board of Directors" below).

The Board of Directors appoints and removes the Chief Executive Officer. The role of the Chief Executive Officer is to implement the mission, strategy and targets set by the Board of Directors and to assume responsibility for the day-to-day management of the Company. The Chief Executive Officer reports directly to the Board of Directors.

In order to provide a group-wide support structure, the Company has corporate offices in Balen, Belgium and Zurich, Switzerland. These offices provide a number of corporate and support functions including finance, treasury, human resources, safety and environment, legal, tax, information technology, corporate development, investor relations and communications.

Pursuant to the Company's articles of association, the Board of Directors must consist of at least three directors. The Company's Corporate Governance Charter provides that the composition of the Board of Directors should ensure that decisions are made in the corporate interest. It should be determined on the basis of diversity, as well as complementary skills, experience and knowledge. Pursuant to the Belgian Code on Corporate Governance, at least half of the directors must be non-executive and at least three directors must be independent in accordance with the criteria set out in the Belgian Companies Code and in the Belgian Code on Corporate Governance. At least one third of the members of the Board of Directors is of the opposite gender.

The directors are appointed for a term of no more than four years by the general shareholders' meeting. They may be re-elected for a new term. Proposals by the Board of Directors for the appointment or re-election of any director must be based on a recommendation by the Nomination and Remuneration Committee. In the event the office of a director becomes vacant, the remaining directors can appoint a successor temporarily filling the vacancy until the next general shareholders' meeting. The shareholders' meeting can dismiss the directors at any time.

On 9 November 2015, the Company entered into a Relationship Agreement with Trafigura Group Pte. Ltd., Urion's 100% parent company, to govern Nyrstar's relationship with Trafigura. The Relationship Agreement provides amongst other things that Trafigura will be able to nominate or propose the nomination of such number of directors to the Company's board of directors as it determines, but limited to a number that does not constitute a majority of the Company's board of directors (such directors being "Trafigura Directors"). The director appointed upon proposal of Trafigura, who is Mr. Martyn Konig, prior to the date of the Relationship Agreement who is an "independent director" shall not for these purposes be considered as a Trafigura Director. No independent director will be nominated or proposed for nomination unless with the approval of a majority of the directors other than the Trafigura Directors. On the date of this report, only Christopher Cox and Jesús Fernandez are Trafigura Directors. Furthermore, the Relationship Agreement provides that the attendance quorum for a board meeting includes at least one independent director and one Trafigura Director, but if this attendance quorum is not met, a subsequent meeting can be held with the same agenda if at least any two directors are present. The Relationship Agreement will have effect for as long as Trafigura holds at least 20% or more but less than 50% of the shares in the Company. Trafigura may decide to terminate the Relationship Agreement if the Trafigura Commercial Agreements that it entered into with the Company are terminated by the Company other than due to material breach by Trafigura or the expiry or non-renewal of the agreed upon term.

The Board of Directors elects a chairman from among its non-executive members on the basis of his knowledge, skills, experience and mediation strength. If the Board of Directors envisages appointing a former Chief Executive Officer as chairman, it should carefully consider the positive and negative aspects in favour of such a decision and disclose why such appointment is in the best interest of the Company. The chairman is responsible for the leadership and the proper and efficient functioning of the Board of Directors.

The Board of Directors meets whenever the interests of the Company so require or at the request of one or more directors. In principle, the Board of Directors will meet sufficiently regularly and at least six times per year. The decisions of the Board of Directors are made

Corporate Governance Statement Corporate Governance Statement

by a simple majority of the votes cast. The chairman of the Board of Directors has a casting vote. The Relationship Agreement provides that in case a Trafigura Director is chairman of the Board of Directors or chairs a meeting of the Board of Directors, he or she shall not have a casting vote.

During 2016, 13 meetings of the Board of Directors were held.

Committees of the Board of Directors

The Board of Directors has set up an Audit Committee, a Nomination and Remuneration Committee and a Health, Safety, Environment and Community Committee.

Audit Committee

The Audit Committee consists of at least three directors. All members of the Audit Committee are non executive directors. According to the Belgian Companies Code, all members of the Audit Committee must be non-executive directors, and at least one member must be independent within the meaning of article 526ter of the Belgian Companies Code. The current members of the Audit Committee are Anne Fahy (Chairman), Martyn Konig and Jesús Fernandez. The current composition of the Audit Committee complies with the Belgian Code on Corporate Governance which requires that a majority of the members of the Audit Committee are independent.

The members of the Audit Committee must have a collective competence in the business activities of the Company as well as accounting, auditing and finance. The current Chairman of the Audit Committee is competent in accounting and auditing as evidenced by her previous role as Chief Financial Officer of BP's Aviation Fuels business. According to the Board of Directors, the other members of the Audit Committee also satisfy this requirement, as evidenced by the different senior management and director mandates that they have held in the past and currently hold (see also "—Other mandates").

The role of the Audit Committee is to:

• inform the Board of Directors of the result of the audit of the financial statements and the manner in which the audit has contributed to the integrity of the financial reporting and the role that the Audit Committee has played in that process;
• monitor the financial reporting process, and to make recommendations or proposals to ensure the integrity of the process;
• monitor the efficiency of the Company's internal control and risk management systems, and the Company's internal audit process and its effectiveness;
• monitor the audit of the financial statements, including the follow-up questions and recommendations made by the statutory auditor;
• assess and monitor the independence of the statutory auditor, in particular with respect to the appropriateness of the provision of additional services to the Company; and
• make recommendations to the Board of Directors on the selection, appointment and remuneration of the statutory auditor.

The Audit Committee regularly reports to the Board of Directors on the exercise of its missions, including when preparing the financial statements.

In principle, the Audit Committee meets as frequently as necessary for the efficiency of the operation of the Audit Committee, but at least four times a year. The members of the Audit Committee must have full access to the Chief Financial Officer and to any other employee to whom they may require access in order to carry out their responsibilities.

During 2016, five Audit Committee meetings were held.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee consists of at least three directors. All members of the Nomination and Remuneration Committee are non-executive directors. In line with the Belgian Companies Code, the Nomination and Remuneration Committee consists of a majority of independent directors. The Nomination and Remuneration Committee is chaired by the Chairman of the Board of Directors or another non-executive director appointed by the committee. The following directors are currently members of the Nomination and Remuneration Committee: Martyn Konig (Chairman), Carole Cable, Anne Fahy and Jesús Fernandez. Pursuant to the Belgian Companies Code, the Nomination and Remuneration Committee must have the necessary expertise on remuneration policy, which is evidenced by the experience and previous roles of its current members. The Chief Executive Officer participates to the meetings of the Nomination and Remuneration Committee in an advisory capacity each time the remuneration of another member of the Management Committee is being discussed.

The role of the Nomination and Remuneration Committee is to make recommendations to the Board of Directors with regard to the appointment of directors, make proposals to the Board of Directors on the remuneration policy and individual remuneration for directors and members of the management committee and to submit a remuneration report to the Board of Directors. In addition, the Nomination and Remuneration Committee each year submits the remuneration report to the annual general shareholders' meeting.

In principle, the Nomination and Remuneration Committee meets as frequently as necessary for the efficiency of the operation of the committee, but at least twice a year.

During 2016, four Nomination and Remuneration Committee meetings were held.

Health, Safety, Environment and Community Committee

The Health, Safety, Environment and Community Committee consists of at least three directors. All members of the Health, Safety, Environment and Community Committee are non-executive directors, with at least one independent director. The Health, Safety, Environment and Community Committee is chaired by the Chairman of the Board of Directors or another non-executive director appointed by the committee. The current members of the Health, Safety, Environment and Community Committee are Christopher Cox (Chairman), Carole Cable and Jesús Fernandez.

The role of the Health, Safety, Environment and Community Committee is to assist the Board of Directors in respect of health, safety, environment and community matters. In particular, its role is to ensure that the Company adopts and maintains appropriate health, safety, environment and community policies and procedures, as well as effective health, safety, environment and community internal control and risk management systems, and to make appropriate recommendations to the Board of Directors.

In principle, the Health, Safety, Environment and Community Committee meets as frequently as necessary for the efficiency of the operation of the committee, but at least twice a year.

During 2016, three Health, Safety, Environment and Community Committee meetings were held.

Activity Report and Attendance at Board and Committee Meetings during 2016

The table summarises the attendance of meetings of the Board of Directors and the respective committees of the Board of Directors by their members in person or by conference call. It does not take into account attendance via representation by proxy.

Name	Board Meeting Attended	Audit	Nomination and Remuneration Health, Safety, Environment	and Community
Julien De Wilde(1)	4 of 13	N/A	1 of 4	1 of 3
Carole Cable	13 of 13	N/A	4 of 4	3 of 3
Christopher Cox	10 of 13	N/A	3 of 4	3 of 3
Oyvind Hushovd(2)	4 of 13	2 of 5	N/A	1 of 3
Martyn Konig	12 of 13	5 of 5	4 of 4	N/A
William A. Scotting(4)	13 of 13	N/A	N/A	N/A
Ray Stewart(1)	3 of 13	2 of 5	1 of 4	N/A
Karel Vinck(2)	3 of 13	1 of 5	N/A	N/A
Anne Fahy(3)	9 of 13	3 of 5	3 of 4	N/A
Jesús Fernandez(3)	9 of 13	3 of 5	3 of 4	1 of 3

(1) Resigned on 27 April 2016

(2) Mandate ended on 27 April 2016 (3) Appointed on 27 April 2016

(4) Resigned on 13 December 2016

The topics discussed at the Board and Committee Meetings are in line with the role and responsibilities of the Board and its Committees as set out in the Corporate Governance Charter, such as for example, the determination of the Company's principal objectives and strategy and the approval of all major investments, divestments, business plans and annual budgets.

Independent Directors

A director will only qualify as an independent director if he or she meets at least the criteria set out in Article 526ter of the Belgian Companies Code, which can be summarised as follows:

• Not being an executive member of the Board of Directors, exercising a function as a member of the executive committee or as a person entrusted with daily management of the Company or a company or person affiliated with the Company, and not having been in such a position during the previous five years before his nomination.
• Not having served for more than three terms as a non-executive director of the Board of Directors, without exceeding a total term of more than twelve years.
• Not being an employee of the senior management (as defined in Article 19, 2° of the Belgian Act of 20 September 1948 regarding the organisation of the business industry) of the Company or a company or person affiliated with the Company and not having been in such a position for the previous three years before his nomination.
• Not receiving, or having received, any significant remuneration or other significant advantage of a financial nature from the Company or a company or person affiliated with the Company, other than any bonus or fee (tantièmes) he or she receives or has received as a non-executive member of the Board of Directors.
• Not holding (directly or via one or more companies under his control) any shareholder rights representing 10% or more of the Company's shares or of a class of the Company's shares (as the case may be), and not representing a shareholder meeting this condition.

• If the shareholder rights held by the director (directly or via one or more companies under his control) represent less than 10%, the disposal of such shares or the exercise of the rights attached thereto may not be subject to contracts or unilateral undertakings entered into by the director. The director may also not represent a shareholder meeting this condition.

• Not having, or having had within the previous financial year, a significant business relationship with the Company or a company or person affiliated with the Company, either directly or as partner, shareholder, member of the Board of Directors, member of the senior management (as defined in Article 19, 2° of the aforementioned Belgian Act of 20 September 1948) of a company or person who maintains such a relationship.

• Not being or having been within the last three years, a partner or employee of the current or former statutory auditor of the Company or a company or person affiliated with the current or former statutory auditor of the Company.
• Not being an executive director of another company in which an executive director of the Company is a non-executive member of the board, and not having other significant links with executive directors of the Company through involvement in other companies or bodies.
• Not being a spouse, legal partner or close family member (by marriage or birth) to the second degree of a member of the Board of Directors, a member of the executive committee, a person charged with the daily management, or a member of the senior management (as defined in Article 19, 2° of the aforementioned Belgian Act of 20 September 1948) of the Company or a company or person affiliated with the Company, or of a person who finds him or herself in one or more of the circumstances described in the previous bullets.

The resolution appointing the director must mention the reasons on the basis of which the capacity of independent director is granted.

In the absence of guidance in the law or case law, the Board of Directors has not further quantified or specified the aforementioned criteria set out in Article 526ter of the Belgian Companies Code. The Company discloses in its annual report which directors are independent directors. An independent director who ceases to satisfy the requirements of independence must immediately inform the Board of Directors.

The shareholders meeting of the Company has appointed Martyn Konig, Carole Cable and Anne Fahy as independent directors.

The Relationship Agreement between the Company and Trafigura provides that the proposal for appointment of any new independent director requires the approval of a majority of the directors other than the Trafigura Directors, it being understood however, that the Relationship Agreement in no way restricts the Trafigura group as shareholder to vote in favour of or against any proposed independent directors. See also "—Board of Directors".

Performance Review of the Board, its Committees and its Members

The Board of Directors evaluates its own size, composition, performance and interaction with executive management and that of its committees on a continuous basis.

The evaluation assesses how the board and its committees operate, checks that important issues are effectively prepared and discussed, evaluate each director's contribution and constructive involvement, and assesses the present composition of the board and its committees against the desired composition. This evaluation takes into account the members' general role as director, and specific roles as chairman, chairman or member of a board committee, as well as their relevant responsibilities and time commitment.

Non-executive directors assess their interaction with the executive management on a continuous basis.

Executive Management

The Company's executive management is composed of the Chief Executive Officer and the other members of the Management Committee, as detailed above in "—Management Committee".

Chief Executive Officer

The Chief Executive Officer is a member of the Board. He leads and chairs the Management Committee and is accountable to the Board of Directors for the Management Committee's performance.

The role of the Chief Executive Officer is to implement the mission, strategy and targets set by the Board of Directors and to assume responsibility for the day-to-day management of the Company. The Chief Executive Officer reports directly to the Board of Directors.

Management Committee

The Board of Directors has delegated the day-to-day management of the Company as well as certain management and operational powers to the Chief Executive Officer. The Chief Executive Officer is assisted by the Management Committee.

The Management Committee is composed of at least four members and includes the Chief Executive Officer. Its members are appointed by the Board of Directors on the basis of a recommendation by the Nomination and Remuneration Committee. The Company's Management Committee does not qualify as a "directiecomité"/"comité de direction" within the meaning of Article 524bis of the Belgian Companies Code. The Management Committee is responsible and accountable to the Board of Directors for the discharge of its responsibilities.

The Management Committee is responsible for assisting the Chief Executive Officer in relation to:

• operating the Company;
• implementing the decisions taken by the Board of Directors;
• putting in place internal controls and risk management systems (without prejudice to the Board of Directors', the Audit Committee's and the Health, Safety, Environment and Community Committee's monitoring roles) based on the framework approved by the Board of Directors;
• presenting the Board of Directors the complete, timely, reliable and accurate preparation of the Company's financial statements, in accordance with applicable accounting standards and policies;
• preparing the Company's required disclosure of the financial statements and other material, financial and non-financial information;
• presenting the Board of Directors with a balanced and understandable assessment of the Company's financial situation; and
• providing the Board of Directors in due time with all information necessary for the Board of Directors to carry out its duties.

Conflicts of Interest

Directors are expected to arrange their personal and business affairs so as to avoid conflicts of interest with the Company. Any director with a conflicting financial interest (as contemplated by Article 523 of the Belgian Companies Code) on any matter before the Board of Directors must bring it to the attention of both the statutory auditor and fellow directors, and take no part in any deliberations or voting related thereto.

Section 1.4 of the Corporate Governance Charter sets out the procedure for transactions and other contractual relationships between Nyrstar, on the one hand, and the directors or related parties of directors, on the other hand, irrespective of whether or not falling within the scope of the legal provisions on conflicts of interest with directors or related parties of Nyrstar. Notably, such transactions or contractual relationships can only be entered into at market conditions, and the director concerned may only participate in the deliberation and decision-making process with regard to such transactions or contractual relationships if the Board of Directors votes to request or permit such participation and if permitted by law. Furthermore, if a director believes that such a conflict arises in respect of any material decision, operation or transaction, he or she must see to it that the Board of Directors is fully informed at the start of the meeting of the potential or perceived conflict of interest. Where applicable, the rules and procedures of articles 523 or 524 of the Belgian Companies Code need to be complied with. For the purpose of the aforementioned rules, the following entities will qualify as a "related party" of a director: (a) a legal entity in which the director acts as a director, as a senior executive or in a similar capacity, and (b) a legal entity that is directly or indirectly under the control of the director concerned.

Section 3.2.4 of the Corporate Governance Charter contains a separate procedure for transactions between Nyrstar and members of the management committee (other than the chief executive officer). Notably, any transaction or other contractual relationship between Nyrstar, on the one hand, and any member of the Management Committee or a related party of such Management Committee member, on the other hand, requires the prior approval of the CEO, which needs to be fully informed by the Management Committee member concerned of the terms and conditions of the transaction or contractual relationship, as well as of the corresponding interest of Nyrstar. Such transaction or contractual relationship can only be entered into at market conditions. For the purpose of the aforementioned rules, the following entities will qualify as a "related party" of a Management Committee member: (a) a legal entity in which the Management Committee member acts as a director, as a senior executive or in a similar capacity, and (b) a legal entity that is directly or indirectly under the control of the Management Committee member.

To the knowledge of the Company, there are, on the date of this report, no potential conflicts of interests between any duties to the Company's directors and Management Committee members and their respective private interests and/or other duties. While this does not entail a direct personal conflict of interest, Mr. Cox is a member of the supervisory committee of Trafigura and Mr. Fernandez is the head of M&A at Trafigura Group Pte. Ltd., and owns a non-voting profit shaing participation in Trafigura Beheer B.V., a parent of Trafigura Group Pte Ltd. As Trafigura is a related party of Mr. Cox and Mr. Fernandez for purposes of Section 1.4 of the Corporate Governance Charter of the Company, this section is also applicable to transactions with Trafigura.

There are no outstanding loans granted by the Company to any of the persons mentioned in "—Board of Directors" and in "—Management Committee", nor are there any guarantees provided by the Company for the benefit of any of the persons mentioned in "—Board of Directors" and in "—Management Committee".

None of the persons mentioned in "—Board of Directors" and in "—Management Committee" has a family relationship with any other of the persons mentioned in "—Board of Directors" and in "—Management Committee".

Dealing Code

With a view to preventing market abuse (insider dealing and market manipulation), the Board of Directors has established a dealing code. The dealing code describes the declaration and conduct obligations of directors, members of the management committee, certain other employees and certain other persons with respect to transactions in shares or other financial instruments of the Company. The dealing code sets limits on carrying out transactions in shares of the Company and allows dealing by the above-mentioned persons only during certain windows. A copy of the dealing code is available on the Company's website.

Disclosure Policy

As a Belgian listed company and with a view to ensuring investors in shares of the Company have available all information necessary to ensure the transparency, integrity and good functioning of the market, the Board of Directors has established an information disclosure policy. The information disclosure policy is aimed at ensuring that inside information of which the Company is aware is immediately disclosed to the public. In addition, the information disclosure policy is aimed at ensuring information that is disclosed is fair, precise and sincere, and will enable the holders of shares in the Company and the public to assess the influence of the information on the Company's position, business and results.

Internal Control and Risk Management

General

The Nyrstar Board of Directors is responsible for the assessment of the effectiveness of Nyrstar's Risk Management Framework and internal controls. The Company takes a proactive approach to risk management. The Board of Directors is responsible for ensuring that nature and extent of risks are identified on a timely basis with alignment to the Group's strategic objectives and activities.

The Audit Committee plays a key role in monitoring the effectiveness of the Risk Management Framework and is an important medium for bringing risks to the attention of the Board of Directors. If a critical risk or issue is identified by the board or management, it may be appropriate for all directors to be a part of the relevant risk management process, and as such the Board of Directors will convene a sub-

Corporate Governance Statement Corporate Governance Statement

committee comprised of a mix of members Board of Directors and senior management. Each respective sub-committee further examines issues identified and reports back to the Board of Directors.

The Company's Risk Management Framework requires regular evaluation of the effectiveness of internal controls to ensure the Group's risks are being adequately managed. The Risk Management Framework is designed to achieving the Company's objectives. The Company acknowledges that risk is not just about losses and harm. Risk can have positive consequences too. Effective risk management enables the Company to achieve an appropriate balance between realising opportunities while minimising adverse impacts.

This section gives an overview of the main features of the Company's internal control and risk management systems, in accordance with the Belgian Corporate Governance Code and the Belgian Companies Code.

Components of the Risk Management Framework

The Risk Management Framework is integrated in the management process and focuses on the following key principles.

The key elements of Risk Management Framework are:

1 Understanding the External and Internal Environment

Understanding the internal and external business environment and the effect this has on Nyrstar's business strategy and plans. This informs the Company's overall tolerance to risk.

2 Consistent Methods for Risk Identification and Analysis of Risks, Existing Controls and Control Effectiveness

Implementing systems and processes for the consistent identification and analysis of risks, existing controls and control effectiveness. Evaluating whether the level of risk being accepted is consistent with levels of risk acceptable to the Audit Committee.

3 Risk Treatment

Using innovative and creative thinking in responding to risks and taking action where it is determined that the Company is being exposed to unacceptable levels of risk.

4 Stakeholder Engagement and Communication

Involving all Nyrstar employees and relevant stakeholders in managing risks and communicating identified key risks and controls.

5 Monitoring and Review

Regularly monitoring and reviewing Nyrstar's risk management framework, Nyrstar's risks and control effectiveness.

The guideline for the Risk Management Framework has been written to comply with ISO 31000; 2009. Compliance with the guideline is mandatory within the Company.

Critical Internal Controls

The following is a summary of Nyrstar's critical internal controls:

Organisational Design

There is a sound organizational structure with clear procedures, delegation and accountabilities for both the business side and the support and control functions, such as human resources, legal, finance, internal audit, etc.

The organizational structure is monitored on an ongoing basis, e.g. through benchmarking the organizational structure with industry standards and competitors. Responsibilities are delegated to business units, by business plans and accompanying budgets approved by management and the Board of Directors within set authorization levels.

Policies and Procedures

The Company has established internal policies and procedures to manage various risks across the Group. These policies and procedures are available on the Company's intranet-site, and distributed for application across the whole Group. Every policy has an owner, who periodically reviews and updates if necessary.

Ethics

The Board of Directors has approved a Corporate Governance Charter and a Code of Business Conduct, including a framework for ethical decision making. All employees must perform their daily activities and their business objectives according to the strictest ethical standards and principles. The Code of Business Conduct is available on Nyrstar's website (www.nyrstar.com) and sets out principles how to conduct business and behave in respect of:

• Our People
• Our Communities and Environment
• Our Customers and Suppliers
• Our Competitors
• Our Shareholders
• Our Assets

The Board of Directors regularly monitors compliance with applicable policies and procedures of the Group.

Whistleblowing

Nyrstar also has a whistleblower procedure in place, allowing staff to confidentially raise concerns about any irregularities in financial reporting, possible fraudulent actions, bribery and other areas.

Quality Control

Nyrstar is ISO 9001 certified for the smelting and refining of zinc and zinc alloys, lead and lead alloys, silver, gold and other by-products. All of its major processes and the controls that they encompass are formalized and published on the Company's intranet.

Financial Reporting and Budget Control

Nyrstar applies a comprehensive Group standard for financial reporting. The standard is in accordance with applicable International Accounting Standards. These include International Financial Reporting Standards (IFRS) and the related interpretations issued by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) as adopted by the European Union. The effectiveness and compliance with the Group standard for financial reporting is consistently reviewed and monitored by the Audit Committee.

In order to ensure adequate financial planning and follow up, a financial budgeting procedure describing the planning, quantification, the implementation and the review of the budget in alignment with forecasts, is closely followed. Nyrstar conducts Group wide budgeting process, which is centrally coordinated and consists of the following steps:

• 1) The Group business strategy is updated and communicated within Nyrstar, which amongst other things outlines the strategic guidelines and objectives for the upcoming financial year.
• 2) Key inputs and assumptions for the budgeting process for the upcoming financial year are provided by relevant internal stakeholders (including expected production, capital expenditure, metal prices, foreign exchange and commercial terms) and uploaded into the centralised budgeting, planning and consolidation system.
• 3) The key inputs and assumptions for the budget then go through a rigorous process of validation by relevant internal stakeholders and senior management. The management committee and the board sign off on the final agreed budget.

Corporate Governance Statement Corporate Governance Statement

• 4) The final budget is communicated to the different Nyrstar business units and departments.
• 5) Nyrstar will then bi-annually communicate to shareholders the Group's full actual financial results, supplemented by quarterly interim management statements, which will include selected key financial results.

Management Committees

Various management committees are established as a control to manage various risks Nyrstar is exposed to:

TREASURY COMMITTEE

The treasury committee comprises the Chief Financial Officer, the Group Treasurer and the Group Controller. The role of the treasury committee is to recommend to the Chief Executive Officer and to the Board of Directors amendments to the treasury policy. This considers all treasury transactions being reviewed before they are recommended to the Chief Executive Officer for review and approval by the Board of Directors. Explicitly this includes preparations for the following Chief Executive Officer and Board of Directors approvals:

• to approve treasury strategies and activities, as recommended by the Group Treasurer, within the constraints of the policy;
• to periodically review treasury operations and activities, approve the use of new financial instrument types and techniques for managing financial exposures;
• to approve the list of authorized counterparties for foreign exchange and money market transactions;
• to approve the use of payment term extensions and cash discounts on commercial contracts that would go beyond standard business conditions; and
• to approve the list of bank relationships.

The treasury committee meets at least quarterly.

COMMODITY RISK MANAGEMENT COMMITTEE

The commodity risk management committee comprises the Chief Financial Officer, the Group Treasurer, the Group Controller and the Group Manager Financial Planning & Analysis. Nyrstar's commodity risk management committee establishes policies and procedures how Nyrstar manages its exposure to the commodity prices and foreign exchange rates. Nyrstar actively and systematically endeavors to minimize any impact on its income statement from metal price risk.

Information, Communication and Financial Reporting Systems

The Group's performance against plan is monitored internally and relevant action is taken throughout the year. This includes, weekly and monthly reporting of key performance indicators for the current period together with information on critical risk areas.

Comprehensive monthly board reports that include detailed consolidated management accounts for the period together with an executive summary from the Chief Financial Officer are prepared and circulated to the Board of Directors by the Company Secretary on a monthly basis.

Monitoring and Review

Management is responsible for evaluating existing controls and the control effectiveness and determines whether the level of risk being accepted is consistent with the level of risk approved by the Board of Directors. Management takes action where it is determined that the Company is being exposed to unacceptable levels of risk and actively encourages all Nyrstar employees to communicate freely risks and opportunities identified.

Internal audit is an important element in the overall process of evaluating the effectiveness of the Risk Management Framework and internal controls. The internal audits are based on risk based plans, approved by the Audit Committee. The internal audit findings are presented to the Audit Committee and management, identifying areas of improvement. Progress of implementation of the actions is monitored by the Audit Committee on a regular basis. The Group internal audit function is managed internally. The Audit Committee supervises the internal audit function.

The Board of Directors pays specific attention to the oversight of risk and internal controls. On a yearly basis, the Board of Directors reviews the effectiveness of the Group's risk management and internal controls. The Audit Committee assists the Board of Directors in this assessment. The Audit Committee also reviews the declarations relating to internal supervision and risk management included in the annual report of the Company. The Audit Committee reviews the specific arrangements to enable staff to express concerns in confidence about any irregularities in financial reporting and other areas e.g., whistleblower arrangements.

To support the protocols described above, both internal resources and external contractors are engaged to perform compliance checks, and reports are provided to the Audit Committee.

Other

The Company is committed to the ongoing review and improvement of its policies, systems and processes.

Principal Shareholders

The Company has a wide shareholder base, mainly composed of institutional investors in the United Kingdom, the United States, Belgium and other European countries, but also comprising Belgian retail investors.

The table below provides an overview of the shareholders that notified the Company pursuant to applicable transparency disclosure rules, up to the date of this report. Although the applicable transparency disclosure rules require that a disclosure be made by each person passing or falling under one of the relevant thresholds, it is possible that the information below in relation to a shareholder is no longer up-to-date. In addition, the Company holds a number of shares as treasury stock.

Shareholder's Name	Date of Notification	% of the voting rights attached to shares before dilution(1)	% of the voting rights attached to shares on a fully diluted basis(2)
Urion Holdings (Malta) Ltd(3)	—	24.64%	20.75%
BlueMountain Capital Management LLC(4)	1 March 2016	4.54%	3.83%
BlackRock(5)	14 February 2017	6.05%	5.09%
Umicore NV(6)	23 March 2011	3.21%	2.70%

(1) The percentage of voting rights is calculated on the basis of the 93,563,960 outstanding shares, taking into account the 1-for-10 reverse stock split that became effective on 9 June 2016. The calculation does not take into account the number of shares issuable upon conversion of the 2018 Convertible Bonds and the 2022 Convertible Bonds. For further information on the number of shares issuable upon conversion of the 2018 Convertible Bonds and 2022 Convertible Bonds, see "—Share Capital and Shares" below.

(2) The percentage of voting rights is calculated on the basis of 111,090,976 outstanding shares, assuming that all 2018 Convertible Bonds have been converted into 5,547,850 new shares at a conversion price of € 21.63 per share, and all 2022 Convertible Bonds have been converted into 11,979,166 new shares at a conversion price of € 9.60 per share. For further information on the number of shares issuable upon conversion of the 2018 Convertible Bonds and 2022 Convertible Bonds, see "—Share Capital and Shares" below.

(3) Urion Holdings (Malta) Ltd is an indirect subsidiary of Trafigura Group Pte. Ltd. and is ultimately controlled by Farringford N.V. Within the context of the completion of the 2016 Rights Offering,

• Trafigura informed the Company that Urion Holdings (Malta) Ltd held 230,556,624 shares after the completion of the Rights Offering on 29 February 2016 (which is before the 1-for-10 reverse stock split that became effective on 9 June 2016). The most recent transparency notification with respect to the shareholding of Urion Holdings (Malta) Ltd. was filed on 1 September 2015, and related to 68,090,869 shares, representing 20.02% on the basis of the then outstanding number of shares.
• (4) BlueMountain Capital Management LLC notified the Company on 1 March 2016 that it is the investment manager for certain investment funds who own shares, and that the investment power over the shares beneficially owned by the investment funds is held by BlueMountain Capital Management LLC. It also informed the Company that the following natural persons constitute members of the management committee of BlueMountain Capital Management LLC and have shared voting and investment power of the shares: Andrew Feldstein, Stephen Siderow, Michael Liberman, Bryce Markus, Derek Smith, David Rubenstein and Peter Greatrex. In its notice, BlueMountain Capital Management LLC notified the Company that it held 42,500,000 shares, representing 4.54% of the then outstanding number of shares (before the 1-for-10 reverse stock split that became effective on 9 June 2016). It also informed the Company that it held 2018 Convertible Bonds for principal amount of € 1,000,000.
• (5) BlackRock, Inc. notified the Company on 16 February 2017 as a parent company for several undertakings controlled by it that these undertakings held 1,287,977 voting rights of the Company, representing 1.38% of the outstanding voting rights in the Company and can acquire 4,369,472 voting rights of the Company after exercise of equivalent financial instruments, representing 4.67% of the outstanding voting rights in the Company. As a result, a total of 5,657,449 voting rights, representing 6.05% of the outstanding voting rights in the Company, have been notified by BlackRock, Inc. pursuant to the Belgian Act of 2 May 2007 on the disclosure of major shareholdings.
• (6) Umicore NV notified the Company on 23 March 2011 that it held 5,251,856 shares, which at the time represented 3.09% of the 170,022,544 then outstanding shares. On 30 September 2014, the Company issued 170,022,544 new shares pursuant to the completion of the 2014 Rights Offering with (non-statutory) preferential subscription rights on a 1-for-1 basis for the existing shareholders of the Company. The Company was informed on 2 April 2015 that Umicore NV held at that time 10,503,712 shares, which represented 3.09% of the 340,045,088 then outstanding shares. On 29 February 2016, the Company issued 608,165,740 new shares pursuant to the completion of the 2016 Rights Offering with (statutory) preferential subscription rights on a 13-for-7 basis for the existing shareholders of the Company. No new notification was filed by Umicore NV after the completion of the 2016 Rights Offering. For the purpose of the percentages shown, it is assumed that Umicore NV exercised its subscription rights in the 2016 Rights Offering in full.

No other shareholders, alone or in concert with other shareholders, notified the Company of a participation or an agreement to act in concert in relation to 3% or more of the current total existing voting rights attached to the voting securities of the Company.

Share Capital and Shares

On the date of this report, the share capital of the Company amounts to EUR 97,192,929.19 and is fully paid-up. It is represented by 93,563,960 ordinary shares, each representing a fractional value of (rounded) EUR 1.04 and representing one 93,563,960th of the share capital. The Company's shares do not have a nominal value.

On 25 September 2013, the Company issued 4.25% senior unsecured convertible bonds due 2018 (the "2018 Convertible Bonds") for an aggregate principal amount of € 120,000,000. The possibility to convert the 2018 Convertible Bonds into new shares of the Company was approved by the extraordinary general shareholders' meeting of the Company held on 23 December 2013. The 2018 Convertible Bonds can be converted into new or existing shares of the Company at any time. To date, none of the 2018 Convertible Bonds have been converted, and all remain outstanding. The conversion price of the 2018 Convertible Bonds can be adjusted downwards in a number of circumstances, including in the event of an issue of new shares, whereby the new shares are issued at a price that is lower than the applicable market price of the Company's shares at the time of the issue. The current conversion price of the 2018 Convertible Bonds (which is subject to adjustment under clause 5(b) of the terms and conditions of the 2018 Convertible Bonds) is €21.63 per share. Based on a conversion price of € 21.63 per share, if all 2018 Convertible Bonds were converted into new shares in their entirety, 5,547,850 new shares would be issued. If the conversion price is adjusted downwards, this would lead to the issuance of more than 5,547,850 new shares if all of the 2018 Convertible Bonds were to be converted in their entirety.

On 11 July 2016, Nyrstar issued 5% senior guaranteed unsecured convertible bonds due 2022 (the "2022 Convertible Bonds") for an aggregate principal amount of € 115,000,000. The possibility to convert the 2022 Convertible Bonds into new shares of the Company was approved by the extraordinary general shareholders' meeting of the Company held on 17 November 2016. The 2022 Convertible Bonds can be converted into new or existing shares of the Company at any time. To date, none of the 2022 Convertible Bonds have been converted, and all remain outstanding. The conversion price of the 2022 Convertible Bonds can be adjusted downwards in a number of circumstances, including in the event of an issue of new shares, whereby the new shares are issued at a price that is lower than the applicable market price of the Company's shares at the time of the issue. The current conversion price of the 2022 Convertible Bonds (which is subject to adjustment under clause 5(b) of the terms and conditions of the 2022 Convertible Bonds) is €9.60 per share. Based on a conversion price of €9.60 per share, if all 2022 Convertible Bonds were converted into new shares in their entirety, 11,979,166 new shares would be issued. If the conversion price is adjusted downwards, this would lead to the issuance of more than 11,979,166 new shares if all of the 2022 Convertible Bonds were to be converted in their entirety.

Form and Transferability of the Shares

The shares of the Company can take the form of registered shares and dematerialized shares. All the Company's shares are fully paid-up and are freely transferable.

Currency

The Company's shares do not have a nominal value, but reflect the same fraction of the Company's share capital, which is denominated in euro.

Voting Rights attached to the Shares

Each shareholder of the Company is entitled to one vote per share. Shareholders may vote by proxy, subject to the rules described in the Company's articles of association.

Voting rights can be mainly suspended in relation to shares:

• which are not fully paid up, notwithstanding the request thereto of the Board of Directors of the Company;
• to which more than one person is entitled, except in the event a single representative is appointed for the exercise of the voting right;
• which entitle their holder to voting rights above the threshold of 5%, 7.5%, 10%, 15%, 20% and any further multiple of 5% of the total number of voting rights attached to the outstanding financial instruments of the Company on the date of the relevant shareholders' meeting, in the event that the relevant shareholder has not notified the Company and the FSMA at least 20 days prior to the date of the shareholders' meeting in accordance with the applicable rules on disclosure of major shareholdings; and
• of which the voting right was suspended by a competent court or the FSMA.

Pursuant to the Belgian Companies Code, the voting rights attached to shares owned by the Company are suspended.

Dividends and Dividend Policy

All shares are entitled to an equal right to participate in the Company's profits (if any). Pursuant to the Belgian Companies Code, the shareholders can in principle decide on the distribution of profits with a simple majority vote at the occasion of the annual shareholders' meeting, based on the most recent statutory audited financial statements, prepared in accordance with the generally accepted accounting principles in Belgium and based on a (non-binding) proposal of the Company's Board of Directors. The Company's articles of association also authorise the Board of Directors to declare interim dividends subject to the terms and conditions of the Belgian Companies Code.

The Company's ability to distribute dividends is subject to availability of sufficient distributable profits as defined under Belgian law on the basis of the Company's statutory unconsolidated financial statements rather than its consolidated financial statements. In particular dividends can only be distributed if following the declaration and issuance of the dividends the amount of the Company's net assets on the date of the closing of the last financial year as follows from the statutory (non-consolidated) financial statements (i.e., summarized, the amount of the assets as shown in the balance sheet, decreased with provisions and liabilities, all as summarized in accordance with Belgian accounting rules), decreased with the non-amortized costs of incorporation and extension and the non-amortized costs for research and development, does not fall below the amount of the paid-up capital (or, if higher, the issued capital), increased with the amount of non-distributable reserves. In addition, prior to distributing dividends, 5% of the net profits must be allotted to a legal reserve, until the legal reserve amounts to 10% of the Company's share capital. The Company's legal reserve currently meets this requirement.

The Board of Directors have taken the decision not to propose to shareholders a distribution for the financial year 2016. This reflects the Board's commitment to maintain a sustainable capital structure.

Information that have an Impact in case of Public Takeover Bids

The Company provides the following information in accordance with Article 34 of the Royal Decree dated 14 November 2007:

• (i) The share capital of the Company amounts to EUR 97,192,929.19 and is fully paid-up. It is represented by 93,563,960 shares, each representing a fractional value of (rounded) EUR 1.04 or one 93,563,960th of the share capital. The Company's shares do not have a nominal value.
• (ii) Other than the applicable Belgian legislation on the disclosure of significant shareholdings and the Company's articles of association, there are no restrictions on the transfer of shares.
• (iii) There are no holders of any shares with special control rights.
• (iv) The awards granted to employees under the Nyrstar Long Term Incentive Plan will vest upon determination by the Nomination and Remuneration Committee.
• (v) Each shareholder of Nyrstar is entitled to one vote per share. Voting rights may be suspended as provided in the Company's articles of association and the applicable laws and articles.

Corporate Governance Statement Corporate Governance Statement

• (vi) There are no agreements between shareholders which are known by the Company and may result in restrictions on the transfer of securities and/or the exercise of voting rights.
• (vii) The rules governing appointment and replacement of board members and amendment to articles of association are set out in the Company's articles of association and the Company's Corporate Governance Charter.
• (viii) The powers of the Board of Directors, more specifically with regard to the power to issue or redeem shares are set out in the Company's articles of association. The Board of Directors was not granted the authorization to purchase its own shares "to avoid imminent and serious danger to the Company" (i.e., to defend against public takeover bids). The Company's articles of association of association do not provide for any other specific protective mechanisms against public takeover bids.
• (ix) At the date of the report, the Company is a party to the following significant agreements which, upon a change of control of the Company or following a takeover bid can enter into force or, subject to certain conditions, as the case may be, can be amended, be terminated by the other parties thereto or give the other parties thereto (or beneficial holders with respect to bonds) a right to an accelerated repayment of outstanding debt obligations of the Company under such agreements:
• 5.00% senior unsecured convertible bonds due 2022
• The USD 150 million uncommitted Trafigura Working Capital Facility (which has been changed to committed and increased to USD 250m as of the 1st of Jan 2017)
• Nyrstar's Revolving Structured Commodity Trade Finance Credit Facility;
• 2019 High Yield Bond (Indenture)
• 4.25% senior unsecured convertible bonds due 2018;
• The zinc prepayment arranged by Deutsche Bank AG dated 30 December 2015;
• Nyrstar's committed EUR 100 million bilateral credit facility with KBC Bank;
• The USD 30 million uncommitted credit facility between Nyrstar Sales & Marketing AG and HSBC Trinkaus & Burkhardt AG;
• The USD 20 million uncommitted credit facility between Nyrstar Finance International AG and Credit Suisse AG;
• Nyrstar's silver prepay with Macquarie bank;
• Nyrstar's silver prepay with JPMorgan Chase Bank, National Association;
• Silver forward purchase agreement (Hydra);
• Common terms deed with the Treasurer of South Australia;
• Nyrstar's USD 100 million uncommitted credit facility with the Royal Bank of Scotland;
• Nyrstar's EUR 16 million guarantee facility with BNP Paribas Fortis;
• various ISDA Master Agreements and related confirmations;
• Nyrstar's committed EUR 16 million bilateral credit facility with KBC Bank; and
• Nyrstar's off-take agreement with the Glencore Group.
• (x) The Chief Executive Officer is currently entitled to a 12-month salary payment in case his employment is terminated upon a change of control of the Company. In addition, the Company's share based plans also contain take-over protection provisions.

No takeover bid has been instigated by third parties in respect of the Company's equity during the previous financial year and the current financial year.

Annual and Extraordinary General Meeting – 20 April 2017

The Annual General Meeting of Shareholders will take place in Brussels (Diamond Building, A. Reyerslaan 80, 1030 Brussels) on the third Thursday of April, i.e. 20 April 2017 at 10.30 am. At this meeting shareholders will be asked to consider and, where applicable, approve amongst others the following matters:

• Reports on the statutory financial statements
• Approval of the statutory financial statements
• Reports on the consolidated financial statements
• Consolidated financial statements
• Discharge from liability of the Directors
• Discharge from liability of the Statutory Auditor
• Remuneration report
• Appointment of Mr Hilmar Rode as new Director
• Re-appointment of Ms Carole Cable as independent Director
• Remuneration of the chairman of the Audit Committee
• Share based remuneration for non-executive Directors
• Possibility to pay out Annual Incentive Plan entitlements in deferred shares
• Approval of new Long Term Incentive Plan
• Approvals in accordance with Article 556 of the Belgian Companies Code

Other proposed resolutions may be added to the agenda.

On 20 April 2017, the Annual General Meeting shall be shortly suspended in order to be continued as an Extraordinary General Meeting before a Notary Public. At this meeting the shareholders will be asked to consider and, where applicable, approve amongst others the following matters:

• Absorption of losses through a decrease of available reserves, and issue premiums
• Special report
• Grant of powers to the Board of Directors under the authorised capital
• Renewal of the powers of the Board of Directors to purchase own shares

Introduction

The Company prepares a remuneration report relating to the remuneration of directors and the members of the Management Committee. This remuneration report is part of the Corporate Governance Statement, which is a part of the annual report. The remuneration report will be submitted to the annual general shareholders' meeting on 20 April 2017 for approval.

Remuneration Policy

Nyrstar's remuneration policy is designed to:

• enable Nyrstar to attract and retain talented employees;
• promote continuous improvement in the business; and
• reward performance to motivate employees to deliver increased shareholder value through superior business results.

Nyrstar obtains independent advice from external professionals to ensure the remuneration structure represents industry best practice, and achieves the twin goals of retaining talented employees and meeting shareholder expectations.

The remuneration policy that has been determined in relation to the directors and members of the Management Committee is further described below.

While there are no plans to amend the remuneration policy and remuneration over the next two years, the remuneration policy and remuneration is reviewed from time to time and monitored to be in line with market practice. In addition, the Board of Directors will submit proposals to the general shareholders' meeting to be held on 20 April 2017 to (i) increase the remuneration of the chair of the Audit Committee with €10,000 from €20,000 to €30,000 given the amount of preparatory work involved compared to other committees, (ii) remunerate certain non-executive directors in whole or partly in deferred share units instead of cash, (iii) renew the powers of the board of directors to pay out entitlements to beneficiaries (including members of the management committee and directors, where applicable) under the AIP in the form of Shares instead of cash, and (iv) renew the LTIP for a term of 10 years.

Directors

General

Upon recommendation and proposal of the nomination and remuneration committee, the Board of Directors determines the remuneration of the directors to be proposed to the general shareholders' meeting.

The proposed remuneration that the Board of Directors submits to the general shareholders' meeting is in principle benchmarked against the remuneration of similar positions in companies included in the Bel20® Index. The Bel20® Index is an index composed of the 20 companies with the highest free float market capitalization having shares trading on the continuous trading segment of the regulated market of Euronext Brussels. The remuneration is set to attract, retain and motivate directors who have the profile determined by the nomination and remuneration committee.

Pursuant to Belgian law, the general shareholders' meeting approves the remuneration of the directors, including inter alia, each time as relevant, (i) in relation to the remuneration of executive and non-executive directors, the exemption from the rule that Share based awards can only vest after a period of at least three years as of the grant of the awards; (ii) in relation to the remuneration of executive directors, the exemption from the rule that (unless the variable remuneration is less than a quarter of the annual remuneration) at least one quarter of the variable remuneration must be based on performance criteria that have been determined in advance and that can be measured objectively over a period of at least two years and that at least another quarter of the variable remuneration must be based on performance criteria that have been determined in advance and that can be measured objectively over a period of at least three years; (iii) in relation to the remuneration of non-executive directors, any variable part of the remuneration; and (iv) any provision of service

agreements to be entered into with executive directors providing for severance payments exceeding twelve months' remuneration (or, subject to a motivated opinion by the nomination and remuneration committee, eighteen months' remuneration). The general shareholders' meeting of the Company has not approved any of the matters referred to in paragraphs (i) to (iv) with respect to the remuneration of the directors of the Company, except that the annual general shareholders' meeting held on 27 April 2016 approved a deviation from the principles referred to in paragraphs (i) and (iii) with respect to the remuneration of certain non-executive directors in deferred Shares units instead of cash (see also below). The board of directors is seeking a similar approval by the general shareholders' meeting to be held on 20 April 2017.

The directors of the Company (excluding the Chief Executive Officer) receive a fixed remuneration in consideration for their membership of the Board of Directors. In addition, the directors (excluding the Chief Executive Officer) receive fixed fees for their membership and/ or chairmanship of any board committees. No attendance fees are paid. The Chief Executive Officer is also a member of the board but he does not receive any additional remuneration in his capacity of board member.

Non-executive directors do not receive any performance related remuneration. The remuneration of Non-Executive Directors takes into account their general role as director, and specific roles as chairman, chairman or member of a board committee, as well as their relevant responsibilities and time commitment and is set as follows:

Chairman:

• Annual fixed remuneration of EUR 200,000 per year
• No additional attendance fees

Other directors (excluding the CEO):

• Annual fixed remuneration of EUR 50,000 per year for membership of the Board of Directors
• Fixed fee of EUR 10,000 per year per board committee of which they are a member
• Fixed fee of EUR 20,000 per year per board committee of which they are the chairman
• No additional attendance fees

The Board of Directors will submit a proposal to the general shareholders' meeting to be held on 20 April 2017 to increase the remuneration of the chair of the Audit Committee with €10,000 from €20,000 to €30,000 given the amount of preparatory work involved compared to other committees.

The board believes that granting the non-executive Directors the opportunity to be remunerated in whole or in part in deferred shares of the Company rather than in cash enables the non-executive Directors to link their effective remuneration to the future performance of Nyrstar and to strengthen the alignment of their interest with the interest of the Company's shareholders. In view hereof, the board received on 26 April 2016 the approval of the general shareholders' meeting to have the option to remunerate certain directors fully or partly in deferred shares units, and not in cash.

On 27 April 2016 the general shareholders' meeting approved that each of the non-executive directors referred to below (the "Eligible Directors") will be remunerated for his or her Director's mandate for the period as of this general shareholders' meeting until the annual general shareholders' meeting of 2017 in the form of "deferred shares units" of the Company, and not in cash, subject to the conditions set out below. The remuneration in shares is for each Eligible Director be limited to the portion set out next to his or her name below (the "Eligible Share Remuneration") of the aggregate remuneration that applies to the director's mandate of the relevant Eligible Director in accordance with the principles that have been determined by the annual general shareholders' meeting of the Company held on 27 April 2011 and that otherwise would have been payable in cash (the "Eligible Remuneration"). The shares will not vest immediately, but will effectively vest and be delivered on the earlier of (i) the end of the Director's mandate of the Eligible Director, or (ii) a change of control over the Company. The shares are granted for free (i.e. for no additional consideration). The number of shares to be granted to an Eligible Director shall be equal to (i) the amount of the Eligible Share Remuneration that would otherwise have been paid in cash (save for this decision by the general shareholders' meeting), divided by (ii) the average closing price of the Company's shares during the ten trading

days preceding the date of this general shareholders' meeting, whereby the result is rounded down to the nearest whole number. The Eligible Directors and their respective Eligible Share Remuneration that will be payable in deferred shares are as follows: (i) Ms. Anne Fahy: EUR 10,000 of her Eligible Remuneration; (ii) Ms. Carole Cable: 50% of her Eligible Remuneration; (iii) Mr. Martyn Konig: 100% of his Eligible Remuneration; and (iv) Mr. Christopher Cox: 100% of his Eligible Remuneration. The general shareholders' meeting approved that the shares can be definitively and fully acquired by an Eligible Director prior to the end of the third year referred to in Article 520ter of the Belgian Companies Code. The general shareholders' meeting also approved, as far as needed and applicable in accordance with Article 556 of the Belgian Companies Code, that the shares can be delivered upon the occurrence of a change of control over the Company. As far as needed and applicable, the general shareholders' meeting acknowledged that the shares shall not be considered as "variable remuneration" pursuant to Article 554, seventh paragraph, of the Belgian Companies Code and Provision 7.7 of the Belgian Corporate Governance Code of 12 March 2009. The Company's Nomination and Remuneration Committee was authorised to further document the grant and to determine the terms and conditions of the grant, which contain customary adjustment clauses to take into account and mitigate the effect of corporate actions, dilutive transactions and similar events, such as (but not limited to) stock splits, reverse stock splits, mergers and de-mergers, dividend payments, other distributions on shares, rights offerings, and share buy-backs.

The Board of Directors intends to submit a similar resolution for approval by the general shareholders' meeting on 20 April 2017

Remuneration and compensation in 2016

Until 27 April 2016 the remuneration of the non-executive directors was entirely payable in cash. The annual shareholders' meeting dated 27 April 2016 approved to remunerate the mandate of certain non-executive directors for the period as of the 2016 annual meeting until the 2017 annual meeting in whole or in part in deferred share units. During 2016 the following gross remuneration was paid to the directors (excluding the CEO):

	Remuneration (EUR)
Julien De Wilde	66,667 (1)
Carole Cable	46,663
Christopher Cox	70,000 (2)
Oyvind Hushovd	26,667 (1)
Martyn Konig	70,000 (2)
Ray Stewart	26,667 (1)
Karel Vinck	20,000 (1)
Jesús Fernandez	53,333 (3)
Anne Fahy	46,667 (3)

(1) These directors left the board of directors as per 27 April 2016.

(2) The director was entitled to receive €70,000 for period May 2015 until April 2016. Upon the director's request no payment was made in 2015. The payment was made in 2016. Since 27 April 2016, both Mr Konig and Mr Cox received 100% of Eligible Remuneration in deferred share units.

(3) These directors joined the board of directors as per 27 April 2016.

Executive Management

General

The remuneration of the Chief Executive Officer and the other members of the Management Committee is based on recommendations made by the nomination and remuneration committee. The chief executive officer participates to the meetings of the nomination and remuneration committee in an advisory capacity each time the remuneration of another member of the Management Committee is being discussed.

The remuneration is determined by the Board of Directors. As an exception to the foregoing rule, pursuant to Belgian law the general shareholders' meeting must approve, as relevant: (i) in relation to the remuneration of members of the Management Committee and other executives, an exemption from the rule that share based awards can only vest after a period of at least three years as of the grant of the awards; (ii) in relation to the remuneration of members of the Management Committee and other executives, an exemption from the rule that (unless the variable remuneration is less than a quarter of the annual remuneration) at least one quarter of the variable remuneration must be based on performance criteria that have been determined in advance and that can be measured objectively over a period of at least two years and that at least another quarter of the variable remuneration must be based on performance criteria that have been determined in advance and that can be measured objectively over a period of at least three years; and (iii) any provisions of service agreements to be entered into with members of the Management Committee and other executives providing (as the case may be) for severance payments exceeding twelve months' remuneration (or, subject to a motivated opinion by the nomination and remuneration committee, eighteen months' remuneration). The general shareholders' meeting of the Company has not approved any of the matters referred to in paragraphs (i) to (iii) with respect to the outstanding remuneration of the members of the management committee of the Company, except that in previous years, the approval by the general shareholders' meeting was obtained with respect to:

• clauses or features included in the LTIP that (automatically or not) result in, or permit the Board of Directors (or a committee or certain members of the Board of Directors) to approve or allow an accelerated or immediate vesting or acquisition of awards made under the LTIP in the event of a public takeover bid or change of control over the Company, which is a deviation from the principle referred to in paragraph (i) above;
• the power of the Board of Directors to pay out entitlements under the Annual Incentive Plan (AIP) in the form of deferred shares of the Company which are acquired by the beneficiary concerned at the moment of delivery (and not at the expiry of a three year period following the grant), which is a deviation from the principle referred to in paragraph (i) above.

An appropriate portion of the remuneration is linked to corporate and individual performance. The remuneration is set to attract, retain and motivate Executive Management who have the profile determined by the nomination and remuneration committee.

The remuneration of the Executive Management consists of the following main remuneration components:

• Annual Base Salary (fixed);
• participation in the Annual Incentive Plan (AIP) (bonus) (variable);
• participation in the Executive Long Term Incentive Plan (LTIP) (variable); and
• pension benefits.

On 3 February 2016, the board decided to terminate the LESOP plan and no longer to make any new award under such plan in 2016 and thereafter.

For performance year 2016, the entitlement for the Chief Executive Officer under the AIP amounted to 100% of the Annual Base Salary at target achievement (with 150% of the Annual Base Salary as maximum entitlement). For performance year 2016 the target entitlement under the AIP amounted to 80% at target achievement for the other members of the Management Committee (with 120% of the Annual Base Salary as maximum entitlement). In line with the Company's approach to remuneration setting, the base salary and overall remuneration packages for the Management Committee members are reviewed approximately every two years. The Board of Directors intends to submit a proposal to the general shareholders' meeting to be held on 20 April 2017 to renew the powers of the board of directors to pay out entitlements to beneficiaries (including members of the management committee and directors, where applicable) under the AIP in the form of Shares of the Company instead of cash.

In 2016, two new members were appointed to the management committee and three members left.

The respective elements of the remuneration package are further described below. There is no claw back of variable remuneration due to incorrect financial information.

Annual Base Salary

The Annual Base Salary constitutes a fixed remuneration. The reference base salary structures are determined with the support of external market data and analysis of economic trends for the different countries. Included in this analysis are the base salaries for various job descriptions paid by a group of peer companies of Nyrstar in several countries. On the basis of this survey, a number of grades are determined. The midpoint for each grade is the 50% percentile to reflect an optimal alignment with the market.

Nyrstar's policy is to pay senior staff members at 100% of the midpoint for their grade, subject to continued above average performance. However, there is discretion to set the fixed remuneration between 80% and 120% of the midpoint, based on experience, job, location, industry demand, unique technical skills, performance, etc.

Annual Incentive Plan

The annual incentive is a variable part of the remuneration in function of individual performance below, at or above average standard during a given year. The terms and conditions are reflected in the Annual Incentive Plan (AIP), which is subject to revision on an annual basis.

The AIP aims to attract and retain talented employees, to make a connection between performance and reward, to reward achievement in line with Nyrstar's financial success, to reward employees for adhering to the Nyrstar Way, and to reward employees in a similar manner to the Company's shareholders.

The AIP is designed around delivering and exceeding the Nyrstar annual plan and budget. The relevant performance year for eligibility under the AIP is 1 January to 31 December, and payments, if any, are usually made in March of the following year.

In order to be eligible under the AIP, the beneficiary must be employed on 31 December of the relevant performance year. The respective criteria and their relative weight to determine eligibility under the AIP are:

• a. the achievement by Nyrstar of annual financial targets, which are determined and approved by the Board of Directors, in order to guarantee the self-funding nature of the plan; and
• b. the achievement by the beneficiary of personal "stretch targets", which aim at achieving an individual performance over and above the normal requirement of his or her function

The main key performance indicators are the Free Cash Flow and Underlying EBITDA on consolidated level, supported by the operational performance of each segment and unit and the individual contribution. Every year the Board of Directors revises and approves the performance criteria both for Nyrstar on a group level and the members of the Management Committee.

The AIP performance criteria for the members of the Management Committee includes:

• Group Financials;
• The maintenance, development and performance of the operations greatly impacted by the ramp up of Port Pirie;
• Health & Safety; Environment; and
• Individual Goals.

The incentive under the AIP only becomes available if Nyrstar meets the performance threshold as approved by the Board in the beginning of the performance year. In summary, payment of the annual incentive is subject to overall acceptable personal behaviour, demonstrated commitment to the Nyrstar Way and personal job performance, as well as the Company's ability to pay.

The eligibility under the AIP is assessed and determined by the nomination and remuneration committee, and any payment of the annual incentive is subject to final board approval.

For further information on the AIP and other share plans, please see "Description of share plans".

Pensions

The members of the Management Committee participate in a defined benefits pension scheme. The contributions by Nyrstar to the pension scheme amount to 20% of the Annual Base Salary.

Other

The management committee members participate in a medical benefit plan that includes amongst other things private hospital and dental medical care. They also receive a representation allowance, a car allowance and (for some management committee members) housing assistance, and benefit from statutory accident and health insurance.

Remuneration and Compensation in 2015

The following remuneration and compensation other than share based awards that are mentioned further was paid to the Chief Executive Officer and other members of the Management Committee in 2016:

	Chief executive officer(6) (€)	Members of the Management Committee other than the chief executive officer (on an aggregate basis) (€)
Annual Base Salary	972,998	2,014,299
Incentives (1)	0	172,423
Pension benefits (2)	176,728	509,686
LTIP (cash Payment) (3)	98,897	445,572
Other components of the remuneration (4)	323,396	762,659
Severance payment (5)	—	512,104
Total	1,572,018	4,416,743

(1) In 2016 the members of the Management Committee did not receive Annual Incentive Payment pertaining to previous year's performance. This payment refers to the outstanding deferred part of the AIP 2014. (2) The pension includes 20% of Annual Base Salary as savings contributions and also risks contributions. (3) The settlement of the three year long term incentive plan vesting in December 2015 was settled in cash by the end of 2016.

(4) Includes representation allowance, housing, car allowance, health insurance made in 2016 (5) Heinz Eigner received a lump sum severance payment equivalent to 12 months of gross base salary as per contractual agreement, amounting to €512,104. No severance payment has been paid yet to William A. Scotting.

(6) This refers to William A. Scotting only. Hilmar Rode did not receive any compensation in 2016.

Payments upon Termination

Each member of the Management Committee is entitled to a severance payment equivalent to twelve months of Annual Base Salary in case of termination of his agreement by Nyrstar. In addition, the agreement with the chief executive officer provides that upon a change of control, his agreement with Nyrstar will be terminated. In that event, the chief executive officer is entitled to a severance payment equivalent to twelve months of Annual Base Salary (inclusive of any contractual notice period). The above applies to all current and former members of the management committee and current and former chief executive officers.

Indemnification and Insurance of Directors and Executive Management

As permitted by the Company's articles of association, the Company has entered into a customary liability indemnification arrangements with the directors and relevant members of the Management Committee and has implemented directors' and officers' insurance coverage.

Description of Share Plans

In 2016 the Company had a Long Term Incentive Plan (LTIP) with a view to attracting, retaining and motivating the employees and Executive Management of the Company and its wholly owned subsidiaries.

In previous years Nyrstar also had a Leveraged Employee Stock Ownership Plan (LESOP). On 17 June 2015, the Board decided to suspend the LESOP plan in 2015 and not to make any new award under such plan in 2015. On 3 February 2016, the board decided to terminate the LESOP plan, and no longer to make any new award under such plan in 2016 and thereafter.

The key terms of the LTIP are described below. For further information on the manner in which awards under the LTIP are treated in Nyrstar's consolidated financial statements, refer to note 33 to the audited consolidated financial statements for the financial year ended on 31 December 2016.

LTIP

General

Under the LTIP, the Executives selected by the Board of Directors may be granted conditional awards to receive ordinary shares in the Company at a future date ("Executive Share Awards") or their equivalent in cash ("Executive Phantom Awards") (Executive Share Awards and Executive Phantom Awards together referred to as "Executive Awards").

The terms of the LTIP may vary from country to country to take into account local tax and other regulations and requirements in the jurisdictions where eligible Executives are employed or resident.

The nomination and remuneration committee makes recommendations to the Board of Directors in relation to the operation and administration of the LTIP.

The current LTIP was approved by a general shareholders' meeting of the Company in 2007 for a term of 10 years, and will come to an end in 2017. The Board of Directors will submit a proposal to the general shareholders' meeting to be held on 20 April 2017 to renew the LTIP for a term of 10 years.

Eligibility

The Board of Directors determines which Executives are eligible to participate in the LTIP (the "Participating Executives").

The value of the conditional Executive Awards under the LTIP varies, depending on the role, responsibility and seniority of the relevant Participating Executive. The maximum value of the conditional Executive Awards granted to any Participating Executive in any financial year of the Company will not exceed 150% of his or her base salary at the time of the grant.

Vesting

Executive Awards will cliff vest after a three-year rolling performance period.

In the event of cessation of employment before the normal vesting due to retirement or death, the Board of Directors may determine that a number of Executive Awards will vest, taking into account such factors as the Board of Directors determines, including the proportion of the performance period which has elapsed and the extent that performance conditions have been satisfied up to the date of leaving.

The Board of Directors determines the LTIP performance conditions and whether they have been met. The Board of Directors has set two performance conditions, which are weighted equally at 50%. For an Executive Award to vest, Nyrstar's annual share price performance is measured relative to the implied change in a notional share price that is based upon the historical performance of the price of zinc (first performance condition) and the MSCI World Metals and Mining Index (second performance condition). An equal number of Executive Awards is granted under each condition. Executive Awards are made to the extent that predetermined scaling thresholds for each of the performance conditions are met.

For the Executive Awards to vest under the grants made in 2014 (Grant 7), made in 2015 (Grant 8) and made in 2016 (Grant 9), the Nyrstar average share price for the 3 year performance period must outperform:

• The zinc price by 5% based on a volume weighted average over the 3 years period; and
• The MSCI world mining and metals index by 2% based on a volume weighted average over the 3 years period.

A volume weighted average out-performance is calculated for each year. These are averaged over the performance period and compared to the vesting schedule.

Awards

Since April 2008, Grants have been made annually in accordance with the rules and conditions of the LTIP. Grants in place during 2016 are shown below:

	Grant 7	Grant 8	Grant 9
Effective grant date	5 September 2014	30 June 2015	2 November 2016
Performance period	1 January 2014 to 31 December 2016	1 January 2015 to 31 December 2017	1 January 2016 to 31 December 2018
Performance criteria	—zinc price 50% —MSCI 50% —Executive remains in service to 31 December 2016	—zinc price 50% —MSCI 50% —Executive remains in service to 31 December 2017	—zinc price 50% —MSCI 50% —Executive remains in service to 31 December 2018
Vesting date	31 December 2016	31 December 2017	31 December 2018

During the period between the satisfaction of the performance conditions and when the participating employee receives the relevant payment, the employee will be entitled to a payment equal to the cash equivalent of any dividends paid.

The 2013 Share awards under Grant 6 vested 50% by 31 December 2015. The payment was made to the participating employees in cash in November 2016.

Movement of LTIP Shares Awarded

The following table sets out the movement in the number of equity instruments granted during the specified periods in relation to the LTIP (including all participants):

	Grant 6	Grant 7	Grant 8	Grant 9	Total
Opening balance at 1 January 2016	2,679,907	5,471,628	3,281,719	-	11,433,254
Initial allocation at 02 November 2016	-	-	-	871,000	871,000
Dilutive impact / adjustment	1,964,270	4,386,870	2,919,100	-	9,270,240
Reverse Stock split (1 to 10)	(4,179,759)	(8,872,647)	(5,580,737)	-	-
Forfeiture	(271,474)	(333,025)	(252,082)	-	(856,581)
Expired	-	-	-	-	-
Additions	1,715	64,348	107,223	-	173,286
Closing balance at 31 December 2016	-	717,174	475,223	871,000	2,063,397

Adjustments to the LTIP

The annual general shareholders' meeting of the Company held on 27 April 2011 approved and ratified, as far as needed and applicable, in accordance with Article 556 of the Belgian Companies Code, any clauses or features included in the LTIP that (automatically or not) result in, or permit the Board of Directors (or a committee or certain members of the Board of Directors) to approve or allow an accelerated or immediate vesting or acquisition of awards made under the LTIP in the event of a public takeover bid or change of control over the Company, and any other clause or feature which in accordance with Article 556 of the Belgian Companies Code entails rights to third parties that have an impact on the Company's equity or give rise to a liability or obligation of the Company, whereby the exercise of such rights is dependent upon a public takeover bid on the Company's Shares or a change of the control over the Company. A similar approval will be sought from the general shareholders' meeting to be held on 20 April 2017 that will be requested to approve the renewal of the LTIP for a term of 10 years.

Deferred Share payments under the Annual Incentive Plan (AIP)

The Company's general shareholders' meeting granted the Board of Directors the power to pay out entitlements to beneficiaries (including members of the Management Committee and directors, where applicable) under the AIP in relation to the performance by such beneficiaries during the years 2012, 2013 and 2014 in the form of shares of the Company instead of cash, subject to the following terms: (a) up to one third of the maximum AIP entitlement in relation to a performance year can be paid in the form of shares instead of cash; (b) the shares to be delivered as payment of an AIP entitlement are granted for no additional consideration payable by the beneficiary concerned; (c) the shares to be delivered as payment of an AIP entitlement in relation to a relevant performance year will be delivered in the second calendar year following the relevant performance year (i.e. early 2014 with respect to the AIP for performance year 2012, early 2015 with respect to the AIP for performance year 2013, and early 2016 with respect to the AIP for performance year 2014), rather than in the beginning of the first year following the respective performance year (which is the case if the entitlements are paid out in cash), and subject to the condition that the beneficiary is still employed by Nyrstar or its subsidiaries at that time. The shareholders also approved that the shares that are delivered as pay out of an entitlement under the AIP are definitively acquired by the beneficiary concerned at the moment of delivery (and not at the expiry of a three year period following the grant). Any shares allocation is dependent on the successful achievement of the AIP performance criteria defined and approved by the Board for each particular performance year as described under Annual Incentive Plan.

The Board of Directors intends to submit a proposal to the general shareholders' meeting to be held on 20 April 2017 to renew the powers of the board of directors to pay out entitlements to beneficiaries (including members of the management committee and directors, where applicable) under the AIP in the form of Shares of the Company instead of cash.

Directors' and Other Interests

Shares and share awards under the LTIP

The table below reflects the Share awards that during 2016 have been granted or delivered under the LTIP to the members of the Management Committee, and those that have expired:

		LTIP (as of 31 December 2016)
Name	Title	Share awards delivered in 2016 under the LTIP of which the performance conditions have been met(1)	Share awards granted, but lapsed in 2016(2)	Share awards granted in 2016 or in prior years under LTIP of which the performance conditions have not been met(3)
Bill Scotting (4)	Chief Executive Officer	108'025	108'025	—
Christopher Eger	Chief Financial Officer	—	—	54'357
Michael Morley (7)	SVP Metals Processing	122'807	122'807	—
Willie Smit	SVP Corporate Services	—	—	54'357
John Galassini (5)	SVP Mining	—	74'429	—
Russell Murphy (6)	Chief HR & SHE Officer	122'807	122'807	—

(1) These Share awards refer to the cash payment of Grant 6 (LTIP 2013).

(2) Share awards pertaining to the Grant 6 (LTIP 2013) forfeited 50%. It also includes forfeitures under other grants related to end of employment.

(3) Vesting is subject to performance conditions

(4) Bill Scotting left the Nyrstar Management Committee on 13 December 2016 and Hilmar Rode was appointed as CEO.

(5) John Galassini was employed by Nyrstar until the end of 2016, serving notice of termination in October 2016.

(6) Russell Murphy was employed by Nyrstar since its inception and was a member of the Nyrstar Management Committee until January 2016. (7) Michael Morley left the Nyrstar Management Committee in January 2017.

Shares and share awards under the AIP

During 2016, no Share awards were delivered nor granted under the AIP to the members of the Management Committee at that time. Share awards that had been granted to previous members of the Management Committee that were no longer employed at the end of 2015, lapsed in 2016.

Total Shareholding

The following number of Shares are held by members of Nyrstar's Management Committee as of 31 December 2016:

Name	Title	Shares (1)
Hilmar Rode	Chief Executive Officer	—
Christopher Eger	Chief Financial Officer	7,142
Willie Smit	SVP Corporate Services	—
Michael Morley	SVP Metals Processing	148,239

(1) Includes the 45,000 shares obtained as part of and held under the 2013 LESOP and the 45,000 shares obtained as part of and held under the 2014 LESOP by Michael Morley at 31st December 2014. Michael Morley left the Nyrstar Management Committee in January 2017.

None of the directors of the Company hold Shares. However, certain non-executive directors will receive their remuneration fully or partly in deferred Shares of the Company.

Report of the Board of Directors Report of the Board of Directors ex Article 119 Company Code

Pursuant to Article 119 of the Company Code, the Board of Directors reports on the operations of the Nyrstar Group with respect to the financial year ended on 31 December 2016.

The information provided in this report is regulated information in accordance with Article 36 of the Royal Decree of 14 November 2007.

A free copy of the annual report of the Board of Directors on the statutory accounts of Nyrstar NV in accordance with Article 96 of the Belgian Company Code can be requested at the Company's registered office.

1. Comments to the Financial Statements

Nyrstar's consolidated financial statements as at and for the year ended 31 December 2016 comprise Nyrstar NV (the "Company") and its subsidiaries (together referred to as "Nyrstar" or the "Group" and individually as "Group entities") and the Group's interest in associates and jointly controlled entities.

The consolidated financial statements of Nyrstar were prepared in accordance with International Financial Reporting Standards as adopted by the European Union. These include International Financial Reporting Standards (IFRS) and the related interpretations issued by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC), effective at the reporting date and adopted by the European Union. The consolidated financial statements have been prepared on the going concern basis.

The Company has assessed that, taking into account its available cash and cash equivalents (including undrawn committed facilities available at the date of authorisation of the consolidated financial statements), its cash flow projections for 2017, based on the approved budgets, it has sufficient liquidity to meet its present obligations and cover working capital needs for 2017 and will remain in compliance with its financial covenants throughout this period.

The cash flow projections for 2017 incorporate the following key assumptions:

Commodity prices and foreign exchange rates

Commodity prices and foreign exchange rates were developed from externally available sources from a number of different market commentators

Production output and capital and operating costs

Based on historical results unless definitive plans are in place which are expected to have a significant effect on operations

Treatment charges

Treatment charges were developed from externally available forecasts and recent historical rates

Port Pirie Redevelopment Project

Capital costs are based on the most recent review of forecast costs to complete the project. The cash flow projections for 2017 do not include any revenue from this project

The Company has undertaken a sensitivity analysis of its liquidity testing through independently adjusting the cash flow projections for 2017 for zinc prices and smelter production output.

• Forecast zinc prices were adjusted to use the lowest annual average for the previous 10 years.
• Forecast smelter production output was adjusted down by 5%, a smelter production level which the Company has exceeded in each of the last 5 years.

In both cases the sensitivity analysis indicated that the Company would have sufficient liquidity to meet its present obligations and cover working capital needs for 2017 and remain in compliance with its financial covenants throughout 2017.

The consolidated financial statements are presented in Euros which is the Company's functional and presentation currency. All financial information has been rounded to the nearest hundred thousand Euro.

Please refer to the relevant pages in the 2016 annual report for the consolidated financial statements.

1.1 Overview of Activities and Finance Overview

The Metals Processing segment produced approximately 1,015,000 tonnes of zinc metal in 2016, in-line with the lower end of full year 2016 guidance, representing a 9% decrease on 2015. As previously communicated by the Company, a number of extraordinary operational issues arose in the Metals Processing segment in Q3 2016 which adversely impacted zinc metal production. Production of 263kt of zinc metal in Q4 2016 was a substantial improvement on Q3 2016 and was in-line with management expectations.

Excluding 54kt of zinc in concentrate production from El Toqui, El Mochito and Contonga which have now been classified as discontinued operations due to their sales, in 2016, Nyrstar's mines produced approximately 96kt of zinc in concentrate, a decrease of 40% compared to 2015. Production in the Mining segment at the continuing operations was impacted due to the suspension of operations at Middle Tennessee and reduced ore throughput at Langlois and East Tennessee.

Group underlying EBITDA1 (continuing operations) of EUR 193 million in 2016, a decrease of 28% on 2015, due to lower treatment charges and lower production from Metals Processing and Mining, partially offset by cost reductions across Metals Processing and Mining.

The lost time injury rate (LTIR) for the Company in 2016 was 1.9, an improvement of 24% compared to a rate of 2.5 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) decreased by 16% and 17% compared to 2015. However, safety performance in 2016 is tragically marked by the four fatalities occurred in Mining.

No environmental events with material business consequences occurred during 2016.

1.2 Non-Financial Key-Performance Indicators

Production

	Financial year 2016	Financial year 2015
Mining production
Zinc in concentrate ('000 tonnes)	96	161
Gold ('000 troy ounces)	1.8	6.1
Silver ('000 troy ounces)	554	872
Copper in concentrate ('000 tonnes)	2.1	2.8
Smelting production
Zinc metal ('000 tonnes)	1,015	1,115
Lead metal ('000 tonnes)	187	185
Sulphuric acid ('000 tonnes, gross)	1,356	1,451
Silver (million troy ounces)	14.8	14.6
Gold ('000 troy ounces)	46.2	77.3

	Financial year 2016	Financial year 2015
Mining production
Zinc in concentrate ('000 tonnes)	96	161
Gold ('000 troy ounces)	1.8	6.1
Silver ('000 troy ounces)	554	872
Copper in concentrate ('000 tonnes)	2.1	2.8
Smelting production
Zinc metal ('000 tonnes)	1,015	1,115
Lead metal ('000 tonnes)	187	185
Sulphuric acid ('000 tonnes, gross)	1,356	1,451
Silver (million troy ounces)	14.8	14.6
Gold ('000 troy ounces)	46.2	77.3

¹ Underlying EBITDA is a non-IFRS measure of earnings, which is used by management to assess the underlying performance of Nyrstar's operations and is reported by Nyrstar to provide additional understanding of the underlying business performance of its operations. Nyrstar defines "Underlying EBITDA" as profit or loss for the period adjusted to exclude loss from discontinued operations (net of income tax), income tax (expense)/benefit, share of loss of equity-accounted investees, gain on the disposal of equity-accounted investees, net finance expense, impairment losses and reversals, restructuring expense, M&A related transaction expenses, depreciation, depletion and amortization, income or expenses arising from embedded derivatives recognised under IAS 39 "Financial Instruments: Recognition and Measurement" and other items arising from events or transactions clearly distinct from the ordinary activities of Nyrstar. For a definition of other terms used in this press release, please see Nyrstar's glossary of key terms available at: http://www.nyrstar.com/investors/en/Pages/investorsmaterials.aspx

The Metals Processing segment produced approximately 1,015,000 tonnes of zinc metal in 2016, in-line with the stated guidance of approximately 1.0 million tonnes.

Markets

The zinc price started the year at a depressed level USD1,554 per tonne and moved down to a 6 year low of USD 1,444 per tonne in mid-January 2016. Since hitting this low, on a relative basis, zinc outperformed the rest of the base metals complex and was one of the best performing commodities during 2016. Over the course of 2016, the zinc price averaged 2,095/t, up 9% on 2015.

On the back of the tightening availability of zinc concentrate, the annual 2016 benchmark treatment charge terms were settled at the end of Q1 2016 at approximately 17% below the 2015 terms and spot treatment charges over the course of 2016 fell substantially. The average realized zinc treatment charge in 2016, on the basis of the settled benchmark, was USD 211 per tonne of concentrate. This compares favourably to the average spot zinc treatment charge which declined heavily over the course of the year and averaged approximately USD 100 per tonne of concentrate. The vast majority of Nyrstar's concentrate requirements are priced at benchmark terms or by reference to the benchmark with a discount applied. Spot treatment charge exposure for Nyrstar is typically only in the range of 5-10% of the concentrate feed book. In the medium term, the bullish trend for the zinc price is expected to continue on the back of supportive supply and demand fundamentals and the US dollar is expected to strengthen further against the Euro, supporting Nyrstar's financial performance.

Safety, Health and Environment

For the second consecutive year, the Metals Processing segment finished the year with the best safety performance since Nyrstar was founded in 2007. The lost time injury rate (LTIR) for Metals Processing in 2016 was 1.6, an improvement of 30% compared to a rate of 2.3 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 18% and 30% respectively compared to 2015.

Mining safety in 2016 was impacted by three fatal incidents that occurred at El Mochito and one at Langlois. The lost time injury rate (LTIR) for the Mining segment in 2016 was 2.3, a decrease of 14% compared to a rate of 2.6 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 3% respectively compared to 2015. In 2016, the East Tennessee mines achieved the milestone of one million working hours DART free and Contonga achieved its best safety performance since being operated by Nyrstar.

No environmental events with material business consequences occurred during 2016.

1.3 Operating Results, Financial Position and Cash Flows

Group gross profit for 2016 of EUR 981 million was down 20% on 2015, driven by lower production volumes in both the Metals Processing and Mining segments and deteriorating benchmark zinc treatment charge terms which per partially offset by higher zinc, lead, silver and gold prices which were up 9%, 5%, 9% and 8% respectively.

Direct operating costs for 2016 of EUR 790 million improved 17% on 2015, due to lower production volumes in both the Metals Processing and Mining segments, significantly lower mining costs as a result of the suspension of operations at Myra Falls and Middle Tennessee and the delivery of sustainable cost saving measures within Metals Processing and at the Corporate level.

Net finance expense for 2016 of EUR 123 million was up EUR 12 million on 2015 primarily due to net debt exclusive of zinc prepay and perpetual securities increasing by 11% and net debt inclusive of zinc prepay and perpetual securities increasing by 24%. During 2016, EUR 110 million of perpetual securities were drawn compared to EUR 22 million net drawn in 2015. At the end of 2016, an aggregate total net of debt issue costs of EUR 132 million (AUD 208 million) of perpetual securities had been drawn for the Port Pirie Redevelopment funding.

Income tax expense for 2016 of EUR 16 million (2015: income tax benefit of EUR 215 million) representing an effective tax rate of -10.6% (2015: 36.2%). The effective tax rate has been impacted by losses incurred by the Group for which no tax benefit has been recognised.

Loss after tax result in 2016 of EUR 414 million, compared to a net loss of EUR 432 million in 2015, as a result of the impairment charges related to the Mining segment assets in 2016 and 2015. Impairment charge of EUR 266 million in 2016 comprised of EUR 133 million for continuing operations and EUR 133 million for discontinued operations.

Capital expenditure (continuing operations) was EUR 261 million in 2016, representing a decrease of 31% year-on-year driven by a EUR 31 million capex decrease in the Mining segment with no expansionary capex and a 27% reduction in total capex spend in the Metals Processing segment compared to 2015 at EUR 322 million. During 2016, EUR 95 million was incurred as capex spend on the Port Pirie Redevelopment funded by the Australian Government backed perpetual securities.

1.4 Liquidity Position and Capital Resources

Cash flow from operating activities before working capital changes of EUR 113 million in 2016 was down 49% compared to EUR 222 million in 2015 and cash outflow from changes in working capital and other balance sheet movements in 2016 of EUR (195) million was down 22% compared to an outflow of EUR (249) million in 2015, resulting in total cash outflow from operating activities for 2016 of EUR 81 million compared to EUR 27 million out-flow for 2015. The increase in net working capital levels was driven primarily by an increase in inventory valuation due to higher commodity prices, including the effect on inventory balance from zinc price increases of approximately EUR 158 million for 2016.

Net debt at the end of 2016, excluding the zinc metal prepay and perpetual securities, was 11% higher compared to the end of 2015 at EUR 865 million (EUR 781 million at the end of 2015). The net debt inclusive of the zinc metal prepay and perpetual securities at the end of 2016 was EUR 1,163 billion, up 24% compared to the end of 2015. Cash balance at the end of 2016 was EUR 127 million compared to EUR 96 million at the end of 2015. During 2016 EUR 21 million which represents a minimum cash balance that the Company agreed to keep in Nyrstar Port Pirie bank account until the Perpetual Securities are fully redeemed was reclassified as to other financial assets as part of restricted cash.

2. Internal Control and Enterprise Risk Management

General

The Nyrstar Board of Directors is responsible for the assessment of the effectiveness of the Risk Management Framework and internal controls. The Group takes a proactive approach to risk management. The Board of Directors is responsible for ensuring that nature and extent of risks are identified on a timely basis with alignment to the Group's strategic objectives and activities.

The Audit Committee plays a key role in monitoring the effectiveness of the Risk Management Framework and is an important medium for bringing risks to the Board's attention. If a critical risk or issue is identified by the Board or management, it may be appropriate for all directors to be a part of the relevant risk management process, and as such the Board of Directors will convene a sub-committee comprised of a mix of Board Members and Senior Management. Each respective sub-committee further examines issues identified and reports back to the Board of Directors.

The Nyrstar Risk Management Framework requires regular evaluation of the effectiveness of internal controls to ensure the Group's risks are being adequately managed. The Risk Management Framework is designed to achieving the Group's objectives. Nyrstar acknowledges that risk is not just about losses and harm. Risk can have positive consequence too. Effective risk management enables Nyrstar to achieve an appropriate balance between realising opportunities while minimising adverse impacts.

This section gives an overview of the main features of the Company's internal control and risk management systems, in accordance with the Belgian Corporate Governance Code and the Belgian Companies Code.

Components of the Risk Management Framework

The Risk Management Framework is integrated in the management process and focuses on the following key principles.

The key elements of Risk Management Framework are:

1 Understanding the external and internal environment

Understanding the internal and external business environment and the effect this has on our business strategy and plans. This informs Nyrstar's overall tolerance to risk.

2 Consistent methods for risk identification and analysis of risks, existing controls and control effectiveness

Implementing systems and processes for the consistent identification and analysis of risks, existing controls and control effectiveness. Evaluating whether the level of risk being accepted is consistent with levels of risk acceptable to the Audit Committee.

3 Risk treatment

Using innovative and creative thinking in responding to risks and taking action where it is determined that the Group is being exposed to unacceptable levels of risk.

4 Stakeholder engagement and Communication

Involving all Nyrstar employees and relevant stakeholders in managing risks and communicating identified key risks and controls.

5 Monitoring and Review

Regularly monitoring and reviewing our risk management framework, our risks and control effectiveness.

The guideline for the Risk Management Framework has been written to comply with ISO 31000; 2009. Compliance with the guideline is mandatory within Nyrstar.

Critical Internal Controls

The following is a summary of Nyrstar's critical internal controls:

Organisational Design

There is a sound organizational structure with clear procedures, delegation and accountabilities for both the business side and the support and control functions, such as human resources, legal, finance, internal audit, etc.

The organizational structure is monitored on an ongoing basis, e.g. through benchmarking the organizational structure with industry standards and competitors. Responsibilities are delegated to business units, by business plans and accompanying budgets approved by management and the Board of Directors within set authorization levels.

Policies and Procedures

The Group has established internal policies and procedures to manage various risks across the Group. These policies and procedures are available on the Nyrstar intranet-site, and distributed for application across the whole Group. Every policy has an owner, who periodically reviews and updates if necessary.

Ethics

The Board of Directors has approved a Corporate Governance Charter and a Code of Business Conduct, including a framework for ethical decision making. All employees must perform their daily activities and their business objectives according to the strictest ethical standards and principles. The Code of Business Conduct is available on www.nyrstar.com and sets out principles how to conduct business and behave in respect of:

• Our People
• Our Communities and Environment
• Our Customers and Suppliers
• Our Competitors
• Our Shareholders
• Our Assets

The Board of Directors regularly monitors compliance with applicable policies and procedures of the Nyrstar Group.

Whistleblowing

Nyrstar also has a whistle-blower procedure in place, allowing staff to confidentially raise concerns about any irregularities in financial reporting, possible fraudulent actions, bribery and other areas.

Quality Control

Nyrstar is ISO 9001 certified for the smelting and refining of zinc and zinc alloys, lead and lead alloys, silver, gold and other by-products. All of its major processes and the controls that they encompass are formalized and published on the Company's intranet.

Financial Reporting and Budget Control

Nyrstar applies a comprehensive Group standard for financial reporting. The standard is in accordance with applicable International Accounting Standards. These include International Financial Reporting Standards (IFRS) and the related interpretations issued by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) as adopted by the European Union. The effectiveness and compliance with the Group standard for financial reporting is consistently reviewed and monitored by the Audit Committee.

In order to ensure adequate financial planning and follow up, a financial budgeting procedure describing the planning, quantification, the implementation and the review of the budget in alignment with forecasts, is closely followed. Nyrstar conducts Group wide budgeting process, which is centrally coordinated and consists of the following steps:

• 1) Group business strategy is updated and communicated within Nyrstar, which amongst other things outlines the strategic guidelines and objectives for the upcoming financial year.
• 2) Key inputs and assumptions for the budgeting process for the upcoming financial year are provided by relevant internal stakeholders (including expected production, capex, metal prices, foreign exchange and commercial terms) and uploaded into the centralised budgeting, planning and consolidation system.
• 3) The key inputs and assumptions for the budget then go through a rigorous process of validation by relevant internal stakeholders and senior management. The Management Committee and the Board sign off on the final agreed budget.
• 4) The final budget is communicated to the different Nyrstar business units and departments.
• 5) Nyrstar will then bi-annually communicate to shareholders the Group's full actual financial results, supplemented by quarterly interim management statements, which will include selected key financial results.

Management Committees

Various management committees are established as a control to manage various risks Nyrstar is exposed to:

Treasury Committee

The Treasury Committee comprises the Chief Financial Officer, the Group Treasurer and the Group Controller. The role of the Treasury Committee is to recommend to the Chief Executive Officer and to the Board of Directors amendments to the treasury policy. This considers all treasury transactions being reviewed before they are recommended to the Chief Executive Officer for review and approval by the Board of Directors. Explicitly this includes preparations for the following Chief Executive Officer and Board of Directors approvals:

• to approve treasury strategies and activities, as recommended by the Group Treasurer, within the constraints of the policy;
• to periodically review treasury operations and activities, approve the use of new financial instrument types and techniques for managing financial exposures;
• to approve the list of authorized counterparties for foreign exchange and money market transactions;
• to approve the use of payment term extensions and cash discounts on commercial contracts that would go beyond standard business conditions; and
• to approve the list of bank relationships.

The treasury committee meets at least quarterly.

Commodity Risk Management Committee

The Commodity Risk Management Committee comprises the Chief Financial Officer, the Group Treasurer, the Group Controller and the Group Manager Financial Planning & Analysis. Nyrstar's commodity risk management committee establishes policies and procedures how Nyrstar manages its exposure to the commodity prices and foreign exchange rates. Nyrstar actively and systematically endeavors to minimize any impact on its income statement from metal price risk.

Information, Communication and Financial Reporting Systems

The Group's performance against plan is monitored internally and relevant action is taken throughout the year. This includes, weekly and monthly reporting of key performance indicators for the current period together with information on critical risk areas.

Comprehensive monthly board reports that include detailed consolidated management accounts for the period together with an executive summary from the Chief Financial Officer are prepared and circulated to the Board of Directors by the Company Secretary on a monthly basis.

Monitoring and Review

Management is responsible for evaluating existing controls and the control effectiveness and determines whether the level of risk being accepted is consistent with the level of risk approved by the Board of Directors. Management takes action where it is determined that the Group is being exposed to unacceptable levels of risk and actively encourages all Nyrstar employees to communicate freely risks and opportunities identified.

Internal audit is an important element in the overall process of evaluating the effectiveness of the Risk Management Framework and internal controls. The internal audits are based on risk based plans, approved by the Audit Committee. The internal audit findings are presented to the Audit Committee and management, identifying areas of improvement. Progress of implementation of the actions is monitored by the Audit Committee on a regular basis. The Group internal audit function is managed internally. The Audit Committee supervises the internal audit function.

The Board of Directors pays specific attention to the oversight of risk and internal controls. On a yearly basis, the Board of Directors reviews the effectiveness of the Group's risk management and internal controls. The Audit Committee assists the Board of Directors in this assessment. The Audit Committee also reviews the declarations relating to internal supervision and risk management included in the annual report of the Company. The Audit Committee reviews the specific arrangements to enable staff to express concerns in confidence about any irregularities in financial reporting and other areas e.g., whistle-blower arrangements.

To support the protocols described above, both internal resources and external contractors are engaged to perform compliance checks, and reports are provided to the Audit Committee.

Other

The Group is committed to the ongoing review and improvement of its policies, systems and processes.

Financial and Operational Risks

The principal risks and uncertainties, which Nyrstar faces, along with the impact and the procedures implemented to mitigate the risks, are detailed in the tables below:

FINANCIAL RISKS

Description	Impact	Mitigation
Commodity price risk
Nyrstar's results are largely dependent on the market prices of commodities and raw materials, which are cyclical and volatile.	Profitability will vary with the volatility of metals prices.	Nyrstar engages in transactional hedging which means that it will undertake short-term hedging transactions to cover the timing risk between raw material purchases and sales of metal and to cover its exposure on fixed-price forward sales of metal to customers. From time to time, Nyrstar may also decide to enter into certain strategic metal price hedges to lock prices that are considered as favourable and providing price certainty to the Company's operations that may otherwise face difficulties related to their liquidity and profitability in a reasonably possible pricing decline.
Forward price risk
Nyrstar is exposed to the shape of the forward price curve for underlying metal prices.	The volatility in the London Metal Exchange price creates differences between the average price we pay for the contained metal and the price we receive for it.	Nyrstar engages in transactional hedging which means that it will undertake short-term hedging transactions to cover the timing risk between raw material purchases and sales of metal and to cover its exposure on fixed-price forward sales of metal to customers. From time to time, Nyrstar may also decide to enter into certain strategic metal price hedges to lock prices that are considered as favourable and providing price certainty to the Company's operations that may otherwise face difficulties related to their liquidity and profitability in a reasonably possible pricing decline.
Foreign Currency Exchange rate risk
Nyrstar is exposed to the effects of exchange rate fluctuations.	Movement of the U.S. Dollar, the Australian Dollar, Canadian Dollar, Swiss Franc, the Peruvian Sol, the Mexican Peso or other currencies in which Nyrstar's costs are denominated against the Euro could adversely affect Nyrstar's profitability and financial position.	Nyrstar has entered into strategic foreign exchanges hedges to limit its downside exposure related to the fluctuations between the Euro and the U.S. Dollar and between the Euro and the Australian Dollar. Nyrstar also regularly enters into short-term hedging transactions to cover its transactional foreign exchange exposures.

zinc concentrates and lead miners to refine their

Interest rate risk & leverage risk			Energy price risk
Nyrstar is exposed to interest rate risk primarily on loans and borrowings. Nyrstar is exposed to risks inherent with higher leverage and compliance with debt covenants.	Changes in interest rates may impact primary loans and borrowings by changing the levels of required interest payments. Nyrstar's indebtedness increased significantly in 2011 in order to finance its expansion into mining and later with regard to the expansion of the Port Pirie Lead smelter, as a consequence it is now subject to risks inherent with higher leverage and compliance with debt covenants. Breaches in debt covenants will jeopardize the financing structure of Nyrstar.	Nyrstar's interest rate risk management policy is to limit the impact of adverse interest rate movements through the use of interest rate management tools. Debt covenants and required head room are monitored by Nyrstar on an on-going basis.	Nyrstar's operating sites, particularly its smelters, are energy intensive, with energy costs accounting for a significant part of its operating costs. Electricity in particular represents a very significant part of its production costs.
Credit risk			OPERATIONAL RISKS
Nyrstar is exposed to the risk of non-payment	Group cash flows and income	Nyrstar has determined a credit policy with	Operational risks
from any counterparty in relation to sales of goods and other transactions.	may be impacted by non-payment.	credit limit requests, use of credit enhancements such as letters of credit, approval procedures, continuous monitoring of the credit exposure and dunning procedure in case of delays.	In operating mines, smelters and other production facilities, Nyrstar is required to obtain and comply with licenses to operate. In addition Nyrstar is subject to many risks and hazards, some of which are out of its control,
Liquidity risk			including: unusual or unexpected geological
Nyrstar requires a significant amount of cash to finance its debt, and fund its acquisitions, its capital investments and its growth strategy. Liquidity risk arises from the possibility that Nyrstar will not be able to meet its financial obligations as they fall due.	Nyrstar may not be able to fund operations, capital investments, the growth strategy and the financial condition of the Company	Liquidity risk is addressed by maintaining a sufficient degree of diversification of funding sources as determined by management, detailed, periodic cash flow forecasting and conservatively set limits on permanently to be available headroom liquidity as well as maintaining ongoing readiness to access financial markets within a short period of time.	or climatic events; natural catastrophes, interruptions to power supplies; congestion at commodities transport terminals; industrial action or disputes; civil unrest, strikes, workforce limitations, technical failures, fires, explosions and other accidents; delays and other problems in major investment projects (such as the ramping-up of mining assets).
Reliance on specific means of funding
Nyrstar uses different means of funding available to the company. They include equity, bonds, committed and uncommitted trade finance facilities as well as metal prepayments or a Perpetual Securities and other sources as and when they became available to the Company.	Different means of funding introduce different risk associated with them. At times, certain means of funding may become unavailable to the Company. Certain means of funding used by the Company, e.g. the Perpetual Securities are accounted based on the IFRS accounting standards that are open to interpretation and require the Company to select and consistently	Management aims to diversify the sources of funding to spread the risk that one of the sources become unavailable to the Company.	Supply risk Nyrstar is dependent on a limited number
	apply its accounting policies. If the accounting standards or their interpretation change or if the interpretation of certain terms and conditions included in the Company's funding arrangements change, the Company may, or may not, be required to change the accounting treatment of some of its funding instruments resulting in their reclassification in the		of suppliers for zinc and lead concentrate. Nyrstar is partially dependent on the supply of zinc and lead secondary feed materials. In addition Nyrstar's mining and smelting operations in developing or emerging countries are dependent on reliable energy supply.
	Company's Consolidated Statement of Financial		Environmental, health & safety risks
	Position. Such reclassifications could have a material adverse impact on Nyrstar's ability to comply with current financial ratios under certain of means of funding.		Nyrstar operations are subject to stringent environmental and health laws and regulations, which are subject to change from time to time. Nyrstar's operations are also subject to climate change legislation.
Treatment charge (TC) risk
Nyrstar's results remain correlated to the levels of TCs that it charges zinc miners to refine their	A decrease in TCs can be expected to have a material adverse effect on Nyrstar's business,	TCs are negotiated on an annual basis. The impact of TC levels is expected to further

results of operations and financial condition.

decrease in the future in line with the

implementation of the SSR projects and the Port

Pirie Redevelopment.

Energy price risk

Nyrstar's operating sites, particularly its
smelters, are energy intensive, with energy
costs accounting for a significant part of
its operating costs. Electricity in particular
represents a very significant part of its

Increases in energy, particularly electricity, prices would significantly increase Nyrstar's costs and reduce its margins.

Nyrstar attempts to limit its exposure to short term energy price fluctuations through forward purchases, long term contracts and participation in energy purchasing consortia.

Description Impact Mitigation production facilities, Nyrstar is required to obtain and comply with licenses to operate. In addition Nyrstar is subject to many risks and hazards, some of which are out of its control, including: unusual or unexpected geological interruptions to power supplies; congestion at commodities transport terminals; industrial workforce limitations, technical failures, fires, explosions and other accidents; delays and other problems in major investment projects (such as the ramping-up of mining assets). Nyrstar's business could be adversely affected if Nyrstar fails to obtain, maintain or renew necessary licenses and permits, or fails to comply with the terms of its licenses or permits. The impact of these risks could result in damage to, or destruction of, properties or processing or production facilities, may reduce or cause production to cease at those properties or production facilities. The risks may further result in personal injury or death, environmental damage, business interruption, monetary losses and possible legal litigation and liability. Negative publicity, including that generated by non- governmental bodies, may further harm Nyrstar's operations. Nyrstar may become subject to liability against which Nyrstar has not insured or cannot insure, including those in respect of past activities. Should Nyrstar suffer a major uninsured loss, future earnings could be materially adversely affected.

Supply risk

Nyrstar is dependent on a limited number of suppliers for zinc and lead concentrate. Nyrstar is partially dependent on the supply of zinc and lead secondary feed materials. In addition Nyrstar's mining and smelting operations in developing or emerging countries are dependent on reliable energy

A disruption in supply could have a material adverse effect on Nyrstar's production levels and financial results. Unreliable energy supply at any of the mining and smelting operations requires appropriate emergency supply or will result in significant ramp up costs after a major power outage.

Nyrstar's process risk management system incorporating assessment of safety, environment, production and quality risks, which includes the identification of risk control measures, such as preventative maintenance, critical spares inventory and operational procedures. Corporate Social Responsibility and the Nyrstar Foundation projects enable Nyrstar to work closely with local communities to maintain a good relationship. Nyrstar currently has insurance coverage for its operating risks associated with its zinc and lead smelters and mining operations which includes all risk property damage (including certain aspects of business interruption), operational and product liability, marine stock and transit and directors' and officers' liability.
Nyrstar management is taking steps to secure raw materials from other sources, increase its flexibility to treat varying qualities of raw material and secondary materials. Nyrstar is continuously monitoring the energy market worldwide. This includes also considering alternate energy supply, e.g. wind power at mine sides.
Safety is one of the core values of Nyrstar, and currently it is implementing common safety policies across all sites along with corresponding health and safety audits. Nyrstar pro-actively monitors changes to environmental, health and safety laws and regulations.

Environmental, health & safety risks

Nyrstar operations are subject to stringent environmental and health laws and regulations, which are subject to change from time to time. Nyrstar's operations are also subject to climate change legislation.

If Nyrstar breaches such laws and regulations, it may incur fines or penalties, be required to curtail or cease operations, or be subject to significantly increased compliance costs or significant costs for rehabilitation or rectification works.

International operations risk
Nyrstar's mining and smelting operations are located in jurisdictions, including developing countries and emerging markets that have varying political, economic, security and other risks. In addition Nyrstar is exposed to nationalism and tax risks by virtue of the international nature of its activities.	These risks include, amongst others, the destruction of property, injury to personnel and the cessation or curtailment of operations, war, terrorism, kidnappings, civil disturbances and activities of governments which limit or disrupt markets and restrict the movement of funds or suppliers. Political officials may be prone to corruption or bribery, which violates Company policy and adversely affects operations.	Nyrstar performs a thorough risk assessment on a country-by-country basis when considering its investment activities. In addition Nyrstar attempts to conduct its business and financial affairs focusing to minimize to the extent reasonably practicable the political, legal, regulatory and economic risks applicable to operations in the countries where Nyrstar operates.
Reserves and resource risk
Nyrstar's future profitability and operating margins depend partly upon Nyrstar's ability to access mineral reserves that have geological characteristics enabling mining at competitive costs. This is done by either conducting successful exploration and development activities or by acquiring properties containing economically recoverable reserves.	Replacement reserves may not be available when required or, if available, may not be of a quality capable of being mined at costs comparable to existing mines.	Nyrstar utilises the services of appropriately qualified experts to ascertain and verify the quantum of reserves and resources including ore grade and other geological characteristics under relevant global standards for measurement of mineral resources.
Project execution risk
Nyrstar's growth strategy relies in part on the implementation of the Port Pirie Redevelopment and SSR programme of projects.	Delay, technical issues or cost overruns in these projects could adversely impact the original business cases which justified these projects and impact Nyrstar's financial position.	These risks are being careful managed by a dedicated technical/project team in smelting (including external resources where needed). All investments leverage internal know how "off the shelf" technology or a different application of an existing technology.

3. Important Events which Occurred after the End of the Financial year

Please refer to Note 43 (subsequent events) in the IFRS Financial Statements.

4. Information regarding the Circumstances that could significantly affect the Development of the Group

No information regarding the circumstances that could significantly affect the development of the Company are to be mentioned. The principal risks and uncertainties facing the Group are covered in section 2 of this report.

5. Research and Development

The Group undertakes research and development through a number of activities at various production sites of the Group.

6. Financial Risks and Information regarding the use by the Company of Financial Instruments to the extent relevant for the evaluation of its Assets, Liabilities, Financial Position and Results

Please refer to Note 3 (Significant accounting policies), Note 5 (Financial risk management) and Note 36 (Financial instruments) in the IFRS Financial Statements.

7. Information provided in accordance with Article 624 of the Belgian Company Code

The extraordinary general shareholders' meeting held on 18 January 2016 approved the cancellation of all 12,571,225 treasury shares held by the Company.

The treasury shares reserve comprises the par value of the Company's share held by the Group. As at 31 December 2016, the Group held none of the Company's shares (31 December 2015: 12,571,225).

During 2015 the Group settled its LTIP Grants and Deferred Shares Awards. A total of 92,832 shares were allocated to the employees as a part of this settlement.

Issued shares	2016	2015
Shares outstanding	93,563,960	327,473,863
Treasury shares	-	12,571,225
As at 31 Dec	93,563,960	340,045,088
Movement in shares outstanding	2016	2015
As at 1 Jan	327,473,863	327,381,031
Capital increase	608,165,740	-
Reverse stock split	(842,075,643)	-
Employee shared based payment plan	-	92,832
As at 31 Dec	93,563,960	327,473,863
Movement in treasury shares	2016	2015
As at 1 Jan	12,571,225	12,664,057
Cancellation of treasury shares	(12,571,225)	-
Employee shared based payment plan	-	(92,832)
As at 31 Dec	-	12,571,225

Issued shares	2016	2015
Shares outstanding	93,563,960	327,473,863
Treasury shares	-	12,571,225
As at 31 Dec	93,563,960	340,045,088
Movement in shares outstanding	2016	2015
As at 1 Jan	327,473,863	327,381,031
Capital increase	608,165,740	-
Reverse stock split	(842,075,643)	-
Employee shared based payment plan	-	92,832
As at 31 Dec	93,563,960	327,473,863
Movement in treasury shares	2016	2015
As at 1 Jan	12,571,225	12,664,057
Cancellation of treasury shares	(12,571,225)	-
Employee shared based payment plan	-	(92,832)
As at 31 Dec	-	12,571,225

Issued shares	2016	2015
Shares outstanding	93,563,960	327,473,863
Treasury shares	-	12,571,225
As at 31 Dec	93,563,960	340,045,088
Movement in shares outstanding	2016	2015
As at 1 Jan	327,473,863	327,381,031
Capital increase	608,165,740	-
Reverse stock split	(842,075,643)	-
Employee shared based payment plan	-	92,832
As at 31 Dec	93,563,960	327,473,863
Movement in treasury shares	2016	2015
As at 1 Jan	12,571,225	12,664,057
Cancellation of treasury shares	(12,571,225)	-
Employee shared based payment plan	-	(92,832)
As at 31 Dec	-	12,571,225

8. Information provided in accordance with Articles 523 and 524 of the Belgian Company Code

Directors are expected to arrange their personal and business affairs so as to avoid conflicts of interest with the Company. Any director with a conflicting financial interest (as contemplated by article 523 of the Belgian Company Code) on any matter before the Board of Directors must bring it to the attention of both the statutory auditor and fellow directors, and take no part in any deliberations or voting related thereto. Provision 1.4 of the corporate governance charter sets out the procedure for transactions between Nyrstar and the directors which are not covered by the legal provisions on conflicts of interest. Provision 3.2.4 of the corporate governance charter contains a similar procedure for transactions between Nyrstar and members of the management committee (other than the Chief Executive Officer).

To the knowledge of the Board of Directors, there are, on the date of this report, no potential conflicts of interests between any duties to the Company of the directors and members of the management committee and their private interests and/or other duties. While this does not entail a direct personal conflict of interest, Mr. Cox is a member of the supervisory committee of Trafigura and Mr. Fernandez is the head of M&A at Trafigura Group Pte. Ltd. and owns a non-voting profit shaing participation in Trafigura Beheer B.V., a parent of Trafigura Group Pte Ltd.

There is no information regarding a conflict of interest in accordance with article 524 of the Belgian Company Code.

9. Audit Committee

The Audit Committee consists of three non-executive members of the Board, of which two are independent members of the Board of Directors and one is non-independent. The members of the Audit Committee have sufficient expertise in financial matters to discharge their functions. The Chairman of the Audit Committee is competent in accounting and auditing as evidenced by her previous role as Chief Financial Officer of BP's Aviation Fuels.

10. Information that have an Impact in the Event of Public Takeovers Bids

The Company provides the following information in accordance with article 34 of the Royal Decree dated 14 November 2007:

• (i) At the date of this report, the share capital of the Company amounts to EUR 97,192,929.19 and is fully paid-up. It is represented by 93,563,960 shares, each representing a fractional value of EUR 1.039 or one 93,563,960th of the share capital. The Company's shares do not have a nominal value.
• (ii) Other than the applicable Belgian legislation on the disclosure of significant shareholdings and the Company's articles of association, there are no restrictions on the transfer of shares.
• (iii) There are no holders of any shares with special control rights.
• (iv) The awards granted to employees under the Nyrstar Long Term Incentive Plan (LTIP) will vest upon determination by the nomination and remuneration committee.
• (v) Each shareholder of Nyrstar is entitled to one vote per share. Voting rights may be suspended as provided in the Company's articles of association and the applicable laws and articles.
• (vi) There are no agreements between shareholders which are known by the Company and may result in restrictions on the transfer of securities and/or the exercise of voting rights.
• (vii) The rules governing appointment and replacement of Board members and amendment to articles of association are set out in the Company's articles of association and the Company's corporate governance charter.
• (viii) The powers of the Board of Directors, more specifically with regard to the power to issue or redeem shares are set out in the Company's articles of association. The Board of Directors was not granted the authorization to purchase its own shares "to avoid imminent and serious danger to the Company" (i.e., to defend against public takeover bids). The Company's articles of association of association do not provide for any other specific protective mechanisms against public takeover bids.

• (ix) At the date of the report, the Company is a party to the following significant agreements which, upon a change of control of the Company or following a takeover bid can enter into force or, subject to certain conditions, as the case may be, can be amended, be terminated by the other parties thereto or give the other parties thereto (or beneficial holders with respect to bonds) a right to an accelerated repayment of outstanding debt obligations of the Company under such agreements:

  • 5.00% senior unsecured convertible bonds due 2022
  • The USD 150 million uncommitted Trafigura Working Capital Facility (which has been changed to committed and increased to USD 250m as of the 1st of Jan 2017)
  • Nyrstar's Revolving Structured Commodity Trade Finance Credit Facility;
  • 2019 High Yield Bond (Indenture)
  • 4.25% senior unsecured convertible bonds due 2018;
  • The zinc prepayment arranged by Deutsche Bank AG dated 30 December 2015;

• Nyrstar's committed EUR 100 million bilateral credit facility with KBC Bank;

• The USD 30 million uncommitted credit facility between Nyrstar Sales & Marketing AG and HSBC Trinkaus & Burkhardt AG;
• The USD 20 million uncommitted credit facility between Nyrstar Finance International AG and Credit Suisse AG;
• Nyrstar's silver prepay with Macquarie bank;
• Nyrstar's silver prepay with JPMorgan Chase Bank, National Association;
• Silver forward purchase agreement (Hydra);
• Common terms deed with the Treasurer of South Australia;
• Nyrstar's USD 100 million uncommitted credit facility with the Royal Bank of Scotland;
• Nyrstar's EUR 16 million guarantee facility with BNP Paribas Fortis;
• various ISDA Master Agreements and related confirmations;
• Nyrstar's committed EUR 16 million bilateral credit facility with KBC Bank; and
• Nyrstar's off-take agreement with the Glencore Group.
• (x) The Chief Executive Officer is currently entitled to a 12-month salary payment in case his employment is terminated upon a change of control of the Company. In addition, the Company's share based plans also contain take-over protection provisions.

No takeover bid has been instigated by third parties in respect of the Company's equity during the previous financial year and the current financial year.

Done at London on 21 February 2017.

On behalf of the Board of Directors,

___________________________ ___________________________

Martyn Konig Hilmar Rode Director Director

STATEMENT OF RESPONSIBILITY

STATEMENT OF RESPONSIBILITY

The undersigned, Hilmar Rode, Chief Executive Officer and Christopher Eger, Chief Financial Officer, declare that, to the best of their knowledge:

• a) the financial statements which have been prepared in accordance with applicable standards give a true and fair view of the assets, the financial position and profit or loss of the issuer and the entities included in the consolidation;
• b) the management report includes a true and fair overview of the development and the performance of the business and of the position of the issuer, and the entities included in the consolidation, together with a description of the principal risks and uncertainties which they are exposed to.

London, 21 February 2017

___________________________ ___________________________

Hilmar Rode Christopher Eger Chief Executive Officer Chief Financial Officer

Consolidated Financial Statements Nyrstar Consolidated Financial Statements

31 December 2016

CONSOLIDATED INCOME STATEMENT

EUR million	Note	2016	2015*
Continuing operations
Revenue	7	2,763.2	3,020.4
Raw materials used		(1,728.6)	(1,725.2)
Freight expense		(53.3)	(69.7)
Gross profit		981.3	1,225.5
Other income		6.4	6.5
Employee benefits expense	11	(303.1)	(363.4)
Energy expenses		(215.5)	(246.1)
Stores and consumables used		(112.7)	(147.9)
Contracting and consulting expense		(118.9)	(126.6)
Other expense	14	(49.9)	(67.8)
Depreciation, depletion and amortisation	15,16	(179.1)	(195.5)
M&A related transaction expense	10	(5.3)	-
Restructuring expense	30	(8.8)	(11.8)
Impairment loss	17	(132.9)	(446.2)
Impairment reversal	17	-	3.8
Result from operating activities		(138.5)	(369.5)
Finance income	12	1.6	1.4
Finance expense	12	(118.7)	(113.0)
Net foreign exchange (loss) / gain	12	(5.4)	0.9
Net finance expense		(122.5)	(110.7)
Share of loss of equity accounted investees	18	-	(0.1)
Loss before income tax		(261.0)	(480.3)
Income tax (expense) / benefit	13	(16.0)	214.5
Loss for the year from continuing operations		(277.0)	(265.8)
Discontinued operations
Loss from discontinued operations, net of income taxes	9	(136.8)	(166.1)
Loss for the year		(413.8)	(431.9)
Attributable to:
Equity holders of the parent		(413.8)	(431.9)
Non-controlling interest		-	-

Loss per share for loss from continuing operations during the period (expressed in EUR per share)

basic	35	(3.16)	(4.66)
diluted	35	(3.16)	(4.66)

* Prior year amounts have been re-presented for the impact of the discontinued operations (note 9)

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

EUR million	Note	2016	2015*
Loss for the year		(413.8)	(431.9)
Continuing operations
Other comprehensive income
Items that may be reclassified to profit:
Foreign currency translation differences		(8.5)	30.0
(Losses) / gains on cash flow hedges	28	(3.7)	34.7
Transfers to the income statement	28	(11.2)	0.5
Income tax benefit / (expense)	13,28	0.9	(10.1)
Change in fair value of investments in equity securities	19	0.3	0.9
Transfers to the income statement		-	-
Items that will not be reclassified to profit:
Remeasurements of defined benefit plans	31	10.3	4.0
Income tax expense	13	(2.5)	(0.6)
Other comprehensive (loss) / income for the year, from continuing operations net of tax		(14.4)	59.4
Discontinued operations
Items that may be reclassified to profit:
Foreign currency translation differences		(0.3)	33.3
Transfers to the income statement	8	(56.1)	-
Other comprehensive (loss) / income for the year, from discontinued operations net of tax		(56.4)	33.3
Other comprehensive (loss) / income for the year, net of tax		(70.8)	92.7
Total comprehensive loss for the year		(484.6)	(339.2)
Attributable to:
Equity holders of the parent		(484.6)	(339.2)
Non-controlling interest		-	-
Total comprehensive loss for the year		(484.6)	(339.2)
* Prior year amounts have been re-presented for the impact of the discontinued operations (note 9)
The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Financial Statements Consolidated Financial Statements

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

EUR million	Note	as at 31 Dec 2016	as at 31 Dec 2015*
Property, plant and equipment	15	1,416.0	1,607.8
Intangible assets	16	6.0	11.3
Investments in equity accounted investees	18	3.4	3.4
Investments in equity securities	19	22.4	20.9
Deferred income tax assets	13	343.0	349.3
Other financial assets	21	165.3	105.0
Other assets	23	2.0	3.8
Total non-current assets		1,958.1	2,101.5
Inventories	22	720.1	506.1
Trade and other receivables	24	219.0	218.1
Prepayments and deferred expenses		9.2	12.5
Current income tax assets		7.3	14.6
Other financial assets	21	52.8	60.0
Other assets	23	-	5.0
Cash and cash equivalents	25	127.1	96.1
Assets classified as held for sale	9	41.3	-
Total current assets		1,176.8	912.4
Total assets		3,134.9	3,013.9

* Restricted cash and Perpetual securities were reclassified as described in note 2 (f)

The accompanying notes are an integral part of these consolidated financial statements.

EUR million	Note	as at 31 Dec 2016	as at 31 Dec 2015*
Share capital and share premium	26	2,153.1	1,892.0
Perpetual securities	27	131.6	21.8
Reserves	28	(103.9)	(31.0)
Accumulated losses		(1,647.1)	(1,239.2)
Foreign currency translation differences accumulated in equity relating to disposal group held for sale	28	10.2	-
Total equity attributable to equity holders of the parent		543.9	643.6
Total equity		543.9	643.6
Loans and borrowings	29	565.0	460.3
Deferred income tax liabilities	13	87.8	87.2
Provisions	30	160.4	181.3
Employee benefits	31	74.0	84.4
Other financial liabilities	21	85.2	134.5
Deferred income	33	52.7	79.8
Total non-current liabilities		1,025.1	1,027.5
Trade and other payables	32	606.9	613.4
Current income tax liabilities		2.9	6.1
Loans and borrowings	29	427.0	417.0
Provisions	30	28.2	31.1
Employee benefits	31	36.0	43.8
Other financial liabilities	21	121.9	17.4
Deferred income	33	313.0	214.0
Other liabilities	23	1.3	-
Liabilities classified as held for sale	9	28.7	-
Total current liabilities		1,565.9	1,342.8
Total liabilities		2,591.0	2,370.3
Total equity and liabilities		3,134.9	3,013.9

* Restricted cash and Perpetual securities were reclassified as described in note 2 (f)

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

EUR million		Note Share capital	Share premium	Perpetual securities	Reserves*	Accumulated losses	Total amount attributable to shareholders Total equity
As at 1 Jan 2016		960.9	931.1	21.8	(31.0)	(1,239.2)	643.6	643.6
Loss for the year		-	-	-	-	(413.8)	(413.8)	(413.8)
Other comprehensive (loss) /income		-	-	-	(78.6)	7.8	(70.8)	(70.8)
Total comprehensive loss		-	-	-	(78.6)	(406.0)	(484.6)	(484.6)
Capital increase		63.2	199.1	-	-	-	262.3	262.3
Change in par value	26	1.2	(1.2)	-	-	-	-	-
Treasury shares		(1.2)	-	-	1.2	-	-	-
Issuance of perpetual securities	27	-	-	109.8	-	-	109.8	109.8
Issuance of convertible bond	30	-	-	-	14.7	-	14.7	14.7
Distribution on perpetual securities		-	-	-	-	(3.5)	(3.5)	(3.5)
Share-based payments		-	-	-	-	1.6	1.6	1.6
As at 31 Dec 2016		1,024.1	1,129.0	131.6	(93.7)	(1,647.1)	543.9	543.9

* Includes foreign currency translation differences relating to disposal group held for sale

			Share	Perpetual		Accumulated	Total amount attributable to
EUR million		Note Share capital	premium	securities	Reserves	losses	shareholders Total equity
As at 1 Jan 2015		960.9	931.8	-	(120.3)	(817.1)	955.3	955.3
Loss for the year		-	-	-	-	(431.9)	(431.9)	(431.9)
Other comprehensive income		-	-	-	89.3	3.4	92.7	92.7
Total comprehensive loss		-	-	-	89.3	(428.5)	(339.2)	(339.2)
Capital decrease		-	(0.7)	-	-	-	(0.7)	(0.7)
Treasury shares		-	-	-	-	0.2	0.2	0.2
Issuance of perpetual securities	27	-	-	21.8	-	-	21.8	21.8
Share-based payments		-	-	-	-	6.2	6.2	6.2
As at 31 Dec 2015		960.9	931.1	21.8	(31.0)	(1,239.2)	643.6	643.6

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

EUR million	Note	2016	2015*
Loss for the year		(413.8)	(431.9)
Adjustment for:
Depreciation, depletion and amortisation	15,14	207.5	251.3
Income tax expense / (benefit)	13	39.5	(244.8)
Net finance expense	12	127.5	115.3
Share of loss in equity accounted investees	18	-	0.1
Impairment loss (net)	17	266.3	564.0
Equity settled share based payment transactions		2.8	4.7
Other non-monetary items		(37.1)	(20.7)
Gain on disposal of subsidiary	8	(55.4)	-
Gain on sale of property, plant and equipment	15	(1.9)	(2.6)
Income tax paid		(22.1)	(13.3)
Cash flow from operating activities before working capital changes		113.3	222.1
Change in inventories		(234.0)	180.8
Change in trade and other receivables		24.3	3.6
Change in prepayments and deferred expenses		2.7	(0.2)
Change in deferred income		61.3	(275.2)
Change in trade and other payables		19.1	(55.8)
Change in other assets and liabilities		(53.6)	(70.1)
Change in provisions and employee benefits		(14.5)	(32.0)
Cash flow used in operating activities		(81.4)	(26.8)
Acquisition of property, plant and equipment	15	(294.0)	(400.9)
Acquisition of intangible assets	16	(0.3)	(0.5)
Proceeds from sale of property, plant and equipment		2.4	4.2
Proceeds from sale of intangible assets		1.2	2.4
Proceeds from sale of subsidiary	8	10.6	-
Interest received		1.1	1.2
Cash flow used in investing activities		(279.0)	(393.6)
Capital increase		262.3	-
Issue of perpetual securities	27	109.8	21.8
Distribution on perpetual securities		(3.5)	-
Proceeds from borrowings		205.0	15.4
Repayment of borrowings		(417.2)	(81.3)
Change in SCTF credit facility		316.2	-
Proceeds from zinc prepayment	21	31.6	132.0
Interest paid		(115.3)	(101.4)
Cash flow from / (used in) financing activities		388.9	(13.5)
Net (decrease) / increase in cash held		28.5	(433.9)
Cash at the beginning of the year	25	96.1	498.5
Exchange fluctuations		4.8	31.5
Cash at the end of the year	9,25	129.4	96.1

*Restricted cash was reclassified as described in note 2 (f) The accompanying notes are an integral part of these consolidated financial statements.

86 87 NYRSTAR NYRSTAR Annual Report 2016

TABLE OF CONTENTS

1.	Reporting entity	89	23. Other assets and liabilities	134
2.	Basis of preparation	89	24. Trade and other receivables	134
3.	Significant accounting policies	92	25. Cash and cash equivalents	135
4.	Critical accounting estimates and judgements	105	26. Capital	135
5.	Financial risk management	107	27. Perpetual securities	137
6.	Exchange rates	110	28. Reserves	139
7.	Segment reporting	110	29. Loans and borrowings	140
8.	Acquisition and disposal of business	113	30. Provisions	143
9.	Discontinued operations	114	31. Employee benefits	144
	10. M&A related transaction expense	118	32. Trade and other payables	150
	11. Employee benefits expense	119	33. Deferred income	150
	12. Finance income and expense	119	34. Share-based payments	151
	13. Income tax	119	35. Loss per share	155
	14. Other expense	124	36. Financial instruments	155
	15. Property, plant and equipment	124	37. Capital commitments	166
	16. Intangible assets	125	38. Operating leases	166
	17. Impairment	126	39. Contingencies	166
	18. Investments in equity accounted investees	130	40. Related parties	167
	19. Investments in equity securities	130	41. Audit and non-audit services
	20. Zinc purchase interest	131	by the Company's statutory auditor	171
	21. Other financial assets and liabilities	131	42. Group entities	171
	22. Inventories	133	43. Subsequent events	172

1. Reporting entity

Nyrstar NV (the "Company") is an integrated mining and metals business, with market leading positions in zinc and lead, and significant positions in other base and precious metals. Nyrstar has mining, smelting, and other operations located in Europe, Australia, Canada, the United States and Latin America. Nyrstar is incorporated and domiciled in Belgium and has its corporate office in Switzerland. The address of the Company's registered office is Zinkstraat 1, 2490 Balen, Nyrstar is listed on NYSE Euronext Brussels under the symbol NYR. For further information please visit the Nyrstar website, www.nyrstar.com.

The consolidated financial statements of the Company as at and for the year ended 31 December 2016 comprise the Company and its subsidiaries (together referred to as "Nyrstar" or the "Group" and individually as "Group entities") and the Group's interest in associates and joint ventures. The consolidated financial statements were authorised for issue by the board of directors of Nyrstar NV on 21 February 2017.

2. Basis of preparation

(a) Statement of compliance

The consolidated financial statements of Nyrstar are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. These include International Financial Reporting Standards (IFRS) and the related interpretations issued by the International Accounting Standards Board (IASB), and the IFRS Interpretations Committee (IFRIC), effective at the reporting date and adopted by the European Union. The consolidated financial statements have been prepared on a going concern basis.

(b) Basis of measurement

The consolidated financial statements have been prepared under the historical cost basis except for derivative financial instruments (note 21), financial instruments at fair value through profit or loss (note 21), and available-for-sale financial assets (note 19).

(c) Functional and presentational currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional' currency). The consolidated financial statements are presented in EUR which is the Company's functional and presentation currency. All financial information has been rounded to the nearest hundred thousand EUR.

(d) Use of estimates and judgements

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgements in the process of applying Nyrstar's accounting policies. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Critical accounting estimates and judgements are disclosed in note 4.

(e) Standards, amendments and interpretations

The following new and revised standards and interpretations, effective as of 1 January 2016 and endorsed by the European Union, have been adopted in the preparation of the consolidated financial statements:

• Annual Improvements to IFRSs 2010-2012 Cycle a collection of amendments to IFRSs, in response to issues addressed during the 2010–2012 cycle

• Annual Improvements to IFRSs 2012-2014 Cycle a collection of amendments to IFRSs, in response to issues addressed during the 2012–2014 cycle

• Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

• Amendments to IAS 27 Equity Method in Separate Financial Statements
• Amendments to IAS 1 Disclosure Initiative
• Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation
• Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations
• Amendments to IAS 16 and IAS 41 Bearer Plants
• Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation Exception

The standards adopted effective as of 1 January 2016 did not have a significant impact on the Group.

New IFRS accounting standards, amendments and interpretations not yet adopted

The Group has not early adopted any other amendment, standard, or interpretation that has been issued but is not yet effective. It is expected that where applicable, these standards and amendments will be adopted on each respective effective date. The following new IFRS standards in issue but not yet effective are expected to have a significant impact on the Group:

IFRS 15 – Revenue from Contracts with Customers – effective for year ends beginning on or after 1 January 2018

IFRS15 was issued in May 2014 and subsequent amendments, Clarifications to IFRS 15, were issued in April 2016. IFRS 15, as amended, is effective for accounting periods beginning on or after 1 January 2018, although the April 2016 amendments have not yet been endorsed by the EU. For the Group, transition to IFRS 15 will take place on 1 January 2018.

The core principle is that revenue should be recognized in a manner that depicts the pattern of the transfer of goods and services to customers. The amount recognized should reflect the amount to which the entity expects to be entitled to apportion revenue earned from contracts to individual promises, or performance obligations, on a relative standalone selling price basis, based on a five-step model.

The group is currently quantifying the implications of this standard; however, the indicative impacts expected on the Group results are as follows:

• Under IFRS 15 the revenue recognition model will change from one based on the transfer of risk and reward of ownership to the transfer of control of ownership. The Group's revenue is predominantly derived from commodity sales, where the point of recognition is dependent on the contract sales terms, known as the International Commercial terms (Incoterms). As the transfer of risks and rewards coincides with the transfer of control at a point in time for the Incoterms as part of the Group's commodity sales arrangements, the timing and the amount of revenue recognized is unlikely to be materially affected for the majority of sales.
• IFRS 15 introduces the concept of performance obligations that are defined as a 'distinct' promised good or service. For the Incoterms Cost, Insurance and Freight, that is regularly used by the Group, the seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination. Consequently, the freight service on export commodity contracts with CIF Incoterms will meet the criteria of a separate performance obligation. Based upon the preliminary assessment performed, the impact on the amount of revenue recorded in a year will not be material.
• Certain costs incurred in fulfilling customer contracts will be deferred on the balance sheet under IFRS 15 and amortized as related revenue is recognized under the contract. This will include the costs associated with the freight services on export commodity contracts with CIF Incoterms, and is not expected to have a material impact.
• Additional impacts may be identified as the Group continues to work through the implementation of IFRS 15.

The Group continues to work on the transition to the new standard by gathering the information required for the new quantitative disclosure requirements. The appropriate changes to systems, processes and controls will be implemented during 2017. While the Group has not yet reached a final conclusion on its transition to IFRS 15, it currently expects to apply IFRS 15 for annual reporting periods beginning on or after 1 January 2018 with the cumulative effect of initially applying IFRS 15 recognised at the date of initial application.

IFRS 9 – Financial Instruments – effective for year ends beginning on or after 1 January 2018

IFRS 9 was issued in July 2014 and becomes effective for the accounting periods beginning on or after 1 January 2018, which will be the date the Group transitions to IFRS 9. The new standard is applicable to financial assets and financial liabilities, and covers the classifications, measurement, and impairment and de-recognition of financial assets and financial liabilities together with a new hedge accounting model.

The standard will impact the classification and measurement of the Group's financial instruments and will require certain additional disclosures. The changes to classification and measurement of financial instruments are not expected to have a significant impact on the Group's existing accounting treatment. Consequently, the Group is assessing whether to take the accounting policy choice to continue to account for all hedges under IAS 39 Financial Instruments: Recognition and Measurement.

The new standard will require an 'expected credit loss' model being applied for impairment of financial assets as opposed to the 'incurred loss' model currently used under IAS 39. The provision for lifetime expected losses on all financial assets is currently being quantified, however, based on the initial assessment no material impact is expected due to low counterparty default risk as a result of the credit risk management processes that are in place.

IFRS 16 – Leases – effective for year ends beginning on or after 1 January 2019:

IFRS 16 was published in January 2016 and will be effective for the Group from 1 January 2019, replacing IAS 17 leases subject to EU endorsement. IFRS 16 will primarily change lease accounting for lessees; lease agreements will give rise to the recognition of an asset representing the right to use the leased item and a loan obligation for future lease payables. Lease costs will be recognized in the form of depreciation of the right to use the leased item and a loan obligation for future lease payables. Lessee accounting under IFRS 16 will be similar to existing IAS 17 accounting for finance leases, but will be substantively different for operating leases when rental charges are currently recorded on a straight line basis and no lease asset or lease loan obligation is recognized. Certain exemptions are available for leases with lease term of 12 months or less or where the underlying asset is of low value and there is an option not to reassess existing arrangements on transition.

This Group is in the process of quantifying the impact of the new standard. This could have a material impact on the Group's consolidated income statement and balance sheet as well as on some alternative performance measures used by the Group, e.g. the Underlying EBITDA, as a significant number of arrangements that are currently accounted for as operating leases will be recognized on the Group's balance sheet. The Group is also working through the options provided by IFRS 16 for the transition to the new standard which will impact whether the impacts noted above will be applied prospectively or retrospectively.

Other issued standards and amendments that are not yet effective are not expected to have an impact on the financial statements.

(f) Reclassification made to the consolidated financial statements

Subsequent to the issuance of the Group's consolidated financial statements as of and for the year ended 31 December 2015, management made the following reclassifications to the comparative figures:

Restricted cash

EUR 20.1 million of restricted cash as at 31 December 2015 was reclassified out of cash and cash equivalents and was presented in other non-current financial assets. Refer note 21(c) and note 27.

Perpetual Securities

During the year, upon further analysis of the terms of the perpetual securities issued by Nyrstar Port Pirie (NPP), management reclassified the perpetual securities from an entirely equity instrument to a compound financial instrument comprising of both equity and liability components. The equity component includes discretionary coupons which the Group may pay into perpetuity. The liability component includes the potential obligation to redeem the Securities for cash in highly specific circumstances outside of the control of the Company and the holder of the Securities. The perpetual securities are discussed in detail in note 27. The accounting policy adopted by the Group in connection with the perpetual securities has been outlined in accounting policy note 3(k). The significant judgement and estimation applied by the Group to classify and measure the perpetual securities has been outlined in note 4. The fair value of the financial liability component at initial recognition and the carrying amount at each subsequent balance sheet date is immaterial and therefore the classification of the perpetual securities did not have a material impact on the balance sheet as at 31 December 2015. Further, the Securities have been presented on a separate line on the balance sheet whereas in 2015 the Securities were presented in the notes to the financial statements.

3. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements and have been applied consistently by the Group entities.

(a) Basis of consolidation

Subsidiaries

Subsidiaries are all entities over which the Group has control. The Group controls another entity, when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. When the company has less than a majority of the voting rights, it has power over another entity when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the other entity unilaterally. The Group considers all relevant facts and circumstances in assessing whether or not the Group's voting rights in the other entity are sufficient to give it power. The Group reassesses whether or not it controls another entity if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group until the date that the control ceases.

Business Combinations

The purchase method of accounting is used to account for the acquisition of subsidiaries in these consolidated financial statements. The assets, liabilities and contingent liabilities of the acquired entity are measured at their fair values at the date of acquisition. Provisional fair values allocated at a reporting date are finalised within twelve months of the acquisition date. The cost of acquisition is measured as the fair value of assets transferred to, shares issued to or liabilities undertaken on behalf of the previous owners at the date of acquisition. Acquisition-related costs are expensed in the period in which the costs are incurred and the services received.

The excess of the cost of acquisition over Nyrstar's share of the fair value of the net assets of the entity acquired is recorded as goodwill. If Nyrstar's share in the fair value of the net assets exceeds the cost of acquisition, the excess is recognised immediately in the income statement.

Investments in associates and joint arrangements

Associates are those entities in which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of another entity.

Joint arrangements are those arrangements of which the Group has joint control, established by contractual agreement and requiring unanimous consent for decisions about the relevant activities. Associates and joint ventures are accounted for using the equity method (equity accounted investees) and are initially recorded at cost. The Group's investment includes goodwill identified on acquisition, net of any accumulated impairment losses.

The consolidated financial statements include the Group's share of the income and expense and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases.

When the Group's share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation to or has made payments on behalf of the investee.

When a group entity undertakes its activities under joint operations, the Group as a joint operator recognises in relation to its interest in the joint operation: (a) its assets, including its share of any assets held jointly; (b) its liabilities, including its share of any liabilities incurred jointly; (c) its revenue from the sale of its share of the output arising from the joint operation; (d) its share of the revenue from the sale of the output by the joint operation; and (e) its expenses, including its share of any expenses incurred jointly. The accounting treatment for the assets, liabilities, revenues and expenses are accounted for by the Group in accordance with its accounting policies and IFRSs applicable to the particular assets, liabilities, revenues and expenses.

Non-controlling interests

Non-controlling interests (NCI) in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from the Group's equity therein. NCI consist of the amount of those interests at the date of the original business combination (see below) and the NCI's share of changes in equity since the date of the combination.

Transactions eliminated on consolidation

The consolidated financial statements include the consolidated financial information of the Nyrstar Group entities. All intercompany balances and transactions with consolidated businesses have been eliminated. Unrealised gains and losses arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. The Group accounts for the elimination of the unrealised profits resulting from intercompany transactions between the mining and smelting businesses. These transactions relate to the sales from the mining to the smelting segment which have not been realised externally.

(b) Foreign currency

Foreign currency transactions

Foreign currency transactions are recognised during the period in the functional currency of each entity at exchange rates prevailing at the date of transaction. The date of a transaction is the date at which the transaction first qualifies for recognition. For practical reasons a rate that approximates the actual rate at the date of the transaction is used at some Group entities, for example, an average rate for the week or the month in which the transactions occur.

Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate at the balance sheet date.

Gains and losses resulting from the settlement of foreign currency transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement.

Foreign operations

The income statement and statement of financial position of each Nyrstar operation that has a functional currency different to EUR is translated into the presentation currency as follows:

• Assets and liabilities are translated at the closing exchange rate at the end of the financial period;
• Income and expense are translated at rates approximating the exchange rates ruling at the dates of the transactions; and
• All resulting exchange differences are recognised as a separate component of equity.

Exchange differences arising from the translation of the net investment in foreign operations are released into the income statement upon disposal.

(c) Financial instruments

Commodity hedging, via the use of metal futures, is undertaken to reduce the Group's exposure to fluctuations in commodity prices in relation to i) its unrecognised firm commitments arising from fixed price forward sales contracts and ii) future volatility in cash flows from the sale of metal.

Derivatives are initially recognised at their fair value on the date Nyrstar becomes a party to the contractual conditions of the instrument. The method of recognising the changes in fair value subsequent to initial recognition is dependent upon whether the derivative is designated as a hedging instrument, the nature of the underlying item being hedged and whether the arrangement qualifies for hedge accounting.

Hedge accounting requires the relationship between the hedging instrument and the underlying hedged item, as well as the risk management objective and strategy for undertaking the hedging transaction to be documented at the inception of the hedge. Furthermore, throughout the life of the hedge, the derivative is tested (with results documented) to determine if the hedge has been or will continue to be highly effective in offsetting changes in the fair value or cash flows associated with the underlying hedged item.

Fair value hedges

A hedge of the fair value of a recognised asset or liability or of a firm commitment is referred to as a fair value hedge. Changes in the fair value of derivatives that are designated and qualify as fair value hedges, are recorded in the income statement, together with changes in the fair value of the underlying hedged item attributable to the risk being hedged.

Cash flow hedges

A hedge of the cash flows to be received or paid relating to a recognised asset or liability or a highly probable forecast transaction is referred to as a cash flow hedge. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised outside of the income statement, directly in other comprehensive income in the hedging reserve. Changes in the fair value of cash flow hedges relating to the ineffective portion are recorded in the income statement. Amounts accumulated in the hedging reserve are recycled through the income statement in the same period that the underlying hedged item is recorded in the income statement. When a hedge no longer meets the criteria for hedge accounting, and the underlying hedged transaction is no longer expected to occur, any cumulative gain or loss recognised in the hedging reserve is transferred to the income statement. When a hedge is sold or terminated, any gain or loss made on termination is only deferred in the hedging reserve where the underlying hedged transaction is still expected to occur.

Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the income statement. Where an embedded derivative is identified and the derivative's risks and characteristics are not considered to be closely related to the underlying host contract, the fair value of the derivative is recognised on the consolidated statement of financial position and changes in the fair value of the embedded derivative are recognised in the income statement.

Investments in equity securities

The classification of investments depends on the purpose for which the investments have been acquired. Management determines the classification of investments at initial recognition. These investments are classified as available-for-sale financial assets and are included in non-current assets unless the Group intends to dispose of the investment within 12 months of the balance sheet date.

The fair value of investments in equity securities is determined by reference to their quoted closing bid price at the reporting date. Any impairment charges are recognised in profit or loss, while other changes in fair value are recognised in other comprehensive income. When investments are sold, the accumulated fair value adjustments recognised in other comprehensive income are included in the income statement within 'gain/loss on sale of investments in equity securities'.

Other financial liabilities

Certain commodity prepayment agreements do not qualify for recognition under Nyrstar's normal purchase, sale or usage requirements and are accounted for as financial instruments. These agreements are classified as other financial liabilities and initially recognised at fair value, net of transaction costs incurred, and subsequently carried at amortised cost.

(d) Property, plant and equipment

Recognition and measurement

Items of property, plant and equipment are carried at cost less accumulated depreciation and impairment. The cost of self-constructed assets includes the cost of materials, direct labour, and an appropriate proportion of production overheads.

The cost of self-constructed assets and acquired assets include estimates of the costs of closure, dismantling and removing the assets and restoring the site on which they are located and the area disturbed. All items of property, plant and equipment, are depreciated on a straight-line and/or unit of production basis. Freehold land is not depreciated.

Once a mining project has been established as commercially viable, expenditure other than that on land, buildings, plant and equipment is capitalised under 'Mining properties and development' together with any previously capitalised expenditures reclassified from 'Exploration and evaluation (see note 3e).

Useful lives are based on the shorter of the useful life of the asset and the remaining life of the operation, in which the asset is being utilised. Depreciation rates, useful lives and residual values are reviewed regularly and reassessed in light of commercial and technological developments. Changes to the estimated residual values or useful lives are accounted for prospectively in the period in which they are identified.

Depreciation

Straight-line basis

The expected useful lives are the lesser of the life of the assets or as follows:

• Buildings: 40 years
• Plant and equipment: 3 25 years

Unit of production basis

• For mining properties and development assets and certain mining equipment, the economic benefits from the asset are consumed in a pattern which is linked to the production level. Such assets are depreciated on a unit of production basis. However, assets within mining operations for which production is not expected to fluctuate significantly from one year to another or which have a physical life shorter than the related mine are depreciated on a straight line basis as noted above.
• In applying the unit of production method, depreciation is normally calculated using the quantity of material extracted from the mine in the period as a percentage of the total quantity of material to be extracted in current and future periods based on proved and probable reserves and, for some mines, other mineral resources. Such non reserve material may be included in depreciation calculations in circumstances where there is a high degree of confidence in its economic extraction.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Critical spare parts purchased for particular items of plant, are capitalised and depreciated on the same basis as the plant to which they relate.

Assets under construction

During the construction phase, assets under construction are classified as construction in progress within property, plant and equipment. Once commissioned these assets are reclassified to property, plant and equipment at which time they will commence being depreciated over their useful life.

Mineral properties and mine development costs

The costs of acquiring mineral reserves and mineral resources are capitalised on the statement of financial position as incurred. Capitalised costs representing mine development costs include costs incurred to bring the mining assets to a condition of being capable of operating as intended by management. Mineral reserves and in some instances mineral resources and capitalised mine development costs are depreciated from the commencement of production using generally the unit of production basis. They are written off if the property is abandoned.

Major cyclical maintenance expenditure

Group entities recognise, in the carrying amount of an item of plant and equipment, the incremental cost of replacing a component part of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the Group entity, the cost incurred is significant in relation to the asset and the cost of the item can be measured reliably. Accordingly, major overhaul expenditure is capitalised and depreciated over the period in which benefits are expected to arise (typically three to four years). All other repairs and maintenance are charged to the income statement during the financial period in which the costs are incurred.

Exploration and evaluation assets

Exploration and evaluation expenditure relates to costs incurred on the exploration and evaluation of potential mineral reserves and resources and includes costs such as exploratory drilling and sample testing and the costs of pre-feasibility studies. Exploration and evaluation expenditure for each area of interest, other than that acquired from the purchase of another mining company, is capitalised as an asset provided that one of the following conditions is met:

• such costs are expected to be recouped in full through successful development and exploration of the area of interest or alternatively, by its sale; or
• exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing, or are planned for the future.

Acquired mineral rights comprise identifiable exploration and evaluation assets including mineral reserves and mineral resources, which are acquired as part of a business combination and are recognized at fair value at date of acquisition. The acquired mineral rights are reclassified as "mine property and development" from commencement of development and amortised on a unit of production basis, when commercial production commences.

Capitalised exploration and evaluation assets are transferred to mine development assets once the work completed to date supports the future development of the property and such development receives appropriate approvals.

(e) Intangible assets

Other intangible assets

Software and related internal development costs are carried at historical cost, less accumulated amortisation and impairment losses. They are typically amortised over a period of five years.

CO2 emission rights/Carbon permits are carried at historical cost, less impairment losses: These intangibles are not amortised. The corresponding balance is recognised in provisions.

(f) Leased assets

Leases under which the Group assumes substantially all of the risks and benefits of ownership, are classified as finance leases, while other leases are classified as operating leases. Finance leases are capitalised with a lease asset and liability equal to the present value of the minimum lease payments or fair value, if lower, being recorded at the inception of the lease. Capitalised lease assets are amortised on a straight-line basis over the shorter of the useful life of the asset or the lease term. Each finance lease repayment is allocated between the liability and finance charges based on the effective interest rate implied in the lease contract.

Lease payments made under operating leases are recognised in the income statement over the accounting periods covered by the lease term.

(g) Inventories

Inventories of finished metals, concentrates and work in progress are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expense. Byproducts inventory obtained as a result of the production process are valued at the lower of cost and net realisable value. Cost includes expenditure incurred in acquiring and bringing the stock to its existing condition and location and includes an appropriate allocation of fixed and variable overhead expense, including depreciation and amortisation. Stores of consumables and spares are valued at cost with allowance for obsolescence. Cost of purchase of all inventories is determined on a FIFO basis. In addition to purchase price, conversion costs are allocated to work-in-progress and finished goods. These conversion costs are based on the actual costs related to the completed production steps.

As the Company applies hedge accounting as referred in note 3c the hedged items of inventory are adjusted by the fair value movement attributable to the hedged risk. The fair value adjustment remains part of the carrying value of inventory and enters into the determination of earnings when the inventory is sold. This impact is compensated by the hedge derivatives which are also adjusted for fair value changes.

(h) Impairment

Financial assets

A financial asset that is not measured at fair value through profit or loss is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost, is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value.

Significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised.

For available for sale equity investments, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment. Impairment losses on available for sale equity investments are not reversed.

Non-financial assets

The carrying amounts of the Group's non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated annually.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit"). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units or groups of cash generating units that are expected to benefit from the synergies of the combination.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss recognised in respect of goodwill cannot be reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(i) Employee benefits

Short term benefits

Liabilities for wages and salaries, including non-monetary benefits and annual leave are recognised in respect of employees' services up to the reporting date, calculated as undiscounted amounts based on remuneration wage and salary rates that the entity expects to pay at the reporting date including related on-costs, such as payroll tax.

Long-term employee benefits other than pension plans

A liability for long-term employee benefits is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of service provided by employees up to the balance sheet date. Consideration is given to expected future wage and salary levels including related on-costs, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national high quality corporate bonds with terms to maturity and currency that match the estimated future cash flows.

Defined contribution plans

Payments to defined contribution retirement plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Defined benefit plans

The Group recognizes a net liability in respect of defined benefit superannuation or medical plans in the statement of financial position. The net liability is measured as the present value of the defined benefit obligation at the balance sheet date less the fair value of the plan assets belonging to the plans and represents the actual deficit or surplus in the Group's defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans ("asset ceiling").

The present value of the defined benefit obligations is based on expected future payments that arise from membership of the fund to the balance sheet date. This obligation is calculated annually by independent actuaries using the projected unit credit method. Expected future payments are discounted using market yields at the balance sheet date on high quality corporate bonds with terms to maturity and currency that match the estimated future cash flows. Any future taxes that are funded by the entity and are part of the provision of the defined benefit obligation are taken into account when measuring the net asset or liability.

Defined benefit costs are split into three categories:

• Service costs, past-service costs, gains and losses on curtailments and settlements,
• Net-interest cost or income,
• Remeasurement.

The Group presents the first component of defined benefit costs in the line item 'employee benefits expenses' and the second component in the line item 'finance expenses' in its income statement. Curtailments gains and losses are accounted for as past-service cost.

Remeasurement comprises of actuarial gains and losses on the defined benefit obligations, the effect of the asset ceiling (if applicable) and the return on plan assets (excluding interest income). These are recognized immediately in the statement of financial position with a charge or credit to Other Comprehensive Income (OCI) in the period in which they occur. Remeasurement recorded in other comprehensive income is not recycled. Those amounts recognized in other comprehensive income may be reclassified within equity. Past service costs are immediately recognized in profit or loss in the period of plan amendment and are not deferred anymore. Net-interest is calculated by applying the discount rate to the net defined benefit liability or asset.

Share-based payment compensation

The Group operates a leveraged employee stock ownership plan and an executive long-term incentive plan, which, at the Group's discretion, are equity-settled or cash-settled share-based compensation plans.

The fair value of equity instruments granted under the equity-settled plans are recognised as an employee benefit expense with a corresponding increase recognised in equity. The fair value is measured at the grant date and recognised over the period during which the eligible employees become entitled to the shares. The amount recognised as an employee benefit expense is the fair value multiplied by the number of equity instruments granted. At each balance sheet date, the amount recognised as an expense is adjusted to reflect the estimate of the number of equity instruments expected to vest, except where forfeiture is only due to the Company's share price not achieving the required target.

For cash-settled share-based payment transactions, the services received and the liability incurred are measured at the fair value of the liability at grant date. The initial measurement of the liability is recognised over the period that services are rendered. At each reporting date, and ultimately at settlement date, the fair value of the liability is remeasured with any changes in fair value recognised in the income statement for the period.

(j) Provisions

A provision is recognised if, as a result of a past event, when the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Restoration, rehabilitation and decommissioning provision

Provisions are recognised for estimated closure, restoration and environmental rehabilitation costs. These costs include the dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas in the financial year when the related environmental disturbance occurs. They are based on the estimated future cash flows adjusted for the risk relating to the uncertainty of the amount and timing of the cash flows using information available at each balance sheet date. The provision is discounted using a current market-based pre-tax discount rate that includes a risk free rate reflecting the location of the provision and a credit spread specific to the liability (note 30). The unwinding of the discount is recognised as interest expense. When the provision is established, a corresponding asset is recognised, where it gives rise to a future benefit, and depreciated over future production from the operations to which it relates.

The provision is reviewed on an annual basis for changes to costs, legislation, discount rates or other changes that impact estimated costs or lives of the operations. The carrying value of the related asset (or the income statement when no related asset exists) is adjusted for changes in the provision resulting from changes in the estimated cash flows or discount rate. The adjusted carrying value of the asset is depreciated prospectively.

Restructuring provision

A constructive obligation for a restructuring arises only when two conditions are fulfilled: a) there is a formal business plan for the restructuring specifying the business or part of a business concerned, the principal locations affected, the location, function and approximate number of employees whose services will be terminated, the expenditure to be incurred and when the plan will be implemented, b) the entity has raised a valid expectation in those affected that it will carry out the plan either by starting to implement the plan or announcing its main feature to those affected by it. Restructuring provisions include only incremental costs associated directly with the restructuring.

Other provisions

Other provisions are recognised when the Group has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation. Where the effect is material, the provision is discounted to net present value using an appropriate current market-based pre-tax discount rate and the unwinding of the discount is included in finance costs.

(k) Compound financial instruments

Compound financial instruments issued by the Group comprise:

• convertible bonds that can be converted to share capital at the option of the holder, and the number of shares to be issued is fixed; and
• perpetual securities with discretionary interest payments and contingent settlement provisions triggered upon the occurrence of events outside the control of the company and the holder.

The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity component. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component, and is included in shareholders' equity. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Convertible bonds

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequent to initial recognition.

Perpetual securities

The liability component of the perpetual securities arises from the presence of contingent settlement provisions where the contingency is outside the control of both the company and the holder. The subsequent measurement of the liability component is at amortised cost which incorporates the expected timing of the uncertain event and the amount of any potential payment discounted to the measurement date. Changes in the expectation of the timing and amount of any payments is reconsidered at each reporting date which may result in remeasurement of the financial liability through profit or loss. Distributions on Perpetual securities are recognised directly in equity.

(l) Revenue

Revenue associated with the sale of commodities is recognised when all significant risks and rewards of ownership of the asset sold are transferred to the customer, usually when insurance risk has passed to the customer and the commodity has been delivered to the shipping agent or the location designated by the customer. At this point Nyrstar retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the commodities and the costs incurred, or to be incurred, in respect of the sale can be reliably measured. Revenue is recognised, at fair value of the consideration receivable, to the extent that it is probable that economic benefits will flow to Nyrstar and the revenue can be reliably measured. Revenue is generally recognised based on incoterms ex-works (EXW) or carriage, insurance and freight (CIF). Revenues from the sale of by-products are also included in sales revenue. Revenue is stated on a gross basis, with freight included in gross profit as a deduction.

For certain commodities the sales price is determined provisionally at the date of sale, with the final price determined within mutually agreed quotation period and the quoted market price at that time. As a result, the invoice price on these sales are marked-to-market at balance sheet date based on the prevailing forward market prices for the relevant quotation period. This ensures that revenue is recorded at the fair value of consideration to be received. Such mark-to-market adjustments are recorded in sales revenue.

When Nyrstar's goods are swapped for goods that are of a similar nature and value, the swap is not regarded as a transaction that generates revenue. The outstanding balances related to these swaps are being recognised as other receivables and other payables until the swaps are fully settled. If any settlement in cash or cash equivalents occurs for value equalisation of such transactions, this settlement amount is recognised in raw materials used. When the goods swapped however are of a dissimilar nature or value from each other, the swap is regarded as a transaction that generates revenue.

(m) Finance income and expense

Finance income includes:

• Interest income on funds invested; and
• Dividend income.

Interest income is recognised as it accrues in the income statement using the effective interest rate method. Dividend income is recognised in the income statement on the date that the Group's right to receive payment is established.

Finance expenses include:

• Interest on short-term and long-term borrowings;
• Interest on other financial liabilities
• Amortisation of discounts or premiums relating to borrowings;
• Amortisation of ancillary costs incurred in connection with the arrangement of borrowings;
• Finance lease charges; and
• The impact of the unwind of discount on long-term provisions for restoration, rehabilitation and decommissioning provision and workers' compensation.
• Implied interest on metal prepayment agreements

Finance expenses are calculated using the effective interest rate method. Finance expenses incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other finance expenses are expensed as incurred.

Net finance expenses represent finance expenses net of any interest received on funds invested. Interest income is recognised as it accrues using the effective interest method.

Foreign currency gains and losses are reported on a net basis.

(n) Income tax

Income tax expense comprises current and deferred income tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case it is recognised in other comprehensive income or equity.

Current income tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred income tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred income tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and joint ventures to the extent that it is probable that they will not reverse in the foreseeable future. In addition a deferred income tax liability is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred income tax assets and liabilities are offset if there is a legally enforceable right to offset current income tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but they intend to settle current income tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred income tax asset is recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred income tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised when the distribution is expected.

Mining taxes and royalties that have the characteristics of an income tax are treated and disclosed as current and deferred income taxes.

(o) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank overdrafts are repayable on demand and are shown within borrowings in current liabilities on the consolidated statement of financial position. For the purposes of the consolidated statement of balance sheet and cash flows, cash includes cash on hand and deposits at call which are readily convertible to cash and are subject to an insignificant risk of changes in value, net of any outstanding bank overdrafts which are recognised at their principal amounts.

(p) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group entities prior to the end of the financial year which are unpaid. The amounts are unsecured and are typically paid within 30 days of recognition. These amounts are initially recognized at fair value and are subsequently carried at amortised cost.

(q) Deferred income

Deferred income consists of payments received by the Company in consideration for future physical deliveries of metal inventories and future physical deliveries of metals contained in concentrate at contracted prices. As deliveries are made, the Company recognises sales and decreases the deferred income on the basis of actual physical deliveries of the products. Revenue is recognised based on the nominal value of the future physical deliveries of metal to customers and the financing element to the advance payments is recognised in the Income Statement as interest expense applying the effective interest rate method.

(r) Trade receivables

Trade receivables represent amounts owing for goods and services supplied by the Group entities prior to the end of the financial period which remain unpaid. They arise from transactions in the normal operating activities of the Group.

Trade receivables are carried at amortised cost, less any impairment losses for doubtful debts. An impairment loss is recognised for trade receivables when collection of the full nominal amount is no longer certain.

(s) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effect(s).

(t) Earnings per share

Nyrstar presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing the profit for the period attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit for the period attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

(u) Segment reporting

Operating segments are components of the Group for which discrete financial information is available and is evaluated regularly by Nyrstar's Management Committee (NMC) in deciding how to allocate resources and assess performance. The NMC has been identified as the chief operating decision maker.

The segment information reported to the NMC is prepared in conformity with the accounting policies consistent with those described in these financial statements and presented in the format outlined in note 7.

Revenues, expenses and assets are allocated to the operating segments to the extent that items of revenue, expense and assets can be directly attributed or reasonably allocated to the operating segments. The interrelated segment costs have been allocated on a reasonable pro rata basis to the operating segments.

(v) Treasury shares

When Nyrstar reacquires its own equity instruments, the par value of treasury shares purchased is deducted from reserves. The difference between the par value of the treasury shares purchased and the amount of consideration paid, which includes directly attributable costs, is recognised as a deduction from accumulated losses. Reacquired shares are classified as treasury shares and may be acquired and held by the entity or by other members of the consolidated group. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting gain or loss on the transaction is recognised in accumulated losses.

(w) Zinc purchase interests

Streaming agreements for the acquisition of zinc concentrates are presented on the statement of financial position as zinc purchase interests. The useful life is determined with reference to the number of metric tonnes to be delivered under the contract. The asset is depleted through the income statement using the unit-of-production method, as the asset is recovered with each metric ton of zinc delivered under the contract.

(x) Loans and Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs.

To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

(y) Borrowing costs

Borrowing costs are expensed as incurred unless they relate to qualifying assets. Qualifying assets are assets that take more than 12 months to commission. In these circumstances, borrowing costs are capitalised to the cost of the assets and depreciated over the useful life of the assets. Capitalisation is based on the period of time that is required to complete and prepare the asset for its intended use.

(z) Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence and may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount.

(aa) Reverse acquisition reserve

The reverse acquisition reserve recognised in Company's reserves was recognised during the formation of Nyrstar in 2007 when one of the legal acquirees was considered to be the accounting acquirer under the rules of IFRS 3. As one of the accounting acquirees was not a business under IFRS 3, a part of the transaction was outside the scope of IFRS 3. While the concepts of reverse acquisition accounting have been applied as required, their application has not resulted in the recognition of goodwill but instead in the recognition of a 'reverse acquisition reserve' on consolidation related to the capital transaction of the accounting acquiree.

4. Critical accounting estimates and judgements

Estimates and judgements used in developing and applying the accounting policies are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. Nyrstar makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and underlying assumptions are reviewed on an ongoing basis.

The critical estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are listed below.

Going concern (note 2(a))

The Company has assessed that, taking into account its available cash and cash equivalents (including undrawn committed facilities available at the date of authorisation of the consolidated financial statements), its cash flow projections for 2017, based on the approved budgets, it has sufficient liquidity to meet its present obligations and cover working capital needs for 2017 and will remain in compliance with its financial covenants throughout this period.

The cash flow projections for 2017 incorporate the following key assumptions:

Commodity prices and foreign exchange rates

Commodity prices and foreign exchange rates were developed from externally available sources from a number of different market commentators

Production output and capital and operating costs

Based on historical results unless definitive plans are in place which are expected to have a significant effect on operations

Treatment charges

Treatment charges were developed from externally available forecasts and recent historical rates

Port Pirie Redevelopment Project

Capital costs are based on the most recent review of forecast costs to complete the project. The cash flow projections for 2017 do not include any revenue from this project

The Company has undertaken a sensitivity analysis of its liquidity testing through independently adjusting the cash flow projections for 2017 for zinc prices, treatment charges and smelter production output.

• Forecast zinc prices were adjusted to use the lowest annual average for the previous 10 years.
• Forecast treatment charge rates were adjusted to use the lowest annual average for the previous 10 years.
• Forecast smelter production output was adjusted down by 5%, a smelter production level which the Company has exceeded in each of the last 5 years.

In all cases the sensitivity analysis indicated that the Company would have sufficient liquidity to meet its present obligations and cover working capital needs for 2017 and remain in compliance with its financial covenants throughout 2017.

Classification of assets and liabilities as held for sale and discontinued operations (note 9)

The Group applies the requirements of IFRS 5: Non-current Assets Held for Sale and Discontinued Operations. The non-current assets and liabilities included in disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use, they are available for immediate disposal and the sale is highly probable. Noncurrent assets held for sale are measured at the lower of their carrying amount or fair value less costs of disposal. The classification of

the assets and liabilities as held for sale requires judgement, in particular in relation to the assessment whether the sale of the assets can be considered as "highly probable". The Group has concluded that at 31 December 2016 the sales process for the mines that have not been classified as assets held for sale and discontinued operations in Note 9 has not progress to the stage that these assets meet the requirements of IFRS 5 for the classification as assets held for sale.

Impairment of assets (note 15,16,17)

The recoverable amount of each cash-generating unit is determined as the higher of the asset's fair value less costs to sell and its value in use. These calculations require the use of estimates and assumptions such as discount rates, exchange rates, commodity prices, future capital requirements and future operating performance. For cash-generating units that comprise mining related assets, the estimates and assumptions also relate to the ore reserves and resources estimates (see below).

Recovery of deferred tax assets (note 13)

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable profits are available to utilise those temporary differences and losses, and the tax losses continue to be available having regard to the nature and timing of their origination and compliance with the relevant tax legislation associated with their recovery. In evaluating whether it is probable that taxable profits will be earned in future accounting periods, all available information is considered. The taxable profit forecasts used in this evaluation are consistent with those prepared and used internally for business planning and impairment testing purposes.

The key assumptions included in the assessment of the recoverability of the tax losses include:

i) Commodity prices, treatment charges and exchange rates consistent with those applied for impairment testing (note 17)

ii) Completion of the construction phase of the Port Pirie Redevelopment project (the "Project") in the second half of 2017

iii) Ramp up of the Project to full capacity in the second half of 2019.

The Group applied sensitivity testing by assuming a further conservative scenario (note 13).

Fair value

The Group has applied estimates and judgments in accounting for discontinued operations (note 9), revenue recognition, impairment testing (note 17), inventories (note 22), share-based payments (note 34) and for its financial assets and liabilities (note 21). Fair value measurements are estimated based on the amounts for which the assets and liabilities could be exchanged at the relevant transaction date or reporting period end, and are therefore not necessarily reflective of the likely cash flow upon actual settlements. Where fair value measurements cannot be derived from publicly available information, they are estimated using models and other valuation methods. To the extent possible, the assumptions and inputs used take into account externally verifiable inputs. However such information is by nature subject to uncertainty, particularly where comparable market based transactions rarely exist.

Determination of ore reserves and resources estimates

Estimated recoverable reserves and resources are used to determine the depreciation of mine production assets (note 15), and in performing impairment testing (note 17). Estimates are prepared by appropriately qualified persons, but will be impacted by forecast commodity prices, exchange rates, production costs and recoveries amongst other factors. Changes in assumptions may impact the carrying value of assets and depreciation and impairment charges recorded in the income statement.

Classification and measurement of the Perpetual Securities (note 27)

Significant judgement is required to classify the perpetual securities (the Securities) as compound instruments or entirely as financial liabilities (IAS 32 paragraph 25). The Securities have both equity and liability features. The equity features include discretionary coupons which the Group may pay into perpetuity. The liability features include the holder's right to request redemption of the Securities for cash

in highly specific circumstances (early redemption events) outside of the control of the Group and the holder of the Securities. The Group concluded it appropriate to adopt an accounting policy classifying the Securities as compound instruments (see notes 2(g) and 3(k)). The Group has provided additional disclosure about the terms of the Securities in note 27.

The Group has adopted a policy of initially recognising the liability component at fair value. The Group estimated the fair value of the liability based on the probability of i) the occurrence of events that must occur before an early redemption event can be triggered which give the holder a right to request redemption of the Securities, ii) the Group being unable to remedy the event and prevent an early repayment event being triggered, and iii) it being in the holder's interest to request redemption of the Securities. The Group assessed the likelihood of early redemption to be remote on the basis that all three of the above factors need to occur. Therefore, the fair value of the liability at initial recognition was assessed to be immaterial.

The subsequent measurement of the Securities is at amortised cost which requires the Group to estimate the expected timing of the uncertain event and the amount of any potential payment discounted to the measurement date.

Restoration, rehabilitation and decommissioning provision (note 30)

A provision is recognised for estimated closure, restoration and environmental rehabilitation costs. These costs include the dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas in the financial year when the related environmental disturbance occurs. They are based on the estimated future costs using information available at each balance sheet date. The provision is discounted using a current market-based pre-tax discount rate and the unwinding of the discount is recognised as interest expense. The calculation of these provision estimates requires assumptions such as application of environmental legislation, plant closure dates, available technologies and engineering cost estimates. A change in any of the assumptions used may have a material impact on the carrying value of restoration provisions.

Retirement benefits (note 31)

The expected costs of providing pensions and post employment benefits under defined benefit arrangements relating to employee service during the period are determined based on financial and actuarial assumptions. Nyrstar makes these assumptions in respect to the expected costs in consultation with qualified actuaries. When actual experience differs to these estimates, actuarial gains and losses are recognized in other comprehensive income. Refer to note 31 for details on the key assumptions.

5. Financial risk management

(a) Overview

In the normal course of business, Nyrstar is exposed to credit risk, liquidity risk and market risk, i.e. fluctuations in commodity prices, exchange rates as well as interest rates, arising from its financial instruments. Listed below is information relating to Nyrstar's exposure to each of these risks and the Group's objectives, policies and processes for measuring and managing risk and measuring capital.

The board of directors has overall responsibility for the establishment and oversight of Nyrstar's risk management framework. Nyrstar's risk management policies are established to identify and analyse the risks faced by Nyrstar, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

The audit committee is responsible for overseeing how management monitors compliance with Nyrstar's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risk faced by Nyrstar. The audit committee is supported in its oversight role by the Group's internal audit function.

(b) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Group is primarily exposed to credit risk through the non-payment from any counterparty in relation to sales of goods. In order to manage the credit exposure, Nyrstar has determined a credit policy with credit limit requests, approval procedures, continuous monitoring of the credit exposure and dunning procedure in case of delays.

Trade and other receivables

Nyrstar's exposure to credit risk is influenced mainly by the individual characteristics of each customer. Each new customer is analysed individually for creditworthiness before the standard terms and conditions are offered. Customers that fail to meet Nyrstar's benchmark creditworthiness may transact with Nyrstar only on a prepayment basis.

Nyrstar provides an allowance for trade and other receivables that represents its estimate of incurred losses in respect of trade and other receivables.

Guarantees

Nyrstar's policy is to provide financial guarantees only on behalf of wholly-owned subsidiaries. At 31 December 2016, no guarantees were outstanding to external customers (31 December 2015 : nil).

(c) Liquidity risk

Liquidity risk arises from the possibility that Nyrstar will not be able to meet its financial obligations as they fall due. Liquidity risk is being addressed by maintaining, what management considers to be, a sufficient degree of diversification of funding sources. These include committed and uncommitted short and medium term bank facilities as well as bonds (e.g. convertible bonds and fixed rate bonds), commodity prepayment agreements and perpetual securities.

Nyrstar uses different means of funding available to the company. They include equity, bonds, committed and uncommitted trade finance facilities as well as metal prepayments or a Perpetual Securities and other sources as and when they became available to the Company. Different means of funding introduce different risk associated with them. At times, certain means of funding may become unavailable to the Company. Management aims to diversify the sources of funding to spread the risk that one of the sources become unavailable to the Company.

Nyrstar is actively managing the liquidity risk in order to ensure that at all times it has access to sufficient cash resources at a cost in line with market conditions for companies with a similar credit standing. Liquidity risk is measured by comparing projected net debt levels (also including the zinc prepayment (Note 21) and perpetual securities (Note 27)) against total amount of available committed facilities. These forecasts are being produced on a rolling basis and include cash flow forecasts of all operational subsidiaries. Also the average remaining life of the committed funding facilities is monitored, at least on a quarterly basis.

The financial covenants of the existing loan agreements are monitored as appropriate in order to ensure compliance. No breach of covenants has occurred during the year.

(d) Market risk

The Group's activities expose it primarily to the financial market risks of changes in commodity prices and foreign exchange rates. The objective of market risk management is to manage and control market exposures within acceptable parameters while optimising the return.

Commodity price risk (note 36(d))

In the normal course of its business, Nyrstar is exposed to risk resulting from fluctuations in the market prices of commodities. Nyrstar regularly engages in transactional hedging which means that it undertakes short-term hedging transactions to cover the timing risk between raw material purchases and sales of metal and to cover its exposure on fixed-price forward sales of metal to customers. In addition to the transactional hedging, the Group also undertakes strategic cash flow hedging to limit downside risks related to the commodity price exposures on future production. Nyrstar reviews its hedging policy on a regular basis.

Both transactional and strategic hedging arrangements are accounted for in the "Other Financial Assets" and the "Other Financial Liabilities" line items of the statement of financial position. Any gains or losses realised from hedging arrangements are recorded within the operating result.

Foreign Currency Exchange Risk (note 36(c))

Nyrstar's assets, earnings and cash flows are influenced by movements in exchange rates of several currencies, particularly the U.S. Dollar, the Euro, the Australian Dollar, the Canadian Dollar, the Peruvian Sol, the Mexican Peso and the Swiss Franc. Nyrstar's reporting currency is the Euro, zinc, lead and other metals are sold throughout the world principally in U.S. Dollars, while Nyrstar's costs are primarily in Euros, Australian Dollars, Canadian Dollars, U.S. Dollars, Peruvian Sols, Mexican Pesos and Swiss Francs. As a result, movement of the currencies in which Nyrstar's costs are denominated against the Euro could adversely affect Nyrstar's profitability and financial position. Until the sale of the El Toqui and the El Mochito mines (note 8) Nyrstar was also exposed to the movements of the Chilean Peso and the Honduran Lempira respectively.

Nyrstar has entered into strategic foreign exchanges hedges to limit its downside exposure related to the fluctuations between the Euro and the U.S. Dollar and between the Euro and the Australian Dollar. Nyrstar also regularly enters into short-term hedging transactions to cover its transactional foreign exchange exposures.

(e) Interest rate risk

Nyrstar incurs interest rate risk primarily on loans and borrowings. This risk is limited as a result of the interest rate on borrowings such as convertible bond and fixed rate bond being fixed. Nyrstar's current borrowings are split between fixed rate and floating rate basis. All variable interest rate loans and borrowings have EURIBOR or LIBOR based interest rates. The interest rate and terms of repayment of Nyrstar's loans are disclosed in note 36(f). Changes in interest rates may impact primary loans and borrowings by changing the levels of required interest payments.

Nyrstar's interest rate risk management policy is to limit the impact of adverse interest rate movements through the use of interest rate management tools. Interest rate risk is measured by maintaining a schedule of all financial assets, financial liabilities and interest rate hedging instruments. At current Nyrstar is exposed to interest rate movements on the SCTF Credit Facility and the loans from related parties (note 36(f). Additionally, Nyrstar is also exposed to the interest rate risk on the perpetual securities, including the interest rate step ups in case the distributions are deferred (note 27). Nyrstar has not entered into interest rate derivatives.

(f) Capital management

The Board's policy is to maintain an adequate capital base so as to maintain investor, creditor and market confidence and so to sustain future development of the business. The board of directors monitors the leverage of the company and the return on capital, which Nyrstar defines as profit after tax divided by total shareholders' equity, excluding non-controlling interests.

The board of directors also assesses the appropriateness of the dividend declarations and the level of dividends to ordinary shareholders. Nyrstar's dividend policy is to ensure that whilst maintaining adequate cash flows for growth and the successful execution of its strategy, Nyrstar aims to maximize total shareholder return through a combination of share price appreciation and dividends. Pursuant to Belgian law, the calculation of amounts available for distribution to shareholders, as dividends or otherwise, must be determined on the basis of the Company's non-consolidated Belgian GAAP financial statements. In accordance with Belgian company law, the Company's articles

of association also require that the Company allocate each year at least 5% of its annual net profits to its legal reserve, until the legal reserve equals at least 10% of the Company's share capital. As a consequence of these factors, there can be no assurance as to whether dividends or similar payments will be paid out in the future or, if they are paid, their amount.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

6. Exchange rates

The principal exchange rates used in the preparation of 2016 financial statements are (in EUR):

	Annual average		Year end
	2016	2015	2016	2015
United States dollar	1.1068	1.1095	1.0538	1.0887
Australian dollar	1.4882	1.4777	1.4587	1.4897
Canadian dollar	1.4658	1.4186	1.4188	1.5116
Swiss franc	1.0901	1.0679	1.0740	1.0835

7. Segment reporting

The Group's operating segments (Metals Processing and Mining) reflect the approach of the Nyrstar Management Committee (NMC) towards evaluating the financial performance and allocating resources to the Group's operations. The NMC has been identified as the chief operating decision making group. The NMC assesses the performance of the operating segments based on a measure of 'Underlying EBITDA'.

'Underlying EBITDA' is a non-IFRS measure of earnings, which is used by management to assess the underlying performance of Nyrstar's operations and is reported by Nyrstar to provide additional understanding of the underlying business performance of its operations. Nyrstar defines "Underlying EBITDA" as profit or loss for the period adjusted to exclude loss from discontinued operations (net of income tax), income tax (expense)/benefit, share of loss of equity-accounted investees, gain on the disposal of equity-accounted investees, net finance expense, impairment losses and reversals, restructuring expense, M&A related transaction expenses, depreciation, depletion and amortization, income or expenses arising from embedded derivatives recognised under IAS 39 "Financial Instruments: Recognition and Measurement" and other items arising from events or transactions clearly distinct from the ordinary activities of Nyrstar.

The components of gross profit are non-IFRS measures which are used internally by management and are the following:

Mining's Payable/ free metal contribution is the metal price received for the payable component of the primary metal contained in concentrate before it is further processed by a smelter.

Metals Processing's Payable/free metal contribution is the value of the difference received between the amount of metal that is paid for in a concentrate and the total zinc recovered from the sale by a smelter.

Treatment charges are the fees charged for the processing of primary (concentrates) and secondary raw materials for the production of metal which is a positive gross profit element for the smelters and a deduction in the gross profit for mines.

Metals Processing's premiums is the premium charged on top of the base LME price for the sales of refined zinc and lead metals.

By-products are secondary products obtained in the course of producing zinc or lead and include primarily sulphuric acid, silver, gold, indium, copper and cadmium.

Other are other costs and revenues associated with smelting or mining operations that do not relate to the above categories.

The 'Metals processing' segment comprises of the Group's smelting operations. The 'Mining' segment comprises of the Group's mining operations. 'Other & Eliminations' contains corporate activities as well as the eliminations of the intra-group transactions including any unrealised profits resulting from intercompany transactions.

For the year ended 31 Dec 2016, EUR million	Metals Processing	Mining	Other and eliminations	Total
Revenue from external customers	2,760.8	2.4	-	2,763.2
Inter-segment revenue	0.4	144.6	(145.0)	-
Total segment revenue	2,761.2	147.0	(145.0)	2,763.2
Payable metal / free metal contribution	263.1	159.6	-	422.7
Treatment charges	370.4	(31.4)	(0.9)	338.1
Premiums	155.6	-	-	155.6
By-products	143.3	17.7	-	161.0
Other	(89.5)	(9.5)	2.9	(96.1)
Gross Profit	842.9	136.4	2.0	981.3
Employee expenses	(218.9)	(63.4)	(20.8)	(303.1)
Energy expenses	(195.3)*	(14.8)	(0.2)	(210.3)
Other expenses / income	(204.9)**	(55.5)	(16.3)	(276.7)
Direct operating costs	(619.1)	(133.7)	(37.3)	(790.1)
Non-operating and other	(1.7)	2.9	0.4	1.6
Underlying EBITDA	222.1	5.6	(34.9)	192.8
Depreciation, depletion and amortisation				(179.1)
M&A related transaction expense				(5.3)
Restructuring expense				(8.8)
Impairment loss (net)				(132.9)
Embedded derivatives				(5.2)
Net finance expense				(122.5)
Income tax expense				(16.0)
Loss from discontinued operations, net of taxes				(136.8)
Loss for the period				(413.8)
Capital expenditure	(236.5)	(40.2)	(3.1)	(279.7)

* Net of EUR 4.2 million recharge of energy costs to external parties

** Net of EUR 10.1 million recharge of other costs to external parties

For the year ended 31 Dec 2015, EUR million*	Metals Processing	Mining	Other and eliminations	Total
Revenue from external customers	3,005.6	14.8	-	3,020.4
Inter-segment revenue	0.7	297.7	(298.4)	-
Total segment revenue	3,006.3	312.5	(298.4)	3,020.4
Payable metal / free metal contribution	265.6	244.2	0.1	509.9
Treatment charges	459.9	(48.9)	-	411.0
Premiums	171.5	-	0.2	171.7
By-products	210.9	31.7	-	242.6
Other	(105.1)	(6.8)	2.2	(109.7)
Gross Profit	1,002.8	220.2	2.5	1,225.5
Employee expenses	(216.6)	(109.5)	(37.3)	(363.4)
Energy expenses	(232.7)**	(26.6)	(0.2)	(259.5)
Other expenses / income	(198.3)	(104.1)	(23.2)	(325.6)
Direct operating costs	(647.6)	(240.2)	(60.7)	(948.5)
Non-operating and other	(19.6)	(10.5)	19.8	(10.3)
Underlying EBITDA	335.6	(30.5)	(38.4)	266.7
Depreciation, amortisation and depletion				(195.5)
M&A related transaction expense				-
Restructuring expense				(11.8)
Impairment loss				(442.4)
Embedded derivatives***				13.4
Net finance expense				(110.7)
Income tax benefit				214.5
Loss from discontinued operations, net of taxes				(166.1)
Loss for the period				(431.9)
Capital expenditure	(321.9)	(92.4)	(4.7)	(419.0)

* Prior year amounts have been re-presented for the impact of the discontinued operations (note 9)

** Net of EUR 4.7 million recharge of energy costs to external parties

*** Includes a one-off gain of EUR 15.7 million on initial recognition of the new electricity delivery agreement in Hobart representing a

difference between the contractual price and the market price at the time of the execution of the agreement

Geographical information

(a) Revenues from external customers

EUR million 2016 2015 Belgium 562.3 485.2 Rest of Europe 772.3 973.4 Americas 282.7 356.1 Australia 831.2 767.0 Asia 280.5 403.1 Other 34.2 35.6 Total 2,763.2 3,020.4

The revenue information above is based on the location (shipping address) of the customer.

Sales to each individual customer (group of customers under the common control) of the Group did not exceed 10% with the exception of sales to Glencore International plc and Trafigura Group Pte. Ltd. which accounted for 27.7% and 13.3% respectively, of the total Group's sales, reported in the Metals Processing segment. (2015: Glencore International plc: 25.4%, Umicore NV/SA: 10.0% and Noble Group Ltd: 13.5%).

(b) Non-current assets

EUR million	31 Dec 2016	31 Dec 2015
Belgium	222.4	228.8
Rest of Europe	267.7	273.0
North America	267.3	379.3
Central America (incl Mexico)	7.6	84.8
South America	0.9	131.9
Australia	656.1	521.3
Total	1,422.0	1,619.1

Non-current assets for this purpose consist of property, plant and equipment and intangible assets.

8. Acquisition and disposal of business

Acquisitions

No acquisitions for the twelve months ended 31 December 2016 and for the twelve months ended 31 December 2015.

Disposals

In 2016, Nyrstar disposed of its controlling interest in the El Toqui mine and the El Mochito mine (note 9).

2016	2015
562.3	485.2
772.3	973.4
282.7	356.1
831.2	767.0
280.5	403.1
34.2	35.6
2,763.2	3,020.4

The carrying value of the assets and liabilities over which control was lost and net cash received from these disposals are detailed below:

EUR million	Note	El Toqui mine El Mochito mine		Total
Property, plant and equipment		37.8	3.6	41.4
Intangible assets		0.2	-	0.2
Other assets		-	0.4	0.4
Total non-current assets		38.0	4.0	42.0
Inventories		20.0	9.5	29.5
Trade and other receivables		5.1	4.3	9.4
Other assets		4.9	0.5	5.4
Cash and cash equivalents		0.3	0.7	1.0
Total current assets		30.3	15.0	45.3
Provisions		7.0	6.6	13.6
Employee benefits		3.4	6.2	9.6
Other non-current liabilities		4.4	-	4.4
Total non-current liabilities		14.8	12.8	27.6
Trade and other payables		6.3	5.4	11.7
Loans and borrowings		0.1	-	0.1
Employee benefits		1.7	0.4	2.1
Total current liabilities		8.1	5.8	13.9
Carrying value of net assets disposed		(45.4)	(0.4)	(45.8)
Add: cash and cash equivalents received		11.1	0.5	11.6
Add: receivables recorded in relation to the disposal		20.2	-	20.2
Add: other financial assets received on disposal	21	13.3	-	13.3
Add: Foreign currency translation gains recycled
to the income statement on the disposal		28.7	27.4	56.1
Net gain on disposal	9	27.9	27.5	55.4
Cash and cash equivalents received		11.1	0.5	11.6
Less: cash and cash equivalents disposed		0.3	0.7	1.0
Net cash received from disposal		10.8	(0.2)	10.6

9. Discontinued operations

El Toqui mine

On 27 June 2016 Nyrstar announced that it has entered into a Share Purchase Agreement (the "Agreement") to sell its El Toqui mine in Chile to Laguna Gold Limited ("Laguna"), an Australian based mining company (the "Transaction"). The Transaction closed on 3 November 2016 (the "Closing Date") at which point the Group recognised the sale of the El Toqui mine (note 8). The loss for the year relating to El Toqui up to the Closing Date has been presented under discontinued operations in the consolidated income statement. Further, an impairment loss on remeasurement to fair value less cost of disposal for El Toqui of EUR 16.2 million was recognised in the consolidated income statement. This impairment reflected the difference between the fair value of the total consideration expected to receive by the Group and the carrying value of the El Toqui disposal group.

At 31 December 2016 the Group received a Cash Consideration payable to Nyrstar of USD 12 million (EUR 11.1 million) payable in cash on the Closing Date. The Group recognised a receivable representing a net present value of the USD 13 million (EUR 11.6 million) cash payments over a four year period following the Closing Date valued at EUR 9.6 million. In addition, the Group recognised an estimated value of the expected tax refund of EUR 3.2 million and the estimated working capital adjustment of EUR 7.4 million. Finally, Nyrstar also recognised a value of EUR 13.3 million related to cash proceeds through a price participation agreement with Laguna on the first 7.9 million tonnes of ore processed at El Toqui following the Closing Date (note 21).

Nyrstar also agreed to indemnify Laguna for (i) any financial penalties relating to environmental prosecutions that existed as at the closing date of the transaction up to a maximum aggregate liability of USD 3.0 million (EUR 2.8 million) for the four years following completion of the sale, and (ii) any costs or liabilities arising out of a specified royalty dispute with a third party. Nyrstar has recognised a provision of EUR 0.8 million in relation to these risks on its balance sheet at 31 December 2016.

Prior to reclassification as disposal group held for sale, the El Toqui mine was part of the mining segment (note 7).

El Mochito mine

On 22 September Nyrstar announced that it has entered into a Share Purchase Agreement to sell its El Mochito mine in Honduras ("El Mochito") to Morumbi Resources Inc. ("Morumbi"), a Canadian based mining company, for cash consideration of USD 0.5 million (EUR 0.4 million). The transaction closed on 21 December 2016 (the "Closing Date") at which point the Group recognised the sale of the El Mochito mine (note 8). The loss for the year relating to El Mochito up to the Closing Date has been presented under discontinued operations in the consolidated income statement. An impairment loss relating to El Mochito of EUR 48.1 million was recognised at 30 June 2016 and a further impairment on remeasurement to fair value less cost of disposal of EUR 31.6 million was recognised in the consolidated income statement. This impairment reflected the difference between the fair value of the total consideration expected to receive by the Group and the carrying value of the disposal group.

In connection with the sale, Nyrstar agreed to indemnify Morumbi for any financial loss relating to certain specified legal and tax proceedings pending at the time of sale, up to a maximum aggregate liability of USD 2.0 million (EUR 1.9 million) in connection with the legal proceedings and USD 1.0 million (EUR 0.9 million) in connection with the tax proceedings.

Prior to reclassification as disposal group held for sale, the El Mochito mine was part of mining segment (note 7).

Contonga mine

On 14 December 2016 Nyrstar announced that it has entered into Share Purchase Agreements to sell its Contonga mine in Peru to subsidiaries of Glencore plc ("Glencore"), a global diversified natural resources company, for a total cash consideration of USD 21.0 million (EUR 19.9 million) (the "Transaction"). Closing of the Transaction is subject to customary closing conditions and are expected to occur in the first half of 2017. Accordingly, the Contonga mine has been classified as a disposal group held for sale from 14 December 2016 and presented as a discontinued operation. An impairment loss on remeasurement to fair value less cost to sell for Contonga of EUR 19.1 million was recognised in the consolidated income statement.

In connection with the sale of the mine, Nyrstar agreed to indemnify Glencore up to a maximum aggregate of USD 22.0 million (EUR 20.9 million) for the following: (i) for a period of six years after the completion of the sale, any unknown tax liabilities incurred prior to the completion of the sale; (ii) for a period of three years after the completion of the sale, all unknown environmental liabilities relating to events or circumstances occurring prior to the completion of the sale (except for certain liabilities specifically assumed by Glencore and set forth in the purchase agreement); (iii) for a period of 12 months after the completion of the sale, any unknown Contonga liabilities arising in relation to the period prior to the completion of the sale (other than those specifically assumed by Glencore) and any Contonga losses occurring as a result of the sale process and structure. Subject to the same USD 22.0 million (EUR 20.9 million) aggregate liability cap, Nyrstar also remains liable for 50% of all liabilities arising from an old tailings deposit in the Contonga mine to the extent that such liabilities exceed USD 8.0 million (EUR 7.6 million), and liable for all such liabilities that exceed USD 11.0 million (EUR 10.4 million).

Prior to reclassification as disposal group held for sale, the Contonga mine was part of mining segment in note 7.

Quebec mineral claims

At the same time and in connection therewith the sale of Contonga, the Group also agreed to sell various mineral claims located in Quebec, Canada to another subsidiary of Glencore for cash consideration of USD 5 million (EUR 4.7 million). Closings of the sale is subject to customary closing conditions and is expected to occur in the first half of 2017. The carrying value of the mineral claims located in Quebec is Nil.

Coricancha mine

On 20 December 2016 Nyrstar announced that it has entered into a Share Purchase Agreement to sell its Coricancha mine in Peru to Great Panther Silver Limited ("Great Panther"), a primary silver mining and exploration company listed on the Toronto Stock Exchange, for a total cash consideration of USD 0.1 million (EUR 0.1 million) plus earn-out consideration of up to USD 10 million (EUR 9.5 million) (the "Transaction"). Under the earn-out, Nyrstar will be paid 15% of the free cash-flow generated by the Coricancha mine during the 5-year period after which the Coricancha mine is cumulative free cash-flow positive from closing of the transaction. Additionally, as a part of the sales consideration Nyrstar provided a guarantee letter for a value of USD 9.7 million (EUR 9.2 million) as security in favour of the Ministerio de Energia y Minas of Peru for closure obligations of the Coricancha mine (the Mine Closure Bond"). The Mine Closure Bond is currently secured by a cash-backed account for the full exposure in favor of the issuing bank guarantor, the balance of which is included in the Company's restricted cash (note 21c). Upon closing, Nyrstar will recognise a financial liability owing to Great Panther. Should Great Panther:

• a. not close the Coricancha mine within three years of the completion of the sale, Great Panther Silver Limited must release the Company from all obligations under the Mine Closure Bond in favor of the Ministerio de Energia y Minas of Peru; or
• b. elect to close the Coricancha mine within three years of the completion of the sale, it may call upon the Company to pay the full amount of the Mine Closure Bond to off-set closure costs. Upon payment of these monies Great Panther will assume the obligations under the Mine Closure Bond and release the Company from all obligations to the Ministerio de Energia y Minas of Peru.

Upon release of Nyrstar from the Mine Closure Bond, the other financial liability shall be derecognised and the monies in the cash backed account in favour of the issuing bank guarantor shall be released to the Company at which time cash shall be reclassified from restricted cash to cash and cash equivalents.

Additionally, as a part of the sales consideration, the Company has agreed to fund certain reclamation works of the Coricancha mine of up to USD 20.0 million (EUR 19.0 million) (note 21h). The best estimate of this liability amounting to EUR 11.6 million has been included as a part of the sales consideration of the mine. Closing of the Transaction is subject to customary closing conditions and is expected to occur in the first quarter of 2017. Accordingly, the Coricancha mine has been classified as a disposal group held for sale from 20 December 2016 and presented as a discontinued operation. An impairment loss on remeasurement to fair value less cost to sell for Coricancha of EUR 18.4 million was recognised in the consolidated income statement.

Nyrstar also agreed to indemnify Great Panther for any fines or sanctions arising from administrative, judicial or arbitration proceedings or regulatory actions relating to Coricancha existing at the time the sale is completed. Nyrstar's maximum liability under this indemnity is limited to USD 4.0 million (EUR 3.8 million) in connection with any amounts paid or payable under proceedings or actions not under appeal from Nyrstar at the time the sale is completed, but is unlimited in the case of any which are under appeal by Nyrstar at that time. The maximum aggregate amount recoverable by Great Panther from Nyrstar under the indemnities in the share purchase agreement are limited to (i) the sum of the purchase price and any earn-out consideration paid to Nyrstar, (ii) a USD 1.5 million (EUR 1.4 million) payment previously made to Nyrstar by Great Panther in 2015 as consideration for an option to purchase the Coricancha mine, and (iii) the amount outstanding under the mine closure bond.

Prior to reclassification as disposal group held for sale, the Coricancha mine was part of mining segment in note 7.

Income statement from discontinued operations:

EUR million	Note	2016	2015
Revenue		108.7	118.7
Raw materials used		(0.2)	(0.3)
Freight expense		(6.5)	(8.2)
Gross profit		102.0	110.2
Other expenses		(104.0)	(124.6)
Depreciation, amortisation and depletion		(28.4)	(55.8)
Impairment loss *		(48.1)	(121.6)
Impairment loss on remeasurement to fair value less cost to sell **		(85.3)	-
Result from operating activities		(163.8)	(191.8)
Finance income		(0.3)	-
Finance expense		(3.0)	(3.8)
Net foreign exchange (loss) / gain		(1.6)	(0.8)
Net finance expense		(4.9)	(4.6)
Gain on the disposal of subsidiaries	8	55.4	-
Loss before income tax		(113.3)	(196.4)
Income tax (expense) / benefit		(23.5)	30.3
Loss for the period from discontinued operations		(136.8)	(166.1)

(*) Represents the impairment loss of the El Mochito mine recognised at 30 June 2016 (**) Includes impairment loss on remeasurement to fair value less cost to sell for El Toqui of EUR 16.2 million, El Mochito EUR 31.6 million, Contonga EUR 19.1 million and Coricancha EUR 18.4 million

Cash flows from discontinued operations:

EUR million	2016	2015
Cash flow from operating activities	(30.4)	(9.2)
Cash flow used in investing activities	(19.2)	(39.9)
Cash flow used in financing activities	(0.5)	(1.3)
Net decrease in cash held	(50.1)	(50.3)

Details of assets and liabilities held for sale at 31 December 2016:

EUR million	as at 31 Dec 2016
Property, plant and equipment	28.4
Intangible assets	0.3
Total non-current assets	28.7
Inventories	5.6
Trade and other receivables	4.1
Prepayments	0.4
Current income tax assets	0.1
Cash and cash equivalents	2.4
Total current assets	12.6
Total assets	41.3
Provisions	19.8
Total non-current liabilities	19.8
Trade and other payables	5.9
Current income tax liabilities	0.1
Provisions	2.4
Employee benefits	0.6
Total current liabilities	9.0

Total liabilities 28.7

Nyrstar remains committed to the disposal of the remaining mines, however, will only consider offers which in management's view reflects the continued improvement in the zinc market. The Group's remaining mines include Langlois and Myra Falls in Canada, Tennessee Mines in the USA and Campo Morado in Mexico. Several parties have recently expressed interest in Langlois and have commenced due diligence procedures. Discussions with interested parties has continued in relation to Myra Falls and due diligence procedures are continuing. New interest parties have commenced phase one due diligence procedures in relation to the Tennessee Mines. The Group is in advanced negotiations with two interested parties for the sale of Campo Morado despite the ongoing security issues in the Mexican State of Guerrero.

However, at 31 December 2016 the sale of Nyrstar's remaining mining assets could not be considered highly probable as defined by IFRS 5: "Non-current assets held for sale and discontinued operations"

10. M&A related transaction expense

Merger and acquisition (M&A) related expense include the acquisition and disposal related direct transaction costs (e.g. advisory, accounting, tax, legal or valuation fees paid to external parties). The M&A related transaction expense in the 2016 income statement amounts to EUR 5.3 million (2015: EUR 0 million). The costs incurred in 2016 relate to the disposal of the mining assets of the Group.

11. Employee benefits expense EUR million 2016 2015 Wages and salaries (265.0) (321.7) Compulsory social security contributions (23.7) (24.6) Contributions to defined contribution plans (4.2) (4.4) Expenses related to defined benefit plans (7.4) (8.3) Equity and cash settled share based payment transactions, incl. social security (2.8) (4.4) Total employee benefits expense (303.1) (363.4) 12. Finance income and expense EUR million 2016 2015 Interest income 1.6 1.4 Total finance income 1.6 1.4 Interest expense (79.6) (84.6) Unwind of discount in provisions (7.7) (8.3) Other finance charges (31.4) (20.1) Total finance expense (118.7) (113.0) Net foreign exchange (loss) / gain (5.4) 0.9 Net finance expense (122.5) (110.7)

13. Income tax

(a) Income tax recognised in the income statement

Current income tax (expense) / benefit	(19.3)	7.7
Deferred income tax (expense) / benefit	(20.2)	237.1
Total income tax (expense) / benefit	(39.5)	244.8
of which:
Income tax (expense) / benefit from continuing operations	(16.0)	214.5

2016	2015
(19.3)	7.7
(20.2)	237.1
(39.5)	244.8
(16.0)	214.5
(23.5)	30.3

	2016	2015
	(265.0)	(321.7)
	(23.7)	(24.6)
	(4.2)	(4.4)
	(7.4)	(8.3)
ecurity	(2.8)	(4.4)
	(303.1)	(363.4)

2015	2016
1.4	1.6
1.4	1.6
(84.6)	(79.6)
(8.3)	(7.7)
(20.1)	(31.4)
(113.0)	(118.7)
0.9	(5.4)
(110.7)	(122.5)

(b) Reconciliation of effective tax rate

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

EUR million	2016	2015
Loss before income tax	(374.3)	(676.7)
Tax at aggregated weighted average tax rate	118.3	234.5
Aggregated weighted average income tax rate	31.6%	34.7%
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Non-taxable amounts	4.2	130.6
Non-recognition and other adjustments to tax losses and temporary differences	(89.5)	(133.0)
Overprovision for previous years	0.8	18.3
Unrecoverable withholding tax	(0.9)	(0.9)
Net adjustment to deferred tax balances due to tax rate change in foreign
jurisdiction	(0.2)	(3.9)
Tax rate impact from discontinued operations	(72.0)	-
Foreign exchange differences	1.2	-
Other	(1.4)	(0.8)
Total income tax (expense) / benefit	(39.5)	244.8
Effective income tax rate	-10.6%	36.2%

The change in the aggregate weighted average income tax rate compared to the year ended 31 December 2015 is due to the variation in the weight of subsidiaries' profits.

Nyrstar recognised an income tax expense for the year ended 31 December 2016 of EUR 39.5 million representing an effective income tax rate of -10.6% (for the year ended 31 December 2015: 36.2%). The tax rate is impacted by the results of impairment testing undertaken in the period and the associated recognition of deferred tax assets. Further, the effective tax rate has been impacted by losses incurred by the Group, including the discontinued operations, for which no tax benefit has been recognised.

(c) Income tax recognised in other comprehensive income

EUR million	2016	2015
Income tax benefit / (expense) recognised on cash flow hedges	0.9	(10.1)
Income tax expense recognised on defined benefits pension schemes	(2.5)	(0.6)
Total income tax recognised directly in other comprehensive income	(1.6)	(10.7)

(d) Recognised deferred income tax assets and liabilities

Deferred tax assets and liabilities consist of temporary differences attributable to:

EUR million	31 Dec 2016	31 Dec 2015
ASSETS:
Employee benefits	28.0	25.0
Provisions	16.1	37.5
Property, plant and equipment	-	1.8
Payables / receivables	(0.7)	-
Tax losses carried forward	348.4	358.7
Other	0.3	0.5
Total	392.1	423.5
Set off of tax	(49.1)	(74.2)
Deferred tax assets	343.0	349.3
LIABILITIES:
Embedded derivatives	(17.8)	(10.4)
Property, plant and equipment	(109.1)	(143.3)
Payables / receivables	(5.1)	(2.4)
Other	(4.9)	(5.3)
Total	(136.9)	(161.4)
Set off of tax	49.1	74.2
Deferred tax liabilities	(87.8)	(87.2)
Deferred tax - net	255.2	262.1
INCOME STATEMENT:
Employee benefits	5.8	(1.4)
Provisions	(22.6)	(5.1)
Property, plant and equipment	30.8	138.9
Payables / receivables	(2.5)	(4.5)
Tax losses carried forward	(9.8)	122.9
Embedded derivatives	(7.8)	(0.3)
Change in consolidation scope	(11.7)	-
Other	(2.4)	(13.4)
Total	(20.2)	237.1
Reconciliation of deferred tax - net:
As at 1 Jan	262.1	23.5
Deferred income tax (expense) / benefit	(20.2)	237.1
Recognised in OCI	(1.6)	(10.7)
Deferred tax from disposed operations	4.2	-
Provision for unrealized foreign exchange result	(1.1)	3.6
Currency translation effects	11.8	8.6
As at 31 Dec	255.2	262.1

EUR 343.0 million (31 December 2015: EUR 354.6 million) of the net deferred tax assets arise in entities that have been loss making in 2016 or in 2015, respectively.

In evaluating whether it is probable that taxable profits will be earned in future accounting periods, all available evidence was considered including the analysis of historical operating results and the assessment of the approved budgets, forecasts and business plans. The forecasts are consistent with those prepared and used internally for business planning and impairment testing purposes.

The most significant net deferred tax assets arise in the Company's subsidiaries in the USA, Switzerland and Canada where the Company has recognised a net deferred tax asset of EUR 98.3 million, EUR 234.5 million and 8.0 million, respectively.

US tax group

US tax law allows for a twenty year carry-forward period for tax losses. The Company has evaluated the latest forecast for its US fiscal unity which includes both the smelting and the mining operations of the Company in the USA. The assessment considered the underlying reasons for historical tax losses, likelihood of the losses to repeat in the future based on Company's financial models, nature and predictability of the future taxable income in the Company's US fiscal unity and the impact of the time restriction to utilise the tax losses in the USA. The recoverability of the tax losses is largely supported by the expected future profitability of the Clarksville smelter which has a history of operating profits that are stable and predictable. In addition, East Tennessee mines generated a taxable profit for 2016 which is expected to continue primarily due to favourable zinc prices. The Group has limited the expected profitability of the East Tennessee mines to the next five years on the basis that this is the period that reflects the Group's detailed mine plan and only includes resources which have the highest level of geological confidence of extraction. The Middle Tennessee mines are being restarted from being on care and maintenance with the costs of the ramp-up being included in the assessment. Based on the assessment the Company has determined that it is probable that the available deferred tax assets related to the tax losses incurred in the USA will be fully utilised before expiring.

Switzerland

Swiss tax law allows for a seven year carry-forward period for tax losses. The Company's Swiss subsidiary is the marketing entity for the Metal Processing segment. Therefore, the profitability of the Swiss subsidiary is closely linked to the profitability of the Company's Metals Processing segment. The unused tax losses recognised in the Swiss subsidiary primarily resulted from impairing its investments in the mining assets. The investments in the mining assets held by Company's Swiss subsidiary have been substantially impaired and therefore no further impairment losses are expected to be incurred.

The Group has assessed the recoverability of the deferred tax asset in the Swiss subsidiary. The assessment considered the underlying reasons for historical tax losses, likelihood of the losses to repeat in the future, nature and predictability of the future taxable income of the Swiss subsidiary and the impact of the time restriction to utilise the tax losses in Switzerland. Based on the evaluation of the forecasts of the Swiss subsidiary it was determined that it is probable that taxable profits will be available in the future against which recognised tax assets can be utilised before expiring. The Group expects to fully utilise the recognised tax losses within six years.

The key assumptions included in the assessment of the recoverability of the tax losses previously incurred by the Swiss entity are those that drive the profitability of the Metal Processing Segment. The key assumptions include:

i) Commodity prices, treatment charges and exchange rates consistent with those applied for impairment testing (note 17)

ii) Completion of the construction phase of the Port Pirie Redevelopment project (the "Project") in the second half of 2017

iii) Ramp up of the Project to full capacity in the second half of 2019.

The Group applied sensitivity testing by assuming a further conservative scenario. This scenario assumed a 30% reduction in the forecasted profitability of the Project. Based on this scenario, the Group expects to fully utilise the recognised tax losses within seven years.

Canada

The Company has also recognised a net deferred tax asset of EUR 8.0 million related to losses incurred by the Langlois mine in Canada. Canadian tax law allows for a twenty year carry-forward period for tax losses. The Langlois mine generated a taxable profit for 2016 which is expected to continue primarily due to favourable zinc prices. The Group has limited the expected profitability of the Langlois mine to the next five on the basis that this is the period that reflects the Group's detailed mine plan and only includes resources which have the highest level of geological confidence of extraction. Based on the assessment the Company has determined that it is probable that the available deferred tax assets related to the tax losses incurred in Canada will be fully utilised before expiring.

(e) Unrecognised deductible temporary differences and tax losses

EUR million	Net deductible temporary differences	Tax loss carry forward	Total Dec 31, 2016	Net deductible temporary differences	Tax loss carry forward	Total Dec 31, 2015
No expiration date	448.4	414.0	862.4	375.2	250.3	625.5
Expiration date within 4 years	-	70.4	70.4	-	20.6	20.6
Expiration date 4 to 7 years	-	394.8	394.8	-	-	-
Expiration date over 7 years	-	-	-	-	113.4	113.4
Total	448.4	879.2	1,327.6	375.2	384.3	759.5

(f) Unremitted earnings

As at 31 December 2016, positive unremitted earnings of EUR 1,058.6 million (31 December 2015: EUR 1,127.7 million) have been retained by subsidiaries and associates for reinvestment. No provision is made for income taxes that would be payable upon the distribution of such earnings.

(g) Tax audit

Nyrstar periodically assesses its liabilities and contingencies for all tax years open to audit based upon the latest information available. The Company is currently subject to ongoing tax audits, inquiries and litigation with the tax authorities in a number of jurisdictions. For the matters where it is probable that additional tax expenses will be incurred, the Company recorded provisions representing its best estimate of these tax expenses, including related interest charges. For the matters where the Company has determined it is not probable that additional tax expenses will be incurred, no provision has been recognised.

Since in certain jurisdictions some of the circumstances that are subject to tax audits are still in existence at 31 December 2016, similar arguments may be put forward by the tax authorities for additional years that are currently not under audit, which may lead to significant tax expenses in the future. For these matters, the best estimate of the quantifiable possible exposure as at 31 December 2016 is between Nil and EUR 73 million. Although Nyrstar cannot estimate the risk related to these tax matters as remote, it does not consider it probable that these tax matters will result in additional tax liabilities to the Company. Therefore, it has not recognised a provision in respect of these matters.

As a part of tax dispute procedures referred to above, Nyrstar Netherlands (Holdings) BV is challenging a corrective corporate income tax assessment relating to an intra-group reorganisation in the year ended 31 December 2010. Further, Nyrstar Belgium NV is challenging an assessment relating to the non-deductibility of interest expenses incurred in the year ended 31 December 2012. Despite the recent court decision in first instance in favour of the tax authorities' position, Nyrstar continues to defend itself in court and remains confident that it has a strong position which will prevail in the next instances. No provision has been recognised for either dispute.

The final outcome of tax examinations may result in a materially different outcome compared to the recorded tax liabilities and contingencies.

14. Other expense

EUR million	2016	2015
Stock movement conversion costs	(1.7)	(9.5)
Other tax expense	(11.0)	(11.2)
Travel expense	(3.6)	(4.6)
Operating lease	(10.4)	(13.4)
Insurance expense	(5.9)	(6.8)
Royalties	-	(3.3)
Communication expenses	(2.8)	(3.3)
IT costs	(2.2)	(1.7)
Memberships/subscriptions	(1.9)	(1.7)
Training	(1.4)	(1.8)
Other	(9.0)	(10.5)
Total other expenses	(49.9)	(67.8)

15. Property, plant and equipment

EUR million	Note	Land and buildings	Plant and equipment	Mining properties and development	Under construction	Cyclical maintenance and other	Total
Cost		181.6	1,639.8	803.9	482.6	146.1	3,254.0
Accumulated depreciation and impairment		(49.6)	(991.3)	(689.8)	-	(107.3)	(1,838.0)
Carrying amounts		132.0	648.5	114.1	482.6	38.8	1,416.0
As at 1 Jan 2016		144.2	721.2	290.4	404.3	47.7	1,607.8
Disposal of subsidiaries		(0.1)	(34.8)	(2.5)	(3.6)	(0.4)	(41.4)
Additions		2.3	35.3	-	229.2	11.9	278.7
Restoration provision adjustments	30	-	-	22.9	-	-	22.9
Transfers		16.9	97.7	24.9	(147.1)	6.7	(0.9)
Disposals		(0.1)	(0.4)	-	-	-	(0.5)
Depreciation expense		(9.5)	(134.8)	(29.0)	-	(28.5)	(201.8)
Reclassified to assets held for sale		(4.9)	(2.5)	(13.3)	(7.7)	-	(28.4)
Impairment	17	(18.9)	(45.9)	(186.6)	(2.3)	1.3	(252.4)
Currency translation effects		2.1	12.7	7.3	9.8	0.1	32.0
As at 31 Dec 2016		132.0	648.5	114.1	482.6	38.8	1,416.0

				Mining properties		Cyclical
EUR million	Note	Land and buildings	Plant and equipment	and development	Under construction	maintenance and other	Total
Cost		197.3	1,800.8	1,207.4	404.3	166.7	3,776.5
Accumulated depreciation and impairment		(53.1)	(1,079.6)	(917.0)	-	(119.0)	(2,168.7)
Carrying amounts		144.2	721.2	290.4	404.3	47.7	1,607.8
As at 1 Jan 2015		140.8	804.5	738.2	161.2	72.6	1,917.3
Additions		3.6	33.4	7.3	369.0	2.5	415.8
Restoration provision adjustments	30	-	-	(4.2)	-	-	(4.2)
Transfers		8.1	48.3	53.1	(115.9)	8.5	2.1
Disposals		(0.4)	(1.2)	-	-	-	(1.6)
Depreciation expense		(8.4)	(147.6)	(61.2)	-	(27.9)	(245.1)
Impairment	17	(3.5)	(35.2)	(486.4)	(12.1)	(10.0)	(547.2)
Currency translation effects		4.0	19.0	43.6	2.1	2.0	70.7
As at 31 Dec 2015		144.2	721.2	290.4	404.3	47.7	1,607.8

The carrying amount of property, plant and equipment accounted for as finance lease assets at 31 December 2016 is EUR 0.6 million and is classified as plant and equipment (2015: EUR 1.4 million). The carrying amount of exploration and evaluation expenditure at 31 December 2016 is EUR 8.9 million and is included in mining properties and development (2015: EUR 8.0 million). The additions (including transfers from under construction) to the carrying amount of the exploration and evaluation expenditure during 2016 were EUR 4.7 million (2015: EUR 13.5 million).

The total gains on sales of property, plant and equipment in the 2016 income statement amount to EUR 1.9 million (2015: EUR 2.6 million).

16. Intangible assets

EUR million	Note	Emission and carbon rights	Software and other	Total
Cost		1.1	40.2	41.3
Accumulated amortisation and impairment		-	(35.3)	(35.3)
Carrying amounts		1.1	4.9	6.0
As at 1 Jan 2016		1.4	9.9	11.3
Additions*		0.8	0.3	1.1
Transfers		-	0.9	0.9
Disposals		(1.2)	-	(1.2)
Amortisation expense		-	(5.7)	(5.7)
Impairment	17	-	(0.4)	(0.4)
Currency translation effects		0.1	(0.1)	-
As at 31 Dec 2016		1.1	4.9	6.0

* EUR 0.8 million relate to non-cash recognition of emission and carbon rights.

EUR million	Note	Emission and carbon rights	Software and other	Total
Cost		1.4	42.4	43.8
Accumulated amortisation and impairment		-	(32.5)	(32.5)
Carrying amounts		1.4	9.9	11.3
As at 1 Jan 2015		1.4	12.6	14.0
Additions*		2.6	0.5	3.1
Transfers		(0.3)	2.4	2.1
Disposals		(2.4)	-	(2.4)
Amortisation expense		-	(6.2)	(6.2)
Impairment	17	-	(0.6)	(0.6)
Currency translation effects		0.1	1.2	1.3
As at 31 Dec 2015		1.4	9.9	11.3

* EUR 2.6 million relate to non-cash recognition of emission and carbon rights.

17. Impairment

In the year ended 31 December 2016 Nyrstar recognised pre-tax net impairment losses of EUR 266.3 million (2015: 564.0 million). The majority of the impairment losses relate to pre-tax impairment charges on Nyrstar's Mining assets. The remaining 2015 impairment charges related to non-core operations of the Group of EUR 16.0 million.

The allocation of the impairment charges for the period to individual assets, cash generating units and operating segments is outlined below:

2016

in EUR million		whereof
Continuing operations	Impairment (loss) / reversal	PP&E and Intangible assets	Investments	Other
Campo Morado	(7.4)	(1.1)	-	(6.3)
Myra Falls	(62.1)	(62.1)	-	-
Middle Tennessee Mines	(30.7)	(30.7)	-	-
Pucarrajo	(14.1)	(14.1)
Langlois	(18.6)	(18.6)	-	-
Mining	(132.9)	(126.6)	-	(6.3)
Total continuing operations	(132.9)	(126.6)	-	(6.3)
		(note 15,16)	(note 18, 19)
Discontinued operations (note 9)
El Mochito	(79.7)	(73.7)	-	(6.0)
El Toqui	(16.1)	(16.2)	-	-
Contonga	(19.2)	(18.1)		(1.0)
Coricancha	(18.4)	(18.0)	-	(0.4)
Total discontinued operations	(133.4)	(126.0)	-	(7.4)
Total	(266.3)	(252.6)	-	(13.7)

in EUR million			whereof
Continuing operations	Impairment (loss) / reversal	PP&E and Intangible assets	Investments	Other
Campo Morado	(375.9)	(375.9)	-	-
Myra Falls	(34.7)	(34.7)	-	-
Middle Tennessee Mines	(10.1)	(10.1)	-	-
Langlois	(5.7)	(5.7)	-	-
Mining	(426.4)	(426.4)	-	-
Investments in equity accounted investees	(12.3)	-	(12.3)	-
Investments in equity securities	(6.9)	-	(6.9)	-
Other	3.2	-	-	3.2
Other non-core assets of the Group1	(16.0)	-	(19.2)	3.2
Total continuing operations	(442.4)	(426.4)	(19.2)	3.2
Discontinued operations (note 9)
El Mochito	(67.1)	(67.1)	-	-
El Toqui	(54.3)	(54.3)	-	-
Peruvian mines	(0.2)	-	-	(0.2)
Total discontinued operations	(121.6)	(121.4)	-	(0.2)
Total	(564.0)	(547.8)	(19.2)	3.0
		(note 15,16)	(note 18, 19)

1 Other non-core assets of the Group are not allocated to operating segments and are included in Other and eliminations in Note 7

Impairment testing for mining operations (Continuing operations)

Recoverable values were determined in their functional currencies on the basis of fair value less cost of disposal (FVLCD) for each operation. The FVLCD for Mining operations were determined as the present value of the estimated future cash flows (expressed in real terms) expected to arise from the continued use of the assets (life of asset), including reasonable forecast expansion prospects and using assumptions that an independent market participant would take into account. These cash flows were discounted using a real after-tax discount rate that reflected current market assessments of the time value of money and the risks specific to the operation. The FVLCD measurement represents in its entirety Level 3 of the fair value hierarchy. Management projected the cash flows over the expected life of the mines, which varied from 8 to 15 years. The Company has also considered the current status and the current outcomes of its mining divestment process on the recoverable amounts of its existing mines.

The key assumptions underlying the FVLCD were forecast commodity prices, foreign exchange rates, treatment charges, discount rates, amount of inferred resources, production assumptions and capital and operating costs.

Commodity price and foreign exchange forecasts were developed from externally available forecasts from a number of different market commentators. A broad range of externally available reputable forecasts were utilised in establishing the robust composite price sets. Equal weighting was applied to each of the individual forecasts in order to exclude any bias. The metal prices applied in the impairment assessment varied in accordance with the year the sale of production was expected to occur with long term prices held flat effective from 2022. The ranges of prices used are outlined in the table below showing the high and low prices over the period of assumed cash flows:

2016

	Low	High	Long term
Commodity prices (USD)
Zinc (per tonne)	2,340	2,859	2,340
Lead (per tonne)	2,018	2,243	2,018
Copper (per tonne)	5,300	6,287	6,287
Gold (per ounce)	1,212	1,278	1,212
Silver (per ounce)	17	29	19
Foreign exchange rates (versus USD)
Canadian Dollar	1.31	1.34	1.31

2015

	Low	High	Long term
Commodity prices (USD)
Zinc (per tonne)	1,801	2,503	2,482
Lead (per tonne)	1,747	1,842	1,747
Copper (per tonne)	4,903	6,907	6,907
Gold (per ounce)	1,124	1,256	1,256
Silver (per ounce)	15	19	19
Foreign exchange rates (versus USD)
Mexican Peso	17.10	17.10	17.10
Canadian Dollar	1.38	1.40	1.38
Honduran Lempira	22.90	23.69	23.69
Peruvian Nuevo Sol	3.50	3.93	3.93
Chilean Peso	721.58	765.76	765.76

Zinc treatment charge assumptions are determined by reference to benchmark treatment charges and historical treatment charge rates as a proportion of the associated metal price and range from 4% to 9% (2015: 9% to 11%) of the underlying metal price.

Discount rates are determined using a weighted average cost of capital methodology on an operation specific basis. The discount rates applied for operations with impairment charges on property, plant and equipment are outlined in the table below:

	Discount rates 2016	Discount rates 2015
Campo Morado	12.70%	12.10%
El Mochito	-	13.00%
El Toqui	-	9.20%
Langlois / Myra Falls	8.50%	8.10%
Middle Tenneessee Mines	8.00%	7.80%

Production assumptions and capital and operating costs are determined based on approved budgets and forecasts with greater weight given to historical results unless definitive plans are in place for capital projects which are expected to have a significant, favourable effect on the operation. In such circumstances, expenditures associated with the capital project are incorporated into the FVLCD model.

Nyrstar has included inferred mineral resources in its valuation models. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on more limited information than indicated and measured mineral resources. Due to the uncertainty that may be attached to inferred mineral resources it cannot always be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration. Due to

this uncertainty, Nyrstar has not included 100% of inferred resources in its model, but instead included differing levels of inferred resources for each mine based on management's view of the likely conversion of inferred resources into reserves at that asset.

The carrying values of net assets of each mining CGU at 31 December 2016 are outlines in the table below:

EUR million

Cash generating unit		Total assets	Total liabilities	Net assets
Campo Morado	FVLCD	9.6	(9.6)	-
Myra Falls	FVLCD	69.7	(51.2)	18.5
Middle Tennessee Mines	FVLCD	35.9	(9.2)	26.7
East Tennessee Mines	FVLCD	121.4	(20.6)	100.8
Pucarrajo	FVLCD	2.7	(15.7)	(13.0)
Langlois	FVLCD	124.2*	(33.5)	90.7

* Includes deferred tax assets of EUR 10.3 million relating to tax losses carried forward which have been assessed for recoverability under IAS 12 (note 13)

Sensitivity analysis

The results of the impairment testing are affected by changes in commodity prices, foreign exchange rates, discount rates and rate of utilisation of inferred resources. Sensitivities to variations in relevant assumptions are depicted in the following table, which sets out the estimated impact on the impairment charges for the financial year ended 31 December 2016 (in EUR million):

Parameter	Variable	EUR million
Zinc price	+/- 30%	99 / (187)
Lead price	+/- 10%	2 / (2)
Copper price	+/- 10%	14 / (14)
Gold price	+/- 10%	15 / (15)
Silver price	+/- 10%	10 / (10)
Foreign exchange rates	+/- 10%	56 / (27)
Discount rate	+ 100bps	(7)
Utilisation of Inferred Resources	- 10%	(5)

Impairment charges related to mining operations (Continuing operations)

Based on the results of its impairment testing at 31 December 2016, the Group has recorded impairment losses related to its continued mining operations totalling of EUR 132.9 million (2015: EUR 442.4 million). The impairment of the Myra Falls mine in Canada and the Campo Morado mine in Mexico was based on the current status of the sales process for the respective mines, comparable market transactions which included recent Nyrstar mine sales, and continued uncertainty related to the restart of the mines. The Langlois mine impairment recognised during 2016 reflected the most recent operational assumptions, and comparable market transactions which included recent Nyrstar mine sales. The Mid Tennessee mines impairment recognised during 2016 reflected the most recent operational assumptions for the mine, and the risks and related costs associated with the mine production ramp up after coming out of care and maintenance in 2016. The impairment in the Puccarajo mine in Peru reflects the decision to close the mine.

In 2016 the Company has also recorded impairment losses related to its discontinued mining operations totalling of EUR 133.4 million (2015: EUR 121.6 million) (note 9).

Other non-core assets of the Group

In the year ended 31 December 2016 Nyrstar recognised impairment losses of EUR nil (2015: EUR 19.8 million) on Group's non-core assets. In 2015, the impairment of EUR 12.3 million on the Group's 22.0% investment in Ironbark Zinc Limited was primarily as a result of the application of the most recent commercial assumptions.

During 2015 Nyrstar recognised a reversal of impairment of EUR 3.8 million in relation to a partial repayment of the previously fully impaired loan facility up to a maximum amount of EUR 20 million that was made available to Talvivaara Sotkamo Limited ("Talvivaara"), a subsidiary of Talvivaara Mining Company Plc in 2014 (Note 19).

18. Investments in equity accounted investees

EUR million	Ownership 2016 / 2015	31 Dec 2016	31 Dec 2015
Ironbark Zinc Ltd1	19.3% / 22.0%	3.3	3.3
Other	49% / 49%	0.1	0.1
Total		3.4	3.4

1 Impairment losses totalling EUR 12.3 million were recorded in connection with Ironbark Zinc Ltd during the year ended 31 December 2015, refer to Note 16.

Summary financial information for equity accounted investees, adjusted for the percentage ownership held by the Group, is as follows:

EUR million	Current assets	Non-current assets	Current liabilities	Non-current liabilities	Revenues	Profit/(Loss)
As at 31 Dec 2016	0.4	5.8	-	-	-	-
As at 31 Dec 2015	0.4	6.4	-	-	-	(0.1)

The fair value (based on the quoted bid prices in an active market, a Level 1 measurement) of Nyrstar's share of Ironbark Zinc Ltd as of 31 December 2016 is EUR 6.0 million (2015: 3.3 million).

19. Investments in equity securities

EUR million	31 Dec 2016	31 Dec 2015
Herencia Resources Ltd1	0.2	0.2
Qualified Environmental Trust	18.6	17.1
Exeltium SAS1	1.5	1.5
Other1	2.1	2.1
Total	22.4	20.9

¹ Impairment losses totalling EUR 6.9 million were recorded in connection with Herencia Resources Ltd., Exeltium SAS and other investments in equity securities during the year ended 31 December 2015 refer to note 17.

All investments in equity securities are measured at level 1 under the fair value measurements using quoted bid prices in an active market (refer to note 34g for further explanation), with the exception of Exeltium SAS, which is a private company and carried at cost.

20. Zinc purchase interest

2015

In August 2015 the Finnish State-owned Terrafame Mining acquired Talvivaara's mining business and assets. In November 2015 Nyrstar assigned all its rights, title, benefits and interest under the Talvivaara Zinc Streaming Agreement to Terrafame for a partial repayment of EUR 3.8 million related to the loan facility up to a maximum amount of EUR 20.0 million that was made available to Talvivaara in 2014.

21. Other financial assets and liabilities

31 Dec 2016	31 Dec 2015
36.5	13.4
111.7	84.6
5.4	7.0
11.7	-
165.3	105.0
16.7	3.1
5.5	23.2
5.2	12.3
0.6	-
2.1	-
22.7	21.4
52.8	60.0
85.2	134.5
85.2	134.5
3.5	12.0
18.8	-
85.2	-
2.8	5.3
-	0.1
11.6	-
121.9	17.4

(a) Instruments used by Nyrstar to manage exposure to currency and commodity price risk exposures

The fair value of derivatives (commodity contracts) hedging inventories and fixed forward sales contracts resulted in a net asset of EUR 13.2 million (31 December 2015: net liability of EUR 8.9 million) being recognised on the statement of financial position.

Carrying amounts of the hedged items of inventory as well as the firm commitments for fixed forward sales contracts are disclosed in note 22 and 23, respectively.

The fair value of foreign exchange derivatives that are commercially effective hedges but do not meet the strict IFRS hedge effectiveness criteria, are classified as held for trading and resulted in a net asset of EUR 2.4 million (31 December 2015 net asset: EUR 7.0 million).

The Group's exposure to currency and commodity risk related to other financial assets and liabilities is disclosed in note 36.

(b) Embedded derivatives

The change in fair value on the effective portion of the Group's embedded derivatives during the year ended 31 December 2016 with a pre-tax positive impact of EUR 28.9 million (31 December 2015: positive impact of EUR 19.9 million) was recognised in the cash flow hedge reserve whilst changes in fair value on the ineffective portion and amortisation of the swap's fair value at inception of EUR 5.2 million loss (31 December 2015: EUR 13.4 million gain) were recognised in the income statement within energy expense.

(c) Restricted cash

The restricted cash balance of EUR 111.7 million as at 31 December 2016 (31 December 2015: EUR 84.6 million) represents amounts placed on deposit to cover certain reclamation costs for the mining operations.

The balance includes an amount of AUD 30.0 million (EUR 20.6 million) (2015: AUD 30.0 million or EUR 20.1 million) which represents a Minimum Cash Balance that the Company agreed to keep in its subsidiary, Nyrstar Port Pirie Pty Ltd's bank account until the Perpetual Securities (note 27) are fully redeemed.(note 2(f))

Additionally, the balance includes restricted cash of USD 9.7 million (EUR 9.2 million) as security in favor of the Ministerio de Energia y Minas of Peru for closure obligations of the Coricancha mine (the "Mine Closure Bond") (note 21h) .

The remaining balance of restricted cash relates to the mine closure deposits that the Company has in place primarily in relation to its mining operations.

(d) Held to maturity

The held to maturity instrument is a government bond that is required to be maintained as a security deposit.

(e) Commodity contracts – cash flow hedges

The net liability of EUR 13.3 million represents a remaining balance of the commodity contracts – cash flow hedges that were not settled at 31 December 2016. The fair value of the effective portion of commodity contracts - cash flow hedges at 31 December 2016 is a pre-tax loss of EUR 40.9 million (31 December 2015: pre-tax gain of EUR 14.1 million). The loss of EUR 40.9 million has been recognised in the cash flow hedge reserve. The hedges were determined to be 100% effective.

(f) Foreign exchange contracts – cash flow hedges

The asset of EUR 0.6 million represents a remaining balance of the foreign exchange contracts – cash flow hedges that were not settled at 31 December 2016. The fair value of the effective portion of foreign exchange contracts - cash flow hedges at 31 December 2016 is a pre-tax loss of EUR 2.9 million (31 December 2015: pre-tax gain of EUR 1.2 million). The loss of EUR 2.9 million has been recognised in the cash flow hedge reserve. The hedges were determined to be 100% effective.

(g) Zinc prepayment

In December 2015, Nyrstar entered into a zinc prepayment, a tripartite agreement between a physical offtaker and a bank, in the nominal amount of USD 150 million (EUR 137.8 million) through a special purpose vehicle ("SPV") structure. The zinc prepayment was increased in the second half of 2016 to USD 185 million (EUR 175.6 million). The prepayment agreement is linked to the physical delivery of refined zinc metal to Trafigura under the terms of a three-year offtake agreement and the zinc prepayment was arranged by Deutsche

Bank AG. The zinc metal prepayment has an amortising structure with a three-year term and a 12-month grace period following which the prepayment will be repaid in equal monthly zinc metal deliveries over a period of two years.

The risks and obligations of Nyrstar as to the SPV are fully described above except that in the event of Trafigura failing to take physical delivery of the zinc delivered by Nyrstar, the Company is required to, on a best efforts basis, find alternative buyers on behalf of the SPV. No financial risks arise to Nyrstar from this obligation.

The zinc metal deliveries are priced at the date of delivery based on prevailing market prices and have not been hedged by the Company thereby retaining full price exposure to zinc metal prices.

Directly attributable transaction costs have been deducted at initial recognition of the zinc prepayment and are amortised over the term of the zinc prepayment together with the interest of LIBOR plus a margin of 4.5%.

(h) Other financial assets

In November 2016 Nyrstar completed its sale of El Toqui mine in Chile to Laguna Gold Limited ("Laguna") (Note 8). As a part of the sales proceeds the Company entered into a price participation agreement with Laguna based on which the Company is entitled to receive price participation proceeds from the owners of the El Toqui mine on the first 7.9 million tonnes of ore processed and sold by El Toqui following the sale of the mine. The price participation commences above a zinc price of USD 2,100 per tonne and is applicable at set zinc prices.

The price participation agreement is a financial asset designated as fair value through profit and loss. The fair value is measured using level 3 inputs which comprise unobservable inputs relating to macroeconomic factors (price and treatment charges consistent with those disclosed in note 17) and operational assumptions relating to production, ore head grades and recoveries of the El Toqui mine that have been determined based on historically achieved levels. There has not been any change in the fair value since its initial recognition at the date of the El Toqui disposal.

The subsequent changes to the fair value will be recognised in profit and loss based on the changes in the key assumptions used in the calculation of the fair value of the price participation agreement and based on the finalised sales of the processed ore by the El Toqui mine. At 31 December 2016, no adjustment has been recognised to the fair value of the price participation agreement as the assumptions used in the calculation have not changed significantly compared with the mine disposal date.

(i) Other financial liabilities

In connection with the sale of the Coricancha mine (note 9), the Company agreed to fund the reclamation works for the Cancha 1 and 2 and Triana tailings facilities up to a maximum amount of USD 20 million (EUR 19.0 million). The Company has recognised EUR 11.6 million as other financial liability representing the Company's best estimate of its obligation to fund the tailings facilities reclamation works. The fair value is measured using level 3 inputs which comprise unobservable inputs.

22. Inventories

EUR million	31 Dec 2016	31 Dec 2015
Raw materials	289.0	170.7
Work in progress	266.9	194.5
Finished goods	111.9	57.2
Stores and consumables	56.7	94.4
Fair value adjustment*	(4.4)	(10.7)
Total inventories	720.1	506.1

* As the Group applies hedge accounting as described in note 3g, the hedged items of inventories are adjusted for fair value movements.

The increase of inventories between 2016 and 2015 is primarily due to the higher zinc, lead and silver prices in 2016 (note 36(d)).

By-product inventories included in Finished goods were written down by EUR 12.2 million (2015: nil) to their net realisable value.

As at 31 December 2016, EUR 390.4 million (2015: 227.5 million) of inventories were pledged for the SCTF credit facility.

23. Other assets and liabilities

EUR million	31 Dec 2016	31 Dec 2015
Deferred debt issuance cost - non-current (b)	-	3.2
Other - non-current	2.0	0.6
Total other non-current assets	2.0	3.8
Fair value of underlying hedged risk - current (a)	-	5.0
Total other current assets	-	5.0
Fair value of underlying hedged risk - current (a)	1.3	-
Total other current liabilities	1.3	-

(a) Fair value of underlying hedged risk

The fair value of fixed forward sales contracts (the underlying hedged items) resulted in a net liability of EUR 1.3 million (2015: net asset of EUR 5.0 million), being offset by an amount of EUR 1.3 million (2015: EUR 5.0 million) representing the fair value of hedging derivatives on these fixed forward sales contracts and included in note 21 other financial assets and liabilities.

(b) Deferred debt issuance cost

Transaction cost of the SCTF credit facility (see note 27) not yet amortised (in case the SCTF is not drawn). (2015: EUR 3.2 million).

24. Trade and other receivables

EUR million	31 Dec 2016	31 Dec 2015
Trade receivables	150.2	182.3
Less provision for receivables	(1.3)	(2.0)
Net trade receivables	148.9	180.3
Other receivables*	70.1	37.8
Total trade and other receivables	219.0	218.1

* During 2016 the Company entered into various commodity swaps ("swaps") to optimise sourcing of raw material supply to its smelters. The outstanding balances of the swaps that did not meet the revenue recognition criteria are recognised in Other receivables: EUR 36.1 million (2015: EUR 25.0 million) and in Other payables: EUR 33.5 million (2015: EUR 23.0 million).

As at 31 December 2016, EUR 28.9 million (2015: EUR 48.6 million) of trade receivables were pledged for the SCTF credit facility.

The movement in the provision for receivables is detailed in the table below:

EUR million	2016	2015
As at 1 Jan	2.0	2.4
Payments	(0.6)	(0.7)
Additions	0.1	0.2
Currency translation effects	(0.2)	0.1
As at 31 Dec	1.3	2.0

The Group's exposure to currency and liquidity risk related to trade and other receivables is disclosed in note 36.

25. Cash and cash equivalents

EUR million	31 Dec 2016	31 Dec 2015
Cash at bank and on hand	127.1	59.4
Short-term bank deposits	-	36.7
Total cash and cash equivalents	127.1	96.1

Cash at bank and on hand and short-term deposits earned a combined weighted average interest rate of 0.7% for calendar year 2016 (2015: 0.7% per annum).

The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 36.

26. Capital

Share capital and share premium

In February 2016 Nyrstar issued 608,165,740 new shares as the result of the completion of a capital increase in the amount of EUR 273.7 million within the framework of a rights offering which was approved by the extraordinary general shareholders' meeting of 18 January 2016. The associated costs of the capital increase amounted to EUR 11.4 million.

As at 31 December 2016 the number of issued ordinary shares is 93,563,960 (31 December 2015: 340,045,088) with a par value of EUR 1.038 (2015: EUR 0.10). The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company's residual assets.

In May 2016 the Company implemented a share consolidation with respect to all outstanding shares by means of a 1-for-10 reverse stock split (the "RSS"). The RSS was effective as of 9 June 2016.

In addition to the issued share capital, Nyrstar has the following two outstanding convertible bonds issued in 2013 and 2016 (note 29) respectively:

• Convertible bonds issued in 2013 in an aggregate principal amount of EUR 120.0 million. Based on a conversion price of EUR 21.63 per share, if all convertible bonds are converted, a maximum of 5,547,850 new shares are to be issued; and
• Convertible bonds issued in 2016 in an aggregate principal amount of EUR 115.0 million. Based on a conversion price of EUR 9.60 per share, if all convertible bonds are converted, a maximum of 11,979,166 new shares are to be issued.

Distribution to shareholders (capital decrease)

The Board of Directors has decided not to propose to shareholders a distribution for the financial year 2016 and 2015.

2016	2015
93,563,960	327,473,863
-	12,571,225
93,563,960	340,045,088
2016	2015

	327,381,031
	-
	-
-	92,832
93,563,960	327,473,863
2016	2015
12,571,225	12,664,057
(12,571,225)	-
-	(92,832)
	327,473,863 608,165,740 (842,075,643)

At 18 January 2016 Nyrstar's extraordinary general meeting approved cancellation of all outstanding treasury shares. Following the cancellation Nyrstar does not hold any treasury shares.

Disclosure of the shareholders' structure

The Group's major shareholders (holding greater than 3% of the Group's outstanding shares) based on notifications of significant shareholdings available as at 31 December 2016 were:

Shareholder's name	Shareholder's address	Date of notification	Number of voting rights	in %
Urion Holdings (Malta) Ltd	Leicester Court, Suite 2, Edgar Bernard Str., Gzira, Malta		1 Sep 2015 23,055,662.0 24.64%
BlackRock Group*	33 King William Street, London EC4R 9AS, UK	16 Dec 2016	5,789,472.0	6.19%
BlueMountain Capital Management LLC	280 Park Ave, 12 FL New York, NY 10017 USA	1 March 2016	4,250,000.0	4.54%
Umicore S.A. / N.V.	Broekstraat 31, 1000 Brussels, Belgium	23 Mar 2011	2,891,126.0	3.09%
Total			35,986,261.0 38.46%

* The number of 6.19% is comprised of voting rights linked to securities (1.73%) and voting rights that may be acquired upon exercise of financial instruments deemed equivalent to voting securities (4.46%)

The Group's major shareholders (holding greater than 3% of the Group's outstanding shares) based on notifications of significant shareholdings available as at 31 December 2015 were:

Shareholder's name	Shareholder's address	Date of notification	Number of voting rights	in %
Urion Holdings (Malta) Ltd	Leicester Court, Suite 2, Edgar Bernard Str., Gzira, Malta		1 Sep 2015 68,090,869.0 20.02%
BlackRock Group	33 King William Street, London EC4R 9AS, UK		14 May 2015 10,772,165.0	3.17%
Umicore S.A. / N.V.	Broekstraat 31, 1000 Brussels, Belgium		23 Mar 2011 10,503,712.0	3.09%
	Dimensional Fund Advisors LP 6300 Bee Cave Road, Building One, Austin, Texas, 78746, USA		29 Apr 2015 10,215,142.0	3.00%
Total			99,581,888.0 29.28%

27. Perpetual securities

Commencing in November 2015, Nyrstar Port Pirie (NPP) issued tranches of perpetual securities (the Securities) related to the Nyrstar Port Pirie lead smelter redevelopment (the Project). The Securities are perpetual, subordinated and unsecured. Distributions on the Securities are unconditionally deferrable into perpetuity and cumulative if deferred. The Securities are redeemable at the option of Nyrstar and also include contingent option for the holder to request redemption (i.e. a contingent settlement provision). Further details about the terms of the Securities are provided below. The accounting policy for the Securities is detailed in notes 2(g) and 3(k) and the critical accounting estimates and judgments in respect of the Securities are explained in note 4. During 2016, EUR 109.8 million of perpetual securities were drawn compared to EUR 21.8 million drawn in 2015. At the end of 2016, an aggregate total of EUR 131.6 million (AUD 208 million) of perpetual securities had been drawn for the Port Pirie Redevelopment funding.

Each tranche is an amount equal to the forecast project costs actually payable in the following calendar month (less the unspent amount of any previous tranches and less any required overrun funding). Nyrstar will issue further tranches throughout 2017 up to a total amount of AUD 291.3 million (EUR 199.5 million) and until the Project is commissioned which is expected in the second half of 2017.

Whilst the Securities are outstanding, NPP is subject to forms of economic compulsion (listed below under Forms of economic compulsion contained in the Securities) which compel the Company to make the intended distributions on the Securities. During 2016, distributions were made in accordance with the targeted distribution schedule. The Company estimates, taking into consideration the forms of economic compulsion disclosed below (which includes funding a liquidity facility as explained below), it will continue to make future distributions and then redeem the Securities according to the targeted amortization schedule. The redemption of the Securities is expected to commence in May 2018 through to November 2022.

Forms of economic compulsion contained in the Securities:

(i) The Securities have scheduled (targeted) distributions (the Distribution Amount Payments) every six months (with the first payment on 27 May 2016) and scheduled (targeted) redemption every six months commencing on 27 May 2018 according to an agreed targeted amortisation schedule (the Amortisation Schedule). The Amortisation Schedule contemplates ten payments of AUD 29.2 million (EUR 27.7 million) with the first payment in May 2018 and subsequent payments every six months with the final payment targeted in November 2022. The distributions on Perpetual Securities in 2016 amounted to AUD 5.2 million (EUR 3.5 million). No redemptions were made in 2016. The Distribution Amount on the Securities accrues daily in respect of each day in the relevant six month period at a distribution rate plus a fee component amount. The distribution rate is based on a floating interest rate being the Bank Bill Rate (this is the interbank rate published by the Australian Financial Markets Association) plus a fixed margin of 1.275%. The average distribution rate for 2016 was 3.37%. The fee component amount varies based on the time and amount of the Securities outstanding. The fee component amount for 2016 was 1.7%. Distributions on Securities are recognised directly in equity.

Nyrstar, at its sole discretion, will have the ability to defer any and all of the Distribution Amount Payments. However, if Nyrstar does not make the Distribution Amount Payments every six months, the unpaid amount is capitalised and added to the amount of accumulated distributions for the following six month period (and so on). The fee component amount may increase depending on the amount outstanding and for how long that amount is outstanding. Should the Company not make the Distribution Amount Payments in accordance with the targeted distribution amount schedule within the first 2.5 years, the fee component amount will increase from 1.7% to 2.5% (and may potentially increase to 3.7% in certain circumstances). The fee increases to 6% per annum if the Perpetual Securities have not been redeemed by the seventh year after first issue, and 10% after ten years.

(ii) In the event NPP defers a Distribution Amount Payment on the Securities, or does not redeem in accordance with the Targeted Amortisation Schedule, or in certain other circumstances, the Group is obliged each time to transfer cash into NPP up to an amount equal to the missed payment or redemption amount (the "Liquidity Facility"). The maximum amount which can be paid into the Liquidity Facility is up to AUD 75.0 million (EUR 51.4 million). There is no requirement for NPP to use the Liquidity Facility to pay Distribution Amount Payments or redeem the Securities, however there are limitations to the use of the Liquidity Facility. These limitations include NPP cannot transfer the proceeds of the Liquidity Facility to another member of the Nyrstar group or use the proceeds to acquire assets unless permitted otherwise in the contractual documentation.

(iii) Except in very limited circumstances, NPP is not permitted to make any distributions (for example dividends, capital redemptions, management fees or similar or interest or principal payments on outstanding intercompany balances) to any other Nyrstar Group companies without prior approval of the Securities holders. This is essentially a "Dividend Stopper" type clause associated with the Securities.

(iv) NPP is required to maintain a minimum cash balance of at least AUD 30.0 million (EUR 20.6 million) which is to be deposited by NPP with an authorised deposit taking institution in Australia. The minimum cash balance is to be maintained until the Securities are fully redeemed and has been classified as restricted cash (note 21).

Contingent settlement provisions:

The Securities are redeemable at the option of Nyrstar or when an early redemption event occurs combined with the holder requesting redemption. Nyrstar can undertake certain actions to prevent an early redemption event from occurring. However, in highly specific circumstances, such as if Nyrstar were unable to execute the mitigating action within the contractually allowed time, an early redemption event will occur. Nyrstar considers the likelihood of having to mandatorily redeem the Securities as remote.

The early redemption events include:

• a) Nyrstar NV ceases to legally or beneficially own (directly or indirectly) 100% of the issued voting share capital of NPP.
• b) A final court order is obtained by or on behalf of a Securities holder in respect of a breach of any provision of an investment document and (i) if capable of appeal, NPP is not diligently pursuing an appeal, is out of time to appeal or there is no right of appeal available to NPP; and (ii) it is in NPP's control to be able to comply with that order, but NPP contravenes that order.
• c) The Nyrstar Group does not make a payment relating to an unforeseen tax liabilities, capital expenditure liabilities or to the liquidity facility within 21 days of that payment being required.
• d) From 27 November 2017, any payment of interest due to NPP from any member of the Nyrstar Group under any intercompany debt arrangement is not paid within 15 days after its due date.
• e) NPP breaches its obligation not to make a distribution other than in the few permitted circumstances and does not remedy the breach within 10 business days of its occurrence.
• f) NPP does not comply with the tolling agreement and, where that event can be remedied, it has not been remedied within 15 days of a Securities holder requesting remedy or NPP becoming aware of the event.
• g) At the end of any month, NPP has not maintained the minimum cash balance except where NPP remedies the event within 7 days.
• h) NPP breaches its representation in respect of no misrepresentations in the financial model provided by NPP on 30 May 2014 except where, if any such non-compliance can be remedied, NPP remedies the non-compliance by complying with the representation as if the representation were deemed to be repeated 30 Business Days after a Securities holder requests remedy or NPP becomes aware of the non-compliance.
• i) NPP fails to comply with its undertakings in respect of:
• (i) providing Securityholders with a no default certificate and audited annual financial report;
• (ii) not granting any security;
• (iii) not disposing of its assets;
• (iv) not entering into any amalgamation, demerger, merger or corporate reconstruction (other than any amalgamation, merger or corporate reconstruction within the Nyrstar Group that does not involve NPP);

(v) not changing its business;

• (vi) not entering into any derivative transactions (other than in accordance with the hedging policy);
• (vii)not joining a tax consolidated group;
• (viii) not commingling property;
• (ix) not providing financial accommodation, guarantees or finance debt;
• (x) insurance; and
• (xi) the project documents,

except where, if any such non-compliance can be remedied, NPP remedies the non-compliance within 30 business days of a Securityholder requesting remedy or NPP becoming aware of the non-compliance.

• j) A director or company secretary of NPP or any of its subsidiaries is charged with, or an employee is convicted at first instance, of corrupt activity and (i) an objective determination is made or upheld (after exhausting any applicable right of appeal or objection); and (ii) NPP fails to implement remedial action for the applicable circumstances and that failure continues for a period of 30 days.
• k) There is an event of default for remediation failure in relation to an environmentally significant event and the event of default continues for a period of 60 days.
• l) NPP publicly announces its intention to permanently abandon the Project.

The Group has assessed that the fair value of the liability is immaterial.

28. Reserves

Reconciliation of movement in reserves

Treasury Translation acquisition hedge Convertible EUR million shares reserves reserve reserve	bond	reserve	Total
As at 1 Jan 2016 (1.2) 148.8 (265.4) 59.5	24.5	2.8	(31.0)
Losses on cash flow hedges - - - (14.0)	-	-	(14.0)
Foreign currency translation differences - (64.9) - -	-	-	(64.9)
Change in fair value of investments in equity securities - - - -	-	0.3	0.3
Cancellation of treasury shares 1.2 - - -	-	-	1.2
Convertible bond issued 2016 (note 29) - - - -	14.7	-	14.7
As at 31 Dec 2016 - 83.9 (265.4) 45.5	39.2	3.1	(93.7)

EUR million	Treasury shares	Translation reserves	Reverse acquisition reserve	Cash flow hedge reserve	Convertible bond	Investments reserve	Total
As at 1 Jan 2015	(1.2)	85.5	(265.4)	34.4	24.5	1.9	(120.3)
Gains on cash flow hedges	-	-	-	25.1	-	-	25.1
Foreign currency translation differences	-	63.3	-	-	-	-	63.3
Change in fair value of investments in equity securities	-	-	-	-	-	0.9	0.9
As at 31 Dec 2015	(1.2)	148.8	(265.4)	59.5	24.5	2.8	(31.0)

Treasury shares

The extraordinary general shareholders' meeting held on 18 January 2016 approved the cancellation of all 12,571,225 treasury shares held by the Company.

The treasury shares reserve comprises the par value of the Company's share held by the Group. As at 31 December 2016, the Group held none of the Company's shares (31 December 2015: 12,571,225).

During 2015 the Group settled its LTIP Grants and Deferred Shares Awards. A total of 92,832 shares were allocated to the employees as a part of this settlement.

29. Loans and borrowings

This note provides information about the contractual terms of the Group's interest-bearing loans and borrowings, which are measured at amortised cost. For more information about the Group's exposure to interest rate, foreign currency and liquidity risks see note 36.

	as at	as at
EUR million	31 Dec 2016	31 Dec 2015
Convertible bonds	211.5	109.4
Fixed rate bonds	340.8	338.4
Unsecured bank loans	12.2	11.6
Finance lease liabilities	0.5	0.9
Total non-current loans and borrowings	565.0	460.3
Fixed rate bonds	-	414.9
Unsecured bank loans	2.1	1.6
SCTF Credit Facility	329.9	-
Loans from related parties	94.8	-
Finance lease liabilities	0.2	0.5
Total current loans and borrowings	427.0	417.0
Total loans and borrowings	992.0	877.3

Convertible bonds

In July 2016 Nyrstar issued an EUR 115 million 5.00% convertible bonds listed on the Frankfurt Open Market (Freiverkehr), due July 2022.

The bonds are convertible at the option of the holder, at any time from 17 November 2016 until 1 July 2022 (ten days prior to final maturity date being 11 July 2022), or if the bonds are called by the Group for redemption prior to the final maturity date, until the seventh day before the date fixed for redemption. The conversion price as at 31 December 2016 is EUR 9.60 per share.

The bonds consist of a liability component and an equity component. The fair values of the liability component (EUR 97.3 million) and the equity component (EUR 14.6 million) were determined, using the residual method, at issuance of the bonds. The liability component is measured at amortised cost at an effective interest rate of 8.46% per annum.

The bonds have been issued at 100% of their principal amount and have a coupon of 5.00% per annum, payable semi-annually in arrears.

In September 2013 Nyrstar issued an EUR 120 million 4.25% convertible bonds listed on the Frankfurt Open Market (Freiverkehr), due September 2018.

The bonds are convertible at the option of the holder, at any time from 31 December 2013 until 15 September 2018 (ten days prior to final maturity date being 25 September 2018), or if the bonds are called by the Group for redemption prior to the final maturity date, until the seventh day before the date fixed for redemption. The conversion price as at 31 December 2016 is EUR 21.63 per share.

The bonds consist of a liability component and an equity component. The fair values of the liability component (EUR 102.3 million) and the equity component (EUR 15.7 million) were determined, using the residual method, at issuance of the bonds. The liability component is measured at amortised cost at an effective interest rate of 8.03% per annum.

The bonds have been issued at 100% of their principal amount and have a coupon of 4.25% per annum, payable semi-annually in arrears.

In 2016 and 2015 no convertible bonds were converted in ordinary shares of the company.

SCTF credit facility

SCTF credit facility is a secured multi-currency revolving structured commodity trade finance credit facility with a limit of EUR 400 million. The facility was refinanced at the end of June 2015 and has a maturity of four years (with run-off period during the fourth year leading to a maturity of June 2019). The facility includes an accordion to increase its size to EUR 750 million on a pre-approved but uncommitted basis.

Funds drawn under the facility bear interest at EURIBOR plus a margin of 2.25%.

Directly attributable transaction costs have been deducted at initial recognition and are amortized over the term of the credit facility. Transaction cost not yet amortized at the balance sheet date amount to EUR 2.3 million (31 December 2015: EUR 3.2 million). In case the SCTF is not drawn these costs are disclosed under other assets (see note 23). In 2015 the costs of the previous SCTF credit facility were written off at the time of renewal, leading to finance charges of EUR 1.5 million.

Borrowings under this facility are secured by Nyrstar's inventories and receivables. In addition to standard representations, warranties and undertakings, including restrictions on mergers and disposals of assets, the facility provides for financial covenants which are linked to total consolidated tangible net worth and net debt to equity.

Fixed rate bonds

In May 2016 Nyrstar repaid its 5.375% fixed rate bonds with an original face value of EUR 525.0 million, due May 2016. In April 2015 Nyrstar repaid its EUR 225.0 million 5.5% fixed rate bonds, due April 2015.

At 31 December 2016, the Company has one outstanding fixed rate bond; 8.5% fixed rate bond with an original face value of EUR 350 million (maturity: September 2019). Directly attributable transaction costs have been deducted at initial recognition and are amortised over the term of the bonds.

Loans from related parties

In May 2016 Nyrstar entered into a USD 150.0 million (EUR: 135.1 million) revolving working capital facility agreement with Trafigura. The facility is uncommitted and secured by the shares of a subsidiary of the Company with a current term through to January 2017 and bears an interest of LIBOR plus 4%. In October 2016 the facility was increased to USD 250.0 million, with extension to end of 2017, on a committed basis.

Terms and debt repayment schedule

Terms and conditions of outstanding loans were as follows:

				31 Dec 2016		31 Dec 2015
EUR million	Currency	Nominal interest rate	Year of maturity	Face value	Carrying amount	Face value	Carrying amount
Fixed rate bonds	EUR	5.40%	2016	-	-	415.0	414.9
Convertible bonds*	EUR	4.25%	2018	120.0	113.0	120.0	109.4
Fixed rate bonds	EUR	8.50%	2019	350.0	340.8	350.0	338.4
Convertible bonds**	EUR	5.00%	2022	115.0	98.5	-	-
SCTF credit facility	USD	EURIBOR +2.25%	2019	332.1	329.9	-	-
Loan from related party		USD LIBOR+4%	2017	100.0	94.8	-	-
Total interest bearing liabilities				1,017.1	977.0	885.0	862.7

* The Company may, at any time on or after 16 October 2016, redeem the convertible bonds together with accrued but unpaid interest, if on not less than 20 out 30 days consecutive dealing days, the volume weighted average price of the shares exceeds 130% of the conversion price.

** The Company may, at any time on or after 1 August 2020, redeem the convertible bonds together with accrued but unpaid interest, if on not less than 20 out 30 days consecutive dealing days, the volume weighted average price of the shares exceeds 150% of the conversion price.

Finance leases
EUR million	31 Dec 2016	31 Dec 2015
Within 1 year	0.1	0.5
Between 2 and 5 years	0.7	1.0
Total undiscounted minimum lease payments	0.8	1.5
Less: amounts representing finance lease charges	0.1	0.1
Present value of minimum lease payments	0.7	1.4

30. Provisions

EUR million	Note	Restoration, rehabilitation and decommissioning	Restructuring	Other	Total
As at 1 Jan 2016		189.3	1.9	21.2	212.4
Reclassified to held for sale		(19.8)	-	(2.4)	(22.2)
Disposal of subsidiaries		(13.6)	-	-	(13.6)
Payments		(14.2)	(1.9)	(2.6)	(18.7)
Additions / (reversals)		(10.0)	7.2	5.3	2.5
PPE asset adjustment	15	22.9	-	-	22.9
Transfers		(12.2)	-	-	(12.2)
Unwind of discount		10.3	-	0.1	10.4
Currency translation effects		6.2	0.1	0.8	7.1
As at 31 Dec 2016		158.9	7.3	22.4	188.6
Whereof current		15.5	7.3	5.4	28.2
Whereof non-current		143.4	-	17.0	160.4

EUR million	Note	Restoration, rehabilitation and decommissioning	Restructuring	Other	Total
As at 1 Jan 2015		186.3	2.4	38.2	226.9
Payments		(10.1)	(4.0)	(3.4)	(17.5)
Additions / (reversals)		2.7	3.5	(14.8)	(8.6)
PPE asset adjustment	15	(4.2)	-	-	(4.2)
Transfers		(0.3)	-	-	(0.3)
Unwind of discount		11.4	-	0.2	11.6
Currency translation effects		3.5	-	1.0	4.5
As at 31 Dec 2015		189.3	1.9	21.2	212.4
Whereof current		24.5	1.9	4.7	31.1
Whereof non-current		164.8	-	16.5	181.3

Restoration, rehabilitation and decommissioning

95% (2015:90%) of all Group's restoration, rehabilitation and decommissioning work on the projects provided for is estimated to occur progressively over the next 20 years. The provision is discounted using a current market based pre-tax real discount rate and the unwinding of the discount is included in interest expense. Refer to note 4 for the significant estimations and assumptions applied in the measurement of this provision.

The discount rates used in the calculation of the environmental provisions are summarized below:

	2016		2015
	Metals Processing	Mining	Metals Processing	Mining
Country specific risk free rate (nominal)	1.29% - 2.91%	2.91% - 8.60%	1.45% - 2.61%	2.51% - 7.72%
Market credit spread	5.0%	5.0%	5.0%	5.0%
Discount rate (nominal)	6.29% - 7.91%	7.91% - 13.60%	6.45% - 7.61%	7.51% - 12.72%
Discount rate (real)	5.03% - 5.67%	5.67% - 11.36%	4.07% - 5.65%	5.64% - 10.86%

The following table sets out the estimated impact on the environmental provisions for the financial year ended 31 December 2016 and 2015 due to a change in the discount rates (in EUR million):

EUR million		2016		2015
Parameter	Variable	Metals Processing		Mining Metals Processing	Mining
Discount rate	+ 100 bps	(3.3)	(8.3)	(3.0)	(9.7)
Discount rate	- 100 bps	3.5	9.2	3.4	11.7

Restructuring

In 2016 Nyrstar incurred restructuring costs of EUR 8.8 million (2015: EUR 11.8 million). The remaining provision of EUR 7.3 million (31 December 2015: EUR 1.9 million) is mainly related to the effect associated with the disposal of the mining operations and to the restructuring of the Company's executive leadership team (Nyrstar Management Committee). The implementation of the restructuring measures is expected to be finalised during 2017.

Other

Other provisions primarily relate to workers compensation benefits, legal claims and other liabilities. The current portion of these costs is expected to be utilised in the next 12 months and the non-current portion of these costs is expected to be utilised over a weighted average life of 2 years (2015: 2 years). The estimates may vary as a result of changes in cost estimates and timing of the costs to be incurred.

31. Employee benefits

EUR million	31 Dec 2016	31 Dec 2015
Long service leave	2.8	2.8
Retirement plans	66.8	73.7
Other	4.4	7.9
Total non-current employee provisions	74.0	84.4
Annual leave and long service leave	23.0	24.2
Other	13.0	19.6
Total current employee provisions	36.0	43.8
Total employee provisions	110.0	128.2

Retirement and post-retirement plans

Nyrstar participates in a number of superannuation and retirement benefit plans. The plans provide benefits on retirement, disablement, death, retrenchment or withdrawal from service, the principal types of benefits being lump sum defined benefits and lump sum defined contribution benefits.

Defined contribution plans

The Group is required to contribute a specified percentage of payroll costs to the retirement benefit schemes to fund the benefits. The only responsibility of the Group is to make the specified contributions.

Employees of Nyrstar Budel BV are members of a multi-employer Metal and Electricity industry defined benefit pension plan (PME). PME are unable to provide the necessary information for defined benefit accounting to be applied and consequently the PME plan has been accounted for as a defined contribution plan. The entity's obligations are limited to the payment of the contributions required according to the funding plan of the PME and cannot held liable for any deficits or contributions from other participating companies.

The total expense for defined contribution plans recognised in the consolidated income statement is EUR 4.2 million.

Defined benefit plans

The Group sponsors defined benefit plans as described below. All defined benefit plans are externally funded, either through a collective insurance contract or through a self-administered pension fund legally separated from the entity. All plans comply with local regulatory frameworks and minimum funding requirements and have been reviewed as at 31 December 2016. Furthermore the Group is responsible for the administration and governance of the defined benefit plans in Belgium, Switzerland, the US and Canada. The plan assets do not include direct investments in the Group's own financial instruments nor in property occupied by or used by the companies of the Group.

The defined benefit plans also include the so-called cash balance plans. The cash balance plans, sponsored by the Belgian and Swiss entities, account for about 11% of the total defined benefit obligation value as at 31 December 2016 (2015: 14%) and are valued on the basis of the Projected Unit Credit Method.

In Belgium, defined contribution plans are subject to a legally enforced minimum rate of return. The latter was modified by a 2015 change of legislation in Belgium on occupational pensions enacted in December 2015. Until 2015 the minimum return was fixed at 3.25% on employer contributions and 3.75% on employee contributions. As of 2016, the minimum rate of return is determined based on the Belgian linear bonds with a term of 10 years with an absolute minimum of 1.75% and an absolute maximum of 3.75%. The Belgium DC plans are funded through a group insurance.

Since 31 December 2015, the Belgian pension plans, which were previously accounted for as defined contribution plans ("Belgium DC Plans"), have been considered defined benefit plans under the requirements of IAS 19 and have been accounted and disclosed accordingly. The obligations of the Belgium DC Plans have been valued as the actuarial present value at any moment of the career of the highest of the accrued individual reserves with the insurance company and the minimum reserves to be guaranteed by the employer. Insured assets have been valued as the actuarial present value of the paid-up value at retirement of the insurance policy for each individual. Both present values are calculated on the basis of the market yield on high-quality corporate bonds. The net defined liability for the plan then equals the sum of the positive differences between liabilities and assets calculated for each individual separately, less the collective reserves accumulated in the group insurance financing fund.

The defined benefit plans expose the sponsoring company to actuarial risks such as investment risk, interest rate risk, salary risk, inflation risk and longevity risk. The medical benefit plans are further exposed to medical cost inflation risk. The possible impact of changes in these risks has been illustrated by a sensitivity analysis which is further detailed below.

Death in service and disability risks are in most countries insured with an external (re)insurance company.

Based on geographical location of the sponsoring entities, the recognised retirement benefit obligations as at 31 December 2016 can be split as follows:

EUR million	31 Dec 2016	Average duration
Euro zone:	(20.3)	11.0 years
Nyrstar Budel BV Excedent Pension Plan
Nyrstar Belgium SA/NV: Staff Old Defined Benefit plan funded through pension fund, Staff Cash Balance Plan, Staff Complementary Savings Plan, Staff Insured Old Defined Benefit plan, Staff "appointements continués", Salaried Employees Old Defined Benefit Plan, Salaried Employees "appointements continués"
Nyrstar NV: Staff Cash Balance Plan, Staff Complementary Savings Plan
Nyrstar France Régime d'Indemnités de Fin de Carrière and Régime du Mutuelle
Nyrstar France Mutuelle (medical benefit plan)
USA:	(29.1)	13.8 years
Nyrstar Clarksville Inc: Hourly Employees' Pension Plan, Salaried Employees' Retirement Plan, Pension Plan for Bargaining Unit Employees, NCI/JCZ Pension Plan for Bargaining Unit Employees, Supplemental Executive Retirement Plan
Nyrstar Clarksville Inc. Post Retirement Medical Benefit and Life Insurance Plan (medical benefit plan)
Canada:	(12.4)	11.1 years
Nyrstar Myra Falls Ltd.: Hourly-Paid Employees' Pension Plan, Thirty-Year Retirement Supplement and Voluntary Early retirement Allowance
Nyrstar Myra Falls Ltd.: Non-Pension post-retirement benefits plan (medical benefit plan)
Switzerland:	(5.0)	19.7 years
Nyrstar Sales & Marketing AG: Pension Plan Staff and Pension Plan Staff NMC funded through the Helvetia Group Foundation
Nyrstar Finance International AG: Pension Plan funded through the Helvetia Group Foundation
Total	(66.8)	12.5 years

The total value of the medical benefit plans, included in the retirement benefit obligations is EUR 33.5 million (2015: EUR 32.4 million).

The amounts recognised on the statement of financial position have been determined as follows:

EUR million	31 Dec 2016	31 Dec 2015
Present value of funded obligations	168.0	167.6
Present value of unfunded obligations	43.4	43.6
Total present value of obligations	211.4	211.2
Fair value of plan assets	(144.6)	(137.6)
Total deficit	66.8	73.6
Limitation on recognition of surplus due to asset ceiling	-	0.1
Total recognised retirement benefit obligations	66.8	73.7
Plan assets comprise:
EUR million	31 Dec 2016	31 Dec 2015
Cash	1.7	1.9
Equity instruments	50.7	47.4
Debt instruments	35.0	35.0
Other assets	57.2	53.3
Total plan assets	144.6	137.6

Mutual funds consist of equity funds, fixed-income funds and mixed investments funds including both equity and debt instruments. All assets, except for the insurance contracts have quoted prices in active markets. The fair value of the insurance contracts corresponds either to the present value of the secured future benefits (Netherlands) or to the capitalized value of the paid contributions at the contractually guaranteed insurance rate (other countries).

The changes in the present value of the defined benefit obligations are as follows:

EUR million	31 Dec 2016	31 Dec 2015
Defined benefit obligations at start of period	211.2	188.7
Current service cost	8.9	8.3
Interest cost	6.1	5.2
Remeasurement (gains)/losses:
Actuarial (gains)/losses arising from changes in demographic assumptions	(2.4)	6.3
Actuarial (gains)/losses arising from changes in financial assumptions	5.5	(10.4)
Actuarial (gains)/losses arising from changes in experience	(6.0)	(2.2)
Actuarial (gains)/losses due to exchange rate movements	5.5	3.5
Contributions paid into the plans by participants	1.4	1.2
Benefits paid by the plans	(16.5)	(8.7)
Past service cost (including plan amendment or curtailment)	(1.5)	(0.1)
Admin expenses, taxes and social securities	(0.8)	(0.6)
Inclusion of Belgian DC Plans	-	20.0
Defined benefit obligations at end of period	211.4	211.2

During 2016 there were no curtailments nor settlements.

The changes in the present value of plan assets are as follows:

EUR million	31 Dec 2016	31 Dec 2015
Fair value of plan assets at start of period	137.6	115.9
Interest Income	4.0	3.2
Remeasurement gains/(losses):
Return on plan assets excluding interest income recognised in net interest expense	7.1	(2.3)
Actuarial gains/(losses) due to exchange rate movements	3.8	1.1
Contribution paid into the plans by employer	6.3	6.0
Contribution paid into the plans by participants	1.4	1.3
Benefits paid by the plans	(14.8)	(7.0)
Admin expenses, taxes and social securities	(0.8)	(0.6)
Inclusion of Belgian DC Plans	-	20.0
Fair value of plan assets at end of period	144.6	137.6

The expense recognised in the income statement is as follows:

EUR million	31 Dec 2016	31 Dec 2015
Service cost:
Current service cost, including admin fees, taxes and social securities	(8.9)	(8.3)
Past service cost	1.5	0.1
Net interest expense	(2.1)	(1.8)
Components of defined benefit costs included in income statement	(9.5)	(10.0)
Remeasurement on the net defined benefit liability:
The return on plan assets (excluding amounts included in net interest expense)	7.1	(2.3)
Actuarial gains and (losses) arising from changes in demographic assumptions	2.4	(6.3)
Actuarial gains and (losses) arising from changes in financial assumptions	(5.5)	10.4
Actuarial gains and (losses) arising from experience adjustments	6.0	2.2
Adjustments for restrictions on the defined benefit asset	(0.2)	-
Actuarial gains/(losses) due to exchange rate movements	0.5	-
Components of defined benefit costs recorded in OCI	10.3	4.0
Total of components of defined benefit cost	0.8	(6.0)

Principal actuarial assumptions

The principal actuarial assumptions used at the reporting date are as follows:

EUR million	31 Dec 2016	31 Dec 2015
Discount rate (range; weighted average in %) Expected future salary increases (range; weighted average in %)	0.0 - 4.0; 2.7 1.0 - 1.8; 1.5	0.4 - 4.1; 3.0 1.25 - 2.5; 2.0
Expected inflation rate (range; weighted average in %)	1.8; 1.8	2.0; 2.0
Initial trend rate (range; weighted average in %)	1.8 - 7.0; 5.8	1.8 - 7.0; 6.0
Ultimate trend rate (range; weighted average in %)	1.8 - 6.0; 4.4	1.8 - 5.0; 4.6
Years until ultimate is reached	0 - 4; 3.2	0 - 4; 3.4

Multiple discount rates have been used in accordance with the regions as indicated in the table above. The discount rates have been determined by reference to high quality corporate bonds with a similar duration as the weighted average duration of the concerned plans for the EURO zone, USA and Canada. As there is no deep market for AA corporate bonds with the required term in Switzerland, discount rates have been determined by reference to government bond rates.

Future salary increase assumptions reflect the Groups' expectations and HR policy for the next few years.

A single inflation rate assumption of 1.8% (2015: 2%) has been used for the EURO zone corresponding to the target inflation rate of the European Central Bank.

The medical cost trend rate assumptions have been determined based on industry standards and survey data with consideration for actual plan experience.

Mortality assumptions are based on the latest available standard mortality tables for the individual countries concerned. These tables imply expected future lifetimes (in years) for employees aged 65 as at the 31 December 2016 of 19 to 24 for males (2015: 18 to 24) and 23 to 28 (2015: 21 to 28) for females. The assumptions for each country are reviewed each year and are adjusted where necessary to reflect changes in fund experience and actuarial recommendations. If applicable, the longevity risk is covered by using appropriate prospective mortality rates.

Sensitivity analysis

The significant actuarial assumptions for the determination of the defined benefit obligation have been discussed earlier in this note. The table below shows the sensitivity analysis on the effect on the defined benefit obligation of reasonable positive changes in the most significant actuarial assumptions used. Note that the sensitivity analysis is done per assumption (where the other significant assumptions were held constant):

EUR million	31 Dec 2016
Discount rate -0.5%	14.7
Discount rate +0.5%	(13.3)
Expected future salary increase - 0.5%	(0.6)
Expected future salary increase + 0.5%	0.9
Expected inflation rate - 0.25%	(0.8)
Expected inflation rate + 0.25%	0.8
Medical cost trend rate -1.0%	(3.9)
Medical cost trend rate +1.0%	5.1
Life expectancy - 1 year	5.0
Life expectancy + 1 year	(5.0)

Expected contributions 2017

The Group expects to make EUR 7.1 million contributions to post-employment defined benefit plans for the year ending 31 December 2017.

32. Trade and other payables

EUR million	31 Dec 2016	31 Dec 2015
Trade payables	572.6	542.5
Other payables*	34.3	70.9
Total trade and other payables	606.9	613.4

* During 2016 the Company entered into various commodity swaps ("swaps") to optimise sourcing of raw material supply to its smelters. The outstanding balances of the swaps that did not meet the revenue recognition criteria are recognised in Other receivables: EUR 36.1 million (2015: EUR 25.0 million) and in Other payables: EUR 33.5 million (2015: EUR 23.0 million).

The Group's exposure to currency and liquidity risk related to trade and other payables is disclosed in note 36.

33. Deferred income

	As at	As at
EUR million	31 Dec 2016	31 Dec 2015
Prepayments for deliveries of silver metal	52.7	79.8
Total non-current deferred income	52.7	79.8
Prepayments for deliveries of silver metal	77.6	29.7
Prepayments for deliveries of zinc and lead metal	229.0	184.3
Other prepayments	6.4	-
Total current deferred income	313.0	214.0
Total deferred income	365.7	293.8

Deferred income consists of payments received by the Company from customers for future physical deliveries of metal production that are expected to be settled in normal course of business.

Prepayments for deliveries of silver metal

In October 2014, Nyrstar entered into a forward sale of a portion of the future incremental silver production from the Port Pirie smelter for a gross upfront payment of approximately AUD 120 million (net proceeds of EUR 85.2 million) in order to fund the second component of the funding package of the redevelopment of its smelter in Port Pirie. The forward sale is for a term of five years. Under the terms of the forward sale, the majority of the silver volumes will be delivered under a defined delivery schedule from 2016 until the end of 2019. Silver prices have been hedged with counterparties.

During H1 2015 Nyrstar entered into silver prepay agreements under which Nyrstar received approximately USD 175 million (EUR 156.4 million) prepayment and agreed to physically deliver 13.1 million oz of silver in monthly instalments. The silver prepayments are amortised into revenue as the underlying silver is physically delivered. As at 31 December 2016, 13.0 million oz of silver have been delivered. The remaining 0.1 million oz will be delivered between January and March 2017.

In December 2016 Nyrstar entered into silver prepay agreements under which Nyrstar received approximately USD 50 million (EUR 47.8 million) prepayment and agreed to physically deliver 4.5 million oz of silver in monthly instalments between January and June 2017.

In connection with these silver prepay agreements Nyrstar entered into forward purchase contracts with equivalent delivery dates to hedge the silver price exposure related to delivery commitments. These contracts are accounted for as effective fair value hedges of the firm sales commitments in the silver prepay agreements. The change in fair value of the forward purchase contracts of EUR 0.6 million has been recognised in the income statement and in other financial liabilities with the related fair value adjustment of the deferred income of EUR 0.6 million also recognised through the income statements.

Prepayments for deliveries of zinc and lead metal

The prepayments for deliveries of zinc and lead metal consist prepayments received from the Company's customers for future physical deliveries of 96kt of zinc and lead metal under existing offtake agreements that will be delivered in first quarter of 2017.

34. Share-based payments

EUR million	2016	2015
Share based payment expenses, including social security	(2.8)	(4.4)

The Company has established an Executive Long Term Incentive Plan (LTIP), a Leveraged Employee Stock Ownership Plan (LESOP) and a Deferred Share Award Plan (together referred to as the "Plans") with a view to attracting, retaining and motivating the employees and senior management of the Company and its wholly owned subsidiaries. The key terms of each Plan are disclosed below:

Long Term Incentive Plan

LTIP Grants 5 to 9 were granted between 2012 and 2016 in accordance with the rules and conditions of the Executive Long Term Incentive Plan (LTIP). The table below summarises the details of the grants.

	Grant 5	Grant 6	Grant 7	Grant 8	Grant 9
Number of instruments granted
at the grant date	2,261,628	2,270,961	5,121,113	3,803,515	871,000
Effective grant date	30 Jun 2012	30 Jun 2013	5 Sep 2014	30 Jun 2015	2 Nov 2016
Performance period	1 Jan 2012 to 31 Dec 2014	1 Jan 2013 to 31 Dec 2015	1 Jan 2014 to 31 Dec 2016	1 Jan 2015 to 31 Dec 2017	1 Jan 2016 to 31 Dec 2018
Vesting date	31 Dec 2014	31 Dec 2015	31 Dec 2016	31 Dec 2017	31 Dec 2018
Settlement (b)	Share	Share	Share	Share	Share
Fair value at grant date (EUR per share) *	1,01	1.37	0.44	2.78	1.13

* the fair value is the weighted average fair value for both performance measures: price of Zinc and MSCI as explained below

(a) Performance criteria

To ensure that the LTIP is aligned with maximizing shareholder returns, the board has set two performance conditions, which are weighted equally. For both performance conditions an equal number of awards has been granted. For an award to vest, Nyrstar's annual share price performance is measured relative to the implied change in a notional share price that is based upon the historical performance of the price of zinc and the MSCI World Metals and Mining Index.

Shares are awarded to eligible employees to the extent that predetermined scaling thresholds for each of the performance conditions are met and that the employee remains in service to vesting date of the respective grant.

(b) Settlement

The board has the discretion to settle Grant 5, Grant 6, Grant 7, Grant 8 and Grant 9 award in shares or cash. However it intends, whenever possible, to settle all plans in shares. As such, all LTIP plans are treated as equity settled share based payments.

The significant inputs into the valuation model for the LTIP plans granted in 2016 and 2015 are:

	2016	2015
Dividend yield	0.0%	0.0%
Expected volatility - Nyrstar share price	60.0%	41.0%
Expected volatility - zinc price	25.0%	19.0%
Expected volatility - MSCI metals and mining index	26.0%	17.0%
Risk free interest rate	1.4%	1.9%
Share price at grant date (in EUR)	4.77	3.21
Expected forfeiture rate	0.0%	0.0%
Valuation model used	Monte Carlo	Monte Carlo

The expected volatilities are based on the historic volatility during the period prior to the grant date (that is equivalent to the expected life of the award, subject to historical data remaining relevant). The performance conditions are both market-related and were accounted for in calculating the fair value of the awards.

The following table sets out the movements in the number of equity instruments granted during the period in relation to the LTIP plans:

	Grant 6	Grant 7	Grant 8	Grant 9	Total
As at 1 Jan 2016	2,679,907	5,471,628	3,281,719	-	11,433,254
Initial allocation 2 Nov 2016	-	-	-	871,000	871,000
Dilutive impact / adjustment	1,964,270	4,386,870	2,919,100	-	9,270,240
Reverse stock split (1 to 10)	(4,179,759)	(8,872,647)	(5,580,737)	-	(18,633,143)
Forfeitures	(269,759)	(333,025)	(252,082)	-	(854,866)
Additions	-	64,348	107,223	-	171,571
Expired	-	-	-	-	-
Settlements	(194,659)	-	-	-	(194,659)
As at 31 Dec 2016	-	717,174	475,223	871,000	2,063,397

	Grant 6	Grant 7	Grant 8	Total
As at 1 Jan 2015	2,826,537	5,859,665	-	8,686,202
Initial allocation 5 Sep 2015	-	-	3,803,515	3,803,515
Dilutive impact / adjustment	-	-	-	-
Forfeitures	(1,022,216)	(1,649,628)	(521,796)	(3,193,640)
Additions	875,586	1,261,591	-	2,137,177
Expired	-	-	-	-
Settlements	-	-	-	-
As at 31 Dec 2015	2,679,907	5,471,628	3,281,719	11,433,254

In 2016 LTIP Grant 6 was settled in cash.

In 2016, certain employees who joined Nyrstar during the year received LTIP awards under Grants 7 and 8. The fair value of these rights amounted to EUR 1.7 million for 2016 (2015: EUR 0.9 million). There have been no changes to the terms and conditions of the grants.

Leveraged Employee Stock Ownership Plan (LESOP)

On 17 June 2015 the Board decided to suspend the LESOP plan and to not continue it in 2015.

In 2013, the Board submitted to the general shareholder`s meeting a proposal to provide a new remuneration component to certain senior managers, including the management committee, called a LESOP. The LESOP would enable participants to purchase shares of the Company at a discount of 20%, following which the shares would be subject to a holding period of three years. For each share purchased by a participant with their personal contribution, a financial institution would provide the participant with additional financing enabling them to purchase nine additional shares at such discount. The number of shares that a participant could purchase with their personal contribution under the LESOP is capped. With respect to the members of the Nyrstar Management Committee, the cap is set at 50,000 shares for each member. At the end of the holding period, the participant will be required to transfer all shares purchased to the financial institution and will receive in return a cash amount or a number of shares of the Company, the value of which equals their personal contribution in the LESOP and a certain percentage of any increase in value of the shares over the lifetime of the LESOP.

The 2013 LESOP was approved by the general shareholder`s meeting in April 2013. The first stage of the 2013 LESOP was implemented in December 2013.

3,065,000 shares were granted, with an effective accounting grant date of 21 December 2013. The shares vested immediately at grant date. The fair value at the grant date per share was EUR 0.10, resulting in the total fair value of EUR 0.3 million fully recognized in the financial year ended 31 December 2013.

On 30 April 2014, the Company's general shareholders' meeting approved and granted the board of directors the powers to establish an annual leveraged employee stock ownership plan for the years 2014, 2015 and 2016 (respectively the ''2014 LESOP'', the ''2015 LESOP'' and the ''2016 LESOP''), whereby each LESOP (if established) must have the following features:

• (i) eligible participants can purchase Shares of the Company at a discount of 20%, whereby the Shares are subject to a holding period of three years,
• (ii) eligible participants can purchase such Shares with their own personal contributions, or alternatively, with a combination of personal contributions and an additional financing provided to them by a financial institution, whereby such leverage will however not exceed a one to nine ratio,
• (iii) the eligible participants include the members of the Nyrstar management committee, as well as other participants determined by the board of directors, and
• (iv) the number of Shares that an eligible participant can purchase with his or her personal contribution is capped, whereby such number is determined by the board of directors (however not exceeding 50,000, as the case may be, adjusted in case of a (reverse) stock split).

The total number of Shares that can be purchased under each LESOP amounts to 6,000,000.

The first stage of the 2014 LESOP was implemented in June 2014. 3,750,000 shares were granted, with an effective accounting grant date of 15 June 2014. 2,500,000 shares vested immediately at grant date and the remaining 1,250,000 shares will vest in 2017. The fair value at the grant date per share was EUR 0.11, resulting in the total fair value of EUR 0.3 million fully recognized in the financial year ended 31 December 2014.

The significant inputs into the valuation model for the LESOP plan granted in 2014 were:

	2015
Dividend yield	3.0%
Risk free interest rate	0.5%
Credit spread for a private individual	5.0%
Interest rate for borrowing securities	0.5%
Share price at grant date (in EUR)	2.15
Valuation model used	Monte Carlo

The following table sets out the movements in the number of equity instruments granted during the period in relation to the LESOP plans:

	2016	2015
As at 1 Jan	1,250,000	1,250,000
Dilutive impact / adjustment	2,175,048	-
Reverse stock split (1 to 10)	(3,207,543)
As at 31 Dec	217,505	1,250,000

Deferred Share Awards or Phantom Awards - annual incentive plan (AIP)

On 24 April 2013, the Company's general shareholders' meeting granted the board of directors the power to pay out entitlements to beneficiaries (including members of the management committee and directors, where applicable) under the AIP in relation to the performance by such beneficiaries during the years 2012, 2013 and 2014 in the form of Shares of the Company instead of cash, subject to the following terms:

(a) up to one third of the maximum AIP entitlement in relation to a performance year can be paid in the form of Shares instead of cash;

• (b) the Shares to be delivered as payment of an AIP entitlement are granted for no additional consideration payable by the beneficiary concerned;
• (c) the Shares to be delivered as payment of an AIP entitlement in relation to a relevant performance year will be delivered in the second calendar year following the relevant performance year (i.e. early 2014 with respect to the AIP for performance year 2012, early 2015 with respect to the AIP for performance year 2013, and early 2016 with respect to the AIP for performance year 2014), rather than in the beginning of the first year following the respective performance year (which is the case if the entitlements are paid out in cash), and subject to the condition that the beneficiary is still employed by Nyrstar or its subsidiaries at that time.

The shareholders also approved that the Shares that are delivered as pay out of an entitlement under the AIP are acquired by the beneficiary concerned at the moment of delivery (and not at the expiry of a three year period following the grant).

The fair value of the service received in return for these Awards for financial year 2016 amounts to nil (2015: EUR 0.6 million).

35. Loss per share

(a) Basic loss per share

The basic loss per share is calculated as follows:

Shareholders of Nyrstar

Continuing operations

EUR million	2016	2015
Shareholders of Nyrstar
Loss attributable to ordinary shareholders (basic)	(413.8)	(431.9)
Weighted average number of ordinary shares (basic, in million)(1)(2)	87.7	57.0
Loss per share (basic, in EUR)	(4.72)	(7.58)
Continuing operations
Loss attributable to continuing operations (basic)	(277.0)	(265.8)
Weighted average number of ordinary shares (basic, in million)(1)(2)	87.7	57.0
Loss per share continuing operations (basic, in EUR)	(3.16)	(4.66)
Discontinued operations
Loss attributable to discontinued operations (basic)	(136.8)	(166.1)
Weighted average number of ordinary shares (basic, in million)(1)(2)	87.7	57.0
Loss per share discontinued operations (basic, in EUR)	(1.56)	(2.91)

Discontinued operations

Weighted average number of ordinary shares (basic, in million)(1)(2)	87.7	57.0
Loss attributable to discontinued operations (basic)	(136.8)	(166.1)

1) In relation to the February 2016 rights offering, the comparative earnings per share for 31 December 2015 have been restated to retroactively reflect the impact of the February 2016 rights issue. As the rights issue was offered at a discount (EUR 0.45) to market value (EUR 1.30), the weighted average number of shares outstanding for 31 December 2016 and 31 December 2015 was adjusted in accordance with IAS 33 Earnings per Share. The adjustment resulted in an increase in the weighted average shares outstanding, both basic and diluted, in 2016 and 2015 of approximately 74 %. Further details of the rights issue are disclosed in Note 26 Share capital and share premium.

2) The comparative earnings per share for 31 December 2015 have been restated to retroactively reflect the impact of the 1-for-10 reverse stock split in June 2016. Further details of the 1-for-10 reverse stock split are disclosed in Note 26 Share capital and share premium.

(b) Diluted loss per share

As the Group incurred a loss for the twelve months ended 31 December 2016, the diluted loss per share EUR 4.72 equals the basic loss per share (EUR 7.58 for the twelve months ended 31 December 2015). The convertible bonds have been anti-dilutive for 2016 and 2015.

36. Financial instruments

In the normal course of business, Nyrstar is exposed to fluctuations in commodity prices and exchange rates, interest rate risk, credit risk and liquidity risk. In accordance with Nyrstar's risk management policies, derivative financial instruments are used to hedge exposures to commodity prices and exchange fluctuations, but may not be entered into for speculative purposes.

(a) Credit risk

(i) Exposure to credit risk

Credit risk for the Group primarily represents the loss that would be recognised if the counterparties to financial instruments fail to perform as contracted. The carrying amount of financial assets represents the maximum credit exposure. The Group does not have any significant credit enhancements to mitigate its credit exposure, except for the retention to the title of the sold products until payment is received by the customers. The maximum exposure to credit risk at the reporting date was:

EUR million	31 Dec 2016	31 Dec 2015
Trade and other receivables	219.0	218.1
Cash and cash equivalents	127.1	96.1
Other financial assets	13.8	-
Commodity contracts used for hedging: assets	22.2	26.3
Embedded derivatives: assets	59.2	34.8
Foreign exchange contracts used for hedging: assets	0.6	-
Foreign exchange contracts used for trading: assets	5.2	12.3
Restricted cash	111.7	84.6
Held to maturity	5.4	7.0
Total	564.2	479.2

The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was:

EUR million	31 Dec 2016	31 Dec 2015
Euro-zone countries	78.9	68.9
Asia	45.2	57.8
United States	10.8	16.4
Other European countries	48.0	41.9
Other regions	36.1	33.1
Total	219.0	218.1

The maximum exposure to credit risk for trade and other receivables at the reporting date by type of customer was:

EUR million	31 Dec 2016	31 Dec 2015
Wholesale customers	183.8	195.9
End-user customers	35.2	22.2
Total	219.0	218.1

(ii) Ageing analysis

Trade and other receivables including ageing of trade and other receivables which are past due but not impaired at the reporting date was:

31 Dec 2016
173.9	184.0
18.0	25.1
23.8	8.7
0.5	0.1
2.8	0.2
219.0	218.1

Credit risk in trade receivables is also managed in the following ways:

• The Company has a duty to exercise reasonable care and prudence in granting credit to and withholding credit from existing and potential customers. The Company takes all reasonable steps and uses its best endeavours to minimize any losses arising from bad debts. The Company's Credit Risk Management Policy describes the structure and systems put in place in order to efficiently and effectively manage the risks related to the credit granted to business partners.

• Payment terms can vary from 0 to 90 days, after the month of delivery. Payment terms are dependent on whether the sale is a cash sale or a sale with an attached letter of credit stating the payment terms.
• A risk assessment is undertaken before granting customers a credit limit. Where no credit limit is granted sales have to be covered by other securities (i.e. bank guarantee, parent guarantee) and/or by documentary collection.
• If sales are covered by a letter of credit, this will in principle be irrevocable, confirmed with approved financial institutions.

(iii) Banks and financial institutions

For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.

(b) Liquidity risk management

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

EUR million	Carrying amount	Contractual cash flows	6 months or less	6 - 12	months 1 - 2 years 2 - 5 years		5 years or more
Finance lease liabilities	(0.7)	(0.7)	(0.1)	(0.1)	(0.2)	(0.3)	-
Loans and borrowings	(991.3)	(1,160.4)	(21.4)	(448.4)	(162.7)	(403.4)	(124.5)
Trade and other payables	(606.9)	(606.9)	(596.4)	(1.9)	(2.5)	(4.2)	(1.9)
Zinc prepayment *	(170.4)	(195.3)	(50.6)	(49.5)	(95.2)	-	-
Other financial liability	(11.6)	(11.6)	-	(11.6)	-	-	-
Commodity contracts – fair value hedges	(3.5)	(3.5)	(3.5)	-	-	-	-
Commodity contracts – cash flow hedges	(18.8)	(18.8)	(18.8)	-	-	-	-
Foreign exchange contracts – held for trading	(2.8)	(2.8)	(2.8)	-	-	-	-
Total, 31 Dec 2016		(1,806.0) (2,000.0)	(693.6)	(511.5)	(260.6)	(407.9)	(126.4)

* to be settled through physical deliveries of zinc (note 21)

In addition to the contractual maturities of financial liabilities disclosed above, the Company intends to redeem the Perpetual Securities as described in note 27(i).

EUR million	Carrying amount	Contractual cash flows	6 months or less	6 - 12	months 1 - 2 years 2 - 5 years		5 years or more
Finance lease liabilities	(1.4)	(1.4)	(0.3)	(0.4)	(0.2)	(0.5)	-
Loans and borrowings	(875.9)	(1,067.3)	(467.1)	(19.0)	(37.0)	(541.0)	(3.2)
Trade and other payables	(613.4)	(613.4)	(600.0)	(4.8)	(5.4)	(1.0)	(2.2)
Zinc prepayment *	(134.5)	(139.4)	(0.4)	(0.4)	(69.5)	(69.1)	-
Commodity contracts – fair value hedges	(12.0)	(12.0)	(12.0)	-	-	-	-
Foreign exchange contracts – held for trading	(5.3)	(5.3)	(5.3)	-	-	-	-
Foreign exchange contracts – cash flow hedges	(0.1)	(0.1)	(0.1)	-	-	-	-
Total, 31 Dec 2015	(1,642.6)	(1,838.9)	(1,085.2)	(24.6)	(112.1)	(611.6)	(5.4)

In addition to the contractual maturities of financial liabilities disclosed above, the Company intends to redeem the Perpetual Securities as described in note 27(i).

(c) Currency risk

Strategic foreign exchange hedges

The Group entered into a series of strategic foreign exchange options and swaps to hedge the Company's monthly exposure related to the direct operating costs denominated in Australian dollars (AUD), Canadian dollars (CAD) and in Euro (EUR). Nyrstar hedged a significant portion of the EUR/USD exposure for the last eight months of 2016 and for the full year 2017. It also hedged a significant portion of the AUD/USD exposure for the last nine months of 2016 and approximately half of the exposure for the first six months of 2017. Finally, the Group hedged a significant portion of the USD/CAD exposure for the last four months of 2016 and for the full year 2017.

The Group has accounted for the strategic foreign exchange hedges as cash flow hedges and determined the hedge relationship to be effective. The amount recognised in other comprehensive income during the period was Nil. No amount related to the strategic foreign exchange hedges was reclassified from equity to income statement. There was also no ineffectiveness recognised in the income statement.

Foreign exchange hedges of the Nyrstar Port Pirie capital expenditures

The Group entered into foreign exchange forwards to hedge its exposure to the volatility in cash outflows related to capital expenditure denominated in foreign currency and incurred in relation to the Nyrstar Port Pirie redevelopment. The Group hedged its AUD exposure to the cash outflows that have been denominated in Euro, USD and Chinese Yuan Renminbi (CNY).

Nyrstar has accounted for the foreign exchange hedges of the Nyrstar Port Pirie capital expenditures as cash flow hedges. The amount recognised in other comprehensive income during the period was a loss of EUR 2.9 million. There was no ineffectiveness recognised in profit or loss related to the foreign exchange hedges of the Nyrstar Port Pirie capital expenditures. The amount that was recycled out of equity during the period and into the carrying amount of the capital expenditure was EUR 2.1 million. The hedges have been fully effective in 2016 with no amount related to the hedge ineffectiveness recognised in the Income Statement. The cash flows related to the hedges are expected to occur during the year ending 31 December 2017 in line with the completion of the Nyrstar Port Pirie redevelopment project completion.

Exposure to currency risk

The Group's exposure to foreign currency risk was as follows based on notional amounts:

EUR million	EUR	USD	AUD	CAD	Other	Total
Trade and other receivables	65.0	126.5	3.6	22.3	1.6	219.0
Other financial assets	-	13.8	-	-	-	13.8
Loans and borrowings	(566.6)	(424.7)	-	-	(0.7)	(992.0)
Zinc prepayment	-	(170.4)	-	-	-	(170.4)
Other financial liabilities	-	(11.6)	-	-	-	(11.6)
Trade and other payables	(146.7)	(357.0)	(80.7)	(10.1)	(12.4)	(606.9)
Gross balance sheet exposure	(648.3)	(823.4)	(77.1)	12.2	(11.5)	(1,548.1)
Foreign exchange contracts	160.8	82.9	(131.5)	(93.0)	(16.2)	3.0
Commodity contracts	-	(0.1)	-	-	-	(0.1)
Net exposure, 31 Dec 2016	(487.5)	(740.6)	(208.6)	(80.8)	(27.7)	(1,545.2)

EUR million	EUR	USD	AUD	CAD	Other	Total
Trade and other receivables	57.5	147.4	7.1	2.0	4.1	218.1
Loans and borrowings	(876.2)	-	-	-	(1.1)	(877.3)
Zinc prepayment	-	(134.5)	-	-	-	(134.5)
Trade and other payables	(171.0)	(313.6)	(99.8)	(8.2)	(20.8)	(613.4)
Gross balance sheet exposure	(989.7)	(300.7)	(92.7)	(6.2)	(17.8)	(1,407.1)
Foreign exchange contracts	46.7	177.4	(149.1)	(73.0)	4.9	6.9
Commodity contracts	-	14.3	-	-	-	14.3
Net exposure, 31 Dec 2015	(943.0)	(109.0)	(241.8)	(79.2)	(12.9)	(1,385.9)

Sensitivity analysis

Nyrstar's results are significantly affected by changes in foreign exchange rates. Sensitivities to variations in foreign exchange rates are depicted in the following table, which sets out the estimated impact on Nyrstar's full year results and equity (in EUR million).

				Income statement
Full year 2016 Full year 2015 annual average annual average
Parameter	rate	rate	Variable	2016	2015	2016	2015
EUR / USD	1.107	1.110	+ / - 10%	(83) / 102	(101) / 123	(70) / 89	(101) / 123
EUR / AUD	1.488	1.478	+ / - 10%	23 / (28)	23 / (28)	23 / (28)	23 / (28)
EUR / CHF	1.090	1.068	+ / - 10%	4 / (5)	4 / (5)	4 / (5)	4 / (5)

The above sensitivities were calculated by modelling Nyrstar's 2016 and 2015 underlying operating performance. Exchange rates are based on an average value observed during that period and are varied in isolation to determine the impact on Nyrstar's full year results and equity.

(d) Commodity price risk management

Metal at risk hedges

The Group is exposed to commodity price volatility on commodity sales and raw materials purchased. The Group enters into zinc, lead and silver futures and swap contracts to hedge certain forward fixed price sales to customers in order to achieve the relevant metal price at the date that the transaction is settled. The Group also enters into zinc, lead and silver futures and swap contracts to more closely align the time at which the price for externally sourced concentrate purchases is set to the time at which the price for the sale of metal produced from that concentrate is set. These instruments are referred to as 'metal at risk' hedges and the terms of these contracts are normally between one and three months.

The Group has accounted the metal at risk hedges as fair value hedges with any mark-to-market on the hedging instrument recognised in the Income Statement. The amount of the losses recognised on the hedging instrument in 2016 was USD 124.1 million (EUR 117.8 million). The gains on the hedged item attributable to the hedged risk was USD 124.6 million (EUR 118.2 million). The fair values of the metal at risk hedges at 31 December 2016 was USD 17.2 million (EUR 16.3 million).

Strategic zinc price hedges

The Group entered into a series of zinc options to hedge the volatility in cash flows from sales of its free metal arising from its exposure to the zinc price. The Group has hedged a significant portion of its zinc free metal production for the last four months of 2016 and for the year 2017.

Additionally, the Group entered into a series of zinc swaps to hedge the Group's exposure related to the zinc price for the payable metal of its mining operations. The Group hedged approximately a quarter of the mining segment's zinc price exposure for the last four months of 2016 and for the year 2017.

Nyrstar has accounted for these strategic zinc price hedges as cash flow hedges. The amount recognised in other comprehensive income during the period was a loss of EUR 13.1 million. No amount related to the strategic zinc price hedges was reclassified from equity to income statement. There was also no ineffectiveness recognised in the income statement.

Silver price hedges related to the long term silver prepayment

The Group entered into forward sales of silver metal to hedge its exposure related to the deliveries of silver units under the long term silver prepayment.

Nyrstar has accounted for the silver price hedges related to the long term silver prepayment as cash flow hedges. The amount recognised in other comprehensive income during the period was a loss of EUR 27.8 million. There was no ineffectiveness recognised in profit or loss related to the silver price hedges related to the long term silver prepayment. The amount reclassified from equity to income statement was EUR 10.5 million. The cash flows related to the hedges are expected to occur during the year ending from 31 December 2017 to 31 December 2019.

Hobart embedded derivatives

Nyrstar Hobart has entered into two electricity fixed price contracts (in the form of swaps) to hedge its exposure to the volatility in electricity prices. The hedge relationships have been accounted for as cash flow hedges. The amount recognised in other comprehensive income during the period was a gain of EUR 28.9 million. The Group reclassified an amount of EUR 0.7 million related to the Hobart embedded derivatives from equity to income statement. The hedge ineffectiveness recognised in profit or loss related to the Hobart embedded derivatives was a loss of EUR 5.2 million. The cash flows related to the hedges are expected to occur during the year ending 31 December 2017 through to 31 December 2020.

The following table sets out a summary of the notional value of derivative contracts hedging commodity price risks at 31 December 2016.

EUR million	Average price in USD	6 months or less	6 - 12 months	12 - 18 months	more than 18 months	Total
Zinc	per tonne
Contracts purchased	2,438	(21.6)	(1.0)	-	-	(22.6)
Contracts sold	2,642	74.1	-	-	-	74.1
Net position		52.5	(1.0)	-	-	51.5
Lead	per tonne
Contracts purchased	2,117	(19.4)	-	-	-	(19.4)
Contracts sold	2,185	90.2	-	-	-	90.2
Net position		70.8	-	-	-	70.8
Silver	per ounce
Contracts purchased	15.9	(10.0)	-	-	-	(10.0)
Contracts sold	17.2	90.5	-	-	-	90.5
Net position		80.5	-	-	-	80.5
Gold	per ounce
Contracts purchased	1,140.7	(3.9)	-	-	-	(3.9)
Contracts sold	1,227.9	16.8	-	-	-	16.8
Net position		12.9	-	-	-	12.9
Copper	per tonne
Contracts purchased	-	-	-	-	-	-
Contracts sold	5,702	0.9	-	-	-	0.9
Net position		0.9	-	-	-	0.9

The following table sets out a summary of the notional value of derivative contracts hedging commodity price risks at 31 December 2015.

EUR million	Average price in USD	6 months or less	6 - 12 months	12 - 18 months	more than 18 months	Total
Zinc	per tonne
Contracts purchased	1,703.0	(76.5)	(26.4)	-	-	(102.9)
Contracts sold	1,614.0	116.4	1.3	-	-	117.7
Net position		39.9	(25.1)	-	-	14.8
Lead	per tonne
Contracts purchased	1,754.0	(11.6)	-	-	-	(11.6)
Contracts sold	1,669.0	57.2	-	-	-	57.2
Net position		45.6	-	-	-	45.6
Silver	per ounce
Contracts purchased	13.9	(9.4)	-	-	-	(9.4)
Contracts sold	14.1	77.5	-	-	-	77.5
Net position		68.1	-	-	-	68.1
Gold	per ounce
Contracts purchased	1,017.1	(4.6)	-	-	-	(4.6)
Contracts sold	1,090.9	31.3	-	-	-	31.3
Net position		26.7	-	-	-	26.7
Copper	per tonne
Contracts purchased	-	-	-	-	-	-
Contracts sold	4,587	0.8	-	-	-	0.8
Net position		0.8	-	-	-	0.8

Sensitivity analysis

Nyrstar's results are significantly affected by changes in metal prices and treatment charges (TC). Sensitivities to variations in metal prices and treatment charges are depicted in the following table, which sets out the estimated impact on Nyrstar's full year results and equity (in EUR million).

					Income statement		Equity
	Full year 2016 annual average	Full year 2015 annual average
Parameter	price	price	Variable	2016	2015	2016	2015
Zinc price	\$2,095	\$1,928	+ / - 30%	199 / (148)	260 / (210)	111 / (70)	260 / (210)
Lead price	\$1,872	\$1,784	+ / - 10%	1 / (1)	3 / (3)	1 / (1)	3 / (3)
Silver price	\$17.1	\$15.7	+ / - 10%	4 /(4)	4 /(4)	(4) / 4	(5)/ 5
Zinc TC	\$203	\$245	+ / - 10%	25 / (25)	30 / (30)	25 / (25)	30 / (30)
Lead TC	\$165	\$193	+ / - 10%	4 / (4)	5 / (5)	4 / (4)	5 / (5)

The above sensitivities were calculated by modelling Nyrstar's 2016 and 2015 underlying operating performance. Metal prices are based on an average value observed during that period and are varied in isolation to determine the impact on Nyrstar's full year results and equity.

(e) Financial Instruments by category

	Loans and	Fair value through profit and	Held to	Available	Derivatives used for	At amortised
EUR million	receivables	loss	maturity	for sale	hedging	costs	Total
Derivative financial instruments	-	21.9	-	-	65.3	-	87.2
Other financial assets	-	13.8	-	-	-	-	13.8
Trade and other receivables excl prepayments	219.0	-	-	-	-	-	219.0
Cash and cash equivalents	127.1	-	-	-	-	-	127.1
Restricted cash	111.7	-	-	-	-	-	111.7
Held to maturity	-	-	5.4	-	-	-	5.4
Investments in equity securities	-	-	-	22.4	-	-	22.4
Borrowings excl finance lease liabilities	-	-	-	-	-	(991.3)	(991.3)
Finance lease liabilities	-	-	-	-	-	(0.7)	(0.7)
Derivative financial instruments	-	(6.3)	-	-	(18.8)	-	(25.1)
Zinc prepayment	-	-	-	-	-	(170.5)	(170.5)
Other financial liabilities						(11.6)	(11.6)
Trade and other payables	-	-	-	-		(606.9)	(606.9)
Net position, 31 Dec 2016	457.8	29.4	5.4	22.4	46.5	(1,781.0)	(1,219.5)

EUR million	Loans and receivables	Fair value through profit and loss	Held to maturity	Available for sale	Derivatives used for hedging	At amortised costs	Total
Derivative financial instruments	-	15.4	-	-	58.0	-	73.4
Trade and other receivables excl prepayments	218.1	-	-	-	-	-	218.1
Cash and cash equivalents	96.1	-	-	-	-	-	96.1
Restricted cash	84.6	-	-	-	-	-	84.6
Held to maturity	-	-	7.0	-	-	-	7.0
Investments in equity securities	-	-	-	20.9	-	-	20.9
Borrowings excl finance lease liabilities	-	-	-	-	-	(875.9)	(875.9)
Finance lease liabilities	-	-	-	-	-	(1.4)	(1.4)
Derivative financial instruments	-	(17.3)	-	-	(0.1)	-	(17.4)
Zinc prepayment						(134.5)	(134.5)
Trade and other payables	-	-	-	-	-	(613.4)	(613.4)
Net position, 31 Dec 2015	398.8	(1.9)	7.0	20.9	57.9	(1,625.2)	(1,142.5)

(f) Interest rate risk management

Nyrstar's exposure to interest rate risk and along with sensitivity analysis on a change of 100 basis points in interest rates at balance date on interest bearing assets and liabilities is set out below:

			31 Dec 2016		Sensitivity analysis, in 100 bp
		Interest rate			Income statement	Equity
EUR million	Floating	Fixed	Total	increase	decrease	increase	decrease
Financial assets:
Cash and cash equivalents	127.1	-	127.1	1.0	(0.4)	1.0	(0.4)
Restricted cash	-	111.7	111.7	-	-	-	-
Held to maturity	-	5.4	5.4	-	-	-	-
Financial liabilities:
Loan facility	-	(14.3)	(14.3)	-	-	-	-
Borrowings - fixed rate bonds	-	(340.8)	(340.8)	-	-	-	-
Borrowings - convertible bonds	-	(211.5)	(211.5)	-	-	-	-
Borrowings - SCTF Credit Facility	(329.8)	-	(329.8)	(3.3)	2.5	(3.3)	2.5
Borrowings - Loans from related parties	(94.8)	-	(94.8)	(1.0)	0.7	(1.0)	0.7
Zinc prepayment	(170.5)		(170.5)	(1.7)	1.3	(1.7)	1.3
Finance lease liabilities	-	(0.8)	(0.8)	-	-	-	-
Net interest bearing financial assets / (liabilities)	(468.0)	(450.3)	(918.3)	(5.0)	4.1	(5.0)	4.1

In addition to the exposure to the interest rate risk on financial liabilities disclosed above, the Company is exposed to the interest rate movements on the Perpetual Securities as described in note 27(i).

	31 Dec 2015			Sensitivity analysis, in 100 bp
		Interest rate			Income statement	Equity
EUR million	Floating	Fixed	Total	increase	decrease	increase	decrease
Financial assets:
Cash and cash equivalents	96.1	-	96.1	1.2	(0.4)	1.2	(0.4)
Restricted cash	-	84.6	84.6	-	-	-	-
Held to maturity	-	7.0	7.0	-	-	-	-
Financial liabilities:
Loan facility	-	(13.2)	(13.2)	-	-	-	-
Borrowings - fixed rate bonds	-	(753.3)	(753.3)	-	-	-	-
Borrowings - convertible bonds	-	(109.4)	(109.4)	-	-	-	-
Zinc prepayment	(134.5)		(134.5)	(1.3)	0.6	(1.3)	0.6
Finance lease liabilities	-	(1.4)	(1.4)	-	-	-	-
Net interest bearing financial assets / (liabilities)	(38.4)	(785.7)	(824.1)	(0.1)	0.2	(0.1)	0.2

In addition to the exposure to the interest rate risk on financial liabilities disclosed above, the Company is exposed to the interest rate movements on the Perpetual Securities as described in note 27(i).

Sensitivity calculations are based on closing cash balances. No negative interest rates are assumed.

(g) Fair value of financial assets and financial liabilities

The carrying amount of all financial assets and liabilities recognised at amortised cost on the consolidated statement of financial position approximate their fair value, with the exception of the fixed rate bonds of EUR 340.8 million (2015: EUR 753.3 million) and the convertible bonds of EUR 211.5 million (2015: EUR 109.4 million), with fair values based on quoted prices in active markets (Level 1 measurement including equity and debt component), of EUR 381.4 million (2015: EUR 687.9 million), and EUR 245.4 million (2015: EUR 96.1 million) respectively.

The following table presents the fair value measurements by level of the following fair value measurement hierarchy for derivatives:

• quoted prices in active markets for identical assets or liabilities (level 1);
• inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly (level 2); and
• inputs for the asset or liability that are not based on observable market data (level 3).

	Valuation technique (s)	Total as at
EUR million	and key input (s)	Level 1	Level 2		Level 3 31 Dec 2016
Commodity contracts – fair value hedges	a	-	16.7	-	16.7
Commodity contracts – cash flow hedges	a	-	5.5	-	5.5
Foreign exchange contracts – held for trading	b	-	5.2	-	5.2
Foreign exchange contracts – cash flow hedge	b	-	0.6	-	0.6
Embedded derivative	c	-	59.2	-	59.2
Total		-	87.2	-	87.2
Commodity contracts – fair value hedges	a	-	(3.5)	-	(3.5)
Commodity contracts – cash flow hedges	a	-	(18.8)	-	(18.8)
Foreign exchange contracts – held for trading	b	-	(2.8)	-	(2.8)
Total		-	(25.1)	-	(25.1)

	Valuation technique (s)				Total as at
EUR million	and key input (s)	Level 1	Level 2		Level 3 31 Dec 2015
Commodity contracts – fair value hedges	a	-	3.1	-	3.1
Commodity contracts – cash flow hedges	a	-	23.2	-	23.2
Foreign exchange contracts – held for trading	b	-	12.3	-	12.3
Embedded derivative	c	-	34.8	-	34.8
Total		-	73.4	-	73.4
Commodity contracts – fair value hedges	a	-	(12.0)	-	(12.0)
Foreign exchange contracts – held for trading	b	-	(5.3)	-	(5.3)
Embedded derivative	b		(0.1)		(0.1)
Total		-	(17.4)	-	(17.4)

For level 2 fair value measurements, fair values are determined based on the underlying notional amount and the associated observable forward prices/rates in active markets. The key inputs in these valuations are as follows (with reference to the tables above):

a) forward commodity prices in active market

• b) forward exchange rates in active market
• c) forward electricity prices in active market

37. Capital commitments

The value of commitments for acquisition of plant and equipment contracted for but not recognised as liabilities at the reporting date are set out in the table below.

EUR million	31 Dec 2016	31 Dec 2015
Within one year	53.1	104.0
Total	53.1	104.0

38. Operating leases

The value of commitments in relation to operating leases contracted for but not recognised as liabilities at the reporting date are set out in the table below.

EUR million	31 Dec 2016	31 Dec 2015
Within one year	8.5	4.5
Between one and five years	11.7	9.1
More than five years	-	0.1
Total	20.2	13.7

39. Contingencies

Legal actions

Although Nyrstar is the subject of a number of claims and legal, governmental and arbitration proceedings incidental to the normal conduct of its business, neither the Company nor any of its subsidiaries is or has been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) during the year ended 31 December 2016 which may have or has had significant effects on the financial position or profitability of the Company and its subsidiaries, taken as a whole.

The sanction process initiated at Coricancha in 2014, related to alleged non-compliances identified by the environmental regulator (OEFA) during an inspection in April 2013, remains open at 31 December 2016. Nyrstar has filed a legal defense contesting OEFA's findings and Nyrstar's assessment is that material monetary penalties are unlikely to be incurred. Efforts to return the sites to compliance are being pursued, however the potential for regulatory action cannot be excluded.

40. Related parties

(a) Related Parties

Relationship with Trafigura

Overview of the relationship with Trafigura

Trafigura is a significant shareholder of the Company through its subsidiary, Urion Holdings (Malta) Ltd ("Urion"). It acquired its shareholding in the Company through several acquisitions, which were notified to the Company as follows:

Date of Notification	Number of shares notified	Percentage of shares notified
1 October 2014	28,638,753	8.42% (1)
2 October 2014	34,651,369	10.19% (1)
12 November 2014	52,035,694	15.30% (1)
1 September 2015	68,090,869	20.02% (1)

(1) On the basis of 340,045,088 outstanding Shares of the Company at that time before conversion of any of the convertible bonds outstanding at that time.

Since the notification of significant shareholding received by the Company at 1 September 2015, Urion acquired additional shares in the Company via market purchases. According to the most recent information received by the Company, at 31 December 2016 Urion held 23,055,662 shares representing 24.64% of the voting rights.

Following the annual general shareholders' meeting held at 27 April 2016, the Board of Directors is comprised of two non-executive dependent directors, namely Mr. Christopher Cox and Jesús Fernandez. Both Mr Christopher Cox and Jesús Fernandez represent Urion.

Trafigura Relationship Agreement

In connection with Trafigura's commitment to support the Offering (see below), on 9 November 2015 the Company entered into a relationship agreement (the "Relationship Agreement") with Trafigura Group Pte. Ltd. to govern Nyrstar's relationship with Trafigura Group Pte. Ltd. and its affiliated persons (collectively "Trafigura").

The Relationship Agreement provides amongst other things for the following:

All transactions between the Group and Trafigura are to be conducted at arm's length and on normal commercial terms.

Trafigura will during the term of the Relationship Agreement not acquire (directly or indirectly) any shares or voting rights in the Company that would bring its aggregate holding of shares or voting rights (when aggregated with the holdings of any person with whom it acts in concert, including, as the case may be, the Group) to a level above 49.9% of the outstanding shares or voting rights of the Company. Furthermore, Trafigura does not intend to and will not, directly or indirectly, solicit, launch or publicly announce the solicitation or launching of a private or public offer or any proxy solicitation with respect to all or substantially all of the voting securities of the Company that is not recommended or otherwise supported by the board of directors of the Company. The aforementioned restrictions would automatically fall away in case of the announcement by a third party at the request of the Belgian FSMA regarding its intention to carry out a public tender offer, the announcement of an actual public tender offer by a third party, an acquisition by a third party of shares such that such person's holding of shares reaches or exceeds 10% of the outstanding shares in the Company, and it becoming unlawful for the Relationship Agreement to remain in force. The restrictions do not prevent Trafigura from soliciting, launching or publicly announcing the solicitation or launching of a private or public offer or any proxy solicitation with respect to all or substantially all of the voting securities of the Company that is recommended or otherwise supported by the board of directors of the Company, tendering shares in a public tender offer (including the entering into an irrevocable commitment with respect to such public tender offer) or entering into another transaction in relation to its shares, such as sale of its shares.

Trafigura will be able to nominate or propose the nomination of such number of directors to the Company's board of directors as it determines, but limited to a number that does not constitute a majority of the Company's board of directors (such directors being a "Trafigura Director", but it being noted that the director appointed upon proposal of Trafigura, Mr. Martyn Konig, prior to the date of the Relationship Agreement who is an "independent director" shall not for these purposes be considered as a Trafigura Director). The Relationship Agreement also provides that the proposal for appointment of any new independent director requires the approval of a majority of the directors other than the Trafigura Directors, it being understood however, that the Relationship Agreement in no way restricts the Trafigura group as shareholder to vote in favour of or against any proposed independent director. In case a Trafigura Director is chairman of the board of directors or chairs a meeting of the board of directors, he or she shall not have a casting vote. Furthermore, the Relationship Agreement provides that the attendance quorum for a board meeting shall be at least one independent director and one Trafigura Director, but if this attendance quorum is not met, a subsequent board meeting can be held with the same agenda if at least any two directors are present.

After completion of the Offering, Trafigura may request the Company to take certain steps, including the publication of a prospectus or other offering document in connection with a proposed disposal of some or all of Trafigura's shares.

After completion of the Offering, if the Company issues equity securities, Trafigura will have pro rata subscription rights.

The Relationship Agreement will have effect for as long as Trafigura holds 20% or more but less than 50% of the shares in the Company. It may be terminated by Trafigura if any of the Trafigura Commercial Agreements that it entered into with the Nyrstar Sales & Marketing AG on 9 November 2015 is terminated other than as a result of expiry or non-renewal and other than due to material breach by Trafigura.

Trafigura's Commitment to the Rights Offering

On 9 November 2015, Trafigura, (through its subsidiary, Urion) agreed, subject to certain conditions, to subscribe for shares in the rights offering ("Offering") that was launched on 5 February 2016, for up to a maximum aggregate amount of EUR 125 million, and provided that its aggregate shareholding in the Company after completion of the Offering is not more than 49.9%. Pursuant to the Rights Offering, Urion subscribed with rights for 149,861,803 new shares for an aggregate amount of EUR 67.4 million. As a result of the Offering, Urion's shareholding in the Company remained at 24.64% in aggregate. The Company paid to Trafigura a commission of EUR 5.0 million;

Trafigura Commercial Agreements

On 9 November 2015, Nyrstar Sales & Marketing AG entered into commercial agreements with Trafigura Pte. Ltd. (the "Trafigura Commercial Agreements") relating to the purchase by Nyrstar from Trafigura of zinc concentrate, lead concentrate and finished refined aluminium metal (the "Purchase Agreements") and the sale by Nyrstar to Trafigura of finished refined zinc metal (part of this contract being implemented by way of the 2015 prepay financing), finished refined lead metal and finished refined copper cathodes (the "Sales Agreements").

All of the agreements entered into force on 1 January 2016 for a fixed term of five years, with an option for Trafigura to renew for a further period of five years. Thereafter they are expected to continue on an evergreen basis, provided that with at least one calendar year's notice (which can be given on and from 31 December 2024) (i) Trafigura may terminate at any time and (ii) Nyrstar may terminate if Trafigura's or its affiliates' shareholding in Nyrstar NV or its affiliate falls below 20%. In addition, the agreements are subject to certain termination rights in case of default under the various agreements. The Company is of the opinion that Trafigura Commercial Agreements were entered into at market conditions.

The Purchase Agreements provide for market-based prices with annually agreed treatment charges (for zinc concentrate and lead concentrate) and premiums (for aluminium) subject to certain fallback mechanisms, in case no agreement can be reached between the parties. Subject to annual agreement, the Purchase Agreements will relate to approximately 10-35% of Nyrstar's feedbook requirements. In January 2017, Nyrstar and Trafigura agreed a framework for the granting by Trafigura, on a case by case basis, of deferred payment terms on concentrate deliveries for two specific Purchase Agreements. Any such deferred payments will be secured by the shares of Nyrstar Budel BV, a subsidiary of the Company.

The Sales Agreements provide for market-based prices with (i) market-based premiums subject to specific market-based discounts up to and including 2017 and annually agreed discounts thereafter for zinc metal, (ii) annually agreed premiums for lead metal and (iii) market-based premiums subject to annually agreed discounts for copper cathodes, subject to certain fallback mechanisms in case no agreement can be reached between the parties The Sales Agreements will relate to substantially all of Nyrstar's commodity grade metal.

In April 2016 Nyrstar announced that it terminated the offtake and marketing agreement with Noble Group Limited ("Noble") to market and sell 200,000 tonnes per annum of commodity grade zinc metal produced at its European smelters. Nyrstar has included the zinc metal volumes that were previously to be provided to Noble until the end of 2016 into the zinc metal offtake agreement with Trafigura entered into on 9 November 2015 with market based terms and a prepayment mechanism.

Trafigura Off-take Agreement under the zinc prepayment agreement

In December 2015 Trafigura also become the off-taker in the USD 150 million (EUR 137.8 million) zinc prepayment arranged by Deutsche Bank AG that is linked to the physical delivery of refined zinc metal to Trafigura under the terms of a three-year offtake agreement. In second half of 2016 the zinc prepayment was increased to USD 185 million.

Trafigura Working Capital Facility

In May 2016 Nyrstar entered into a USD 150 million revolving working capital facility agreement with Trafigura. The facility was uncommitted and was secured by the shares of Nyrstar France SAS, a subsidiary of the Company, with a current term through to January 2017 and with an interest of LIBOR plus 4%. In November 2016, with the effective date of 1 January 2017, the working capital facility become committed, was extended till 31 December 2017 and was upsized to USD 250 million. The amended working facility is secured by a share pledge over the shares of Nyrstar France SAS, a subsidiary of the Company.

Transactions with related parties

Trafigura become a related party to Nyrstar at 28 August 2015 when it acquired more than 20% ownership in Nyrstar. The transaction values disclosed below include the transactions from 1 January 2016 to 31 December 2016. The comparative 2015 information include transaction from 28 August 2015 to 31 December 2015.

Sale of goods and services

Purchase of goods

	Transaction values for the year ended 31 December
EUR million	2016	2015
Sale of goods and services
Trafigura Beheer B.V.	-	-
Subsidiaries & associates of Trafigura Beheer B.V.	354.5	24.5
Purchase of goods
Trafigura Beheer B.V.	-	-
Subsidiaries & associates of Trafigura Beheer B.V.	514.0	26.3
Amounts owed by*
Trafigura Beheer B.V.	-	-
Subsidiaries & associates of Trafigura Beheer B.V.	40.9	47.3
Amounts owed to*
Trafigura Beheer B.V.	-	-
Subsidiaries & associates of Trafigura Beheer B.V.	140.7	94.3

Amounts owed by*

Amounts owed to*

*Includes the balances of the commodity swaps (Note 24 and 32)

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No expenses have been recognized in the current or prior years for bad or doubtful debts in respect of the amounts owed by related parties.

The balance owed to Trafigura at 31 December 2016 of EUR 129.8 million (2015: Nil) includes Trafigura's direct participation of USD 35 million (EUR 33.2 million) in the Zinc prepayment (2015: USD 50 million (EUR 45.9 million)) (Note 20) and the Loan from related parties of EUR 94.8 million (2015: Nil) (note 29).

EUR million	Balances at the end of 31 December
	2016	2015
Loan from related parties
Trafigura Beheer B.V.	-	-
Subsidiaries & associates of Trafigura Beheer B.V.	129.8	-
Interest and fees paid to related parties
Trafigura Beheer B.V.	-	-
Subsidiaries & associates of Trafigura Beheer B.V.	4.3	-

(b) Key management compensation

Board of directors

EUR million	2016	2015
Salaries and other compensation	0.4	0.5
Nyrstar Management Committee
EUR million	2016	2015
Salaries and other compensation	4.7	5.9
Pension benefits	0.7	0.4
Share based payments	0.9	0.8

Share based payments reflect the cost to the Group related to share based awards granted to the members of the NMC. These costs do not represent actual monetary or non-monetary benefits received by the members of the NMC.

41. Audit and non-audit services by the Company's statutory auditor

During the period, the auditor received fees for audit and audit related services provided to the Group as follows:

EUR thousand	2016	2015
Audit services	186.6	99.0
Audit related services	-	95.6
Tax services	-	8.9
Total Deloitte Bedrijfsrevisoren	186.6	203.5
Audit services	951.8	1,185.5
Audit related services	213.1	-
Tax services	22.4	33.6
Total other offices in the Deloitte network	1,187.3	1,219.1

42. Group entities

The holding company and major subsidiaries included in the Group's consolidated financial statements are:

	Belgian company	Country of	Ownership	Ownership
Entity	number	incorporation	31 Dec 2016	31 Dec 2015
Nyrstar NV	RPR 0888.728.945	Belgium	Holding entity	Holding entity
Nyrstar Australia Pty Ltd		Australia	100%	100%
Nyrstar Hobart Pty Ltd		Australia	100%	100%
Nyrstar Port Pirie Pty Ltd		Australia	100%	100%
Nyrstar Trading GmbH		Austria	100%	100%
Nyrstar Resources (Barbados) Ltd		Barbados	100%	100%
Nyrstar Belgium NV	RPR 0865.131.221	Belgium	100%	100%
Breakwater Resources Ltd		Canada	100%	100%
Canzinco Ltd		Canada	100%	100%
Nyrstar Mining Ltd		Canada	100%	100%
Nyrstar Canada (Holdings) Ltd		Canada	100%	100%
Nyrstar Myra Falls Ltd		Canada	100%	100%
Sociedad Contractual Minera El Toqui		Chile	-	100%
GM-Metal SAS		France	-	100%
Nyrstar France SAS		France	100%	100%
Nyrstar France Trading SAS		France	100%	100%
Nyrstar Germany GmbH		Germany	100%	100%
Nyrstar Hoyanger AS		Norway	100%	100%
American Pacific Honduras SA de CV		Honduras	-	100%
Servicios de Logistica de Centroamerica SA de CV		Honduras	-	100%
Nyrstar Campo Morado SA de CV		Mexico	100%	100%
Nyrtrade Mexico SA de CV		Mexico	100%	100%
Nyrstar Budel BV		The Netherlands	100%	100%
Nyrstar International BV		The Netherlands	100%	100%
Nyrstar Netherlands (Holdings) BV		The Netherlands	100%	100%
Nyrstar Coricancha S.A.		Peru	100%	100%
Nyrstar Ancash S.A.		Peru	100%	100%

Notes to the consolidated financial statements

Nyrstar Peru S.A.	Peru	100%	100%
Nytrade Perú SA	Peru	100%	100%
Nyrstar Finance International AG	Switzerland	100%	100%
Nyrstar Sales & Marketing AG	Switzerland	100%	100%
Breakwater Tunisia SA	Tunisia	100%	100%
Nyrstar Clarksville Inc	United States	100%	100%
Nyrstar Holdings Inc	United States	100%	100%
Nyrstar IDB LLC	United States	100%	100%
Nyrstar Tennessee Mines - Gordonsville LLC	United States	100%	100%
Nyrstar Tennessee Mines - Strawberry Plains LLC	United States	100%	100%
Nyrstar US Inc	United States	100%	100%
Nyrstar US Trading Inc	United States	100%	100%
Nyrstar US Trading Inc	United States	100%	100%

43. Subsequent events

On 9 February 2017, the Company announced it has undertaken a comprehensive review of the Port Pirie Redevelopment project (the "Project") to ensure that the scope, flow sheet and commissioning will provide Port Pirie with industry leading performance.

Management's review has confirmed that the Project is the right strategy for the Company as it will have a significant positive longterm effect on Nyrstar's operations and deliver a substantial earnings uplift. The review also identified that rework is required to the fabrication of key module components, which will delay the start of hot commissioning, however a number of engineering improvements were identified that will also unlock additional value. Port Pirie is at a stage where the identified improvements can still be implemented effectively ahead of the revised hot commissioning milestone.

The new TSL furnace hot commissioning will be postponed by 6 months to September 2017. This time will be primarily used to do the rework referred to above and to enhance the slag tapping process on the TSL furnace. Ancillary benefits include the completion of further advanced training of plant personnel as well as improved start-up sequencing of the TSL furnace and tie-in to the existing operations. To further reduce ramp-up risk, the Company intends to operate the existing sinter and acid plants in parallel with the ramp-up of the TSL furnace and new acid plant The total estimated cost to complete the project is expected to increase from AUD 563 million to AUD 660 million, an increase of approximately EUR 70 million.

With the exception of the events stated above, there have been no material reportable events subsequent to 31 December 2016.

Statutory auditor's report on the consolidated financial statements

Statutory auditor's report on the consolidated financial statements Statutory auditor's report on the consolidated financial statements

Nyrstar NV summarized (non-consolidated) financial statements as at 31 December 2016

The annual accounts prepared under Belgian GAAP are presented below in summarized form. In accordance with the Belgian Company Code, the annual accounts of Nyrstar NV together with the management report and the statutory auditor's report will be deposited with the National Bank of Belgium.

These documents may also be obtained on request from: Nyrstar NV, Zinkstraat 1, B- 2490 Balen (Belgium).

The statutory auditor, Deloitte Bedrijfsrevisoren BV o.v.v.e. CVBA, represented by Gert Vanhees has expressed an unqualified opinion on the annual statutory accounts of Nyrstar NV.

Balance sheet

EUR thousands	As at 31 December 2016	As at 31 December 2015
Formation expenses	14,077	6,639
ASSETS
Non-current assets	1,235,423	1,496,755
Property, plant and equipment	3	3
Financial assets	1,235,420	1,496,752
Current assets	411,444	429,540
Receivables > 1 year	-	400,000
Receivables < 1 year	406,287	2,445
Current investments	-	20,076
Cash	109	1,647
Accrued income	5,048	5,372
Total assets	1,660,944	1,932,934
LIABILITIES
Shareholders' equity	1,257,203	1,273,617
Issued share capital	97,193	34,005
Share premium	2,368,925	2,143,411
Legal reserve	16,257	16,257
Undistributable reserves	-	20,076
Distributable reserves	17,029	17,029
Retained earnings	(1,242,201)	(957,161)
Provisions for risks and charges	9,856	7,900
Liabilities	393,885	651,417
Non-current Liabilities	214,732	110,531
Current Liabilities	179,153	540,886
Total equity and liabilities	1,660,944	1,932,934

Income Statement

EUR thousands	As at 31 December 2016	As at 31 December 2015
Operating income	13,596	9,526
Operating charges	(25,592)	(21,452)
Operating result	(11,996)	(11,926)
Financial income	12,346	22,133
Financial charges	(285,816)	(1,181,555)
Ordinary result before taxes	(285,466)	(1,171,348)
Income taxes	426	8,902
Net result	(285,040)	(1,162,446)
Result allocation
Retained earnings from prior year	(957,161)	205,285
Addition to the legal reserves	-	-
Addition to the other reserves	-	1,674
Profit/loss to be carried forward	(1,242,201)	(957,161)

176 177 NYRSTAR NYRSTAR Annual Report 2016

Glossary of key industry terms

Acid plant A facility that recovers sulphur dioxide from discharged gases and manufactures sulphuric acid from it.

Ag Chemical symbol for silver.

Alloy Metal containing several components.

Alloying A technique of combining or mixing two or more metals to make an entirely new metallic compound; for example, mixing copper and tin creates bronze.

Antimony A metallic element, often a pathfinder element for gold.

Au Chemical symbol for gold.

Base metal Non precious metal, usually refers to copper, lead, and zinc.

Blast furnace A tall shaft furnace used to smelt sinter and produce crude lead bullion and a slag.

Bullion Crude metal that contains impurities; needs to be refined to make market quality metal.

By-products By-products are secondary products obtained in the course of producing zinc or lead and include primarily sulphuric acid, silver, gold, indium, copper and cadmium.

Cadmium A soft bluish-white ductile malleable toxic bivalent metallic element; occurs in association with zinc ores.

C1 cash costs The costs of mining, milling and concentrating, on-site administration and general expenses, property and production royalties not related to revenues or profits, metal concentrate treatment charges, and freight and marketing costs less the net value of the by-product credits.

Cake The solid mass remaining after the liquid that contained it has been removed.

Calcine Product of roasting zinc sulphide concentrates; mainly zinc oxide, also with silica and iron

compounds, lead compounds, minor elements and residual combined sulphur.

Cathode Negatively charged electrode in electrolysis; in zinc and cadmium electrolysis, the cathode is a flat sheet of aluminium.

Cellhouse The location in the production process where zinc metal is electrolytically plated onto aluminium cathodes.

Cement, cementation The process of obtaining a metal from a solution of one of its compounds by precipitation with another metal (e.g., obtaining copper from a solution of copper sulphate by adding metallic zinc).

CGG Continuous Galvanising Grade zinc; contains alloying agents such as aluminium. lead and selenium in specific qualities desired by customers; used in continuous strip galvanising plants.

CIM Canadian Institute of Mining, Metallurgy and Petroleum.

Cobalt A hard, lustrous, silver-grey metal.

Coke Product made by de-volatilisation of coal in the absence of air at high temperature.

Concentrate Material produced from metalliferous ore by mineral processing or beneficiation; commonly based on sulphides of zinc, lead and copper; in a concentrate, the abundance of a specific mineral is higher than in the ore.

Continuous galvanising A system for providing a continuous supply of material to be galvanised.

Conversion Price Operating cost for a smelter to produce market quality metal, not including the cost of raw materials.

Copper cementate Metallic copper obtained by cementation.

Copper sulphate A copper salt made by the action of sulphuric acid on copper oxide.

Cu Chemical symbol for copper.

Dewatering A process usually used to remove water from wet solids or slurries by draining, pressing, pumping.

Die casting A process for producing parts in large quantities, by injecting molten metal under pressure into a steel die.

dmt Dry metric tonne.

doré Unrefined gold and silver bullion bars, usually consisting of approximately 90% precious metals, which are to be further refined to almost pure metal.

Dross Solid scum that forms on top of molten metals as a result of oxidation; must be removed for recycle.

EBITDA Most references to EBITDA in the releases are Underlying EBITDA.

"Underlying EBITDA" is a non-IFRS measure of earnings, which is used internally by management to assess the underlying performance of Nyrstar's operations and is reported by Nyrstar to provide additional understanding of the underlying business performance of its operations.

Nyrstar defines "Underlying EBITDA" as profit or loss for the period adjusted to exclude loss from discontinued operations, net of income taxes, income tax (expense) / benefit, share of loss of equity-accounted investees, gain on the disposal of equity-accounted investees, net finance expense, impairment losses and reversals, restructuring expense, M&A related transaction expense, depreciation, depletion and amortization, material income or expense arising from embedded derivatives recognized under IAS 39 "Financial Instruments: Recognition and Measurement and other items arising from events or transactions that management considers to be clearly

Glossary of key industry terms

distinct from the ordinary activities of Nyrstar."

Electrolysis The process by which metals (here zinc, cadmium, and copper) are 'won' or deposited from solution onto a cathode by the passage of an electric current through the solution between anode and cathode.

Electrolyte Solution containing metals (here zinc, cadmium, copper and silver) circulating in an electrolysis cell.

Electrowinning The process of removing metal from a metal bearing solution by passing an electric current through the solution.

EPA Environment Protection Authority of a state, provincial or federal government.

EZDA Proprietary zinc die casting alloy made at the Hobart smelter; the alloy contains aluminium and magnesium.

Flotation A method of mineral concentration, usually of sulphide ores, by which valuable mineral particles adhere to froth bubbles for collection as a concentrate; waste particles remain in the slurry for eventual disposal as a tailing.

Fluxes Additives to a feed mix made to produce a fluid slag in the furnace; typical fluxes are lime, silica and iron oxide.

Free metal contribution Metals Processing's free metal contribution

is the value of the difference received between the amount of metal that is paid for in a concentrate and the total zinc and lead recovered from the sale by a smelter

Fuming, fume A process for recovering of zinc and lead from molten lead blast furnace slag by injecting coal; the metals are removed as vapours in the gas stream, and are deoxidised to form a fume that is collected.

Galvanising Process of coating steel

sheet or fabricated products with a thin layer of zinc for corrosion protection.

Gangue The non-valuable minerals in an ore or concentrate.

Germanium A brittle grey crystalline element that is a semiconducting metalloid (resembling silicon).

Grade Quantity of metal per unit weight of host rock.

Greenhouse gases Gaseous components of the atmosphere that contribute to the greenhouse effect.

Grinding Size reduction to relatively fine particles.

Gross profit Revenue minus raw materials used and freight expense.

g/t Grammes per tonne.

Gypsum Calcium sulphate, hydrated.

Hydrometallurgical The treatment of ores and concentrates using a wet process that usually involves the dissolution of some component and its subsequent recovery from solution.

Indicated Mineral Resource That part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Indium A rare, soft silvery metallic element.

Induction furnace Furnace that heats metals without fuel combustion; the metal is heated by an electromagnetic

field created by electrical windings or inductors.

Inferred Mineral Resource That part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Intermediate copper cementate See: Cementation.

JORC Code The 2004 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves as published by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia.

kt Thousand tonnes.

Leachate The liquid produced when water percolates through any permeable material.

Leaching A process using a chemical solution to dissolve solid matters.

Lead sulphate A white crystal or powder compound of lead, sulphur and oxygen. It often forms at and is most readily seen at the terminals of lead acid car batteries. In Nyrstar it generally describes a residue produced in the leach stage of zinc smelters.

Life-of-mine Number of years that an operation is planning to mine and treat ore, taken from the current mine plan.

LME London Metal Exchange.

Lost time injury rate Twelve-month rolling averages of the number of lost time injuries per million hours worked, and include all employees and contractors across all operations.

Matte Mixed sulphide compound

Glossary of key industry terms

produced in a furnace; at the Port Pirie smelter matte is a lead-copper-sulphur material.

Measured Mineral Resource That part of a mineral resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

Mineral Reserve The economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined.

Mineral Resource A concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilised organic material including base and precious metals, coal, and industrial minerals in or on the Earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge.

Mt Million (metric) tonnes.

Net smelter return ("NSR") "Net smelter return" (or "NSR") is the gross revenue (total revenue minus production costs) that the owner of a mining property receives from the sale of the mine's metal/non metal products

less transportation and refining costs.

NI 43-101 The Canadian Securities Administrators National Instrument 43-101 Standards of Disclosure for Mineral Projects.

Ore Mineral bearing rock.

Oxidation The process by which minerals are altered by the addition of oxygen in the crystal structures.

Oxide washing Process to remove halides from zinc secondaries.

Paragoethite Form of goethite made as a by-product of zinc production, so named since the process differs from the normal "goethite process".

Payable metal Mining's Payable metal contribution is the metal price received for the payable component of the primary metal contained in concentrate before it is further processed by a smelter.

Pb Chemical symbol for Lead.

Premiums Smelters' premiums is the premium charged on top of the base LME price for the sales of refined zinc and lead metals.

Probable Mineral Reserve The

economically mineable part of an indicated and, in some circumstances, a measured mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.

Proven Mineral Reserve The economically mineable part of

a measured mineral resource

demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.

Recordable injuries Any injury requiring medical treatment beyond first aid.

Recordable injury rate Twelvemonth rolling averages of the number of recordable injuries per million hours worked, and include all employees and contractors across all operations.

Reductant The element in a reduction-oxidation (redox) reaction that reduces the other element involved in the reaction to a lower oxidation state. For example converting the lead in lead oxide to lead metal in a blast furnace uses the carbon contained in coke as a reductant.

Refining Charge or RC A negotiated fee that may be linked to metal prices, paid by the miner or seller of precious metals to a smelter as a concession on the cost of the metal concentrate or secondary feed materials that the smelter purchases.

RLE process Roast-Leach-Electrowin; technology used for the production of zinc and which combines the roasting, leaching and electrowinning processes. See also definition of each individual process.

Roaster In zinc production, a fluid-bed furnace used to oxidise zinc sulphide concentrates; operates typically at 930-970"C; air injected through the furnace bottom 'fluidises' the bed of fine combusting solids.

Roasting The process of burning concentrates in a furnace to convert the contained metals into a more readily recovered form.

Glossary of key industry terms

Secondaries See: Secondary feed materials.

Secondary feed materials By-

products of industrial processes such as smelting and refining that are then available for further treatment/ recycling. It also includes scrap from metal machining processes and from end-of-life materials.

SHG Special High Grade Zinc; minimum 99.995% zinc; premium quality, used by die casters; traded on the LME; attracts a price margin over lower grades.

Silica The chemical compound silicon dioxide, also known as silica, is the oxide of silicon.

Sinter A hard, porous, agglomerated intermediate material made by oxidation at moderately high temperature of sulphide concentrates, fluxes and returns on a grate conveyor termed a sinter machine.

Slag Mixture of oxides produced in molten form in a furnace at high temperature.

Smelting Chemical reduction of a metal from its ore by fusion.

Softening Oxidation process that removed arsenic and antimony from lead bullion; so named as arsenic and antimony make lead into a hard alloy.

Solvent extraction Method used in hydrometallurgy for metal recovery and/or purification; metal(s) are transferred to and from a selective organic liquid that is dissolved in a type of kerosene.

Spent electrolyte Electrolyte discharged from the electrolysis cells; compared with the feed electrolyte, the solution has a lower level of the metal being electrowon (i.e., zinc, copper) and correspondingly elevated acid level.

Stripping Removal of metal from material on which it has precipitated or been adsorbed, e.g., gold from carbon

or zinc from cathodes.

Sulphate A salt or ester of sulphuric acid.

Sulphide concentrate The product,

usually of the flotation process, in which sulphide particles are removed from the crushed rock, containing predominantly sulphide minerals.

Sulphides Minerals consisting of a chemical combination of sulphur with metals.

t Metric tonne.

Tailings Material rejected from a treatment plant after the recoverable valuable minerals have been extracted.

Treatment Charge or TC A negotiated fee that may be linked to

metal prices, paid by the miner or seller to a smelter as a concession on the cost of the metal concentrate or secondary materials that the smelter purchases.

TC is is a positive gross profit element for the smelters and a deduction in the gross profit for mines.

UG Underground.

Underlying EBITDA See EBITDA

Zn Chemical symbol for zinc.

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