Earnings Release • Jul 24, 2014
Earnings Release
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24 July 2014
Nyrstar NV ('Nyrstar') announces today its results for the six months ended 30 June 2014.
Management will discuss the results in a conference call with the investment community at 09:00 CET. The presentation will be webcast live on the Nyrstar website, www.nyrstar.com, and will also be available in archive.
Nyrstar delivered a solid performance for the first half of 2014.
We continue to make progress with our strategic priorities that in turn unlock the value inherent in our integrated business model. At the same time, we continue to demonstrate our commitment to cost control, disciplined capital expenditure and working capital control to preserve our balance sheet strength.
Our recently created Marketing, Sourcing & Sales segment is showing encouraging progress in supporting the Group's overall profitability. Through a better understanding of the markets, customers, products and end-uses in which we operate, Nyrstar has started to place and market commodity grade metal products directly with customers and continues to work closely with Noble, leveraging our strategic marketing agreement to enter into new geographical markets and reach new customers. In turn, increased metal premiums contributed to improved EBITDA performance for the Metals Processing segment that ultimately drove the Group's EBITDA for the period of EUR 110 million, up 12 percent on the prior half.
Project Lean, our cost savings programme, remains on track to deliver the targeted EUR 75 million of sustainable savings at the end of 2014. The initiative has had a direct impact on our segmental unit costs at the half-year, which were down 3 percent and 18 percent respectively for our Mining and Metals Processing segments year-on-year. Along with sustainable working capital management during the first half of the year, we ended the period with a solid improvement in our Net debt position, down 14 percent over the last twelve months to EUR 653 million. At the end of the period, we had committed undrawn liquidity headroom and cashon-hand of EUR 768 million.
We remain focused on improving the profitability of all our mining assets. During the period we implemented a number of initiatives identified from the ongoing review of the segment, namely better mine planning and operational efficiencies across all our mines, and identified the Coricancha and Pucarrajo mines as non-core assets given the limited scale and marginal economics of the two mines. We are mindful that we need to do more to improve performance and returns of the segment, and thus continue reviewing and implementing changes across the Mining business for the remainder of 2014. We remain confident in our decision to vertically integrate Nyrstar and we see an increasing trend in the percentage of total zinc concentrates from our own mines used internally by the Group's smelter network (approximately 52 percent in H1 2014 compared to 41 percent in H1 2013)reflecting the value of our mines now and the potential post SSR and the Port Pirie redevelopment.
A major milestone was achieved in May when we decided to go ahead with the redevelopment of Port Pirie backed by a binding Government agreement for the funding of the project. The final funding package limits the use of Nyrstar's balance sheet and preserves the financial flexibility of the Group. Work on site continues on time and to budget. The project go-ahead marks a landmark reached in the wider Metals Processing segment transformation where we remain committed to the roll-out of our Smelting Strategic Review ("SSR") projects, whilst conscious of sequencing to maintain discipline in our capital expenditure. We continue to move ahead from feasibility to the implementation phase on a number of SSR projects for the remainder of 2014 within the capital expenditure allocated for the year.
The safety of our workforce is our top priority and we remain committed to continuous improvement. During the period we implemented further stringent reporting practices to reinforce the importance of adopting a 'safety first' culture throughout the Group and have made a number of key hires to support the process, and I am pleased to report that our safety performance for the first six months of 2014 remains strong.
Graham Buttenshaw, Senior Vice President of Mining has decided to pursue other opportunities outside of Nyrstar. I thank Graham for his contribution to the Company and the Nyrstar Management Committee, and I am confident that Bob Katsiouleris, Senior Vice President Marketing, Sourcing and Sales will assume the interim role successfully, drawing on more than 20 years of experience in industrial minerals and metals sales,
marketing, operations, processing, finance and purchasing to continue with the Mining Strategic Review in line with wider Group strategy.
Our business model allows us to retain a leading position in zinc and lead, and pursue growing positions in other base, precious and minor metals including copper, gold, silver and indium.
We are encouraged to see the zinc prices trending up, but nevertheless we continue to take measures to become a more tightly-run business as we remain conscious of the need for a prudent and disciplined approach to managing the business ensuring it is sustainable for the long-term. Our capital allocation processes ensure that we are only investing in the best opportunities for the Group.
If fully implemented our SSR growth plans anticipate the Company deploying incremental capital of approximately EUR 250 million by the end of 2016 in order to fund the ca. 25 projects the Company has identified. In addition, Nyrstar intends to address the refinancing of its EUR 225 million bond ahead of its scheduled 2015 maturity. Accordingly, Nyrstar is evaluating access to equity and debt capital markets, in order to address these and other potential funding needs. The Company also continues to evaluate other alternative forms of financing.
We are focused on producing the right product mix to better meet the demands of the market. End use fundamentals remain strongly underpinned by improved sentiment in many developed economies and the trend of urbanisation in the emerging markets; this, together with our three business units focused on our strategic priorities, I am confident that we have set ourselves firmly on the path towards taking full advantage of our unique integrated business model to improve on our strong market position.
| United Kingdom | +44(0)20 3427 1901 |
|---|---|
| Belgium | +32(0)2 404 0660 |
| USA | +1646 254 3367 |
| Germany | +49(0)69 2222 10622 |
| Canada | +1416 216 4142 |
| Australia | +61(0)2 9253 5962 |
| Switzerland | +41(0)22 567 5432 |
| France | +33(0)1 76 77 22 22 |
| Netherlands | +31(0)20 716 8296 |
Nyrstar is an integrated mining and metals business, with market leading positions in zinc and lead, and growing positions in other base and precious metals; essential resources that are fuelling the rapid urbanisation and industrialisation of our changing world. Nyrstar has mining, smelting, and commercial operations located in Europe, the Americas, China and Australia and employs approximately 6,500 people. Nyrstar is incorporated in Belgium and has its corporate office in Switzerland. Nyrstar is listed on NYSE Euronext Brussels under the symbol NYR. For further information please visit the Nyrstar website, www.nyrstar.com
Amy Rajendran Group Manager Investor Relations T: +41 44 745 8103 M: +41 79 722 3089 E: [email protected]
This release includes forward-looking statements that reflect Nyrstar's intentions, beliefs or current expectations concerning, among other things: Nyrstar's results of operations, financial condition, liquidity, performance, prospects, growth, strategies and the industry in which Nyrstar operates. These forward-looking statements are subject to risks, uncertainties and assumptions and other factors that could cause Nyrstar's actual results of operations, financial condition, liquidity, performance, prospects or opportunities, as well as those of the markets it serves or intends to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. Nyrstar cautions you that forward-looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which Nyrstar operates may differ materially from those made in or suggested by the forward-looking statements contained in this news release. In addition, even if Nyrstar's results of operations, financial condition, liquidity and growth and the development of the industry in which Nyrstar operates are consistent with the forward-looking statements contained in this news release, those results or developments may not be indicative of results or developments in future periods. Nyrstar and each of its directors, officers and employees expressly disclaim any obligation or undertaking to review, update or release any update of or revisions to any forward-looking statements in this report or any change in Nyrstar's expectations or any change in events, conditions or circumstances on which these forward-looking statements are based, except as required by applicable law or regulation.
1 All references to EBITDA in the press release refer to Underlying EBITDA which excludes exceptional items related to restructuring measures, M&A related transaction expenses, impairment of assets, material income or expenses arising from embedded derivatives recognised under IAS 39 and other items arising from events or transactions clearly distinct from the ordinary activities of Nyrstar.
2 Group Underlying EBITDA per tonne of zinc in concentrate and zinc metal produced.
3 Net working capital is calculated as inventory, accounts receivables balances less accounts payable and deferred revenue.
4 Gearing is calculated as Net debt to Net debt plus Equity.
5 Net cash flow from operating activities represents cash flow from operations after working capital changes and income tax.
6 Lost Time Injury Rate (LTIR) is a 12-month rolling average of the number of lost time injuries per million hours worked, and include all employees and contractors at all operations. Prior period data can change to account for the reclassification of incidents following the period end date.
7 Recordable Injury Rate (RIR) is a 12-month rolling average of the number of recordable injuries per million hours worked, and include all employees and contractors at all operations. Prior period data can change to account for the reclassification of incidents following the period end date
8 Own mine production.
| Zinc market metal ('000 tonnes) Lead market metal ('000 tonnes) |
552 93 |
569 93 |
(3%) 0% |
519 86 |
6% 8% |
|---|---|---|---|---|---|
| Mining unit cost (USD DOC/t ore milled)9 | 66 | 67 | (1%) | 68 | (3%) |
| Metal Processing unit cost (EUR DOC/t market metal)10 |
477 | 490 | (3%) | 581 | (18%) |
| Average LME zinc price (USD/t)11 | 2,051 | 1,883 | 9% | 1,937 | 6% |
| Average exchange rate (EUR/USD) | 1.37 | 1.34 | 2% | 1.31 | 5% |
| Lead price (USD/tonne)12 | 2,101 | 2,106 | 0% | 2,177 | (3%) |
| Copper price (USD/tonne)12 | 6,916 | 7,113 | (3%) | 7,540 | (8%) |
| Silver price (USD/t. oz)12 | 20.05 | 21.07 | (5%) | 26.63 | (25%) |
| Gold price (USD/t. oz) 13 | 1,291 | 1,302 | (1%) | 1,523 | (15%) |
Gross profit for the reporting period was up 1 percent on the prior half to EUR 637 million, driven principally by improved contributions from premia contribution (up 12 percent to EUR 75 million), offset in part by an unfavourable EUR:USD exchange rate. The increase in premia was augmented by the Marketing Sourcing & Sales business unit delivering on Nyrstar's commercial strategy. Group Gross profit contribution from treatment charges of EUR 136 million was flat over the prior half, with higher 2014 benchmark zinc treatment charges offset by a stronger EUR:USD exchange rate. Free metal income was EUR 290 million, up 3 percent on the prior half, driven by higher zinc price and higher volumes sold in the Mining segment. By-products income of EUR 192 million was 3 percent down on prior half driven by decline in average copper, silver and gold prices.
Group EBITDA for the first six months of 2014 was EUR 110 million, up 12 percent compared to EUR 98 million in the prior half driven by improved overall production volumes, further improvement in cost control, higher realised premiums and realised treatment charges, and improved zinc prices over the period; these were offset by an overall decline in average copper, silver and gold prices, and an appreciation of 2 percent during the first six months of 2014 of the average EUR:USD exchange rate.
The Group reported a net loss after tax for the period of EUR (66) million in H1 2014, compared to a net loss of EUR (104) million in H2 2013. Nyrstar recognised an income tax benefit for H1 2014 of approximately EUR 12 million, representing an effective tax rate of approximately 15 percent compared to an effective negative tax rate of approximately 26 percent on H2 2013. The negative effective tax rate in H2 2013 resulted from the nondeductibility of goodwill impairments in the Mining segment recorded in H2 2013.
Cash and cash equivalents as at 30 June 2014 was EUR 310 million, up 6 percent on the prior half.
Net debt at the end of H1 2014 was EUR 653 million, an improvement of EUR 17 million since the end of 2013; and a 14 percent improvement since the end of June 2013. The Group maintained focus on delivering sustainable optimisation of working capital levels and released incremental cash of approximately EUR 55 million over the first half of the year, and EUR 126 million over the twelve months comprising H2 2013 and H1 2014.
9 Mining unit cost is USD direct operating costs per tonne of ore milled. Direct operating costs include people costs, energy costs, stores, external services and other operating costs
10 Metal Processing unit cost is EUR direct operating costs per tonne of zinc and lead metal production. Direct operating costs include people costs, energy costs, stores, external services and other operating costs
11 Cash settlement price.
12 Averages of LBMA AM daily fixing prices.
Net debt to EBITDA ratio for H1 2014 on LTM basis was 3.1x, improving from 3.6x as at 31 December 2013, and from 3.9x as at 30 June 2013.
Net working capital at the end of the period was EUR (132) million.
Gearing as at 30 June 2014 of 44 percent remains in-line with the level as at 31 December 2013.
The Group generated EUR 111 million of cash inflows from operating activities before working capital movements. Cash outflows from investing activities for the period of EUR 84 million represents capital expenditure on sustaining, as well as exploration, development and growth projects, net of disposals and proceeds from divestment of equity accounted investees. As at 30 June 2014 Nyrstar's EUR 400 million revolving structured commodity trade finance facility remained undrawn and was also fully undrawn as of 31 December 2013. Committed undrawn liquidity headroom and cash on hand was EUR 768 million at the end of H1 2014.
Capital expenditure was approximately EUR 93 million in the first half of 2014, an increase of 4 percent on the prior half and is expected to ramp up in the second half of the year towards guidance (see page 8 below).
During the period, as part of Nyrstar's on-going commitment to continued improvement in safety, management instilled further stringent reporting practices across the Group, and delivered a solid result for the period. No serious injuries were reported.
The Mining segment produced approximately 140,000 tonnes of zinc in concentrate, up 4 percent on the prior period despite operational issues at the Tennessee mines that impacted the production performance of the Mining segment. Nyrstar received approximately 17,000 tonnes of zinc in concentrate under its streaming agreement with Talvivaara in the first half of 2014 following entry into a loan and streaming holiday agreement. In line with management's expectations, the Metals Processing segment produced approximately 552,000 tonnes of zinc market metal in H1 2014, a decrease of 3 percent on H2 2013 attributable to planned maintenance shutdowns across the segment, and three less operating days in H1 2014 compared to H2 2013.
The average zinc price appreciated by 9 percent in H1 2014 to USD 2,050/t compared to USD 1,883/t in H2 2013 driven by underlying demand in key end use sectors for zinc, despite a slow start to the year on the back of severe winter weather conditions in North America and slower than expected growth in China's infrastructure industry. Automotive production and consumer goods continues to perform well. The cash to three months spread remained tight throughout H1 2014 and entered its first period of backwardation since 2007.
Benchmark treatment charges settled at approximately USD 223 per dry metric tonne at a basis zinc price of USD 2,000 per tonne, which represents a 6 percent improvement from the 2013 benchmark treatment charge of USD 210.50 per dry metric tonne, at the same basis price.
The Company maintains its full year 2014 production and has narrowed its Group CAPEX guidance for the year to EUR 280-315 million from EUR 290-335 million. In addition, Nyrstar provides guidance on its Port Pirie redevelopment project for the project life, 2014 to 2016.
| 2014 Mining | |
|---|---|
| Zinc (own mines) | 280,000-310,000 tonnes |
| Lead | 15,000-18,000 tonnes |
| Copper | 12,000-14,000 tonnes |
| Silver13 | 4,750,000-5,250,000 troy ounces |
| Gold | 65,000-70,000 troy ounces |
| 2014 Metals Processing | |
| Zinc | 1.0-1.1 million tonnes |
| 2014 CAPEX (unless otherwise stated) | |
| Mining | EUR 105-115 million |
| - Sustaining | EUR 40-45 million |
| - Exploration, development and growth | EUR 65-70 million |
| Metals Processing | EUR 175-200 million |
| - Sustaining | EUR 75-80 million |
| - Growth | EUR 20-30 million |
| - Port Pirie Redevelopment | EUR 80-90 million |
| 2014 Group CAPEX | EUR 280-315 million |
| Port Pirie Redevelopment further guidance | ||
|---|---|---|
| - | 2015 Guidance | EUR 190-200 million |
| - | 2016 Guidance | EUR 40-50 million |
| - | Redevelopment total | EUR 338 million14 |
The production guidance above reflects Nyrstar's current expectations. Importantly, Nyrstar's strategy is to focus on maximising value rather than production and, as such, the production mix of these metals may be altered during the course of the year depending on prevailing market conditions.
Revised updates may be issued by Nyrstar in subsequent trading updates during 2014, if it is expected that there will be material changes to the above guidance.
If fully implemented Nyrstar's SSR growth plans anticipate the Company deploying incremental capital of approximately EUR 250 million by the end of 2016 in order to fund the ca. 25 projects the Company has identified. In addition, Nyrstar intends to address the refinancing of its EUR 225 million bond ahead of its scheduled 2015 maturity. Accordingly, Nyrstar is evaluating access to equity and debt capital markets, in order to address these and other potential funding needs. The Company also continues to evaluate other alternative forms of financing.
13 75% of the silver produced by Campo Morado is subject to a streaming agreement with Silver Wheaton Corporation whereby only USD 3.90/oz is payable. In H1 2014, Campo Morado produced approximately 478,000 troy ounces of silver.
| EUR million | H1 | H2 | H1 | ||
|---|---|---|---|---|---|
| unless otherwise indicated | 2014 | 2013 | % H/H Change |
2013 | % Y/Y Change |
| Treatment charges | 174 | 173 | 1% | 164 | 6% |
| Free metal | 124 | 128 | (3%) | 116 | 7% |
| Premium | 75 | 67 | 12% | 61 | 23% |
| By-products | 102 | 108 | (6%) | 108 | (6%) |
| Other | (45) | (60) | (25%) | (51) | (12%) |
| Gross profit | 430 | 415 | 4% | 398 | 8% |
| Employee expenses | (102) | (97) | 5% | (110) | (7%) |
| Energy expenses | (117) | (131) | (11%) | (140) | (16%) |
| Other expenses / income | (88) | (96) | (8%) | (101) | (13%) |
| Direct operating costs | (307) | (324) | (5%) | (352) | (13%) |
| Non-operating and other | (15) | (17) | (12%) | 28 | - |
| EBITDA | 108 | 75 | 44% | 74 | 46% |
| EBITDA/t15 | 168 | 113 | 49% | 124 | 35% |
| Sustaining | 32 | 29 | 10% | 46 | (30%) |
| Growth | 13 | 10 | 30% | 10 | 30% |
| CAPEX | 45 | 39 | 15% | 56 | (20%) |
| Production ('000 tonnes) | |||||
| Zinc market metal | 552 | 569 | (3%) | 519 | 6% |
| Lead market metal | 93 | 93 | (0%) | 86 | 8% |
Gross profit increased by 4 percent to EUR 430 million in H1 2014. Zinc treatment charges increased by 1 percent due to a higher zinc benchmark in 2014 than in 2013 (USD 223 per dry metric tonne at a basis price of USD 2,000 per tonne in 2014 compared to a benchmark treatment charges of USD 210.50 per dry metric tonne at the same basis price in 2013). However, the impact of higher benchmark treatment charges was partially offset by lower market metal production and a higher proportion of concentrates purchased outside benchmark contracts compared to H2 2013. On a year-on-year comparison, Gross profit was up 8 percent driven principally by a 23 percent uplift in premia contribution.
Following the termination of the European metal off-take agreement with Glencore, Nyrstar regained direct marketing control for a significant portion of volumes, and used the Noble strategic marketing agreement to expand sales (by customer and region) of Nyrstar branded products, which positively impacted premia gross profit contribution. The total premia results increased by 12 percent over the prior half. Given the lower production volumes, free metal contribution of EUR 124 million was down 3 percent on H2 2013.
The contribution of By-products to Gross profit in H1 2014 was EUR 102 million, a decrease of 6 percent on H2 2013. The reduced Gross profit contribution was mainly driven by lower gold, silver and copper prices coupled with lower production volumes at Port Pirie as a result of an unplanned blast furnace maintenance shut down in May. This was offset in part by an improvement in sulphuric acid prices and increased indium metal and germanium leach sales from the Group's Auby and Clarksville smelters.
15 Metals Processing segment underlying EBITDA per tonne of zinc and lead metal produced.
The contribution of Other gross profit elements increased by 25 percent, attributable mainly to lower freight costs relative to H2 2013.
Despite lower production volumes, the operating unit costs per tonne (of zinc and lead metal) for the segment improved by 3 percent to EUR 477 per tonne, driven by a combination of reduced external service costs in the period and lower energy expenses compared to H2 2013. In absolute terms, direct operating costs were down by 5 percent on the prior half, and 13 percent year-on-year. Additionally, the weakening of the Australian Dollar against the Euro in the first half of 2014 positively impacted segmental cost performance in Euro terms as approximately 40 percent of the segment operating costs are denominated in Australian dollars.
The Metals Processing segment delivered EBITDA of EUR 108 million in H1 2014, an increase of 44 percent compared to EUR 75 million in H2 2013.
Capital expenditure in H1 2014 of EUR 45 million was up 15 percent from H2 2013, EUR 39 million. This comprised approximately EUR 32 million on sustaining expenditure and EUR 13 million of growth capital expenditure covering both Smelting Strategic Review project expenditures of EUR 2 million, and Port Pirie transformation project expenditures of EUR 11 million. Nyrstar continues the sequencing of its SSR projects for the remainder of 2014, within the growth capital expenditure guidance for the year of EUR 20-30 million.
The transformation blueprint consists of approximately 25 projects, that fall under three categories of investment: debottlenecking Nyrstar's smelters; building fuming capacity; and building minor metal extraction capability. The capital investment for the entire blueprint is estimated at EUR 265 million, with no single investment exceeding EUR 50 million. If fully implemented, this would entail approximately EUR 250 million of CAPEX on SSR projects by the end of 2016. Based on this capital investment and timeline and other internal economic assumptions, Nyrstar expects the transformation to generate a post-tax IRR of 25-30%16 .
16 Based on internal economic and flat metal price assumptions for the duration of the project; and includes the zinc plant closure.
| EUR million | H1 | H2 | H1 | ||||
|---|---|---|---|---|---|---|---|
| unless otherwise indicated | 2014 | 2013 | % H/H Change |
2013 | % Y/Y Change |
||
| Treatment charges | (39) | (37) | 5% | (39) | (0%) | ||
| Payable metal contribution | 168 | 153 | 10% | 182 | (8%) | ||
| By-products | 90 | 90 | 0% | 83 | 8% | ||
| Other | (11) | 13 | (185%) | 0 | - | ||
| Gross profit | 208 | 219 | (5%) | 226 | (8%) | ||
| Employee expenses | (69) | (68) | 1% | (72) | (4%) | ||
| Energy expenses | (25) | (24) | 4% | (24) | 4% | ||
| Other expenses / income | (78) | (83) | (6%) | (87) | (10%) | ||
| Direct operating costs | (171) | (175) | (2%) | (183) | (7%) | ||
| Non-operating and other | (11) | 2 | - | (10) | 10% | ||
| EBITDA | 26 | 46 | (43%) | 33 | (21%) | ||
| EBITDA/t17 | 165 | 329 | (50%) | 228 | (28%) | ||
| Sustaining | 20 | 27 | (26%) | 25 | (20%) | ||
| Exploration, development and growth | 26 | 20 | 30% | 26 | |||
| CAPEX | 46 | 47 | (2%) | 50 | (8%) | ||
| Production | |||||||
| Zinc in concentrate ('000 tonnes) | 140 | 134 | 4% | 138 | 1% | ||
| (own mine) | |||||||
| Talvivaara ('000 tonnes) | 17 | 7 | 143% | 7 | 143% | ||
| Gold ('000 troy ounces) | 29.2 | 50.4 | (42%) | 24.8 | 18% | ||
| Silver ('000 troy ounces) | 2,502 | 2,383 | 5% | 2,363 | 6% | ||
| Copper in concentrate ('000 tonnes) | 6.2 | 6.6 | (6%) | 6.3 | (2%) | ||
| Lead in concentrate ('000 tonnes) | 7.9 | 6.3 | 25% | 7.9 | 0% |
Gross profit for the Mining segment was down 5 percent to EUR 208 million in H1 2014. Increases in payable metal contribution from higher sales of zinc concentrate in the reporting period, and higher average zinc price in the half. The H2 2013 result was also impacted by a strategic hedging gain of EUR 22 million of which there was none in H1 2014.
The segment treatment charge expense increased by 5 percent to EUR 39 million as a result of higher zinc concentrate sales volumes of 12 percent compared to the previous half inclusive of volumes delivered under the Talvivaara streaming agreement as well as an increase in the market benchmark zinc treatment charge per tonne, which was in part mitigated by the efforts of the Marketing Sourcing & Sales business unit selectively placing volumes into the market at competitive spot treatment charge rates.
Payable metal contribution improved by 10 percent due to higher zinc production volumes (inclusive of volumes delivered under the Talvivaara streaming agreement), and the subsequent increase in sales volumes compared to the previous half; this was offset by the appreciation in the EUR/USD exchange rate during the period.
By-product contributions for the period were comparable half-on-half given high volumes of lead concentrate sold during the first six months of 2014, an income from sales of germanium and gallium product sourced from the Tennessee mines, offset by lower sales volumes of copper and gold concentrate compared to the last six
17 Mining segment underlying EBITDA per tonne of zinc in concentrate produced.
months of 2013. By-product contributions, were up 8 percent driven by 18 percent and 6 percent increases in the production of gold and silver, respectively, over the comparable periods.
Direct operating costs for the Mining segment were down 2 percent in absolute terms, despite the increase in overall zinc production volumes (inclusive of deliveries under the Talvivaara streaming agreement), reflecting Project Lean driven savings specifically in external services spend and stores and consumables.
The increase in Non-operating and other expenses in the period represents the costs attributable to concentrate inventory carried over from the prior half and subsequently sold during the reporting period.
| Direct operating costs | H1 | H2 | H1 | ||||
|---|---|---|---|---|---|---|---|
| USD/tonne ore milled | 2014 | 2013 | % H/H Change |
2013 | % Y/Y Change |
||
| Campo Morado | 81 | 81 | 0% | 130 | (38%) | ||
| Contonga | 62 | 51 | 22% | 91 | (32%) | ||
| El Mochito | 74 | 75 | (1%) | 56 | 32% | ||
| El Toqui | 78 | 92 | (15%) | 75 | 4% | ||
| Langlois | 115 | 118 | (3%) | 150 | (23%) | ||
| Myra Falls | 136 | 142 | (4%) | 132 | 3% | ||
| Tennessee mines | 42 | 39 | 8% | 37 | 14% | ||
| Average | 66 | 67 | (1%) | 68 | (3%) |
The average direct operating cost improvement in USD per tonne of ore milled for H1 2014 (excluding Talvivaara) of 1 percent on H2 2013 includes one-off operational issues at the Tennessee operations during H1 2014.
The unit direct operating costs at Contonga fell 32 percent year-on-year and 13 percent half-on-half but, due to a taxation provision reversal in the second half of 2013, reflect a 22 percent increase over the second half of 2013. The Tennessee mines recorded an 8 percent half-on-half increase due to the operational issues that impacted production during the period. This was offset by an overall improvement in direct operating costs at the remaining mines attributable to initiatives from the Turnaround Phase (Phase 1 of the Mining Strategic Review; see page 17 below) and the Group's Project Lean initiative. Direct operating costs at El Toqui reduced significantly half-on-half in light of a sustained increase in ore milled and improved cost management. Year-onyear direct operating costs improved by 3 percent.
EBITDA for the period was EUR 26 million, down 43 percent on the prior half.
Total capital expenditure for the Mining segment of EUR 46 million was down 2 percent on the second half of 2013 of EUR 47 million. Sustaining capital expenditure was EUR 20 million, which was down EUR 7 million from the second half of 2013 as a result of the Turnaround Phase and continued emphasis on optimal capital management across the Mining segment. Of the EUR 26 million spent on Exploration, development and growth; EUR 21 million was spent on exploration and mine development capital expenditure, up 24 percent over the prior half, an increase aligned with Nyrstar's current mine plans and as a function of the increase in ore extraction rates. The remaining EUR 5 million was spent on growth projects in the Mining segment during the reporting period, up EUR 2 million on the prior half and predominately spent at Campo Morado as test work continues outside the G9 ore-body (adapting the mill circuit to treat new zones).
On 1 April 2014, Nyrstar entered into a loan and streaming holiday agreement with Talvivaara Sotkamo Limited and Talvivaara Mining Company Plc (collectively referred to as 'Talvivaara'). Under the agreement Nyrstar has provided Talvivaara with a loan facility up to a maximum amount of EUR 20 million, made available in several tranches with the amount of each advance calculated with reference to a corresponding delivery of zinc in concentrate under the zinc streaming agreement signed in February 2010. The value of each advance is approximately equal to the amortised value of the zinc streaming agreement, which in April 2014 was approximately half of the market value of the zinc in concentrate delivered under the contract. This structure ensures that Nyrstar continues to receive deliveries of its zinc in concentrate from Talvivaara whilst not
increasing the net financial exposure of Nyrstar to Talvivaara. During H1 2014, Talvivaara delivered approximately 17,000 tonnes of zinc in concentrate to Nyrstar. All of this concentrate was delivered in Q2 2014 following entry into the loan and streaming holiday agreement.
Subject to Talvivaara securing a mutually beneficial financial solution, Nyrstar has agreed thereafter to provide Talvivaara with an option to enter into a streaming holiday based on volumes of zinc in concentrate up to an amount of 80,000 tonnes. In the event of a streaming holiday, the value sharing mechanism of the zinc streaming agreement will be amended to reduce on a pro rata basis; if the full holiday period is elected, the value sharing mechanism becomes nil. In such a circumstance, Nyrstar would purchase the zinc in concentrate on commercial terms from Talvivaara, outside the framework of the original contract, thus extending the life of the zinc streaming agreement.
As Talvivaara continues with its corporate reorganisation process, the zinc streaming agreement continues to remain in force and Nyrstar is actively working with Talvivaara along with other key stakeholders to explore the option of identifying potential investor(s) to participate in an overall financial solution for Talvivaara, providing sufficient liquidity for its current funding gap and allowing Talvivaara to perform its obligations under the zinc streaming agreement.
Nyrstar announces that Graham Buttenshaw has decided to pursue other opportunities outside of Nyrstar. Bob Katsiouleris, Senior Vice President Marketing, Sourcing and Sales has assumed the position of Acting-Senior Vice President of Mining. Both Bob and Graham have worked closely together on this changeover to ensure a smooth handover process. Nyrstar has employed an executive search agency to identify potential candidates for the permanent position of Senior Vice President of Mining.
Graham joined Nyrstar in March 2012 as the Group General Manager Mining for Latin America. He was appointed as the global Senior Vice President Mining in June 2013. In his role, Graham spearheaded the Company's Mining Strategic Review, a mine optimisation programme, which began in the second half of 2013, following the formation of the Group's three business units.
The core objective of MSS is to drive a commercial strategy in line with the wider Group's integrated business model that ensures that Nyrstar produces a series of products that will be marketed and sold at above industry returns through a better strategic understanding of the markets. The efforts of the MSS business unit are showing solid signs of improving the Group's overall profitability in the first half of 2014.
Nyrstar entered a strategic marketing agreement with the Noble Group in October 2013 to market and sell a significant portion of commodity grade zinc metal produced at its European smelters, and in January 2014 the Group shipped its first products to Noble. The agreement is exceeding management's expectations. The agreement covers 200,000 tonnes per annum and allows Nyrstar's product to enter new geographical markets and reach new customers, thereby expanding the Group's market exposure. Additionally, Nyrstar's direct marketing efforts for commodity grade and alloys was successfully augmented by the completion of contract negotiations with major steelmakers during the period.
Zinc concentrate benchmark treatment charges have improved 6 percent from the 2013 benchmark.
Nyrstar regularly assesses the market to make strategic hedging arrangements with respect to zinc prices to counter the volatile pricing environment.
During the period Nyrstar opened a sales office in Hong Kong in order to support the growing footprint of MSS.
| H1 | H2 | H1 | |||
|---|---|---|---|---|---|
| % H/H | % Y/Y | ||||
| 2014 | 2013 | Change | 2013 | Change | |
| Zinc metal ('000 tonnes) | |||||
| Auby | 85 | 83 | 2% | 69 | 23% |
| Balen/Overpelt | 134 | 132 | 2% | 120 | 12% |
| Budel | 144 | 141 | 2% | 134 | 7% |
| Clarksville | 57 | 57 | 0% | 49 | 16% |
| Hobart | 120 | 141 | (15%) | 132 | (9%) |
| Port Pirie | 13 | 15 | (13%) | 15 | (13%) |
| Total | 552 | 569 | (3%) | 519 | 6% |
| Lead metal ('000 tonnes) | |||||
| Port Pirie | 93 | 93 | - | 86 | 8% |
| Other products | |||||
| Copper cathode ('000 tonnes) | 2 | 2 | - | 2 | - |
| Silver (million troy ounces) | 7.2 | 9.0 | (20%) | 8.9 | (19%) |
| Gold ('000 troy ounces) | 20 | 31 | (35%) | 35 | (43%) |
| Indium metal (tonnes) | 24 | 16 | 50% | 16 | 50% |
| Sulphuric acid ('000 tonnes) | 697 | 741 | (6%) | 648 | 8% |
The Metals Processing segment produced approximately 552,000 tonnes of zinc market metal in H1 2014, a decrease of 3 percent on H2 2013 attributable to planned maintenance shutdowns across the segment in addition to having three fewer operating days in H1 2014 compared to H2 2013. Whilst further planned maintenance shutdowns are scheduled for H2 2014, Nyrstar maintains its full year 2013 production guidance of 1.0 - 1.1 million tonnes.
The Auby smelter produced approximately 85,000 tonnes of zinc market metal in H1 2014, an increase of 2 percent on H2 2013 following strong operational performance that offset unplanned maintenance work on the roaster. This is a new production record for the Auby smelter, largely attributable to higher current efficiency, which led to higher zinc recovery compared to the prior half. Auby's indium production for the first six months of the year reached a record half of 24 tonnes, up 50 percent on H2 2013 production of 16 tonnes.
Balen/Overpelt completed a planned maintenance shutdown of the F4 roaster and sulphuric acid plant both on time and within budget. Despite this large shutdown, the plant produced approximately 134,000 tonnes of zinc market metal in H1 2014, an increase of 2 percent on H2 2013.
At Budel, strong performance continued with zinc market metal production of approximately 144,000 tonnes in the period, which is a new site record and a 2 percent increase on the prior half of 141,000 tonnes.
The Clarksville smelter contributed approximately 57,000 tonnes of market metal zinc production in H1 2014, which was in-line with H2 2013 production. Unplanned roaster and leach maintenance, along with the impact of severe winter weather impacted zinc cathode production, which was offset by the drawdown of zinc cathode inventory on hand at the end of 2013.
Zinc market metal production at the Hobart smelter for H1 2014 was approximately 120,000 tonnes, which was 15 percent below H2 2013. The reduction was mainly caused by the planned maintenance shutdown of the No.5 roaster and sulphuric acid plant in H1 2014 in line with guidance and management expectations. An unexpected delay of Century concentrate shipments in early 2014 led to a shortage of calcine prior to the planned shutdown, which further impacted on production volumes compared to H2 2013.
H1 2014 lead market metal production at the Port Pirie smelter was approximately 93,000 tonnes, which was inline with H2 2013 production. The Port Pirie blast furnace suffered a leaking fore-hearth in late April leading to an unplanned 12-day shutdown impacting H1 2014 metal production. Zinc market metal production of approximately 13,000 tonnes in H1 2014 was 13 percent below H2 2013 in line with management expectations, primarily influenced by a planned slag-fumer maintenance shutdown and the April blast furnace shutdown. As
announced in May, Nyrstar ceased zinc metal production at Port Pirie in mid-July and zinc oxides produced at Port Pirie are currently processed at Nyrstar's other smelters. H1 2014 production of silver, gold and copper was also adversely impacted by the blast furnace shutdown, leading to an increased stock of silver and gold in the sinter.
H1 2014 LTIR reduced by 30 percent compared to H2 2013, and the severity of LTIs in H1 2014 was reduced by 60 percent compared to H2 2013. The number of days lost or under restricted duties was reduced by 50 percent in H1 2014 compared to H2 2013. Auby recorded a second year of LTIR free and the Budel smelter is performing at world class level across the industry.
| Smelter & production step impacted | Timing and duration | Estimated impact | |||||
|---|---|---|---|---|---|---|---|
| Clarksville - roaster and acid plant | Q3: 2 – 3 weeks | nil – 1,000t zinc metal | |||||
| Auby – roaster | Q4: 2 weeks | nil | |||||
| Port Pirie – lead plant | Q4: 3 weeks | nil-500t |
| '000 tonnes | H1 | H2 | % H/H | H1 | % Y/Y |
|---|---|---|---|---|---|
| unless otherwise indicated | 2014 | 2013 | Change | 2013 | Change |
| Total ore milled | 3,554 | 3,486 | 2% | 3,474 | 2% |
| Total zinc concentrate | 285 | 254 | 12% | 258 | 10% |
| Total lead concentrate | 13.8 | 10.8 | 28% | 13.5 | 2% |
| Total copper concentrate | 32.9 | 37.1 | (11%) | 31.2 | 5% |
| Zinc in Concentrate | |||||
| Campo Morado | 12 | 14 | (14%) | 11 | 9% |
| Contonga | 7 | 6 | 17% | 6 | 17% |
| El Mochito | 13 | 12 | 8% | 13 | (0%) |
| El Toqui | 18 | 9 | 100% | 14 | 29% |
| Langlois | 20 | 18 | 11% | 18 | 11% |
| Myra Falls | 15 | 14 | 7% | 13 | 15% |
| East Tennessee | 33 | 35 | (6%) | 36 | (8%) |
| Middle Tennessee | 23 | 23 | - | 27 | (15%) |
| Tennessee Mines | 56 | 58 | (3%) | 63 | (11%) |
| Own Mine Total | 140 | 134 | 4% | 138 | 1% |
| Talvivaara Stream | 17 | 7 | 143% | 7 | 143% |
| Total | 157 | 140 | 12% | 145 | 8% |
| Lead in concentrate | |||||
| Contonga | 0.1 | 0.1 | - | 0.2 | (50%) |
| El Mochito | 6.0 | 5.6 | 7% | 6.0 | (0%) |
| El Toqui | 1.0 | 0.0 | 100% | 1.2 | (17%) |
| Myra Falls | 0.7 | 0.6 | 17% | 0.4 | 75% |
| Total | 7.9 | 6.3 | 25% | 7.9 | (0%) |
| Copper in concentrate | |||||
| Campo Morado | 2.3 | 2.6 | (12%) | 2.3 | (0%) |
| Contonga | 1.5 | 1.5 | - | 1.1 | 36% |
| Langlois | 1.0 | 0.9 | 11% | 1.1 | (9%) |
| Myra Falls | 1.4 | 1.6 | (13%) | 1.6 | (13%) |
| Total | 6.2 | 6.6 | (6%) | 6.3 | (2%) |
| Gold ('000 troy oz) | |||||
| Campo Morado | 3.4 | 6.5 | (48%) | 5.2 | (35%) |
| El Toqui | 12.1 | 33.2 | (64%) | 8.2 | 48% |
| Langlois | 1.0 | 0.9 | 11% | 0.9 | 11% |
| Myra Falls | 12.2 | 9.8 | 24% | 8.0 | 53% |
| Total18 | 29.2 | 50.4 | (42%) | 24.8 | 18% |
| Silver ('000 troy oz) | |||||
| Campo Morado 19 | 478 | 657 | (27%) | 499 | (4%) |
| Contonga | 166 | 156 | 6% | 150 | 11% |
| El Mochito | 759 | 783 | (3%) | 854 | (11%) |
| El Toqui | 161 | 47 | 243% | 95 | 69% |
| Langlois | 270 | 246 | 10% | 278 | (3%) |
| Myra Falls | 664 | 479 | 39% | 339 | 96% |
| Total20 | 2,502 | 2,383 | 5% | 2,363 | 6% |
18 Coricancha contributed in H1 2014, H2 2013 and H1 2013 of 500, 100 and 2,500 troy oz of gold respectively.
19 75% of the silver produced by Campo Morado is subject to a streaming agreement with Silver Wheaton Corporation whereby USD 3.90/toz is payable.
20 Coricancha contributed in H1 2014, H2 2013 and H1 2013 5,000, 15,000 and 149,000 troy oz of silver respectively.
The first half performance of the Mining segment reflects the implementation of a number of initiatives from the Turnaround Phase offset by three significant mechanical failures at the Tennessee mines. During the first half of 2014, modified mine/plant operational techniques coupled with improved operational efficiencies at the majority of the mines, resulted in a 2 percent increase in ore processed on the prior half.
Nyrstar's mines produced approximately 140,000 tonnes of zinc in concentrate during the reporting period, the second highest half year result since Nyrstar acquired the mines.
Total zinc production at the Tennessee mines was approximately 56,000 tonnes, down 3 percent on the prior period as a result of equipment failures that resulted in reduced processing capacity on site. Nevertheless, mining continued throughout the period to increase stockpiled inventories, which will be drawn down during the second half of 2014. A focused reliability centred maintenance program is to be implemented at the Tennessee mines and then rolled out across the segment during the remainder of 2014 and thereafter.
Several operational modifications were identified and implemented at the El Toqui mine during the first half of 2014 which significantly improved ore processing rates. Coupled with a focused zinc campaign and increase in volume of ore milled, El Toqui delivered approximately 18,000 tonnes of zinc metal in concentrate from 299,000 tonnes of total ore milled in H1 2014. Gold production was 12,100 oz for H1 2014, in which the zinc production record was achieved, with a campaign switch planned towards the higher grade gold orebodies for the remainder of 2014.
Modified mine extraction techniques coupled with improved operational efficiencies at El Mochito saw ore processing rates climb steadily throughout the half. The mine delivered approximately 13,000 tonnes of contained zinc during the period, performing in line with management expectations. The modified mine extraction program established in the first half is expected to enable the mine to access high grade stopes in the second half of 2014.
Myra Falls delivered a strong performance for the half, with approximately 15,000 tonnes of contained zinc, exceeding management expectations, as a result of mine plan modifications enabling higher zinc and silver grades to be mined throughout the period. Work continued in developing towards the western orebodies.
The downward trend of deteriorating ore grades at Campo Morado continued throughout the first half of 2014 as the G9 orebody neared completion. Major metallurgical test programs in relation to Campo Morado continued in Canada, Australia and Mexico with full plant trials being undertaken, during the second quarter of 2014. The initial results confirm complex mineralogy that can be processed economically (albeit with some modifications to the flow sheet) for a minimal capital investment. Management continues to assess the findings with an outcome expected in the second half of 2014.
The Langlois mine continues to deliver results in line with management expectations.
Contonga continued to perform well operationally, with minor plant modifications implemented to maximise mill throughput within its permitted level.
In April 2014, the Coricancha and Pucarrajo mines were identified as non-core assets given the limited scale and marginal economics of the two mines. Management took the decision to put the Coricancha mine on care and maintenance in the second half of 2013, and Pucarrajo has not been mined since its acquisition in 2010.
The Turnaround Phase continues for the remainder of 2014.
The Mining segment recorded a solid safety performance for the period, with Myra Falls awarded the coveted Ryan Award for the second consecutive year as well as the 2014 Mine Rescue Award across British Columbia. The segment continued its focus on instilling a 'safety first' culture through the implementation of the Group's critical standards policy, and prevention of low likelihood but high consequence events at the mines. An internal corporate audit of the segment is scheduled for the last quarter of the year.
In the second half of 2013, following the formation of the Group's three business units, Nyrstar initiated a review of its global mining assets aimed at identifying opportunities to make a step-change improvement in the Mining segment's operational and financial performance. The Mining Strategic Review is an optimisation programme with the core aims of improving EBITDA and maximising Free Cash Flow from the segment through optimising the production from all Nyrstar's mines, all whilst improving overall direct operating costs per tonne. The programme is operational in nature and is not envisaged to be capital consumptive.
It is being undertaken in two phases; firstly, a preliminary Turnaround Phase to implement immediate measures to improve the profitability of the mines and introduce operational optimisations that are sustainable within the existing mining footprint. Management aims to optimise mill head grades, improve throughput levels, better utilise existing infrastructure and improve operational practices on site across all its mining assets. The second, more comprehensive phase links specifically to the Metals Processing segment and the outcome of the Smelting Strategic Review programme to be implemented in coordination with the Marketing Sales & Sourcing business unit, will seek to maximum value inherent in the mineral resources produced by Nyrstar's mines are captured through the Group's integrated business model.
In the first quarter of 2014, as an outcome of the first phase, the Coricancha and Pucarrajo mines were identified as assets with limited scale and marginal economics and were thus deemed as non-core mining assets. Strategic alternatives are currently being explored for these mines. Discussions for the divestment of Pucarrajo are advanced and will continue through H2 2014. Coricancha remains on care and maintenance until further notice. Management remains focussed on its remaining assets.
Nyrstar initially expected to begin the second phase of the optimisation programme in the second half of 2014, however, management concluded it more appropriate to continue to focus on the Turnaround Phase, and to only proceed to a second stage once the preliminary phase has delivered further in line with the core aims of the programme. The Turnaround Phase progresses for the remainder of 2014 as a non-capital consumptive initiative.
At the end of May 2014 Nyrstar announced its decision to go ahead with the redevelopment of Port Pirie. The agreement is backed by a binding Government agreement for the funding structure of the redevelopment of its Port Pirie smelter into an advanced metals recovery and refining facility. With this step Nyrstar is pursuing a unique opportunity in achieving its stated mission to maximise value from its integrated business model. A final feasibility study concluded a leveraged internal rate of return ("IRR") of 25-30 percent22 for the project implying an unlevered IRR of approximately 15-20 percent.
A funding agreement with the South Australian Government and EFIC, Australia's export credit agency, gave Nyrstar the certainty needed to move forward and transform Port Pirie into an advanced metal recovery and refining facility. The project, with a capital expenditure of EUR 338 million, is structured as follows: Nyrstar's own contribution remains unchanged at approximately EUR 68 million23; another approximately EUR 191 million24 is expected to be raised from third party financiers that will benefit from a AAA credit rated guarantee from EFIC25 , which is supported by a back-to-back guarantee from the South Australian Government; finally, the forward sale of future silver production is expected to raise approximately EUR 79 million. The latter part of the agreement is expected to be entered into during 2014 for a term of five years, and entails that silver will be delivered under a defined delivery schedule post commissioning from 2016 until the end of 2019.
The final project costs of EUR 338 million include Nyrstar building and owning a sulphuric acid plant, thereby retaining all marketing rights for the sulphuric acid produced. Excluding the sulphuric plant, project costs increased by less than 10 percent from pre-feasibility stage to final feasibility stage. The final project costs also include greater than 20 percent contingency and inflation allocation over the project spending horizon. Major
21 Based on AUD/EUR exchange rate of 1.52 (2 January to 30 April 2014; in line with the press release issued on the project dated 16 May 2014)
22 Based on internal economic and flat metal price assumptions for the duration of the project including the closure of the zinc plant.
23 Exact Nystar contribution AUD 102,750,000.
24 Exact Project Level Financing AUD 291,250,000.
25 EFIC: Export Finance and Insurance Corporation.
construction work on the Port Pirie site is scheduled to begin early next year and the facility is expected to be fully operational by the end of 2016.
Nyrstar has updated its capital expenditure guidance on the redevelopment for the project life from 2014-2016 as outlined on page 8 above.
Nyrstar continues the sequencing of its SSR projects for the remainder of 2014, within the growth capital expenditure guidance for the year of EUR 20-30 million.
The transformation blueprint consists of approximately 25 projects, that fall under three categories of investment: debottlenecking Nyrstar's smelters; building fuming capacity; and building minor metal extraction capability. The capital investment for the entire blueprint is estimated at EUR 265 million, with no single investment exceeding EUR 50 million. If fully implemented this would entail approximately EUR 250 million of CAPEX on SSR projects over the next years. Based on this capital investment and timeline and other internal economic assumptions, Nyrstar expects the transformation to generate a post-tax IRR of 25-30%26 .
During the period Nyrstar concluded its divestment of its non-core assets Foel and Genesis.
26 Based on internal economic and flat metal price assumptions for the duration of the project; and includes the zinc plant closure.
| Production KPI by Site | Ore | Mill head grade | Recovery | Concentrate | Metal in concentrate | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| PERIOD | milled ('000 tonnes) |
Zinc (%) |
Lead (%) |
Copper (%) |
Gold (g/t) |
Silver (g/t) |
Zinc (%) | Lead (%) |
Copper (%) |
Gold (%) | Silver (%) |
Zinc (kt) |
Lead (kt) |
Copper (kt) |
Zinc (kt) |
Lead (kt) |
Copper (kt) |
Gold (k'toz) |
Silver (m'toz) |
|
| Campo Morado | 354 | 4.70% | 0.96% | 0.96% | 1.22 | 114.87 | 74.4% | 0.0% | 67.8% | 24.3% | 36.6% | 26 | 0.0 | 16.6 | 12 | 0.0 | 2.3 | 3.4 | 478 | |
| Contonga | 189 | 4.05% | 0.15% | 1.10% | 0.00 | 32.64 | 88.3% | 40.6% | 73.6% | 0.0% | 83.6% | 14 | 0.2 | 5.8 | 7 | 0.1 | 1.5 | 0.0 | 166 | |
| Coricancha | 2 | 8.16% | 1.99% | 1.46% | 21.45 | 146.73 | 61.3% | 24.9% | 20.1% | 40.4% | 57.1% | 0 | 0.0 | 0.0 | 0 | 0.0 | 0.0 | 0.5 | 5 | |
| El Mochito | 355 | 4.09% | 2.12% | 0.00% | 0.00 | 75.35 | 86.1% | 80.2% | 0.0% | 0.0% | 88.2% | 26 | 9.4 | 0.0 | 13 | 6.0 | 0.0 | 0.0 | 759 | |
| El Toqui | 299 | 6.47% | 0.59% | 0.18% | 1.55 | 19.98 | 91.4% | 58.5% | 0.0% | 81.5% | 84.0% | 36 | 1.9 | 0.0 | 18 | 1.0 | 0.0 | 12.1 | 161 | |
| Langlois | 263 | 7.94% | 0.00% | 0.49% | 0.16 | 41.71 | 93.5% | 0.0% | 75.0% | 75.6% | 76.5% | 38 | 0.0 | 4.1 | 20 | 0.0 | 1.0 | 1.0 | 270 | |
| H1 2014 | Myra Falls | 263 | 6.20% | 0.67% | 0.72% | 1.96 | 92.62 | 89.4% | 37.0% | 74.0% | 73.3% | 84.9% | 28 | 2.2 | 6.5 | 15 | 0.7 | 1.4 | 12.2 | 664 |
| East Tennessee | 1,040 | 3.52% | 0.00% | 0.00% | 0.00 | 0.00 | 91.4% | 0.0% | 0.0% | 0.0% | 0.0% | 53 | 0.0 | 0.0 | 33 | 0.0 | 0.0 | 0.0 | 0 | |
| Middle Tennessee | 789 | 3.12% | 0.00% | 0.00% | 0.00 | 0.00 | 92.8% | 0.0% | 0.0% | 0.0% | 0.0% | 36 | 0.0 | 0.0 | 23 | 0.0 | 0.0 | 0.0 | 0 | |
| Tennessee Mines | 1,830 | 3.35% | 0.00% | 0.00% | 0.00 | 0.00 | 91.9% | 0.0% | 0.0% | 0.0% | 0.0% | 89 | 0.0 | 0.0 | 56 | 0.0 | 0.0 | 0.0 | 0 | |
| Own Mine Total | 3,554 | 4.41% | 0.42% | 0.26% | 0.42 | 32.40 | 89.2% | 53.1% | 67.2% | 60.9% | 67.6% | 257 | 13.8 | 32.9 | 140 | 7.9 | 6.2 | 29.2 | 2,502 | |
| Talvivaara Stream | 0 | 0.00% | 0.00% | 0.00% | 0.00 | 0.00 | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 28 | 0.0 | 0.0 | 17 | 0.0 | 0.0 | 0.0 | 0 | |
| All Mines Total | 3,554 | 4.41% | 0.42% | 0.26% | 0.42 | 32.40 | 100.0% | 53.1% | 67.2% | 60.9% | 67.6% | 285 | 13.8 | 32.9 | 157 | 7.9 | 6.2 | 29.2 | 2,502 | |
| Campo Morado | 352 | 5.44% | 0.94% | 1.05% | 1.83 | 138.15 | 75.7% | 0.0% | 70.1% | 31.1% | 42.0% | 31 | 0.0 | 20.1 | 14 | 0.0 | 2.6 | 6.5 | 657 | |
| Contonga | 177 | 4.01% | 0.17% | 1.17% | 0.00 | 32.20 | 88.9% | 47.8% | 72.0% | 0.0% | 84.9% | 13 | 0.3 | 5.6 | 6 | 0.1 | 1.5 | 0.0 | 156 | |
| Coricancha | 3 | 3.45% | 0.61% | 1.10% | 1.85 | 174.80 | 83.6% | 45.7% | 62.4% | 33.1% | 82.8% | 0 | 0.0 | 0.1 | 0 | 0.0 | 0.0 | 0.1 | 15 | |
| El Mochito | 389 | 3.72% | 1.87% | 0.00% | 0.00 | 72.91 | 85.8% | 77.3% | 0.0% | 0.0% | 85.9% | 25 | 8.8 | 0.0 | 12 | 5.6 | 0.0 | 0.0 | 783 | |
| El Toqui | 276 | 4.21% | 0.07% | 0.15% | 4.44 | 7.03 | 81.2% | 2.8% | 0.0% | 84.2% | 74.9% | 20 | 0.0 | 0.0 | 9 | 0.0 | 0.0 | 33.2 | 47 | |
| Langlois | 253 | 7.71% | 0.00% | 0.44% | 0.13 | 35.70 | 94.0% | 0.0% | 82.6% | 85.2% | 84.7% | 34 | 0.0 | 4.0 | 18 | 0.0 | 0.9 | 0.9 | 246 | |
| H2 2013 | Myra Falls | 258 | 6.19% | 0.59% | 0.86% | 1.76 | 67.05 | 88.5% | 36.7% | 72.8% | 67.0% | 86.1% | 26 | 1.7 | 7.3 | 14 | 0.6 | 1.6 | 9.8 | 479 |
| East Tennessee | 1,011 | 3.68% | 0.00% | 0.00% | 0.00 | 0.00 | 94.9% | 0.0% | 0.0% | 0.0% | 0.0% | 56 | 0.0 | 0.0 | 35 | 0.0 | 0.0 | 0.0 | 0 | |
| Middle Tennessee | 766 | 3.22% | 0.00% | 0.00% | 0.00 | 0.00 | 93.5% | 0.0% | 0.0% | 0.0% | 0.0% | 36 | 0.0 | 0.0 | 23 | 0.0 | 0.0 | 0.0 | 0 | |
| Tennessee Mines | 1,776 | 3.48% | 0.00% | 0.00% | 0.00 | 0.00 | 94.3% | 0.0% | 0.0% | 0.0% | 0.0% | 92 | 0.0 | 0.0 | 58 | 0.0 | 0.0 | 0.0 | 0 | |
| Own Mine Total | 3,486 | 4.30% | 0.36% | 0.27% | 0.66 | 32.02 | 89.1% | 50.2% | 69.7% | 67.9% | 66.4% | 243 | 10.8 | 37.1 | 134 | 6.3 | 6.6 | 50.4 | 2,383 | |
| Talvivaara Stream | 0 | 0.00% | 0.00% | 0.00% | 0.00 | 0.00 | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 11 | 0.0 | 0.0 | 7 | 0.0 | 0.0 | 0.0 | 0 | |
| All Mines Total | 3,486 | 4.30% | 0.36% | 0.27% | 0.66 | 32.02 | 93.6% | 50.2% | 69.7% | 67.9% | 66.4% | 254 | 10.8 | 37.1 | 140 | 6.3 | 6.6 | 50.4 | 2,383 | |
| Campo Morado | 1% | (14)% | 2% | (9)% | (33)% | (17)% | (2)% | - | (3)% | (22)% | (13)% | (16)% | - | (17)% | (14)% | - | (12)% | (48)% | (27)% | |
| Contonga | 7% | 1% | (12)% | (6)% | - | 1% | (1)% | (15)% | 2% | - | (2)% | 8% | (33)% | 4% | 17% | - | - | - | 6% | |
| Coricancha | (33)% | 137% | 226% | 33% | 1060% | (16)% | (27)% | (46)% | (68)% | 22% | (31)% | - | - | (100)% | - | - | - | - | (67)% | |
| El Mochito | (9)% | 10% | 13% | - | - | 3% | 0% | 4% | - | - | 3% | 4% | 7% | - | 8% | 7% | - | - | (3)% | |
| El Toqui | 8% | 54% | 743% | 20% | (65)% | 184% | 13% | 1967% | - | (3)% | 12% | 80% | - | - | 100% | 100% | - | (64)% | 243% | |
| % H/H | Langlois | 4% | 3% | - | 11% | 21% | 17% | (1)% | - | (9)% | (11)% | (10)% | 12% | - | 2% | 11% | - | 11% | 11% | 10% |
| Change | Myra Falls | 2% | 0% | 14% | (16)% | 12% | 38% | 1% | 1% | 2% | 9% | (1)% | 8% | 29% | (11)% | 7% | 17% | (13)% | 24% | 39% |
| East Tennessee | 3% | (4)% | - | - | - | - | (4)% | - | - | - | - | (5)% | - | - | (6)% | - | - | - | - | |
| Middle Tennessee | 3% | (3)% | - | - | - | - | (1)% | - | - | - | - | - | - | - | - | - | - | - | - | |
| Tennessee Mines | 3% | (4)% | - | - | - | - | (3)% | - | - | - | - | (3)% | - | - | (3)% | - | - | - | - | |
| Own Mine Total | 2% | 3% | 17% | (4)% | (37)% | 1% | 0% | 6% | (4)% | (10)% | 2% | 6% | 28% | (11)% | 4% | 25% | (6)% | (42)% | 5% | |
| Talvivaara Stream | - | - | - | - | - | - | - | - | - | - | - | 155% | - | - | 143% | - | - | - | - | |
| All Mines Total | 2% | 3% | 17% | (4)% | (37)% | 1% | 7% | 6% | (4)% | (10)% | 2% | 12% | 28% | (11)% | 12% | 25% | (6)% | (42)% | 5% |
| Production KPI by Site | Ore | Mill head grade | Recovery | Concentrate | Metal in concentrate | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| milled | ||||||||||||||||||||
| ('000 | Zinc | Lead | Copper | Gold | Silver | Lead | Copper | Silver | Zinc | Lead | Copper | Zinc | Lead | Copper | Gold | Silver | ||||
| PERIOD | tonnes) | (%) | (%) | (%) | (g/t) | (g/t) | Zinc (%) | (%) | (%) | Gold (%) | (%) | (kt) | (kt) | (kt) | (kt) | (kt) | (kt) | (k'toz) | (m'toz) | |
| Campo Morado | 354 | 4.70% | 0.96% | 0.96% | 1.22 | 114.87 | 74.4% | 0.0% | 67.8% | 24.3% | 36.6% | 26 | 0.0 | 16.6 | 12 | 0.0 | 2.3 | 3.4 | 478 | |
| Contonga | 189 | 4.05% | 0.15% | 1.10% | 0.00 | 32.64 | 88.3% | 40.6% | 73.6% | 0.0% | 83.6% | 14 | 0.2 | 5.8 | 7 | 0.1 | 1.5 | 0.0 | 166 | |
| Coricancha | 2 | 8.16% | 1.99% | 1.46% | 21.45 | 146.73 | 61.3% | 24.9% | 20.1% | 40.4% | 57.1% | 0 | 0.0 | 0.0 | 0 | 0.0 | 0.0 | 0.5 | 5 | |
| El Mochito | 355 | 4.09% | 2.12% | 0.00% | 0.00 | 75.35 | 86.1% | 80.2% | 0.0% | 0.0% | 88.2% | 26 | 9.4 | 0.0 | 13 | 6.0 | 0.0 | 0.0 | 759 | |
| El Toqui | 299 | 6.47% | 0.59% | 0.18% | 1.55 | 19.98 | 91.4% | 58.5% | 0.0% | 81.5% | 84.0% | 36 | 1.9 | 0.0 | 18 | 1.0 | 0.0 | 12.1 | 161 | |
| H1 2014 | Langlois | 263 | 7.94% | 0.00% | 0.49% | 0.16 | 41.71 | 93.5% | 0.0% | 75.0% | 75.6% | 76.5% | 38 | 0.0 | 4.1 | 20 | 0.0 | 1.0 | 1.0 | 270 |
| Myra Falls | 263 | 6.20% | 0.67% | 0.72% | 1.96 | 92.62 | 89.4% | 37.0% | 74.0% | 73.3% | 84.9% | 28 | 2.2 | 6.5 | 15 | 0.7 | 1.4 | 12.2 | 664 | |
| East Tennessee | 1,040 | 3.52% | 0.00% | 0.00% | 0.00 | 0.00 | 91.4% | 0.0% | 0.0% | 0.0% | 0.0% | 53 | 0.0 | 0.0 | 33 | 0.0 | 0.0 | 0.0 | 0 | |
| Middle Tennessee | 789 | 3.12% | 0.00% | 0.00% | 0.00 | 0.00 | 92.8% | 0.0% | 0.0% | 0.0% | 0.0% | 36 | 0.0 | 0.0 | 23 | 0.0 | 0.0 | 0.0 | 0 | |
| Tennessee Mines | 1,830 | 3.35% | 0.00% | 0.00% | 0.00 | 0.00 | 91.9% | 0.0% | 0.0% | 0.0% | 0.0% | 89 | 0.0 | 0.0 | 56 | 0.0 | 0.0 | 0.0 | 0 | |
| Own Mine Total | 3,554 | 4.41% | 0.42% | 0.26% | 0.42 | 32.40 | 89.2% | 53.1% | 67.2% | 60.9% | 67.6% | 257 | 13.8 | 32.9 | 140 | 7.9 | 6.2 | 29.2 | 2502 | |
| Talvivaara Stream | 0 | 0.00% | 0.00% | 0.00% | 0.00 | 0.00 | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 28 | 0.0 | 0.0 | 17 | 0.0 | 0.0 | 0.0 | 0 | |
| All Mines Total | 3,554 | 4.41% | 0.42% | 0.26% | 0.42 | 32.40 | 100.0% | 53.1% | 67.2% | 60.9% | 67.6% | 285 | 13.8 | 32.9 | 157 | 7.9 | 6.2 | 29.2 | 2502 | |
| Campo Morado | 213 | 6.42% | 0.85% | 1.48% | 2.08 | 148.41 | 76.8% | 0.0% | 72.0% | 36.6% | 49.0% | 22 | 0.0 | 14.5 | 11 | 0.0 | 2.3 | 5.2 | 499 | |
| Contonga | 169 | 4.28% | 0.17% | 1.01% | 0.00 | 34.38 | 89.4% | 59.2% | 65.5% | 0.0% | 80.4% | 13 | 0.3 | 4.1 | 6 | 0.2 | 1.1 | 0.0 | 150 | |
| Coricancha | 48 | 1.71% | 0.48% | 0.49% | 2.45 | 116.05 | 73.9% | 65.8% | 53.3% | 92.2% | 94.2% | 1 | 0.4 | 0.5 | 1 | 0.1 | 0.1 | 2.5 | 149 | |
| El Mochito | 386 | 3.92% | 1.93% | 0.00% | 0.00 | 79.46 | 84.7% | 80.0% | 0.0% | 0.0% | 86.5% | 25 | 9.2 | 0.0 | 13 | 6.0 | 0.0 | 0.0 | 854 | |
| El Toqui | 277 | 5.80% | 0.78% | 0.15% | 1.80 | 15.36 | 85.5% | 56.1% | 0.0% | 51.0% | 69.4% | 29 | 2.4 | 0.0 | 14 | 1.2 | 0.0 | 8.2 | 95 | |
| Langlois | 225 | 8.42% | 0.00% | 0.57% | 0.14 | 44.25 | 93.0% | 0.0% | 86.1% | 85.7% | 86.7% | 32 | 0.0 | 5.2 | 18 | 0.0 | 1.1 | 0.9 | 278 | |
| H1 2013 | Myra Falls | 265 | 5.64% | 0.49% | 0.89% | 1.30 | 48.98 | 88.7% | 30.5% | 68.9% | 72.4% | 81.2% | 25 | 1.2 | 6.8 | 13 | 0.4 | 1.6 | 8.0 | 339 |
| East Tennessee | 1,009 | 3.74% | 0.00% | 0.00% | 0.00 | 0.00 | 94.7% | 0.0% | 0.0% | 0.0% | 0.0% | 57 | 0.0 | 0.0 | 36 | 0.0 | 0.0 | 0.0 | 0 | |
| Middle Tennessee | 882 | 3.27% | 0.00% | 0.00% | 0.00 | 0.00 | 94.1% | 0.0% | 0.0% | 0.0% | 0.0% | 42 | 0.0 | 0.0 | 27 | 0.0 | 0.0 | 0.0 | 0 | |
| Tennessee Mines | 1,891 | 3.52% | 0.00% | 0.00% | 0.00 | 0.00 | 94.4% | 0.0% | 0.0% | 0.0% | 0.0% | 99 | 0.0 | 0.0 | 63 | 0.0 | 0.0 | 0.0 | 0 | |
| Own Mine Total | 3,474 | 4.41% | 0.38% | 0.26% | 0.41 | 29.04 | 89.9% | 59.6% | 68.2% | 55.8% | 73.4% | 247 | 13.5 | 31.2 | 138 | 7.9 | 6.3 | 24.8 | 2,363 | |
| Talvivaara Stream | 0 | 0.00% | 0.00% | 0.00% | 0.00 | 0.00 | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 11 | 0.0 | 0.0 | 7 | 0.0 | 0.0 | 0.0 | 0 | |
| All Mines Total | 3,474 | 4.41% | 0.38% | 0.26% | 0.41 | 29.04 | 94.4% | 59.6% | 68.2% | 55.8% | 73.4% | 258 | 13.5 | 31.2 | 145 | 7.9 | 6.3 | 24.8 | 2,363 | |
| Campo Morado | 66% | (27)% | 13% | (35)% | (41)% | (23)% | (3)% | - | (6)% | (34)% | (25)% | 18% | - | 14% | 9% | - | - | (35)% | (4)% | |
| Contonga | 12% | (5)% | (12)% | 9% | - | (5)% | (1)% | (31)% | 12% | - | 4% | 8% | (33)% | 41% | 17% | (50)% | 36% | - | 11% | |
| Coricancha | (96)% | 377% | 315% | 198% | 774% | 26% | (17)% | (62)% | (62)% | (56)% | (39)% | (100)% | (100)% | (100)% | (100)% | (100)% | (100)% | (80)% | (97)% | |
| El Mochito | (8)% | 4% | 10% | - | - | (5)% | 2% | 0% | - | - | 2% | 4% | 2% | - | - | - | - | - | (11)% | |
| El Toqui | 8% | 12% | (24)% | 20% | (14)% | 30% | 7% | 4% | - | 60% | 21% | 24% | (21)% | - | 29% | (17)% | - | 48% | 69% | |
| Langlois | 17% | (6)% | - | (14)% | 17% | (6)% | 1% | - | (13)% | (12)% | (12)% | 19% | - | (21)% | 11% | - | (9)% | 11% | (3)% | |
| % Y/Y Change |
Myra Falls | (1)% | 10% | 37% | (19)% | 51% | 89% | 1% | 21% | 7% | 1% | 5% | 12% | 83% | (4)% | 15% | 75% | (13)% | 53% | 96% |
| East Tennessee | 3% | (6)% | - | - | - | - | (4)% | - | - | - | - | (7)% | - | - | (8)% | - | - | - | - | |
| Middle Tennessee | (11)% | (5)% | - | - | - | - | (1)% | - | - | - | - | (14)% | - | - | (15)% | - | - | - | - | |
| Tennessee Mines | (3)% | (5)% | - | - | - | - | (3)% | - | - | - | - | (10)% | - | - | (11)% | - | - | - | - | |
| Own Mine Total | 2% | - | 11% | - | 1% | 12% | (1)% | (11)% | (1)% | 9% | (8)% | 4% | 2% | 5% | 1% | - | (2)% | 18% | 6% | |
| Talvivaara Stream | - | - | - | - | - | - | - | - | - | - | - | 155% | - | - | 143% | - | - | - | - | |
| All Mines Total | 2% | - | 11% | - | 1% | 12% | 6% | (11)% | (1)% | 9% | (8)% | 10% | 2% | 5% | 8% | - | (2)% | 18% | 6% | |
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