Nyrstar NV

Environmental & Social Information • Apr 20, 2018

Payments to Governments Report 2017

Payments to Governments Report 2017

Introduction	1
Basis for preparation and scope	2
Government	2
Project	3
Production entitlements	3
Taxes on income	3
Royalties	3
Non-ordinary dividends	3
Bonuses	3
License fees	3
Infrastructure improvements	4
Disclosure threshold	4
Exchange rate	4
Forward looking statements	4
Reports	5
Payments per country as of 31 December 2017:	5
Payments per country as of 31 December 2016:	6
Payments by government as of 31 December 2017:	6
Payments by government as of 31 December 2016:	7
Payments by project as of 31 December 2017:	8
Payments by project as of 31 December 2016:	9

Introduction

This Payments to Governments Report ("Report") discloses the payments that Nyrstar NV and its subsidiaries ("Nyrstar") made during 2017 on a country-by-country and project-by-project basis as required by Belgian Law dated 18 December 2015 and the Belgian Royal Decree dated 11 September 2016 entering into effect as of 1 October 2016. This Belgian law enacts domestic rules in line with the reporting requirements of Chapter 10 of the EU Accounting Directive (2013/34/EU) which applies to large entities like Nyrstar that are involved in Extractive industries (exploration, prospection, discovery, development and extraction of minerals, oil, natural gas or other materials within the economic activities listed in Regulation (EC) No 1893/2006 of The European Parliament and of the Council of 20 December 2006 under Section B — Mining and Quarrying) and the logging of primary forests (naturally regenerated forest of native species, where there is no clearly visible indication of human activities and the ecological processes are both significantly disturbed).

This Report is available for download at www.nyrstar.com

Basis for preparation and scope

Nyrstar NV as a parent of the Nyrstar Group has prepared the Report on consolidated basis and reports the activity of any of its subsidiary entities that are active in the extractive industry.

Taxes, production entitlements, royalties, and other payments to governments are presented on a cash-paid basis during the reporting period. In-kind payments are converted into monetary value at the date of settlement.

Payments made by Nyrstar to governments arising from activities involving the exploration, prospection, discovery, development and extraction of minerals, oil, natural gas or other materials (extractive activities) are disclosed in this Report. It excludes payments to governments related to Nyrstar's metal processing business.

Payments made to government by the Contonga mine, Peru, after 31 August 2017 are not included in the 2017 Report as the Contonga mine was sold to a third party / transaction closed in September 2017 and Nyrstar had no control over the mine as of 31 December 2017. The 2016 disclosures include full payments made to government by the Contonga mine in 2016.

Payments made to government by the Coricancha mine, Peru, after May 2017 are not included in the 2017 Report as the Coricancha mine was sold to a third party / transaction closed in June 2017 and Nyrstar had no control over the mine as of 31 December 2017. The 2016 disclosures include full payments made to government by the Coricancha mine in 2016.

Payments made to government by the Campo Morado mine, Mexico, in 2017 are not included in the 2017 Report as the Campo Morado mine was sold to a third party / transaction closed in June 2017 and Nyrstar had no control over the mine as of 31 December 2017. The 2016 disclosures include full payments made to government by the Campo Morado mine in 2016.

Payments made to government during 2016 by the El Toqui mine, Chile, are excluded from the Report as the El Toqui mine was sold to a third party in November 2016 and Nyrstar had no control over the mine as of 31 December 2016.

Payments made to government during 2016 by the El Mochito mine, Honduras, are excluded from the Report as the El Mochito mine was sold to a third party in December 2016 and Nyrstar had no control over the mine as of 31 December 2016.

Unless noted otherwise in the Report, the following terms have the definition as stated below:

Government

Government includes any federal, national, regional or local authority of a country in which the Nyrstar entity operates or another country and it includes any department, agency or undertaking controlled by that authority.

Project

Project is defined as operational activities that are governed by a single contract, license, lease, concession or similar legal agreements and form the basis for payment liabilities to a government. Where such agreements are substantially interconnected, those agreements are considered as a single project.

Production entitlements

Production entitlements are payments to governments based on the volume of output, as mandated in any agreement or license. These entitlements can be paid in cash or in-kind. The value of these payments is calculated based on the market price at the time of the in-kind payment.

Taxes on income

Taxes on income are levied on the income, production or profits of companies. They also include withholding taxes paid on dividends, interest, royalties, and services. Excluded are taxes levied on consumption such as value added taxes ("VAT"), personal income taxes or sales taxes. Property and environmental taxes are also excluded. Taxes on income include taxes paid in-kind, if applicable. The value of taxes paid in-kind is calculated based on the market price at the time of the in-kind payment.

Royalties

Royalties are usage-based payments for the right to the on-going use of an asset (i.e. payments to governments in respect of revenue or production related to the extraction of metals).

Non-ordinary dividends

Non-ordinary dividends such as any dividend paid in lieu of production entitlements or royalties. In this context, dividends do not include payments to governments when a government is a shareholder of the company, as long as the dividend is paid to the government under the same terms and conditions as applicable to other shareholders.

Bonuses

Bonuses are payments related to awards, grants, or transfer of extraction rights. Payments can be in the form of periodic payments or a fixed amount upon signing of a contract, achievement of certain production levels or targets and discovery of (additional) mineral resources or deposits. Bonuses could be paid i.e. when singing a lease, when discovering natural resources and/or when production has commenced. Bonuses include signature, discovery and production bonuses.

License fees

License fees are levied on the right to use a geographical area for exploration, development and production and include rental fees, area fees, entry fees, severance tax and other considerations for licenses and/or concessions.

Infrastructure improvements

Payments related to the construction of infrastructure. Such payments are disclosed if Nyrstar is contractually obligated to improve the infrastructure. Payments in respect of social or community programs, for example building/providing a hospital or school are excluded.

Disclosure threshold

Payments made to a government are single payments or series of related payments of EUR/CAD/USD 100,000 (or equivalent) or more in a financial year.

Exchange rate

Payments made to a government in currencies other than EUR are translated for this Report based on the foreign exchange rate at yearly average rate.

Forward looking statements

This document has been prepared by the management of Nyrstar NV (the "Company"). It does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company or any member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of the Company or any member of its group, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.

The information included in this document has been provided to you solely for your information and background and is subject to updating, completion, revision and amendment and such information may change materially. Unless required by applicable law or regulation, no person is under any obligation to update or keep current the information contained in this presentation and any opinions expressed in relation thereto are subject to change without notice. No representation or warranty, express or implied, is made as to the fairness, accuracy, reasonableness or completeness of the information contained herein. Neither the Company nor any other person accepts any liability for any loss howsoever arising, directly or indirectly, from this presentation or its contents.

This document includes forward-looking statements that reflect the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, performance, prospects, growth, strategies and the industry in which the Company operates. These forward-looking statements are subject to risks, uncertainties and assumptions and other factors that could cause the Company's actual results of operations, financial condition, liquidity, performance, prospects, growth 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. The Company 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 the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company's results of operations, financial condition, liquidity and growth and the development of

the industry in which the Company operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods. The Company 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 presentation or any change in the Company'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.

This document and any materials distributed in connection with this document are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe any such restrictions. The Company's shares have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act") and may not be offered or sold in the United States absent registration under the Securities Act or exemption from the registration requirement thereof.

Reports

The following reports have been prepared on the basis as outlined in Basis for preparation and scope on page 1 of this Report.

Payments per country as of 31 December 2017:

All amounts are in EUR thousand

COUNTRY	PRODUCTION ENTITLEMENTS	TAXES4	ROYALTIES5	NON-ORDINARY DIVIDENDS	BONUSES	LICENSE FEES	INFRASTRUCTURE IMPROVEMENT7	TOTAL
Canada1	-	783	-	-	-	92	6,199	7,074
Mexico2	-	-	-	-	-	-	-	-
Peru1,3	-	1,034	38	-	-	49	-	1,121
USA4,5	-	-	115	-	-	-	-	115
Tunisia6	-	-	-	-	-	-	-	-
Total	-	1,817	153	-	-	141	6,199	8,310

Some of the 2017 payments to governments in Canada and Peru are over the local currency 100,000 but below the equivalent of EUR 100,000.

Mexican mine Campo Morado was sold to a third party in 2017.

3

Contonga and Coricancha mines in Peru were sold in September 2017, June 2017 respectively. Payments to governments after the transaction are not included in the 2017 report.

4 The mines in USA are part of the USA federal consolidated tax group including all Nyrstar USA entities where the head entity and some other entities are not in extractive industry. The federal consolidated group's tax obligations is recorded at the level of the head entity of the USA federal consolidated tax group.

The combined 2017 royalties payments to governments by the Nyrstar's mining entities in the USA were above the equivalent of EUR 100,000. The stand-alone royalties payments to governments by the Nyrstar's mining entities in the USA were below the equivalent of EUR 100,000.

6 All the 2017 payments to governments by Breakwater Tunisia SA were below the local currency 100,000 and the equivalent of EUR 100,000.

Payments per country as of 31 December 2016:

All amounts are in EUR thousand

COUNTRY	PRODUCTION ENTITLEMENTS	TAXES	ROYALTIES	NON-ORDINARY DIVIDENDS	BONUSES	LICENSE FEES	INFRASTRUCTURE IMPROVEMENT3	TOTAL
Canada	-	750	-	-	-	-	4,641	5,391
Mexico	-	-	-	-	-	167	-	167
Peru	-	366	340	-	-	-	522	1,228
USA1	-	-	-	-	-	-	-	-
Tunisia2	-	-	-	-	-	-	-	-
Total	-	1,116	340	-	-	167	5,163	6,786

All the 2016 payments to governments by the Nyrstar's mining entities in the USA were below the equivalent of EUR 100,000.

All the 2016 payments to governments by Breakwater Tunisia SA were below the equivalent of EUR 100,000.

3 Infrastructure improvements include direct guarantee payments to governments for restoration of the sites after the site closure.

Payments by government as of 31 December 2017:

All amounts are in EUR thousand

COUNTRY/GOVERNMENT	PRODUCTION ENTITLEMENTS	TAXES4	ROYALTIES5	NON-ORDINARY DIVIDENDS	BONUSES	LICENSE FEES	INFRASTRUCTURE IMPROVEMENTS7	TOTAL
CANADA1
National	-	394	-	-	-	-	-	394
Regional - Province of Quebec	-	389	-	-	-	92	6,199	6,680
Total	-	783	-	-	-	92	6,199	7,074
MEXICO2
National	-	-	-	-	-	-	-	-
Total	-	-	-	-	-	-	-	-
PERU1,3
National	-	1,034	38	-	-	-	-	1,072
Mining Geological Institute	-	-	-	-	-	49	-	49
Total	-	1,034	38	-	-	49	-	1,121
USA4,5
Regional – State of Tennessee	-	-	115	-	-	-	-	115
Total	-	-	115	-	-	-	-	115
TUNISIA6
National	-	-	-	-	-	-	-	-
Total	-	-	-	-	-	-	-	-
Total	-	1,817	153	-	-	141	6,199	8,310

Some of the 2017 payments to governments in Canada and Peru are over the local currency 100,000 but below the equivalent of EUR 100,000.

Mexican mine Campo Morado was sold to a third party in 2017.

Contonga and Coricancha mines in Peru were sold in September 2017, June 2017 respectively. Payments to governments after the transaction are not included in the 2017 report.

⁴ The mines in USA are part of the USA federal consolidated tax group including all Nyrstar USA entities where the head entity and some other entities are not in extractive industry. The federal consolidated group's tax obligations is recorded at the level of the head entity of the USA federal consolidated tax group.

⁵ The combined 2017 royalties payments to governments by the Nyrstar's mining entities in the USA were above the equivalent of EUR 100,000. The stand-alone royalties payments to governments by the Nyrstar's mining entities in the USA were below the equivalent of EUR 100,000.

6 All the 2017 payments to governments by Breakwater Tunisia SA were below the local currency 100,000 and the equivalent of EUR 100,000.

Payments by government as of 31 December 2016:

All amounts are in EUR thousand

COUNTRY/GOVERNMENT	PRODUCTION ENTITLEMENTS	TAXES	ROYALTIES	NON-ORDINARY DIVIDENDS	BONUSES	LICENSE FEES	INFRASTRUCTURE IMPROVEMENTS3	TOTAL
CANADA
National	-	370	-	-	-	-	-	370
Regional - Province of Quebec	-	380	-	-	-	-	4,641	5,021
Total	-	750	-	-	-	-	4,641	5,391
MEXICO
National	-	-	-	-	-	167	-	167
Total	-	-	-	-	-	167	-	167
PERU
National	-	366	340	-	-	-	522	1,228
Total	-	366	340	-	-	-	522	1,228
USA1
National	-	-	-	-	-	-	-	-
Total	-	-	-	-	-	-	-	-
TUNISIA2
National	-	-	-	-	-	-	-	-
Total	-	-	-	-	-	-	-	-
Total	-	1,116	340	-	-	167	5,163	6,786

All the 2016 payments to governments by the Nyrstar's mining entities in the USA were below the equivalent of EUR 100,000.

All the 2016 payments to governments by Breakwater Tunisia SA were below the equivalent of EUR 100,000.

Payments by project as of 31 December 2017:

All amounts are in EUR thousand

COUNTRY/PROJECT	PRODUCTION ENTITLEMENTS	TAXES4	ROYALTIES5	NON-ORDINARY DIVIDENDS	BONUSES	LICENSE FEES	INFRASTRUCTURE IMPROVEMENTS7	TOTAL
CANADA1
Myra Falls mine – mine
operations	-	327	-	-	-	92	-	419
Langlois mine – withholding
taxes	-	67	-	-	-	-	-	67
Langlois Mine – site restoration and rehabilitation	-	-	-	-	-	-	6,199	6,199
Langlois Mine - mining taxes	-	389	-		-	-	-	389
Bouchard-Hebert mine – site restoration and rehabilitation	-	-	-	-	-	-	-	-
Breakwater Resources Ltd withholding taxes	-	-	-	-	-	-	-	-
Total	-	783	-	-	-	92	6,199	7,074
MEXICO2
Campo Morado mine	-	-	-	-	-	-	-	-
Total	-	-	-	-	-	-	-	-
PERU1
Contonga mine3	-	1,034	38	-	-	49	-	1,121
Coricancha mine3	-	-	-	-	-	-	-	-
Total	-	1,034	38	-	-	49	-	1,121
USA4,5
Nyrstar Tennessee mines	-	-	115	-	-	-	-	115
Total	-	-	115	-	-	-	-	115
TUNISIA6
Nyrstar Tunisia	-	-	-	-	-	-	-	-
Total	-	1,817	153	-	-	141	6,199	8,310

Some of the 2017 payments to governments in Canada and Peru are over the local currency 100,000 but below the equivalent of EUR 100,000.

Mexican mine Campo Morado was sold to a third party in 2017.

3 Contonga and Coricancha mines in Peru were sold in September 2017, June 2017 respectively. Payments to governments after the transaction are not included in the 2017 report.

⁴ The mines in USA are part of the USA federal consolidated tax group including all Nyrstar USA entities where the head entity and some other entities are not in extractive industry. The federal consolidated group's tax obligations is recorded at the level of the head entity of the USA federal consolidated tax group.

⁵ The combined 2017 royalties payments to governments by the Nyrstar's mining entities in the USA were above the equivalent of EUR 100,000. The stand-alone royalties payments to governments by the Nyrstar's mining entities in the USA were below the equivalent of EUR 100,000.

6 All the 2017 payments to governments by Breakwater Tunisia SA were below the local currency 100,000 and the equivalent of EUR 100,000.

Payments by project as of 31 December 2016:

All amounts are in EUR thousand

COUNTRY/PROJECT	PRODUCTION ENTITLEMENTS	TAXES	ROYALTIES	NON-ORDINARY DIVIDENDS	BONUSES	LICENSE FEES	INFRASTRUCTURE IMPROVEMENTS3	TOTAL
CANADA
Myra Falls mine - withholding
taxes	-	123	-	-	-	-	-	123
Langlois mine – withholding
taxes	-	62	-	-	-	-	-	62
Langlois Mine – site restoration and rehabilitation	-	-	-	-	-	-	2,268	2,268
Langlois Mine – mining taxes	-	380	-	-	-	-	-	380
Bouchard-Hebert mine – site restoration and rehabilitation	-	-	-	-	-	-	2,373	2,373
Breakwater Resources Ltd
withholding taxes	-	185	-	-	-	-	-	185
Total	-	750	-	-	-	-	4,641	5,391
MEXICO
Campo Morado mine	-	-	-	-	-	167	-	167
Total	-	-	-	-	-	167	-	167
PERU
Contonga mine	-	269	340	-	-	-	142	751
Coricancha mine	-	97	-	-	-	-	380	477
Total	-	366	340	-	-	-	522	1,228
USA1
Nyrstar Tennessee mines	-	-	-	-	-	-	-	-
Total	-	-	-	-	-	-	-	-
TUNISIA2
Nyrstar Tunisia	-	-	-	-	-	-	-	-
Total	-	-	-	-	-	-	-	-
Total	-	1,116	340	-	-	167	5,163	6,786

All the 2016 payments to governments by the Nyrstar's mining entities in the USA were below the equivalent of EUR 100,000.

All the 2016 payments to governments by Breakwater Tunisia SA were below the equivalent of EUR 100,000.

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