9 February 2017 at 07.00 CET Nyrstar NV ("Nyrstar" or the "Company") today provides an update on its senior management team and its metals processing assets. The Company's Full Year 2016 Results are scheduled for release on 22 February 2017.
Management Team Update
Since December 2016, a number of changes have been made to Nyrstar's senior management team to supplement existing technical, operating and commercial expertise which will enhance delivery of Nyrstar's strategy:
Hilmar Rode was appointed Chief Executive Officer in December 2016. He has more than 20 years of industry experience, having most recently led the successful transformation of Minera Escondida in Chile and prior to that the restructuring and business optimisation of Kazzinc in Kazakhstan
Frank Rittner was appointed Chief Operating Officer in January 2017. Most recently, Frank was the Chief Operating Officer at Kazzinc with a strong background in driving operational excellence and improving profitability
Sebastião Balbino, previously Vice President Commercial at Nyrstar, was appointed as Chief Commercial Officer in January 2017 to strengthen the sourcing and allocation of raw materials to Nyrstar's smelting operations which is crucial to ensure Nyrstar's long-term success in the market
Commenting on the management team additions, Hilmar Rode, Chief Executive Officer, said: "We have the right strategy, asset base and the right people with the necessary technical, operational and commercial expertise to provide best-in-class performance and create value for stakeholders. Our highly capable and experienced senior management team supported by the new members will ensure that the Company operates with a culture of excellence across its portfolio. We are continuing to intensify our process of thoroughly reviewing the full potential of our operations and the team has already identified opportunities for: 1) further improvements across the zinc smelter network; 2) optimisation of the Port Pirie Redevelopment project; and 3) extraction of maximum value from our now cash flow positive North American mining portfolio."
Operational Update - 2016 Key Production Figures
Nyrstar achieved solid production performance in Q4 2016 in both the Metals Processing and Mining segments. Zinc metal production of 263 kt was a substantial 8% improvement on Q3 2016 which was negatively impacted by exceptional production outages. Annual zinc metal production of 1,015 kt was in-line with guidance. In the mining segment, zinc concentrate production from continuing performance in Q4 2016 of 25 kt was improved by 14% compared to Q3 2016.
A detailed breakdown of the 2016 operational and financial performance of the business will be provided in the Company's FY 2016 Results.
Project Update - Port Pirie Redevelopment
The Company has undertaken a comprehensive review of the Port Pirie Redevelopment 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 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, an increase of approximately EUR 70 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.
Commenting on the revised guidance for the Port Pirie Redevelopment, Hilmar Rode, Chief Executive Officer, said: "The Port Pirie Redevelopment is a large, complex project which absolutely remains the right strategic decision for the Company. The revised furnace start-up date will not only ensure the successful completion of the project, but also deliver improved returns of approximately EUR 130 million per annum, compensating for the increased capital cost and more prudent ramp-up schedule."