Nyrstar operational and financial update
Nyrstar NV provides an update on the ongoing capital structure review and certain operational and financial matters including the Port Pirie Redevelopment and expectations for full year 2018 Underlying EBITDA.
The Nyrstar Board of Directors and management, with the assistance of independent advisors from Alvarez & Marsal, Morgan Stanley and Freshfields, are continuing the comprehensive review of the Company's capital structure as previously announced. This review is being led by a special independent committee of the Nyrstar Board of Directors. As part of the review, Nyrstar has developed a new five year business plan (the “Business Plan”) that provides the basis for negotiations with financial stakeholders to establish a robust and sustainable long term capital structure for the Company. During the course of this week, Nyrstar has engaged in constructive discussions with representatives of its various financial stakeholder groups to work towards this objective in an accelerated timeframe. Following these discussions, Nyrstar deems it appropriate to update all stakeholders with this release.
The Company will make additional announcements as these discussions progress, as appropriate.
Further to the press release issued on 22 January 2019 advising that the Company had been the subject of a targeted cyber-attack which had severely impacted certain IT systems, including email and network servers across Nyrstar's headquarters in Zurich, Switzerland and globally at the Metals Processing and Mining operations, the Company can now confirm that the cyber-attack was contained on 22 January 2019 and Nyrstar's IT department, with assistance from key IT-partners and global cyber security agencies, has been working on a technical recovery plan over the past ten days. Nyrstar's IT systems, including email correspondence and access to file servers, are expected to return to normal operation during the course of the coming week. Nyrstar's Metals Processing and Mining operations were not materially impacted operationally by the cyber-attack.
As communicated in the second interim management statement for 2018 that was published on 30 October 2018, the Myra Falls mine commenced zinc production during September 2018. This production was made possible due to the fact that the primary components of the restart scope of works had been completed, including the rehabilitation of the underground mines, the rebuilding and refurbishment of the processing plant, repair of the underground crusher, rehabilitation and upgrade of key infrastructure including roads and loading facilities and upgrade of the underground fleet of mobile equipment.
Following the restart, at the end of Q4 2018 Nyrstar was required to suspend ore extraction and production at the mill to address deficiencies identified in compliance orders from the Ministry for Energy, Mines & Petroleum Resources in British Columbia. Nyrstar is currently working to address the necessary repairs and production should resume by the end of Q1 2019 or during Q2 2019 at the latest. In the meantime, Nyrstar is continuing with its underground development and remediation activities at the Myra Falls mine.
Port Pirie Redevelopment - Operational update
During the course of 2018, the new TSL furnace has ramped-up successfully, including in terms of operating time, volume of material treated and the proportion of high margin residues in the feed. In H2 2018, the residue consumed in the TSL feed was approximately 60% of the overall feed mix, exceeding the fully ramped-up target of 40% residue in the feed. The volume of material treated in the TSL furnace has also continued to increase quarter-on-quarter during 2018 and will further increase during 2019.
In December 2018, the Company chose not to operate the old sinter plant at Port Pirie in order to further support reducing lead in air emissions which ended the year below the defined limit. In addition, Nyrstar also performed maintenance on the TSL furnace and blast furnace during December 2018. These maintenance shuts were to address a TSL furnace cooling issue; and to bring forward maintenance previously scheduled for the blast furnace in January 2019. The TSL furnace resumed operation on 15 December 2018.
As the Port Pirie Redevelopment continues to ramp-up, it will increasingly consume larger volumes of the internally generated residues that have been stockpiled at Port Pirie. Further internal residues are being generated for consumption at Port Pirie, primarily by the Hobart zinc smelter, and the Port Pirie site continues to generate zinc fume for consumption at Hobart. Nyrstar is evaluating future projects to improve throughput of the slag fumer and increase the ability of the Port Pirie site to treat the higher halide content of certain recycles that are consumed as feed for the plant.
Source : Strategic Research Institute