Nyrstar: Update on zinc streaming agreement with Talvivaara

Nyrstar NV ('Nyrstar') announces today that it has entered into a loan and streaming holiday agreement ('the Agreement') with Talvivaara Sotkamo Limited and Talvivaara Mining Company Plc (collectively referred to as 'Talvivaara').

The Agreement is set out with the intention of supporting the corporate reorganisation of Talvivaara without increasing Nyrstar's net exposure to Talvivaara.

Nyrstar will make available to Talvivaara a loan facility up to a maximum amount of EUR 20 million subject to a number of conditions. Nyrstar shall make the facility 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. The value of each advance shall approximately equal the amortised value of the zinc streaming agreement, which currently represents approximately half of the market value of the zinc in concentrate under the contract.  The Agreement is thus structured to ensure Nyrstar continues to receive deliveries of its zinc in concentrate from Talvivaara whilst not increasing the net financial exposure of Nyrstar to Talvivaara.

Additionally, Nyrstar continues to work actively 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; one that provides sufficient liquidity for its current funding gap and will allow Talvivaara to perform its obligations under the zinc streaming 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 the amount of 80,000 tonnes. In the event of a streaming holiday, the value sharing mechanism of the original zinc streaming agreement (dated February 2010) will be amended to reduce on a pro rata basis; implying if the full holiday period is elected, the value sharing mechanism becomes nil. During the streaming holiday, Nyrstar will purchase the zinc in concentrate at commercial terms from Talvivaara, outside the framework of the original contract, thus extending the life of the zinc streaming agreement.

Nyrstar's obligation to extend financing under the loan facility will cease at the earlier of the aggregate amount outstanding including accrued interest exceeding EUR 20 million or the commencement of a streaming holiday.

Nyrstar continues to work closely with Talvivaara, and the Administrator to the corporate reorganisation process.

Nyrstar will immediately be receiving approx. 10,000 tonnes of zinc in concentrate under the zinc streaming agreement.