Prospectus dated 12 October 2007

Nyrstar NV (incorporated in Belgium on 13 April 2007 registered office: Zinkstraat 1, 2490 Balen, Belgium enterprise number 0888.728.945) Offering of 69,565,218 Ordinary Shares This is an offering (the “Offering”) by Umicore SA/NV and Zinifex Limited (the “Selling Shareholders”) of 69,565,218 ordinary shares of no nominal value of Nyrstar NV (the “Company”). The Offering includes a public offering in Belgium and an offering to qualified and/or institutional investors in Belgium and outside of Belgium. Subject to sufficient retail demand, no less than 10% of the aggregate number of ordinary shares offered in the Offering (before any over- allotments) will be allocated to retail investors in Belgium. See “Underwriting and Plan of Distribution” beginning on page 289. The number of ordinary shares initially offered in the Offering may be increased by up to 25% of the aggregate number of ordinary shares initially offered in the Offering (the “Increase Option”). Any decision to exercise the Increase Option will be communicated at the latest on the date the offer price is announced. See “Underwriting and Plan of Distribution” beginning on page 289. The Selling Shareholders will grant to UBS Limited, as Stabilisation Manager, on behalf of itself and the Underwriters (as set out in “Underwriting and Plan of Distribution — Underwriting”), an option to purchase additional ordinary shares of the Company, representing a maximum of 15% of the total number of ordinary shares included in this Offering, including the ordinary shares, if any, offered if the Increase Option is exercised, at the offer price (the “Greenshoe Option”). The option will be exercisable for a period of 30 calendar days from the date of commencement of conditional trading. The Stabilisation Manager may exercise the option for the account of the Underwriters, solely to cover over-allotments. In connection with this Offering, the Stabilisation Manager may over-allot or effect transactions that stabilise or maintain the market price of the ordinary shares of the Company at levels above those which might otherwise prevail in the open market. Such transactions may be effected on the Eurolist by Euronext™ market (the “Eurolist”) of Euronext Brussels, in the over-the-counter market or otherwise. There is no assurance that such stabilisation will be undertaken and, if it is, it may be discontinued at any time. See “Underwriting and Plan of Distribution” beginning on page 289. The offer price for the ordinary shares sold in the public offering in Belgium and in the offering to qualified and/or institutional investors will be identical. The Company will not receive any proceeds from the sale of ordinary shares by the Selling Shareholders in this Offering. Listing on the Eurolist of Euronext Brussels of all Ordinary Shares Prior to this Offering, there has been no public market for the Company’s ordinary shares. We have applied to Euronext Brussels to have the ordinary shares of the Company listed on the Eurolist of Euronext Brussels under the symbol “NYR”. Trading of the ordinary shares on the Eurolist of Euronext Brussels is expected to commence, on an “if-and-when-delivered” basis, on or about 29 October 2007. The Company was created only recently and it only started its activities under its own name on 1 September 2007. This prospectus includes only limited audited financial information, and it is not used as the basis of the discussion of the financial position and results of operations of the Company herein. See “Cautionary Note Regarding the Presentation of Financial Information Included in this Prospectus” beginning on page i. An investment in the Company’s ordinary shares involves substantial risks and uncertainties, including among others the following: our results are largely dependent on commodity prices, which are cyclical and volatile; our results are linked to the level of zinc and lead treatment charges, which are cyclical in nature; we are exposed to the shape of the forward price curve for underlying metal prices; our business is exposed to the effects of exchange rate fluctuations; an increase in energy costs, in particular electricity costs, or a disruption in the supply of energy for our operations may significantly increase production costs or adversely affect production; our operations are subject to stringent environmental and health laws and regulations which could expose us to significant increased compliance costs and litigation relating to environmental and health issues; we may face start-up and integration issues as we transition to being a new company; and the limited audited historical financial information available for the Zinifex Carve-out Group and the Umicore Carve-out Group does not form the basis for the discussion under “Operating and Financial Review and Prospects” included in this prospectus, no audited historical financial information is available for Nyrstar as a stand-alone entity and the Nyrstar Pro Forma Consolidated Financial Information may not be representative of our results. See “Risk Factors” beginning on page 26 for a discussion of certain factors to be considered in connection with an investment in the ordinary shares. All of these factors should be considered before investing in the ordinary shares. The final offer price will be determined within an offer price range, which will be announced on or about 15 October 2007, on the basis of a book-building process, conducted during the offering period, in which only institutional investors will participate. The offer price will be determined as soon as possible after the end of the offering period, and will be published in the Belgian press no later than on the first business day following its determination, which is expected to be on or about 29 October 2007, and no later than the fifth business day following the end of the offering period. For a discussion of the considerations relating to the pricing of this Offering and a summary of the compensation payable to the Underwriters in connection with this Offering, see “Underwriting and Plan of Distribution” beginning on page 289 and “Information on the Public Offering in Belgium” beginning on page 294. The ordinary shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or the applicable securities laws of any state or other jurisdiction of the United States and, subject to certain exceptions, may not be offered or sold within the United States. The ordinary shares are being offered and sold (i) within the United States only to “qualified institutional buyers”, as defined in Rule 144A under the Securities Act (“Rule 144A”), pursuant to the exemption from the registration requirements of the Securities Act provided by Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and (ii) outside the United States in reliance on Regulation S under the Securities Act (“Regulation S”). See “Selling and Transfer Restrictions” beginning on page 296 for a description of restrictions on offers, sales and transfers of the ordinary shares and the distribution of this prospectus in other jurisdictions. Delivery of the ordinary shares is expected to take place in book-entry form through the facilities of Euroclear Belgium against payment therefore in immediately available funds on or about 1 November 2007. Joint Global Coordinators UBS Investment Bank Deutsche Bank Goldman Sachs International

Joint Bookrunners UBS Investment Deutsche Bank Goldman Sachs Fortis KBC Securities Bank International

Co-managers Macquarie RBC Degroof ING Petercam

CAUTIONARY NOTE REGARDING THE PRESENTATION OF FINANCIAL INFORMATION INCLUDED IN THIS PROSPECTUS

Nyrstar was established on 13 April 2007. All historical financial information included in this prospectus is that of its predecessor businesses, the former zinc and lead smelting and alloying business of Zinifex Limited (the “Zinifex Carve-out Group”) and the zinc smelting and alloying business of Umicore SA/NV (the “Umicore Carve-out Group”), which were combined into Nyrstar on 31 August 2007. Prior to that date, neither of the carve-out businesses operated as stand-alone entities or prepared stand-alone financial statements or other financial information. See “Risk Factors — Risks Relating to Nyrstar as a New Entity — The limited audited historical financial information available for the Zinifex Carve-out Group and the Umicore Carve-out Group does not form the basis for the discussion under “Operating and Financial Review and Prospects” included in this prospectus, no audited historical financial information is available for Nyrstar as a stand-alone entity and the Nyrstar Pro Forma Consolidated Financial Information may not be representative of our results” beginning on page 35.

Zinifex Carve-out Group and Umicore Carve-out Group historical financial information The historical combined financial information of the Zinifex Carve-out Group included in this prospectus is based on International Financial Reporting Standards (“IFRS”), applied historically by Zinifex Limited after applying certain carve-out principles and adjustments. The historical combined financial information of the Umicore Carve-out Group included in this prospectus is based on International Financial Reporting Standards as endorsed by the European Union, applied historically by Umicore SA/NV after applying certain carve-out principles and adjustments. Certain significant differences exist between IFRS and U.S. generally accepted accounting principles (“U.S. GAAP”). Accordingly, references to IFRS in this prospectus should not be construed as compliant with or equivalent to U.S. GAAP.

While this prospectus includes audited combined historical financial statements for the twelve and six month periods ended 30 June 2007 for the Zinifex Carve-out Group and the Umicore Carve-out Group, respectively, such financial statements do not form the principal basis for the review and analysis of the historical performance of the Zinifex Carve-out Group or the Umicore Carve-out Group included herein. Rather, the principal historical financial information included in this prospectus is comprised of unaudited combined selected historical financial information which has been carved-out and derived from the accounting records and management accounts of each of Zinifex Limited and Umicore SA/NV, and we have based our review and analysis of historical results principally upon such unaudited information, after modifying the Umicore Carve-out Group financial information as described below.

The accounting policies, presentations, and definitions applied in the Zinifex Carve-out Group historical combined financial information (including measures not prepared in accordance with generally accepted accounting principles (“non-GAAP”), such as “EBITDA”) differ in certain significant respects from those applied in the Umicore Carve-out Group historical combined financial information, and accordingly such information is not directly comparable. Further, such historical information is not necessarily indicative of the future operating results or financial status of the assets comprised therein and does not purport to be indicative of what the operating results and financial status of such assets would have been if the Zinifex Carve-out Group and the Umicore Carve-out Group had been operated as separate entities as of the dates or for the periods presented.

This prospectus includes a significant number of adjustments and non-GAAP financial measures and data in addition to the GAAP-based historical financial information, solely to facilitate analysis of the financial performance of our businesses. For example, in the section titled “Operating and Financial Review and Prospects”, for purposes of the comparison between periods, the Umicore Carve-out Group combined selected historical financial information has been adjusted to exclude the impact of certain historic items, principally the impact of derivative instruments previously undertaken for hedging purposes. We also present modified Nyrstar Pro Forma Financial Information, as discussed further below.

By their nature, these non-GAAP and adjusted measures have not been determined under IFRS or any other generally accepted accounting principles, may not be comparable to other similarly titled measures used by other companies, and should not be considered as substitutes for the historical and pro forma financial information contained in this prospectus. Non-GAAP and adjusted measures have not been subjected to our auditors’ examination or review procedures.

i Nyrstar pro forma financial information The unaudited Nyrstar Pro Forma Consolidated Financial Information included in this prospectus gives pro forma effect to the transfers of the Zinifex Carve-out Group and the Umicore Carve-out Group to Nyrstar, as if they had occurred on 1 January 2006 in respect of the consolidated pro forma income statement information, and on 30 June 2007 in respect of the pro forma consolidated balance sheet. The unaudited Nyrstar Pro Forma Consolidated Financial Information does not include an adjustment for incremental corporate costs, such as overheads, attributable to Nyrstar as a stand-alone entity, which have been estimated at between EUR 15 million and EUR 20 million, as such costs are not considered at this stage to be sufficiently factually supportable. See “Selected Financial Information — Selected Unaudited Nyrstar Pro Forma Consolidated Financial Information” beginning on page 60 and the notes on PF-14 and PF-16 for an estimate of these costs. To facilitate additional understanding of the consolidated pro forma financial information, we have also included supplementary notes to the pro forma financial information which should be read in conjunction with the unaudited Nyrstar Pro Forma Consolidated Financial Information and notes thereto.

The acquisition by Nyrstar of the Zinifex and Umicore Carve-out Groups has been accounted for as a reverse acquisition, reflecting the Zinifex Carve-out Group as the accounting acquirer. Accordingly, the assets and liabilities of the Zinifex Carve-out Group have been accounted for in the Nyrstar Pro Forma Consolidated Financial Information based on their pre-combination carrying amounts, restated to comply with Nyrstar accounting policies, while the assets and liabilities of Nyrstar and the Umicore Carve-out Group have been recorded under “purchase accounting” principles at their estimated fair values.

The unaudited Nyrstar Pro Forma Consolidated Financial Information has been provided for illustrative purposes only and is not necessarily indicative of the consolidated results of operations or financial position that we would have actually obtained during the periods presented and are not necessarily representative of the consolidated results of operations or financial position that we expect in future periods.

The Nyrstar Pro Forma Consolidated Financial Information has been prepared in accordance with Commission Regulation (EC) No. 809/2004. For the avoidance of doubt, it does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the U.S. Securities and Exchange Commission.

We have also included modified non-GAAP pro forma information (not within the scope of our auditors’ examination or review procedures) which is intended to present the hypothetical impact of hedging arrangements in line with practices that we currently implement. This has been done for illustrative purposes only, and there can be no guarantee that actual results would have been as reflected or that Nyrstar will continue these practices in the future. Further, the Nyrstar modified pro forma information presented herein also includes a “pro forma changes in working capital” measure for which the bases for calculation is bespoke.

Auditor’s Reports The historical combined financial information of the Zinifex Carve-out Group and the Umicore Carve-out Group has been audited (in accordance with International Standards on Auditing (“ISA”) or reviewed in accordance with International Standards on Review Engagements (“ISRE”), as indicated in the reports included herein (which reports are qualified insofar as they relate to the audited historical combined financial information). This prospectus also includes a report issued in accordance with International Standard on Assurance Engagements (“ISAE”) 3000 on the Nyrstar Pro Forma Financial Information. ISA, ISRE and ISAE differ in certain significant respects from U.S. generally accepted auditing standards (“U.S. GAAS”), and accordingly, references to ISA, ISRE or ISAE in this prospectus should not be construed as being compliant with or equivalent to U.S. GAAS.

ii TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING THE PRESENTATION OF FINANCIAL INFORMATION INCLUDED IN THIS PROSPECTUS ...... i SUMMARY ...... 1 Business Overview ...... 1 Risk Factors ...... 1 Competitive Strengths ...... 3 Strategy ...... 4 Business Description ...... 4 Hobart ...... 5 Port Pirie ...... 5 Budel ...... 5 Clarksville ...... 5 Balen ...... 5 Overpelt ...... 6 Auby ...... 6 Chinese Operations ...... 6 Other Operations ...... 6 Environmental Management ...... 7 Shareholding Structure ...... 7 Business Combination — Relationship with the Selling Shareholders ...... 7 Board of Directors — Corporate Governance ...... 8 SUMMARY OF THE OFFERING ...... 9 SUMMARY FINANCIAL INFORMATION ...... 13 Nyrstar Pro Forma Financial Information ...... 13 Summary Historical Carve-out Financial Information ...... 19 Recent Developments ...... 24 Current Trading and Prospects ...... 25 RISK FACTORS ...... 26 Risks Relating to Nyrstar’s Business and the Zinc and Lead Smelting and Alloying Industries ...... 26 Risks Relating to Nyrstar as a New Entity ...... 34 Risks Relating to the Offering ...... 36 FORWARD-LOOKING STATEMENTS ...... 39 IMPORTANT INFORMATION ...... 40 Responsibility Statements ...... 40 Approval of the Prospectus ...... 41 Notice to United States Investors ...... 42 Notice to New Hampshire Residents ...... 42 Notice to Investors in the European Economic Area ...... 42 Notice to United Kingdom Investors ...... 43 Notice to French Investors ...... 43 Notice to Japanese Investors ...... 43 Notice to Canadian Investors ...... 43

iii Notice to Australian Investors ...... 43 PRESENTATION OF FINANCIAL AND OTHER INFORMATION ...... 44 Use of Key Terms ...... 44 Summary of Overall Approach to Presentation of Financial Information and Data ...... 44 Zinifex Carve-out Group Unaudited Combined Selected Historical Financial Information ...... 45 Umicore Carve-out Group Unaudited Combined Selected Historical Financial Information ...... 46 Audited Zinifex Carve-out Group Combined Financial Statements and Audited Umicore Carve-out Group Combined Financial Statements ...... 47 Nyrstar Unaudited Pro Forma Consolidated Financial Information ...... 48 Föhl China Co., Ltd ...... 49 Non-IFRS Financial Measures ...... 50 Financial Year ...... 51 Annualisation ...... 51 Currencies and Exchange Rates ...... 51 Rounding ...... 51 Industry and Other Statistical Information ...... 52 AVAILABLE INFORMATION ...... 53 ENFORCEMENT OF FOREIGN JUDGMENTS AND SERVICE OF PROCESS ...... 54 United States ...... 54 DIVIDEND POLICY ...... 55 EXCHANGE RATES ...... 56 USE OF PROCEEDS ...... 58 CAPITALISATION AND INDEBTEDNESS ...... 59 SELECTED FINANCIAL INFORMATION ...... 60 Selected Unaudited Nyrstar Pro Forma Consolidated Financial Information ...... 60 Pro forma consolidated income statement data ...... 61 Pro forma consolidated balance sheet data ...... 61 Selected Unaudited Historical Carve-out Financial Information ...... 62 Zinifex Carve-out Group ...... 63 Umicore Carve-out Group ...... 64 OPERATING AND FINANCIAL REVIEW AND PROSPECTS ...... 65 Overview of Nyrstar ...... 66 Significant Factors Affecting Nyrstar’s Results of Operations ...... 67 Zinc Prices ...... 67 Gross Profit Realised by Zinc Smelters ...... 68 Structural Hedging of Metal Price and Currency Exposure ...... 72 Gross Profit Realised by our Port Pirie Lead Smelter ...... 72 Costs of Production ...... 73 Exchange Rates ...... 76 Environmental Costs ...... 76 Defined Benefit Pension Plans ...... 77 Restructurings and impairments ...... 77 Taxes ...... 77 Segmental Presentation ...... 77

iv Nyrstar Pro Forma Consolidated Income Statement Data Modified to Reflect the Current Transactional and Structural Hedging Policy of Nyrstar ...... 77 Gross Profit ...... 79 Results of Operations for the Zinifex Carve-out Group ...... 82 Explanation of Certain Key Income Statement Items and Other Operational Data for the Zinifex Carve-out Group ...... 82 Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Six Months Ended 30 June 2006 and 2007 ...... 83 Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Years Ended 31 December 2005 and 2006 ...... 93 Results of Operations for the Umicore Carve-out Group ...... 103 Explanation of Certain Key Income Statement Items and Other Operational Data for the Umicore Carve-out Group ...... 103 Presentation of Adjusted Results for the Umicore Carve-out Group ...... 104 Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Six Months Ended 30 June 2006 and 2007 ...... 105 Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Years Ended 31 December 2005 and 2006 ...... 114 Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Year Ended 31 December 2004 and 2005 ...... 123 Liquidity and Capital Resources ...... 125 Funding Sources ...... 125 Pro Forma Cash Flow Data ...... 125 Capital Expenditures ...... 128 Working Capital ...... 129 Contractual Obligations and Commitments ...... 130 Other Commercial and Regulatory Commitments ...... 130 Related Party Transactions ...... 131 Disclosure on Market Risk ...... 131 Commodity price risk ...... 131 Foreign Currency Exchange Risk ...... 131 Interest Rate Risk ...... 131 Credit Risk ...... 131 Critical Accounting Estimates and Policies ...... 132 Recent Accounting Pronouncements ...... 132 Recent Developments ...... 133 Current Trading and Prospects ...... 134 THE ZINC AND LEAD SMELTING AND ALLOYING INDUSTRIES ...... 136 Introduction ...... 136 Zinc ...... 136 Lead ...... 137 Zinc ...... 137 Overview of the Zinc Smelting Industry ...... 137 Major Zinc Mining and Smelting Companies ...... 139 First-Use and End-Use Market Sectors ...... 140 Geographic Patterns and Drivers of Zinc Consumption ...... 141

v Smelter Gross Profit ...... 143 Mine Production ...... 148 Smelter Production ...... 148 Zinc Price Outlook ...... 150 Treatment Charge Outlook ...... 152 The Competitive Cost Position of the Nyrstar Zinc Smelters ...... 153 Lead ...... 154 Major Lead Mining and Smelting Companies ...... 154 Lead Consumption ...... 155 Mine Production ...... 155 Smelter/Refinery Production ...... 156 Refined Lead Market Outlook and Forecast Lead Prices ...... 157 Lead Concentrate Market Outlook and Forecast Treatment Charges ...... 158 BUSINESS ...... 160 Overview ...... 160 Business Combination and Creation of Nyrstar ...... 160 Group Structure Chart ...... 161 Competitive Strengths ...... 162 Strategy ...... 165 Business Description ...... 168 Segments and Summary Description of the Nyrstar Assets ...... 168 Production Process ...... 168 Sourcing of Raw Materials and Marketing and Sales ...... 171 Environment, Health and Safety ...... 174 Hobart ...... 176 Port Pirie ...... 184 Budel ...... 192 Clarksville ...... 198 Balen and Overpelt Operations ...... 203 Balen ...... 204 Overpelt ...... 211 Auby ...... 216 Chinese Operations ...... 224 Nyrstar Yunnan Zinc Alloys Co., Ltd ...... 224 Föhl China Co., Ltd ...... 229 Genesis ...... 231 Other Operations ...... 234 Galva 45 S.A...... 234 GM-Metal SAS ...... 237 ARA ...... 239 Padaeng Industry Public Company Limited ...... 243 Corporate ...... 245 Employees ...... 246 Insurance ...... 246 Intellectual Property and Research and Development ...... 247

vi Information Technology ...... 249 Legal Proceedings ...... 250 Material Contracts ...... 251 SELLING SHAREHOLDERS ...... 252 Umicore ...... 252 Zinifex ...... 252 MANAGEMENT AND CORPORATE GOVERNANCE ...... 253 Board of Directors ...... 253 Senior Management Team ...... 254 Corporate Governance ...... 256 Introduction ...... 256 Board of Directors ...... 256 Board Committees ...... 257 Executive Management ...... 258 Remuneration of Directors and Executive Management ...... 259 Indemnification and insurance of Directors and Executive Management ...... 259 General Information on Directors and Members of Executive Management ...... 259 Directors’ and Other Interests ...... 262 Description of Our Share Plans ...... 262 Employee Share Acquisition Plan ...... 262 Executive Long Term Incentive Plan ...... 263 RELATED PARTY TRANSACTIONS ...... 265 Business Combination and Shareholders’ Agreement ...... 265 Equalisation Mechanism ...... 265 Additional Capital Increase — Purchase Price Adjustment Based on IPO Proceeds ...... 266 No Representations and Warranties from the Selling Shareholders ...... 266 Obligations of Nyrstar — Release of Guarantees ...... 266 Liability relating to the Prospectus and Related Offering Documents ...... 267 Non-compete Undertaking ...... 267 Post-IPO Provisions ...... 267 Ancillary Agreements ...... 267 Sale and Purchase Agreements with Zinifex and Umicore ...... 268 Transitional Services Agreements with Zinifex and Umicore ...... 268 Concentrate Purchase Agreements with Zinifex ...... 269 Metal Purchase and Sale Agreements with Umicore ...... 269 MAJOR SHAREHOLDERS ...... 271 List of Major Shareholders and Voting Rights ...... 271 Control of Nyrstar ...... 271 DESCRIPTION OF NYRSTAR’S SHARES AND ARTICLES OF ASSOCIATION ...... 272 General ...... 272 Corporate Purpose ...... 272 Share Capital and Shares ...... 273 Form and Transferability of the Shares ...... 273 Currency ...... 273

vii Description of Rights and Benefits Attached to the Shares ...... 273 Changes to the Share Capital ...... 276 Purchase and Sale of Own Shares ...... 277 Legislation and Jurisdiction ...... 277 Notification of Significant Shareholdings ...... 277 Public Takeover Bids ...... 278 Squeeze-outs ...... 279 Sell-out Right ...... 279 TAXATION ...... 280 Belgian Tax Regime ...... 280 Belgian Residents ...... 280 Belgian Non-residents ...... 283 United States Tax Regime ...... 285 Dividends ...... 286 Sale or other Disposition ...... 287 Disposition of Foreign Currency ...... 288 Passive Foreign Investment Company Considerations ...... 288 Backup Withholding and Information Reporting ...... 288 UNDERWRITING AND PLAN OF DISTRIBUTION ...... 289 Nature of the Offering ...... 289 Underwriting ...... 289 Lock-up Arrangements ...... 290 Increase Option ...... 290 Greenshoe and Price Stabilisation ...... 291 Plan of Distribution and Allocation ...... 291 Offer Price ...... 291 Form and Delivery ...... 292 Listing ...... 292 Other Relationships ...... 293 No Public Offering Outside Belgium ...... 293 Paying Agents and Related Services (Service Financier/Financiële Dienst)...... 293 INFORMATION ON THE PUBLIC OFFERING IN BELGIUM ...... 294 Retail Offering Period ...... 294 Application Procedure for Retail Investors ...... 294 Retail Offer Price ...... 294 Allocation to Retail Investors ...... 295 Payment and Taxes ...... 295 SELLING AND TRANSFER RESTRICTIONS ...... 296 Selling Restrictions ...... 296 General ...... 296 United States ...... 296 Canada ...... 296 European Economic Area ...... 300 France ...... 300 United Kingdom ...... 300

viii Australia ...... 301 Japan ...... 301 Kuwait ...... 301 United Arab Emirates ...... 301 Transfer Restrictions ...... 301 United States ...... 301 LISTING AND GENERAL INFORMATION ...... 303 General ...... 303 Indices ...... 304 Brokerage Fees and Transaction Costs ...... 304 Belgian Tax on Stock Exchange Transactions ...... 304 Clearing and Settlement ...... 305 LEGAL MATTERS ...... 306 INDEPENDENT AUDITORS ...... 307 APPENDIX I: GLOSSARY ...... 308 APPENDIX II: INTRODUCTION TO FINANCIAL INFORMATION ...... 318 APPENDIX III: INDEX TO HISTORICAL FINANCIAL INFORMATION ...... 319 APPENDIX IV: INDEX TO PRO FORMA FINANCIAL INFORMATION ...... 320 CHAPTER I: UNAUDITED ZINIFEX CARVE-OUT GROUP COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION Basis of Preparation ...... F-1 Zinifex Carve-out Group Combined Selected Historical Financial Information for the Years Ended 31 December 2006 and 2005, and Six Months Ended 31 December 2004 ...... F-3 Zinifex Carve-out Group Combined Selected Historical Financial Information for the Six Months Ended 30 June 2007 and 2006 ...... F-5 Independent Accountant’s Review Report on the Zinifex Carve-out Group’s Combined Selected Historical Financial Information ...... F-7 CHAPTER II: UNAUDITED UMICORE CARVE-OUT GROUP COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION Basis of Preparation ...... F-8 Umicore Carve-out Group Combined Selected Historical Financial Information for the Years Ended 31 December 2006, 2005 and 2004 ...... F-9 Umicore Carve-out Group Combined Selected Historical Financial Information for the Six Months Ended 30 June 2007 and 2006 ...... F-15 ISRE 2400 Review Report of the Auditors on Umicore Carve-out Group’s Combined Selected Historical Financial Information ...... F-18 CHAPTER III: AUDITED ZINIFEX CARVE-OUT GROUP COMBINED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 Audited Zinifex Carve-out Group Combined Income Statement for the Year Ended 30 June 2007 . . . A-3 Audited Zinifex Carve-out Group Combined Statement of Recognised Income and Expense for the Year Ended 30 June 2007 ...... A-4 Audited Zinifex Carve-out Group Combined Balance Sheet as at 30 June 2007 ...... A-5 Audited Zinifex Carve-out Group Combined Statement of Cash Flows for the Year Ended 30 June 2007 ...... A-6 Notes to the Audited Zinifex Carve-out Group Combined Financial Statements for the Year Ended 30 June 2007 ...... A-8 Directors’ Declaration ...... A-32 Independent Auditors’ Report to the Directors of Zinifex Limited ...... A-33

ix CHAPTER IV: AUDITED UMICORE CARVE-OUT GROUP COMBINED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 Audited Umicore Carve-out Group Combined Income Statement for the Six Months Ended 30 June 2007 ...... A-34 Audited Umicore Carve-out Group Combined Balance Sheet as at 30 June 2007 ...... A-35 Audited Umicore Carve-out Group Combined Cash Flow Statement for the Six Months Ended 30 June 2007 ...... A-36 Audited Umicore Carve-out Group Combined Statement of Recognised Income and Expenses for the Six Months Ended 30 June 2007 ...... A-37 Notes to the Audited Umicore Carve-out Group Combined Financial Statements for the Six Months Ended 30 June 2007 ...... A-38 Auditor’s Report on Umicore Carve-out Group Combined Financial Statements ...... A-68 PRO FORMA FINANCIAL INFORMATION Independent Assurance Report on the Nyrstar Pro Forma Financial Information ...... PF-2 CHAPTER I: NYRSTAR UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION General Framework ...... PF-3 Basis of Preparation ...... PF-4 Pro Forma Consolidated Balance Sheet as at 30 June 2007 ...... PF-7 Selected Pro Forma Consolidated Income Statement Information Before Net Financing Costs and Income Tax for the Six-Month Period Ended 30 June 2007 ...... PF-8 Selected Pro Forma Consolidated Income Statement Information Before Net Financing Costs and Income Tax for the Year Ended 31 December 2006 ...... PF-9 Notes to the Pro Forma Adjustments ...... PF-10 CHAPTER II: SUPPLEMENTARY NOTES TO THE NYRSTAR PRO FORMA CONSOLIDATED FINANCIAL INFORMATION ...... PF-17

x SUMMARY

You should read the following summary together with the more detailed information and the financial statements and other financial information contained elsewhere in this prospectus. This summary does not include all the information which may be important to an investor. Any decision to invest in the ordinary shares offered herein should be based on a consideration of the prospectus as a whole. No civil liability will attach to the Company or the Selling Shareholders solely on the basis of this summary, unless it is misleading, inaccurate or inconsistent when taken together with other parts of the prospectus.

Business Overview Nyrstar comprises the former zinc and lead alloying and smelting assets of Umicore and Zinifex. It is now the world’s largest producer of zinc metal and alloys, as well as a leading lead and silver producer with operations spread over four continents. During 2006, on a pro forma basis, we produced more than one million tonnes of zinc and nearly 225,000 tonnes of lead. Our zinc is used primarily in steel galvanising and die-casting and our lead is used primarily in the production of lead acid batteries. Given the polymetallic nature of the zinc and lead concentrates that we process, we are also one of the world’s largest producers of refined silver and we produce other valuable by-products such as indium, copper, gold and cadmium. We produce high-quality branded products, including value-added alloys, which generally enable us to earn a premium over the commodity metal price and to differentiate our product offering on the basis of high quality.

Our operations include zinc and lead smelters previously owned and operated by Zinifex and Umicore including Hobart (Australia), Port Pirie (Australia), Budel (the Netherlands), Clarksville (United States), Balen (Belgium), Overpelt (Belgium) and Auby (France). Our smelters are technologically advanced with relatively high recovery rates. We also have shareholdings in businesses engaged in zinc reprocessing and recycling and zinc galvanising in France, lead acid battery recycling in Australia, zinc alloying and smelting and die-casting in China and zinc smelting in Thailand.

Our product portfolio includes a number of high margin, premium quality zinc alloy products, many of which hold strong competitive positions in niche technical application markets. Moreover, our global footprint allows us to serve customers worldwide: we have a geographically diversified portfolio of high-quality assets that are well-positioned to supply customers locally.

Nyrstar NV is incorporated in Belgium and has its corporate offices in London, the United Kingdom and in Balen, Belgium. Nyrstar’s operating sites are also supported by a western Regional Support Office in Balen, Belgium, and an eastern Regional Support Office in Melbourne, Australia.

Risk Factors An investment in our shares is subject to several types of risks relating to our business and to the zinc and lead smelting and alloying industries, to the fact that Nyrstar is a new entity and to the specifics of the Offering, as described in the section “Risk Factors” herein. Before making any decision to invest in the ordinary shares offered hereby, investors should carefully consider these risks. Such risks include, but are not limited to, the following: • Our results are largely dependent on commodity prices, which are cyclical and volatile. This is due to the fact that, as a zinc and lead smelter, our profitability is largely determined by the interplay between the price for zinc and lead (which determines the amount of value available to be shared between the miner and the smelter) and treatment charges (“TCs”) (which determine how that value is shared between the miner and the smelter). Volatility in metal prices affects each component of our zinc refining margin: TCs, free zinc, the net zinc metal sales revenue and revenues from the sales of valuable by-products. • Our results are linked to the level of zinc and lead TCs, which are cyclical in nature, as they are subject to fluctuations based on the supply and demand dynamics of the global zinc and lead concentrate market. • We are exposed to the shape of the forward price curve for underlying metal prices. Since the metal price used to determine the amount we pay for metal contained in the raw materials that we purchase is normally an average of the London Metal Exchange price over an agreed period of time and because of

1 the lapse of time between the time of purchase of metal in its unprocessed form for conversion into products and the sale of those products, the volatility in the London Metal Exchange price creates differences between the average price we pay for the contained metal and the price we receive for it. Accordingly, we are exposed to any fluctuations in price between the moment we purchase raw material and the moment we sell our products to our customers. • Our business is exposed to the effects of exchange rate fluctuations, particularly since zinc and lead are sold principally in U.S. dollars while our costs are primarily denominated in euro and Australian dollars. • We are dependent on a limited number of suppliers for zinc and lead concentrate and a disruption in supply could have a material adverse effect on our production levels and results of operations. A number of factors largely beyond our control, including interruptions in production by suppliers, decisions by suppliers to allocate supplies of concentrate to other purchasers, price fluctuations and increasing transport costs could negatively affect our business. • An increase in energy costs, in particular electricity costs, or a disruption in the supply of energy for our operations may significantly increase production costs or adversely affect production. • We have entered into various agreements with the Selling Shareholders, which has created a certain level of dependence on the Selling Shareholders. We depend on Zinifex in its capacity as a supplier of zinc and lead concentrate, on Umicore as a customer and on both Selling Shareholders as providers of transitional services. • Our operations are subject to stringent environmental and health laws and regulations which could expose us to significant increased compliance costs and litigation relating to environmental and health issues. • In the event that we are unable to sell certain by-products that we produce during the zinc and lead smelting process, we may be required to limit or reduce our overall production levels. • We are a newly incorporated company with no operating history of our own, since we have only been in existence as a separate entity since 31 August 2007. • We may face issues relating to start-up and to integrating the operation of assets acquired from Zinifex and Umicore as we transition to being an independent company. For instance, integration of business systems will require substantial effort and expense. • We have an obligation to indemnify the Selling Shareholders for all losses incurred by them in respect of the businesses transferred to us. We assumed all contingent liabilities attached to the businesses transferred to us, regardless of when they arose. • We will have limited recourse against Zinifex and Umicore in respect of the zinc and lead smelting and alloying businesses we acquired with respect to matters that may affect the value of such businesses. • The limited audited historical financial information available for the Zinifex Carve-out Group and the Umicore Carve-out Group does not form the basis for the discussion under “Operating and Financial Review and Prospects” included in this prospectus, no audited historical financial information is available for Nyrstar as a stand-alone entity and the Nyrstar Pro Forma Consolidated Financial Information may not be representative of our results. • A change in underlying economic conditions or adverse business performance may result in impairment charges. The business combination between Zinifex and Umicore has been accounted for as a reverse acquisition with the Zinifex Carve-out Group being considered the acquirer and Nyrstar and the Umicore Carve-out Group being considered the acquirees. The fair value of the Umicore assets was determined at a historical high point of the commodity cycle and a fall in commodity prices or other changes in economic conditions may lead to the incurrence of substantial impairment charges. • If the Selling Shareholders retain residual shareholdings, they may exercise influence over the Company, and the interests of the Selling Shareholders may not always be aligned with the interests of the Company or the Company’s other shareholders. • The ordinary shares of the Company will be listed and traded on the Eurolist of Euronext Brussels on an “if-and-when-delivered” basis as from the listing date until the envisaged closing date. Euronext Brussels may annul all transactions effected in the ordinary shares if the ordinary shares are not delivered on the closing date.

2 Competitive Strengths • Our business is well-positioned to benefit from favourable trends in zinc TCs and a strong LME zinc metal commodity price, which are forecast to exceed long-term historical averages in the near term. Zinc and lead consumption growth has been significantly higher than global industrial production growth in recent years, facilitating the current environment of high refined metal prices compared to the long-term historical average. The high metal prices, in turn, appear to have encouraged miners to increase mine production and, therefore, to increase the supply of concentrate. Based on 2007 information from industry consultant Brook Hunt, this increase in mine output is expected, subject to certain variables, to be higher than increases in smelting capacity utilisation through 2008. This would typically suggest that annual TCs will increase during this period. Consequently, this represents a potential positive industry trend for smelting companies such as Nyrstar, as increasing TCs effectively mean that smelting companies receive a higher proportion vis-à-vis the mining companies of the value of the zinc metal in the concentrate they treat. • We are the world’s largest zinc producer and a leading lead producer, which we believe leaves us well-positioned to take a leading role in shaping our industry’s future and to realise economies of scale. As the largest zinc producer globally, we expect to be able to play a leading role in setting the benchmark, or industry standard, TC as well as to shape the future direction of the zinc and lead industries, while generating economies of scale . • We have a geographically diversified portfolio of high-quality assets that are well-positioned to supply customers globally. We have operations across four continents, primarily in Europe and Australia. Our Australian smelters supply the growing industrial markets of the Asia-Pacific region, including China, Taiwan and Hong Kong. Our Clarksville smelter is the only primary zinc smelter in the United States, which provides us with a competitive advantage in being able to service our customers there at short notice and at low transport costs. In Europe, there is a shortage of smelting capacity which gives our European smelters an advantage in supplying Europe’s major industrial centres. We intend to leverage our global market presence to take advantage of market dynamics . • We provide a high level of service to our customers and produce high-quality branded products that we believe will enable us to achieve a premium over commodity metal prices. We produce a range of premium products, including value-added alloys, which we believe will continue to enable us to earn a premium over the commodity metal price and to differentiate our products based on higher levels of quality and service. • We have secure and diverse sources of feedstock supplies. We have life-of-mine concentrate purchase agreements with Zinifex relating to its Century and Rosebery mines, from which we currently derive approximately 48% of our zinc concentrate feedstock requirements. Our Balen, Auby, Budel and Clarksville smelters are also capable of processing significant quantities of secondary materials , that tend to be less expensive than zinc concentrates and cheaper to process into refined metal. Overall, secondary materials currently supply approximately 20% of our total feedstock requirements. • We have an experienced management team sourced from both Zinifex and Umicore which has a track record of optimising its asset base and of capital discipline. Most of our management team comes to us from Umicore and Zinifex and previously held senior management positions at those companies. As such, it has a high degree of familiarity with our assets and of the broader zinc and lead industries. • We have identified a pipeline of organic growth and optimisation projects for our existing assets. Some of these initiatives will be realised by simply sharing and pooling the technological expertise from both Zinifex and Umicore that our management team brings with it. In addition, we expect to benefit from a number of ongoing improvements that were initiated before our formation. • We have a conservative capital structure and stringent financial management policies that should enable us to maintain our existing asset base through business cycles. Our conservative financial position and our financial management policies are designed to provide us with the financial strength and flexibility to pursue growth opportunities and to reduce financial gearing during periods of low TCs and metals prices. • We are committed to respecting environmental standards and we have management systems in place to ensure that we maintain both our environmental and safety track records. We strive to maintain a safe environment for our workers, minimise our impact on the environment and contribute to the communities in which we operate. Our operations have improved in a number of environmental areas in recent years. We are committed to continuing to meet our environmental standards and commitments.

3 Strategy Our strategy is based on four key focuses for our business: • Protecting our people, local communities and the environment; • Managing our complex multi-metal commodity facilities; • Providing high-quality products and services tailored to the needs of our customers; and • Maximising the consumption of recycled zinc rich feed materials into our processes.

Furthermore, we plan to implement a number of strategic initiatives, summarised below, aimed at optimising our existing asset base, leveraging our core capabilities and taking advantage of the multi-faceted skill base we possess through our management teams at all of our sites. • Continue to invest in our assets to maintain a competitive cost structure and increase capacity utilisation; • Realise the synergies between the Umicore and Zinifex asset portfolios identified during the Nyrstar formation process; • Increase our use of recycled zinc feedstock materials; • Increase our sales of value-added, premium margin products in high growth markets; • Pursue opportunities to increase energy efficiency and manage electricity cost; • Invest in technology to increase recycling and reduce our environmental footprint; and • Facilitate and contribute to industry consolidation.

Business Description The table below sets out key aspects of our main facilities.

Nyrstar Facility Capacity (tonnes) per annum Products ownership Hobart ...... 260,000 SHG zinc and alloys 100% Port Pirie ...... lead: 235,000 Lead, lead alloys, zinc, copper, 100% zinc: 45,000 refined silver, gold Budel ...... 260,000 SHG zinc and alloys 100% Clarksville ...... 120,000 SHG zinc and alloys 100% Balen ...... 270,000, being increased to 275,000 Zinc cathodes, SHG zinc and 100% galvanising alloys Overpelt ...... 200,000 Die-casting and galvanising alloys 100% 92,000 Washed oxides Auby ...... 135,000, being increased to 160,000 Zinc cathodes 100% NYZA (Kunming) ..... 60,000 SHG zinc 60% Föhl China(1) ...... 700 Die-casting parts 50% Genesis ...... 23,000, being increased to 78,000 Die-casting alloys 50% Galva 45 ...... coated steel parts: 60,000 Galvanised products 66% GM-Metal ...... 26,000 Die-casting alloys 100% ARA ...... 40,000 Lead and lead alloys 50% Padaeng ...... 110,000 SHG zinc and alloys 24.9% Note: (1) On the date of this prospectus, ownership of the 50% shareholding in Föhl China Co., Ltd has not yet been transferred from Umicore to the Nyrstar group. Such transfer is still subject to a waiver by Umicore’s joint venture partner of its purchase option as well as to the subsequent approval of the sale by the Chinese examination and approval authority.

4 The following summarises the main features of our sites.

Hobart The Hobart smelter in Hobart, Tasmania uses the RLE process for zinc production. Hobart sources the majority of its concentrate requirements from the Rosebery and Century mines with the balance sourced predominantly from other Australian mines. Hobart produced approximately 235,000 tonnes of zinc products in 2006, as well as lesser amounts of other associated metals and by-products. Its key products are the EZDA die- casting alloy, the zinc/aluminium alloy known as continuous galvanising grade (“CGG”) and special high grade (“SHG”) zinc used mainly in general galvanising, which are exported predominantly to Asia and in particular to China.

Port Pirie The Port Pirie smelter, located near Adelaide, Australia, is an integrated multi-metal smelter and refinery with flexibility to efficiently process a wide range of metals containing lead-dominant feedstock to produce refined lead, refined silver, zinc, copper and gold. The site can produce approximately 235,000 tonnes of refined lead and lead alloy products, up to 16 million troy ounces (500 tonnes) of refined silver and approximately 45,000 tonnes of zinc, as well as copper, gold and sulphuric acid. Port Pirie is the world’s largest primary lead smelting facility based on production volume, which allows it to generate significant economies of scale. The site processes feedstock from a variety of locations, including all of the Rosebery’s lead concentrates as well as lead concentrates from Century. Port Pirie also processes a large amount of by-products, which it sources from Hobart and from its own stockpiles along with other materials that are sourced externally.

Budel The Budel zinc smelter located in the southeast of the Netherlands is among the most modern (built in 1973 and expanded in 2006) and efficient (98.6% recovery rate in 2006) zinc smelters in the world. In addition, it produces virtually no solid waste. It has a production capacity of approximately 260,000 tonnes of zinc product per year. Budel’s major products are SHG zinc and CGG zinc alloys and it also produces a die-casting alloy following a 2006 plant upgrade. The site also produces copper cake, cadmium and sulphuric acid by-products. Budel’s feedstock comprises both zinc concentrates primarily from the Century mine and secondary zinc oxides that are recycled from residues produced primarily by the steel industry in Europe.

Clarksville The Clarksville zinc refinery, located in Tennessee (United States), is a relatively modern electrolytic zinc smelter that produced more than 110,000 tonnes of SHG zinc and CGG zinc alloys in 2006, of which it has an established reputation as a high-quality producer. It is currently the only primary zinc producer in the United States and most of its metal products are sold to U.S. customers. The refinery is located in proximity to the industrial heartland of the United States, giving it a geographic competitive advantage and allowing it to realise a premium over the LME price for its zinc products. Clarksville historically obtained its concentrates from nearby Tennessee Valley mines. While these mines were closed in recent years, it sourced its concentrates from mines in Central and South America, Ireland and Australia. The Tennessee Valley mines have recently reopened or are scheduled to reopen and we expect Clarksville to source an increasing proportion of its concentrates from them.

Balen The Balen smelter is an integrated zinc smelter located in the northeast of Belgium. The Balen smelter produces zinc from feedstock of both zinc concentrates and recycled zinc secondary materials and has a production capacity of 270,000 tonnes, which we expect to increase to 275,000 tonnes through process optimisation and maintenance. Secondary materials currently account for approximately 20% of Balen’s feed requirements and consist largely of washed oxides from Overpelt. The zinc concentrates are sourced from suppliers world-wide. Approximately one third of the zinc cathodes produced are melted and cast on-site to produce alloys and SHG zinc. Most of the remaining zinc cathode is transported to the nearby Overpelt plant to be transformed into a range of other alloy products. Balen also produces substantial quantities of by-products such as sulphuric acid, Balen Leach Product (a lead and silver product) and copper cement.

5 Overpelt Overpelt is a zinc alloying plant and oxide washing facility that is located 18 kilometres from Balen. It produces zinc alloys largely from Balen cathodes and washes secondary raw materials to remove impurities, which are then used as feedstock by Balen and Auby. The Overpelt casting plant processed approximately 180,000 tonnes of zinc cathodes in 2006, transforming them into high margin specialty zinc alloys, including high purity zinc destined for the alkaline battery industry. The Overpelt washing plant processed approximately 95,000 tonnes of secondary zinc oxides in 2006 that came mainly from Waelz kilns located in France and Germany. We share the Overpelt site with Umicore, which operates a lead rolling mill and a zinc powder facility on the site.

Auby The Auby smelter, located in the north of France, has an annual capacity of 135,000 tonnes of zinc cathode. The zinc cathode is sold primarily to Umicore’s Building Products business unit, which operates a rolling mill adjacent to the plant. Auby produces a range of valuable by-products, including indium since 2006. We expect to invest to increase zinc production to approximately 160,000 tonnes per annum by the end of 2008 as well as indium production to over 56 tonnes by 2008.

Chinese Operations The accounting segment “Chinese Operations” consists of the following assets: Nyrstar Yunnan Zinc Alloys Co., Ltd (“NYZA”, also referred to as “Kunming” by industry analysts), Föhl China Co., Ltd and Genesis Alloys (Ningbo) Ltd and its affiliated companies Genesis Recycling Technology (BVI) Ltd and Genesis Alloys Ltd.

NYZA (Kunming) The NYZA plant is located within the Yunnan Copper plant site near Kunming, China. NYZA is a joint venture in which we own 60% of the shares and a Chinese state-owned enterprise, Yun Tong Zinc Co. Ltd, owns the other 40%. The plant was commissioned in 2002 and currently has an annual capacity of 54,000 tonnes and produces SHG zinc. It is currently undergoing an upgrade to enable production of zinc alloys for use in the Chinese die-casting and galvanising markets. The hydrometallurgical process associated with a thermal treatment of the leach residue makes NYZA a zero waste plant.

Föhl China Co., Ltd Föhl China Co., Ltd (“Föhl China”) produces custom made zinc die-casting parts and is a 50/50 joint venture with Adolf Föhl Verwaltungs- und Beteiligungs GmbH (50%). Production started in June 2006.

Genesis Genesis Alloys Ningbo Ltd (“Genesis”) is a zinc die-cast alloy producer and is a 50/50 joint venture between us and Lee Kee Group, a Hong Kong-based metals distribution company. Genesis commenced operations in 2001 and we believe it is now regarded as the domestic supplier of choice for domestically produced premium quality die-cast alloys in China.

Other Operations Galva 45 S.A. Galva 45 S.A. (“Galva 45”) is a French company specialising in galvanising manufactured steel parts, with an annual production capacity of about 60,000 tonnes. We own 66% of the shares with the balance held by the plant’s largest customer. Galva 45 specialises in a variety of steel coating treatments and in particular in specialty galvanising of automotive parts (engine cradles, suspension arms, beams, bearings, etc.) and tubular products for use in the agriculture sector and livestock farming.

GM-Metal SAS GM-Metal SAS (“GM-Metal”) is a die-casting alloys producer with annual production capacity of about 20,000 tonnes. GM-Metal is also a specialised recycler of die-casting alloys.

6 ARA

Australian Refined Alloys Pty Ltd (“ARA”) is a lead acid battery recycling 50/50 joint venture between us and the Sims Group, an Australian metals recycling company ARA operates two lead acid battery recycling facilities located near Sydney and Melbourne. In 2006, ARA recycled approximately 4 million batteries, producing approximately 35,000 tonnes of lead and lead alloys.

Padaeng Industry Public Company Limited

We have a 24.9% shareholding in Padaeng Industry Public Company Limited (“Padaeng”), a Thai company listed on the stock exchange of Thailand. Padaeng is the only producer of SHG zinc in Southeast Asia with an annual production capacity of 110,000 tonnes of zinc metal and alloys. Padaeng has a long-term lease currently up for renewal to operate a nearby zinc mine, from which it currently sources the bulk of its concentrates.

Environmental Management

We are committed to continuing to improve our environmental performance and have budgeted foreseeable investments and expenditures for these purposes. The key environmental issues for our sites reflect in general the long site histories and ongoing changes in regulatory standards. These issues relate essentially to the remediation of historical soil and groundwater contamination, by-product and waste management, upgrade of pollution control equipment for air and water emissions and upgrade of facilities to reduce fugitive emissions to air and reduce future soil contamination.

The environmental risk reduction projects currently in place include remediation of contaminated soil and groundwater at Balen and Overpelt, landfill closure and handover to the local government aurhority at Budel, the recovery and sale of by-product stockpiles at Hobart and Clarksville, minimising lead emissions and community exposure through the tenby10 community project at Port Pirie, the closure of the old landfill and optimisation of the current landfill at Balen and Auby and the reduction of the visual impact from the Hobart tail gas plume. These projects are only examples of our continuous efforts to minimise the environmental impact of both our production processes and our products.

Shareholding Structure

On the date of this prospectus, Zinifex and Umicore each hold 50% of the ordinary shares in Nyrstar. Immediately prior the closing of this Offering, following the exercise by Zinifex of a subscription right that allows for the alignment of the Selling Shareholders’ legal shareholdings with their relative economic interests in Nyrstar, Zinifex will own 59,735,768 shares (representing a 59.74% interest) and Umicore will own 40,264,232 shares (representing a 40.26% interest) in Nyrstar.

Business Combination — Relationship with the Selling Shareholders

Nyrstar was incorporated on 13 April 2007 by Zinifex and Umicore with a view to a business combination between the Selling Shareholders. We entered into a number of agreements with Zinifex and Umicore in connection with our formation and in anticipation of this Offering. Pursuant to these agreements we will continue to conduct extensive business with the Selling Shareholders and receive services from them after the closing of the Offering. Zinifex and Umicore will also continue to be represented on our Board of Directors.

On 23 April 2007 Zinifex, Umicore and Nyrstar signed a Business Combination and Shareholders’ Agreement (“BCSA”) in which Zinifex and Umicore agreed to combine Zinifex’s zinc and lead smelting and alloying business and Umicore’s zinc smelting and alloying business. Closing under the BCSA took place on 31

7 August 2007. Prior to closing under the BCSA, our operations were therefore conducted by the Selling Shareholders alongside, or even as part of, their other operations. A number of our principal sites were only recently carved out into stand-alone legal entities. Umicore’s zinc assets in Belgium and France (i.e., the plants in Balen, Overpelt and Auby) were transferred to separate legal entities in November 2006 and Zinifex’s Hobart smelter was only carved out from the Zinifex group on 31 August 2007. These recently formed legal entities were then transferred to the Nyrstar group on 31 August 2007 along with the other legal entities of the Zinifex and Umicore groups constituting the zinc and lead smelting and alloying business of Zinifex and the zinc smelting and alloying business of Umicore.

We acquired these businesses from the Selling Shareholders pursuant to various sale and purchase agreements entered into on 31 August 2007. We are currently in the process of calculating adjustments, based on working capital, net current tax liabilities and net debt metrics, to the purchase prices we paid to Zinifex and Umicore to acquire such assets.

We are also a party to several commercial agreements with Zinifex and Umicore. The principal agreements with Zinifex are concentrate purchase agreements on a “life-of-mine” basis from Zinifex’s Century and Rosebery mines, which currently account for 48% of our zinc concentrate feedstock requirements. The principal commercial agreements with Umicore are for the sale of zinc products to Umicore business units, pursuant to which Umicore is our largest customer. These agreements were entered into at a time when our assets were owned by the Selling Shareholders and, therefore, they were not tested in the market. We are also a party to transitional services agreements with Zinifex and Umicore relating to IT and finance matters.

Board of Directors — Corporate Governance At the closing of the Offering, the Company’s Board of Directors will be composed as follows:

Principal function within the Name Company Nature of directorship Julien De Wilde(1)...... Chairman Non-Executive, Independent Paul Fowler ...... CEO, Director Executive Peter Mansell ...... Director Non-Executive Karel Vinck ...... Director Non-Executive Roland Junck ...... Director Non-Executive, Independent Ray Stewart ...... Director Non-Executive, Independent

Nyrstar’s Board of Directors adopted a corporate governance charter in accordance with the recommendations set out in the Belgian Corporate Governance Code. The corporate governance charter, which will be effective as of the closing of the Offering, describes the main aspects of the corporate governance of the Company. Except in respect of the composition of the Nomination and Remuneration Committee, the Company will apply the nine corporate governance principles contained in the Belgian Code on Corporate Governance.

The Company’s independent auditors are Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren / Reviseurs d’Entreprises and PricewaterhouseCoopers Bedrijfsrevisoren / Reviseurs d’Entreprises.

8 SUMMARY OF THE OFFERING

The Offering ...... The Offering is an offering by the Selling Shareholders and comprises: • a public offering in Belgium. Subject to sufficient retail demand, no less than 10% of the total number of shares offered in the Offering (including the shares that are covered by the Increase Option, if exercised, but excluding the ordinary shares in relation to which the Underwriters have been granted the Greenshoe Option) will be allocated to retail investors in Belgium; and • an offering to qualified and/or institutional investors in Belgium and elsewhere outside the United States, in reliance on Regulation S under the Securities Act, and an offering in the United States to qualified institutional buyers (“QIBs”) in reliance on Rule 144A or another exemption from, or a transaction not subject to, the registration requirements of the Securities Act.

Shares Offered ...... The Offering includes 69,565,218 ordinary shares, as well as any ordinary shares offered if the Increase Option is exercised (together, the “Shares Offered”).

Additional Shares ...... In addition to the Shares Offered, the Underwriters may deliver a number of ordinary shares equal to up to 15% of the Shares Offered, to cover over-allotments, if any (the “Additional Shares”). See “Underwriting and Plan of Distribution” beginning on page 289.

Selling Shareholders ...... Umicore SA/NV (“Umicore”), a public limited liability company organised under the laws of Belgium, and Zinifex Limited (“Zinifex”), a public limited liability company organised under the laws of the State of Victoria, Australia.

Offer Price ...... Thefinal offer price will be determined within an offer price range, which will be announced on or about 15 October 2007, on the basis of a book-building process, conducted during the offering period, in which only institutional investors will participate. The offer price will be determined as soon as possible after the end of the offering period, and will be published in the Belgian press no later than on the first business day following its determination, which is expected to be on or about 29 October 2007, and no later than the fifth business day following the end of the offering period. The final offer price could be lower than the lower-end of the offer price range, but will in no event exceed the upper-end of the offer price range.

Increase Option ...... Depending on the volume of demand, the number of ordinary shares offered in the Offering may be increased by up to 17,391,304 ordinary shares representing up to 25% of the aggregate number of ordinary shares initially offered in the Offering. Any decision to exercise the Increase Option will be communicated at the latest on the date the final offer price is announced, which is currently expected to be on or about 29 October 2007. To the extent such Increase Option is exercised, the Underwriters will severally purchase the additional ordinary shares.

Greenshoe Option ...... The Selling Shareholders will grant UBS Limited, as Stabilisation Manager, on behalf of itself and the Underwriters, an option to

9 purchase up to 13,043,478 additional ordinary shares of the Company at the offer price, representing a maximum of 15% of the total number of ordinary shares included in the Offering. UBS Limited may exercise the option, in whole or in part for a period of 30 calendar days from the date of commencement of conditional trading, for the account of the Underwriters, solely to cover over-allotments, if any. See “Underwriting and Plan of Distribution — Greenshoe and Price Stabilisation” beginning on page 291.

The number of ordinary shares initially offered in the Offering and the number of shares underlying the exchangeable bonds, if any, will be announced in the Belgian press on or about 15 October 2007.

Use of Proceeds ...... The Selling Shareholders will receive all of the net proceeds of the Offering, after deduction of selling, underwriting and management commissions and other expenses payable by the Selling Shareholders. See “Use of Proceeds” beginning on page 58.

Expenses Relating to the Offering .... Theaggregate of the administrative, legal and audit costs as well as the costs of publications, printing of this Prospectus and the remuneration of the CBFA and of Euronext Brussels, as well as the underwriting commissions (which include a discretionary component) are expected to amount to approximately 2.7% of the Offering proceeds (assuming the Increase Option and the Greenshoe Option are exercised in full and the discretionary component is paid to the Underwriters). All such expenses will be borne by the Selling Shareholders.

Lock-up ...... TheCompany and the Selling Shareholders will agree, for a period of 180 and 360 days, respectively, to certain restrictions on issuances, sales or other transfers of ordinary shares of the Company. See “Underwriting and Plan of Distribution — Lock-up Arrangements” beginning on page 290.

Dividend Policy ...... Following its listing, the Company initially intends to pay a dividend of a minimum of 30% of consolidated net profit after tax. In addition, the Company currently intends to pay its first dividend in 2008 in respect of the four months to 31 December 2007. See “Dividend Policy” beginning on page 55.

Transfer Restrictions ...... Theordinary shares initially offered and sold in certain jurisdictions are subject to restrictions on transfer. See “Selling and Transfer Restrictions” beginning on page 296.

10 Retail Investors ...... ForpurposesoftheOffering,ordersplaced by natural persons residing in Belgium and by Belgian legal entities applying for ordinary shares of the Company for an aggregate amount of less than EUR 250,000 shall be treated as part of the public offering in Belgium.

Allocation to Retail Investors ...... Theaggregate number of ordinary shares of the Company allocated to retail investors will be determined after the end of the offering period. In the event that purchase orders received from retail investors in Belgium exceed 10% of the total number of Shares Offered (including the ordinary shares that are covered by the Increase Option, but excluding the ordinary shares in relation to which the Underwriters have been granted the Greenshoe Option), the allocation among applications from retail investors will be made on the basis of objective allocation criteria.

Preferential Allocation for Retail Investors ...... Preferential treatment will be given to applications received from retail investors before 4.00 p.m. Brussels time on 19 October 2007 or applications for Shares Offered submitted by retail investors to KBC Bank, Fortis Bank, KBC Securities, Deutsche Bank, Bank Degroof, Petercam, ING Belgium and CBC Banque.

Payment and Delivery ...... TheUnderwriters expect to deliver the ordinary shares to purchasers on or about 1 November 2007 through the facilities of Euroclear Belgium. The ordinary shares will be eligible for clearance through Euroclear Belgium. See “Underwriting and Plan of Distribution” beginning on page 289.

Listing and Trading ...... There is currently no market for the ordinary shares of the Company. We have applied for listing on the Eurolist of Euronext Brussels under the symbol “NYR”. See “Underwriting and Plan of Distribution” beginning on page 289. Trading is expected to commence on or about 29 October 2007 on an “if-and-when- delivered” basis. See “Risk Factors — Risks Relating to the Offering — The ordinary shares of the Company will be listed and traded on the Eurolist of Euronext Brussels on an “if-and-when-delivered” basis as from the listing date until the envisaged closing date. Euronext Brussels may annul all transactions effected in the ordinary shares if the ordinary shares are not delivered on the closing date” beginning on page 38.

Security Codes ...... Thefollowing codes have been assigned to the ordinary shares of the Company: Common Code: 032621228 ISIN: BE0003876936 Belgium Security Code (SVM): 3876.93

Indicative Timetable ...... Thefollowing dates are all indicative dates and are subject to change:

15 October 2007 ...... Expected publication of offer price range

15 October 2007 ...... Expected start of retail offering period

15 October 2007 ...... Expected start of institutional offering period

19 October 2007 at 4 p.m., Brussels time ...... Expected closing of early application period for preferential allocation to retail investors

11 26 October 2007 at 4 p.m., Brussels time (T-1) ...... Expected closing of retail offering period

26 October 2007 (T-1) ...... Expected closing of institutional offering period

29 October 2007 (T) ...... Expected announcement of the offer price

29 October 2007 (T) ...... Expected publication date of results of Offering and retail allocation matrix — Communication of allocations

29 October 2007 (T) ...... Start of conditional trading on the Eurolist of Euronext Brussels

1 November 2007 (T+3) ...... Expected closing date (payment, settlement and delivery)

1 November 2007 (T+3) ...... Start of unconditional trading on the Eurolist of Euronext Brussels

General Timetable (in the event of an early closing of the Offering) ...... Anyearly closing of the offering period will be announced by a press release (together with any related revision of the expected dates on pricing and closing) at the latest the day after such early closing. In the event of an early closing of the offering period, the revised expected dates of pricing, conditional trading and listing and closing would be as follows:

T-1...... Expected closing of the retail offering period

T-1...... Expected closing of the institutional offering period

T ...... Revised expected announcement of the offer price

T ...... Revised expected publication date of results of Offering and retail allocation matrix — Communication of allocations

T ...... Revised start of conditional trading

T+3 ...... Revised expected closing date

Revised unconditional trading

Paying Agents ...... Thefinancial service in Belgium will be provided by Fortis Bank and KBC Bank.

12 SUMMARY FINANCIAL INFORMATION

The following summary financial information should be read in conjunction with the “Cautionary Note Regarding the Presentation of Financial Information Included in this Prospectus” and “Operating and Financial Review and Prospects” as well as the Zinifex Combined Selected Historical Financial Information, the Umicore Combined Selected Historical Financial Information, the Nyrstar Pro Forma Consolidated Financial Information and Supplementary Notes to the Nyrstar Pro Forma Consolidated Financial Information elsewhere in this prospectus.

The Zinifex Carve-out Group and the Umicore Carve-out Group were contributed to Nyrstar on 31 August 2007. Prior to that date, neither of the Zinifex Carve-out Group nor the Umicore Carve-out Group operated as stand alone entities and neither prepared stand alone financial statements; further, during this time Nyrstar had minimal assets and conducted no operations.

The historical financial information included in this prospectus is comprised principally of (i) limited audited combined financial statements and (ii) selected unaudited combined historical financial information for each of the Zinifex Carve-out Group and the Umicore Carve-out Group.

Unaudited historical combined selected financial information has been included for each of the Zinifex Carve-out Group and the Umicore Carve-out Group. Such information has been derived from the accounting records of Zinifex Limited and Umicore SA/NV, respectively. Unaudited Zinifex Carve-out Group Combined Selected Historical Financial Information has been provided as of and for the years ended 31 December 2005 and 2006, and for the six month periods ended 31 December 2004 and 30 June 2006 and 2007. Unaudited Umicore Carve-out Group Combined Selected Historical Financial Information has been provided as of and for the years ended 31 December 2004, 2005 and 2006 and as of and for the six months ended 30 June 2006.

The unaudited Nyrstar Pro Forma Consolidated Financial Information included in this prospectus is based on (i) with respect to the pro forma selected consolidated income statement information, the unaudited Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information for the year ended 31 December 2006 and the six months ended 30 June 2007, and (ii) with respect to pro forma consolidated balance sheet information, the Audited Zinifex Carve-out Group Combined Financial Statements and Audited Umicore Carve-out Group Combined Financial Statements as at 30 June 2007. Such information gives pro forma effect to the transfers of the Zinifex Carve-out Group and the Umicore Carve-out Group to Nyrstar, as if they had occurred on 1 January 2006 in respect of the pro forma selected consolidated income statement information, and on 30 June 2007 in respect of the pro forma consolidated balance sheet. Additionally, to facilitate additional understanding of the combined consolidated pro forma financial information, we have included herein supplementary notes to the Nyrstar Pro Forma Consolidated Financial Information.

The unaudited Nyrstar Pro Forma Consolidated Financial Information has been provided for illustrative purposes only and is not necessarily indicative of the consolidated results of operations or financial position that we would have actually obtained during the periods presented and are not necessarily representative of the future consolidated results of operations or financial position that we expect in future periods. Such information does not purport to be in compliance with Article 11 of Regulation S-X under the Securities Act.

Additionally, this prospectus includes unaudited modified pro forma information, such as modified pro forma revenue and modified pro forma EBITDA, to facilitate additional analysis. This information, which includes illustration of the potential effect of certain hypothetical actions, is provided supplementally and is not intended to be and should not be used as an alternative to the historical combined financial information and data of the Zinifex Carve-out Group or the Umicore Carve-out Group, or to the unaudited Nyrstar Pro Forma Consolidated Financial Information and other Nyrstar data included herein before modification. As described herein, the modified pro forma and historical data is determined using hypothetical assumptions among alternatives, and by its nature, will not be comparable to modified pro forma data that may be presented by other companies. Such information does not purport to be in compliance with generally accepted accounting principles nor with Article 11 of Regulation S-X under the Securities Act.

Nyrstar Pro Forma Financial Information See notes 1.3 and 2 to the Nyrstar Pro Forma Consolidated Financial Information beginning on page PF-1 for a presentation and discussion of the pro forma adjustments that were made to the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information to prepare the Nyrstar Pro Forma Consolidated Financial Information.

13 It should be noted that the unaudited Nyrstar Pro Forma Consolidated Financial Information does not include an adjustment for incremental corporate costs, such as overheads, attributable to Nyrstar as a stand-alone entity, which have been estimated at between EUR 15 million and EUR 20 million, as such costs are not considered at this stage to be sufficiently factually supportable. See “Selected Financial Information — Selected Unaudited Nyrstar Pro Forma Consolidated Financial Information” beginning on page 60. In addition, in accordance with the BCSA, certain modifications in respect of modeled working capital, net current tax liabilities and net debt are currently being calculated to the purchase price for the acquisition of the Zinifex Carve-out Group and the Umicore Carve-out Group as described in note 1.3 to the Nyrstar Pro Forma Consolidated Financial Information. These adjustments are not reflected in the unaudited Nyrstar Pro Forma Consolidated Financial Information as they cannot be quantified at this time. This information is expected to be available during the last quarter of 2007 and will primarily affect cash, inventories and accounts receivable. The BCSA also provides that Nyrstar will pay purchase price adjustments to Zinifex and to Umicore in the event that the value of Nyrstar as inferred from this Offering exceeds the aggregate values for which the Zinifex Carve-out Group and the Umicore Carve-out Group were acquired on 31 August 2007 by more than 5 per cent. As Nyrstar is currently unable to estimate the amounts of these purchase price adjustments, if any, they have not been reflected in the unaudited Nyrstar Pro Forma Consolidated Financial Information. See also “Related Party Transactions — Business Combination and Shareholders’ Agreement — Additional Capital Increase — Purchase Price Adjustment Based on IPO Proceeds” beginning on page 266. The acquisition by Nyrstar of the Zinifex and Umicore Carve-out Groups has been accounted for as a reverse acquisition, reflecting the Zinifex Carve-out Group as the accounting acquirer. Accordingly, the assets and liabilities of the Zinifex Carve-out Group have been accounted for in the Nyrstar Pro Forma Consolidated Financial Information based on their pre-combination carrying amounts, restated to comply with Nyrstar accounting policies, while the assets and liabilities of Nyrstar and the Umicore Carve-out Group have been recorded under “purchase accounting” principles at their estimated fair values. The following table sets forth summary unaudited Nyrstar Pro Forma Consolidated Financial Information: Year ended Six months 31 December ended 2006 30 June 2007 (EUR million) Summary Pro Forma Consolidated Income Statement Information Revenue ...... 3,173.3 2008.9 Result from operating activities before depreciation and amortisation ...... 436.0 182.7 Depreciation and amortisation ...... (70.8) (39.1) Result from operating activities ...... 365.2 143.6 Share of profit of equity accounted investees ...... 15.1 7.5 Result before net financing costs and income tax(1) ...... 380.3 151.1 Note: (1) The pro forma consolidated income statement has been provided only to the result before net financing costs and income tax level. The pro forma tax profile and gearing of Nyrstar may differ substantially from that of the Zinifex Carve-out Group and the Umicore Carve-out Group, which, historically, have been operated under different corporate structures and, therefore, a comparison of historical net financing cost and income tax expense is not considered to be meaningful, appropriate or representative. As of 30 June 2007 (EUR million) Summary Pro Forma Consolidated Balance Sheet Data(1) Assets Non-current assets Goodwill ...... 188.2 Intangible assets ...... 0.7 Property, plant and equipment ...... 835.7 Investment in associates and joint ventures ...... 95.4 Deferred tax assets ...... 130.5 Other assets ...... 0.9 Total non-current assets ...... 1,251.4 Current assets Inventories ...... 598.9 Trade and other receivables ...... 461.2 Other financial assets ...... 17.6 Current tax assets ...... 8.2 Other assets ...... 8.4 Cash and cash equivalents ...... 100.0 Total current assets ...... 1,194.3 Total assets ...... 2,445.7

14 As of 30 June 2007 (EUR million) Equity and Liabilities Equity Equity attributable to equity holders of the parent ...... 1,423.7 Minority interests ...... 19.9 Total equity ...... 1,443.6 Non-current liabilities Retirement and benefit obligation ...... 33.5 Non-current provisions ...... 127.2 Deferred tax liabilities ...... 154.8 Total non-current liabilities ...... 315.5 Current liabilities Borrowings ...... 350.0 Trade and other payables ...... 259.4 Other financial liabilities ...... 23.5 Current tax liabilities ...... 20.1 Current provisions ...... 33.6 Total current liabilities ...... 686.6 Total liabilities ...... 1,002.1 Total equity and liabilities ...... 2,445.7

Year ended Six months 31 December ended 2006 30 June 2007 (EUR million except per share data) Other Pro Forma Financial Information Operating costs ...... (625.8) (370.3) Gross profit(1) ...... 1061.8 553.0 EBITDA(2) ...... 451.1 190.2 EBITDA margin(3) ...... 14.2% 9.5% Result before net financing costs and income tax per share(4) (EUR) ...... 3.80 1.51 EBITDA per share(4) (EUR) ...... 4.51 1.90 Change in working capital(5) ...... (573.1) 54.4 Capital expenditure ...... (108.1) (54.0) Notes: (1) Gross profit as we use it is not a GAAP measure and should not be equated to other similarly titled measures of companies which define gross profit as revenue less cost of sales. For a discussion of the elements of gross profit as we use the measure, see “Operating and Financial Review and Prospects — Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters” beginning on page 68. (2) Nyrstar defines EBITDA as result before net financing costs and income tax and depreciation and amortisation. EBITDA includes share of profits in investments accounted for using the equity method. For a description of how we calculate pro forma EBITDA, see “Operating and Financial Review and Prospects — Liquidity and Capital Resources — Pro Forma Cash Flow Data” beginning on page 125. This measure is presented as we believe that it and similar measures are frequently used in the zinc and lead smelting, refining and alloying industries as a means of evaluating a company’s operating performance. Because not all companies calculate EBITDA identically, the presentation of Nyrstar EBITDA may not be comparable to other similarly titled measures of other companies. The calculation of Nyrstar EBITDA in this prospectus is different from the calculation of Umicore Carve-out Group EBITDA, in that Umicore adds back non-cash expenses. EBITDA is a non-GAAP measure, is not a measure of financial position, liquidity or profitability and should not be considered as an alternative to net profit/(loss) or operating cash flows determined in accordance with GAAP.

15 (3) Pro forma EBITDA margin represents pro forma EBITDA divided by pro forma revenue. See “Presentation of Financial and Other Information” beginning on page 44. (4) Assumes 100 million shares in issue. (5) Change in working capital is defined as the movement between the opening and closing balance sheet values of inventory plus trade debtors and other receivables less trade creditors and other payables adjusted for intercompany or other related party transactions. For a description of how we calculate pro forma change in working capital, see “Operating and Financial Review and Prospects — Liquidity and Capital Resources — Pro Forma Cash Flow Data” beginning on page 125.

Reconciliation of the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information to the Nyrstar Pro Forma Consolidated Financial Information The following table sets forth a reconciliation of the Summary Income Statement Information of the Zinifex Carve-out Group and the Umicore Carve-out Group to the Summary Nyrstar Pro Forma Consolidated Income Statement Information for the six months ended 30 June 2007:

Zinifex Umicore Elimination of Carve-out Carve-out Pro-forma inter-company Nyrstar Pro Group Group adjustments(1) transactions Forma (EUR million) Revenue ...... 1,242.7 798.7 (13.0) (19.5) 2,008.9 Result from operating activities before depreciation and amortisation ...... 131.5 62.8 (11.6) — 182.7 Depreciation and amortisation ...... (21.6) (10.7) (6.8) — (39.1) Result from operating activities ...... 109.9 52.1 (18.4) — 143.6 Share of profit of equity accounted investees . . . — 3.3 4.2 — 7.5 Result before net financing costs and income tax ...... 109.9 55.4 (14.2) — 151.1 Note: (1) The pro forma adjustments are described in note 7 to the Nyrstar Pro Forma Consolidated Financial Information.

The following table sets forth a reconciliation of the Summary Income Statement Information of the Zinifex Carve-out Group and the Umicore Carve-out Group to the Summary Nyrstar Pro Forma Consolidated Income Statement Information for the year ended 31 December 2006:

Zinifex Umicore Elimination of Carve-out Carve-out Pro-forma inter-company Nyrstar Pro Group Group adjustments(1) transactions Forma (EUR million) Revenue ...... 2,126.8 1,107.6 (23.9) (37.2) 3,173.3 Result from operating activities before depreciation and amortisation ...... 387.5 (9.6) 58.1 — 436.0 Depreciation and amortisation ...... (37.4) (25.4) (8.0) — (70.8) Result from operating activities ...... 350.1 (35.0) 50.1 — 365.2 Share of profit of equity accounted investees . . . — 9.2 5.9 — 15.1 Result before net financing costs and income tax ...... 350.1 (25.8) 56.0 — 380.3 Note: (1) The pro forma adjustments are described in note 8 to the Nyrstar Pro Forma Consolidated Financial Information.

16 Nyrstar Pro Forma Financial Information Modified to Reflect the Current Transactional and Structural Hedging Policy of Nyrstar In order to facilitate a better understanding of the impact of certain hedging arrangements on our pro forma results, we include in this prospectus modified pro forma financial information reflecting certain management adjustments as described below.

Umicore did not hedge certain historically built up inventories of metal, which were permanently tied up in the manufacturing and commercial operations of the Umicore Carve-out Group as Umicore management assessed these inventories as not being exposed to fluctuations in zinc prices. At the Nyrstar level, after fair value step-up and alignment to Nyrstar’s accounting policies, these inventories become fully exposed. Zinifex did not hedge its exposure to fluctuations in zinc prices with respect to concentrate purchases from Zinifex mines and hedged approximately 75% of its concentrate purchases from third parties. At the Nyrstar level, all these concentrate purchases are fully exposed. Since Nyrstar currently engages in full transactional hedging of all of its inventories and concentrate purchases, a modification has been made to the Nyrstar pro forma information to illustrate what the Nyrstar results might have been had Nyrstar’s current transactional hedging policies been in effect since 1 January 2006.

Umicore implemented “structural” or “cash flow” hedging of zinc price and currency movements to limit its exposure to fluctuations in metal prices and exchange rates on TCs and free zinc sales. It forward hedged its forecasted exposure to metal prices and currency risk when metal prices expressed in euro or exchange rates were above their historical averages and were at levels where attractive margins could be secured. This structural hedging included the use of forward contracts on metals and forward contracts on currencies. Upon the formation of Nyrstar, all of the structural hedges of the Umicore Carve-out Group were repurchased by Umicore. Whereas the Umicore Carve-out Group engaged in structural hedging, Nyrstar does not currently engage in structural hedging, although it may review this policy in the future. See “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Presentation of Adjusted Results for the Umicore Carve-out Group — Structural Metal Price and Currency Risk Hedging” beginning on page 105. Accordingly, a modification has been made to the Nyrstar pro forma information to illustrate what the Nyrstar results might have been had Nyrstar’s current structural hedging policies been in effect since 1 January 2006.

This modified pro forma information is a non-GAAP measure that has not been determined under IFRS or any other generally accepted accounting principles, and may not be comparable to other similarly titled measures used by other companies. It is not within the scope of our auditors’ examination or review procedures.

For a further discussion of the modifications and a presentation of how these modified figures have been calculated, see “Presentation of Financial and Other Information” beginning on page 44 and “Operating and Financial Review and Prospects — Nyrstar Pro Forma Consolidated Income Statement Data Modified to Reflect the Current Transactional and Structural Hedging Policy of Nyrstar” beginning on page 77.

17 The following table shows certain unaudited non-GAAP Nyrstar pro forma consolidated financial information modified to reflect a retroactive application of the current hedging policy of Nyrstar:

Year ended Six months 31 December ended 30 June 2006 2007 (EUR million) Summary Modified Pro Forma Consolidated Financial Information Revenue ...... 3,173.3 2,008.9 Transactional hedging modification(1) ...... — — Structural hedging modification(2) ...... 215.8 81.1 Modified revenue ...... 3,389.1 2,090.0

Gross profit(3) ...... 1,061.8 553.0 Transactional hedging modification(1) ...... (134.0) 86.8 Structural hedging modification(2) ...... 215.8 81.1 Modified gross profit ...... 1,143.6 720.9

EBITDA(4) ...... 451.1 190.2 Transactional hedging modification(1) ...... (134.0) 86.8 Structural hedging modification(2) ...... 215.8 81.1 Modified EBITDA ...... 532.9 358.1

Modified EBITDA margin(5) ...... 15.7% 17.1% Result before net financing costs and income tax(6) ...... 380.3 151.1 Transactional hedging modification(1) ...... (134.0) 86.8 Structural hedging modification(2) ...... 215.8 81.1 Modified result before net financing costs and income tax ...... 462.1 319.0

Change in working capital(7) ...... (573.1) 54.4 Modifications related to IAS 39 effects(8) ...... 27.1 (21.5) Modifications related to pro forma adjustments(9) ...... (5.7) 1.4 Modifications related to purchase accounting(10) ...... — 38.0 Modified change in working capital(11) ...... (551.7) 72.3

Notes: (1) Modified to reflect retroactive application of Nyrstar’s transactional hedging policy to all Umicore Carve-out Group inventories and all Zinifex Carve-out Group concentrate purchases. (2) Modified to remove the effect of structural hedging effected by the Umicore Carve-out Group, which is the forward hedging of metal price exposure that results from the impact that metal prices have on TCs and on free metal recovered from materials supplied for treatment and refining. See “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Presentation of Adjusted Results for the Umicore Carve-out Group — Structural Metal Price and Currency Risk Hedging” beginning on page 105. (3) Gross profit as we use it is not a GAAP measure and should not be equated to other similarly titled measures of companies which define gross profit as revenue less cost of sales. For a discussion of the elements of gross profit as we use the measure, see “Operating and Financial Review and Prospects — Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters” beginning on page 68. (4) Nyrstar defines modified EBITDA as result before net financing costs and income tax and depreciation and amortisation modified to reflect the current structural and transactional hedging policy of Nyrstar. EBITDA includes share of profits in investments accounted for using the equity method. This measure is presented as we believe that it and similar measures are frequently used in the zinc and lead smelting, refining and alloying industries as a means of evaluating a company’s operating performance. Because not all companies calculate EBITDA identically, the presentation of Nyrstar EBITDA may not be comparable to other similarly titled measures of other companies. The calculation of Nyrstar EBITDA in this prospectus is different from the calculation of Umicore Carve-out Group EBITDA, in that Umicore adds back non-cash expenses. EBITDA is a non-GAAP measure, is not a measure of financial position, liquidity or profitability and should not be considered as an alternative to net profit/(loss) or operating cash flows determined in accordance with GAAP. See “Presentation of Financial and Other Information” beginning on page 44.

18 (5) Modified pro forma EBITDA margin represents modified pro forma EBITDA divided by modified pro forma revenue. (6) The modified pro forma consolidated income statement has been provided only to the result before net financing costs and income tax level. The pro forma tax profile and gearing of Nyrstar may differ substantially from that of the Zinifex Carve-out Group and the Umicore Carve-out Group, which, historically, have been operated under different corporate structures and, therefore, a comparison of historical net financing cost and income tax expense is not considered to be meaningful, appropriate or representative. (7) Change in working capital is defined as the movement between the opening and closing balance sheet values of inventory plus trade debtors and other receivables less trade creditors and other payables adjusted for intercompany or other related party transactions. For a description of how we calculate pro forma change in working capital, see “Operating and Financial Review and Prospects — Liquidity and Capital Resources — Pro Forma Cash Flow Data” beginning on page 125. (8) Umicore’s working capital definition does not take into account accruals and deferrals related to IAS 39 effects. The Nyrstar working capital definition takes such effects into account. The IAS 39 effects are mainly related to the Auby electricity contract which linked electricity prices to the zinc price. As IAS 39 hedge accounting was not applied to this embedded derivative, the negative fair value impact of the higher zinc prices was recognised in 2006. This result was reversed in the first half of 2007. (9) Modifications relate to the change in accounting policies related to revenue recognition. Umicore recognises revenue at some sites at the metal reference stage. The Nyrstar policy is to recognise revenue only when the significant risks and rewards of ownership have been transferred to a third party. (10) Modifications relate to the fair value step-up of Umicore inventories and accounting policy alignments (principally inventory valuation). (11) Modified change in working capital is defined in the same manner as “change in working capital” set out in Note 7 above, modified by management to reflect the business combination and the alignment of accounting policies, as well as to remove the effect of application of IAS 39. See “Operating and Financial Review and Prospects — Liquidity and Capital Resources — Pro Forma Cash Flow Data” beginning on page 125.

Summary Historical Carve-out Financial Information The summary historical carve-out financial information for the Zinifex Carve-out Group presented below as of and for the years ended 31 December 2005 and 2006 and as of and for the six months ended 30 June 2006 and 2007 has been extracted from the Zinifex Carve-out Group Combined Selected Historical Financial Information, included elsewhere in this prospectus. See “Presentation of Financial and Other Information — Zinifex Carve-out Group Unaudited Combined Selected Historical Financial Information” beginning on page 45.

The summary historical carve-out financial information for the Umicore Carve-out Group presented below as of and for the years ended 31 December 2004, 2005 and 2006 and as of and for the six months ended 30 June 2006 and 2007 has been extracted from the Umicore Carve-out Group Combined Selected Historical Financial Information, included elsewhere in this prospectus. See “Presentation of Financial and Other Information — Umicore Carve-out Group Unaudited Combined Selected Historical Financial Information” beginning on page 46.

Neither the Zinifex Carve-out Group Combined Selected Historical Financial Information nor the Umicore Carve-out Group Combined Selected Historical Financial Information is necessarily indicative of Nyrstar’s future operating results or financial position and neither purports to be indicative of what Nyrstar’s operating results and financial position would have been if Nyrstar had operated as a single entity, or if the Zinifex Carve-out Group or the Umicore Carve-out Group had been operated as stand-alone entities, as of the dates or for the periods presented.

The Unaudited Zinifex Carve-out Group Combined Selected Historical Financial Information and the Unaudited Umicore Carve-out Group Combined Selected Historical Financial Information include, in the opinion of Zinifex and Umicore, respectively, all significant adjustments necessary to present fairly the results of the Zinifex Carve-out Group and the Umicore Carve-out Group, respectively, for the periods presented. The adjustments and certain assumptions are described in the notes to the Historical Carve-out Financial Information included elsewhere in this prospectus.

19 Summary Zinifex Carve-out Group Combined Selected Historical Financial Information Year ended Six months ended 31 December 30 June 2005 2006 2006 2007 (EUR million) Summary Income Statement Information Revenue ...... 1,134.1 2,126.8 954.3 1,242.7 Profit from operating activities before depreciation and amortisation ..... 88.1 387.5 153.5 131.5 Depreciation and amortisation ...... (29.6) (37.4) (17.4) (21.6) Profit from operating activities ...... 58.5 350.1 136.1 109.9 Share of profit of equity accounted investees ...... — — — — Profit before net financing costs and income tax ...... 58.5 350.1 136.1 109.9

Summary Balance Sheet Information (at period end) Allocated assets ...... 677.2 1,077.5 892.4 1,105.7 Allocated liabilities ...... 391.6 489.2 493.7 405.9 Other Financial Information Change in working capital ...... (56.4) (298.5) (76.9) 61.1 Capital expenditure ...... (47.5) (79.0) (50.1) (40.1)

Summary Information from Operating and Financial Review and Prospects—Results of Operations for the Zinifex Carve-out Group Year ended Six months ended 31 December 30 June 2005 2006 2006 2007 (EUR million) EBITDA(1) ...... 88.1 387.5 153.5 131.5 EBITDA margin(2) ...... 7.8% 18.2% 16.1% 10.6% Gross profit(3) ...... 421.8 773.4 347.3 370.1 Operating costs(4) ...... (333.6) (386.0) (193.8) (238.6) Notes: (1) The Zinifex Carve-out Group defines EBITDA as profit before net financing costs, income tax and depreciation and amortisation (or “profit from operating activities before depreciation and amortisation”). This measure is presented as we believe that it and similar measures are frequently used in the zinc and lead smelting, refining and alloying industries as a means of evaluating a company’s operating performance. Because not all companies calculate EBITDA identically, the presentation of Zinifex EBITDA may not be comparable to other similarly titled measures of other companies. The calculation of Zinifex Carve-out Group EBITDA is different from the calculation of Umicore Carve-out Group EBITDA, in that EBITDA as determined by Zinifex includes non-cash expenses in profit before net financing costs and income tax. The non-cash expenses included in profit before net financing costs and income tax include EUR 11.0 million in the year ended 31 December 2005, EUR 9.8 million in the year ended 31 December 2006, and EUR 4.7 million in each of the six month periods ended 30 June 2006 and 2007. EBITDA is a non-GAAP measure, is not a measure of financial position, liquidity or profitability and should not be considered as an alternative to net profit/(loss) or operating cash flows determined in accordance with GAAP. See “Presentation of Financial and Other Information” beginning on page 44. (2) EBITDA margin represents EBITDA divided by Revenue. (3) Gross profit as we use it is not a GAAP measure and should not be equated to other similarly titled measures of companies which define gross profit as revenue less cost of sales. For a discussion of the elements of gross profit as the measure is used in relation to the Zinifex Carve-out Group, see “Operating and Financial Review and Prospects — Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters” beginning on page 68 and “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Explanation of Certain Key Income Statement Items and Other Operational Data for the Zinifex Carve-out Group — Gross Profit” beginning on page 82. (4) Operating costs as we use it is not a GAAP measure and should not be equated to other similarly titled measures of other companies. See “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Explanation of Certain Key Income Statement Items and Other Operational Data for the Zinifex Carve-out Group — Operating Costs” beginning on page 82.

20 The Zinifex Carve-out Group’s revenue increased by 88% from EUR 1,134.1 million in the year ended 31 December 2005 to EUR 2,126.8 million in the year ended 31 December 2006, and by 30% from EUR 954.3 million in the six months ended 30 June 2006 to EUR 1,242.7 million in the six months ended 30 June 2007, driven, in each case and among other things, by increases in zinc, lead and other metal prices and notwithstanding lower production in 2006 due to scheduled major shutdowns at Hobart and Port Pirie. Gross profit increased by 83% from EUR 421.8 million for the year ended 31 December 2005 to EUR 773.4 million for the year ended 31 December 2006, and by 7% from EUR 347.3 million for the six months ended 30 June 2006 to EUR 370.1 million for the six months ended 30 June 2007, in each case driven largely by the positive effects of higher LME zinc prices on treatment charge escalators (i.e., increases over the base treatment charges paid by mines to smelters for the processing of zinc concentrate triggered by higher zinc prices), higher zinc and other metal prices on the value of free metal (i.e., the difference between the amount of metal that is paid for in concentrates and the total metal recovered for sale by the smelter) and by-products sales, as well as by higher premiums (i.e., the prices charged on certain zinc products above the LME zinc price). Operating costs increased by 16% from EUR 333.6 million in the year ended 31 December 2005 to EUR 386.0 million in the year ended 31 December 2006, primarily as a result of increases in maintenance and contracting costs related to the major shutdowns at Hobart and Port Pirie, higher energy costs and upward wage pressure as a result of prevailing industry conditions. Operating costs increased by 23% from EUR 193.8 million in the six months ended 30 June 2006 to EUR 238.6 million in the six months ended 30 June 2007, mainly as a result of increases in other expenses resulting largely from the depreciation of the U.S. dollar against the Australian dollar and the euro and higher corporate charges, including an allocation to the Zinifex Carve-out Group of Zinifex senior management remuneration. EBITDA increased more than four-fold from EUR 88.1 million in the year ended 31 December 2005 to EUR 387.5 million in the year ended 31 December 2006 and profit before net financing costs and income tax increased almost six-fold from EUR 58.5 million to EUR 350.1 million over the same period as revenue increases outpaced increases in raw materials, energy and labour costs. EBITDA decreased by 14% from EUR 153.5 million in the six months ended 30 June 2006 to EUR 131.5 million in the six months ended 30 June 2007 and profit before net financing costs and income tax decreased by 19% from EUR 136.1 million to EUR 109.9 million over the same period, as a result of, among other things, the increase in other expenses described above, as well as increases in contracting costs related to the removal and sale of previously accumulated residues at Hobart and additional environmental rehabilitation provisions at Port Pirie. This summary should be read together with the more detailed information about the Zinifex Carve-out Group’s results of operations contained elsewhere in this prospectus, by which this summary is qualified. For a detailed discussion and analysis of the results of operations of the Zinifex Carve-out Group for the years ended 31 December 2005 and 2006 and the six months ended 30 June 2006 and 2007, see “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group” beginning on page 82.

Summary Umicore Carve-out Group Combined Selected Historical Financial Information

Year ended Six months ended 31 December 30 June 2004 2005 2006 2006 2007 (EUR million) Summary Income Statement Information Turnover ...... 712.8 713.2 1,107.6 531.7 798.7 Profit/(Loss) from operating activities before depreciation, amortisation and other non-cash expenses ...... 87.9 23.1 23.2 (6.8) 45.8 Depreciation and amortisation ...... 34.4 39.2 25.4 12.1 10.7 Other non-cash expenses ...... 5.3 30.4 32.8 0.0 (17.0) Profit/(Loss) from operating activities ...... 48.2 (46.5) (35.0) (18.9) 52.1 Share of profit in investments accounted for using the equity method ...... 1.1 2.8 9.2 5.5 3.3 Profit/(Loss) before net financing costs and income tax ...... 49.3 (43.7) (25.8) (13.4) 55.4

Summary Balance Sheet Information (at period end) Allocated assets ...... 344.7 414.6 708.2 687.0 739.9 Allocated liabilities ...... 169.8 232.9 275.4 380.8 285.8 Other Financial Information Change in working capital ...... n/a (58.1) (208.8) (118.0) (13.2) Capital expenditure ...... (24.9) (22.4) (29.5) (12.5) (14.1)

21 Summary Information from Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group

For purposes of the discussion and analysis set forth in the section “Operating and Financial Review and Prospects — Results of Operations of the Umicore Carve-out Group” beginning on page 103, we have first excluded from the unaudited Umicore Carve-out Group Combined Selected Historical Financial Information the effects of (i) certain items that management considers to be non-recurring and (ii) IAS 39 impacts, consistent with Umicore’s financial reporting and communications, and we have also excluded the effect of the “structural” metal price and currency hedging engaged in by Umicore. The results obtained after the exclusion of these effects are referred to as “adjusted results” and are by definition non-GAAP measures. See “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Presentation of Adjusted Results for the Umicore Carve-out Group” beginning on page 104. The following table sets out a reconciliation of line items in the Umicore Carve-out Group Combined Selected Historical Financial Information with the items adjusted as noted above.

Six months ended Year ended 31 December 30 June 2004 2005 2006 2006 2007 (EUR million) Turnover ...... 712.8 713.2 1,107.6 531.7 798.7 Reversal of structural hedging ...... (54.3) 15.9 215.5 93.1 81.1 Reversal of IAS 39 effects ...... — — — — — Reversal of non-recurring items ...... — — — — — Adjusted turnover ...... 658.5 729.1 1,323.1 624.8 879.8 EBITDA(1) ...... 89.0 25.9 32.4 (1.3) 49.1 Reversal of structural hedging ...... (54.3) 15.9 215.5 93.1 81.1 Reversal of IAS 39 effects ...... — — — — — Reversal of non-recurring items ...... (4.3) — 1.7 — — Adjusted EBITDA ...... 30.4 41.8 249.6 91.8 130.2 Profit/(loss) before net financing costs and income tax ...... 49.3 (43.7) (25.8) (13.4) 55.4 Reversal of structural hedging ...... (54.3) 15.9 215.5 93.1 81.1 Reversal of IAS 39 effects ...... — 4.6 26.7 (4.0) (21.2) Reversal of non-recurring items ...... (2.4) 37.0 5.9 2.9 2.0 Adjusted profit/(loss) before net financing costs and income tax . . . (7.4) 13.8 222.3 78.6 117.3 Adjusted EBITDA margin(2) ...... 4.6% 5.7% 18.9% 14.7% 14.8% Gross profit(3) ...... n/a 251.1 238.3 114.7 194.5 Reversal of structural hedging ...... (54.3) 15.9 215.5 93.1 81.1 Reversal of IAS 39 effects ...... n/a 4.6 26.7 (4.0) (21.2) Reversal of non-recurring items ...... — — (2.1) (2.1) 0.5 Adjusted gross profit ...... n/a 271.6 478.4 201.7 254.9 Operating cash costs(4) ...... n/a (232.6) (238.0) (115.4) (128.0) Notes: (1) The Umicore Carve-out Group defines EBITDA as profit/(loss) before net financing costs and income tax, depreciation and amortisation and other non-cash expenses. EBITDA includes share of profits in investments accounted for using the equity method. This measure is presented as we believe that it and similar measures are frequently used in the zinc and lead smelting, refining and alloying industries as a means of evaluating a company’s operating performance. Because not all companies calculate EBITDA identically, the presentation of Umicore EBITDA may not be comparable to other similarly titled measures of other companies. The calculation of Umicore Carve-out Group EBITDA is different from the calculation of Zinifex Carve-out Group EBITDA, in that EBITDA as determined by Umicore excludes non-cash expenses in profit/(loss) before net financing costs and income tax and therefore must be added back in to calculate EBITDA. EBITDA is a non-GAAP measure, is not a measure of financial condition, liquidity or profitability and should not be considered as an alternative to net profit/(loss) or operating cash flows determined in accordance with GAAP. See “Presentation of Financial and Other Information” beginning on page 44.

22 (2) Adjusted EBITDA margin represents adjusted EBITDA divided by adjusted turnover. (3) Gross profit as we use it is not a GAAP measure and should not be equated to other similarly titled measures of companies which define gross profit as revenue less cost of sales. For a discussion of the elements of gross profit as the measure is used in relation to the Umicore Carve-out Group, see “Operating and Financial Review and Prospects — Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters” beginning on page 68 and “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Explanation of Certain Key Income Statement Items and Other Operational Data for the Umicore Carve-out Group — Gross Profit” beginning on page 104. (4) The impact of structural hedging, IAS 39 effects and other items that management of the Umicore Carve-out Group considers to be non-recurring do not affect operating cash costs.

The Umicore Carve-out Group engaged in structural hedging of metal prices and currency risk to limit its exposure to fluctuations in metal prices and exchange rates on TCs and free zinc sales. It forward hedged its forecasted exposure to metal prices and currency risk when metal prices expressed in euro or exchange rates were above their historical averages and were at levels where attractive margins could be secured by using forward contracts on metals and currencies. The structural hedge impact refers to the difference realised between the contract prices of these hedging instruments and the metal prices and currency rates used to settle the hedging instruments at their maturity date. In 2004, net positive impacts were realised on the structural hedging of the U.S. dollar/euro exchange rate. In 2005, 2006 and the first half of 2007, net negative impacts were realised on the structural hedging of zinc metal prices and the hedging of the U.S. dollar/euro exchange rate.

IAS 39 fair value hedge accounting allows hedged items to be measured at fair value at the balance sheet date. In the absence of IAS 39 hedge accounting, hedging instruments are measured at fair value (i.e., “marked to market”) at each financial statement date with changes in fair value reflected in earnings, while the underlying hedged items are carried at cost. As the Umicore Carve-out Group did not apply IAS 39 hedge accounting to its transactional hedges or the embedded derivatives in certain of its contracts, its results were affected by non-cash volatility in the income statement. These effects have been separately quantified as IAS 39 effects. In 2004, IAS 39 was not yet applicable. In 2005, the IAS 39 effects were related to the transactional hedging of zinc. In 2006 and the first half of 2007, the effects were related mainly to the embedded derivative in Auby’s electricity contract which linked electricity prices in part to the price of zinc.

Non-recurring items related to restructuring measures, impairment of assets and other income or expenses arising from events or transactions that Umicore’s management considered to be clearly distinct from the ordinary activities of the Umicore Carve-out Group. In 2005 and 2006, non-recurring items related primarily to the restructuring of the Auby/Calais site and cover the impairment of fixed assets, provisioning for penalties incurred upon the cancellation of certain commercial contracts, redundancy costs and demolition and rehabilitation costs. In 2004 and the first half of 2007, they related, among other things, to exceptional insurance proceeds, impairments of certain equipment and provisioning of environmental liabilities.

The Umicore Carve-out Group’s adjusted turnover increased by 11% from EUR 658.5 million in the year ended 31 December 2004 to EUR 729.1 million in the year ended 31 December 2005 and by 81% from EUR 729.1 million in the year ended 31 December 2005 to EUR 1,323.1 million in the year ended 31 December 2006, driven, among other things, by increases in LME zinc prices and notwithstanding decreases in production volumes in 2005 and 2006 due, among other things, to the restructuring of Auby/Calais. The start of operations in China in the second half of 2006 also contributed to the increase in adjusted turnover in 2006. The Umicore Carve-out Group’s adjusted turnover increased by 40% from EUR 624.8 million in the six months ended 30 June 2006 to EUR 879.8 million in the six months ended 30 June 2007, driven mainly by increases in LME zinc prices and the start of operations in China as mentioned above. Adjusted gross profit increased by 76% from EUR 271.6 million in the year ended 31 December 2005 to EUR 478.4 million in the year ended 31 December 2006 and by 26% from EUR 201.7 million in the six months ended 30 June 2006 to EUR 254.9 million in the six months ended 30 June 2007. These increases were predominantly driven by the increases in LME zinc prices and their positive effects on treatment charge escalators, the value of free zinc and premiums and, to a lesser extent, by the increases in other metal prices, such as silver and lead, and their positive effects on sales of by-products, partially offset by less favourable base treatment charges as a result of the scarcity of zinc concentrate and lower production volumes at Auby/Calais after the restructuring. Operating cash costs increased by 2% from EUR 232.6 million in the year ended 31 December 2005 to EUR 238.0 million in the year ended 31 December 2006 and by 11% from EUR 115.4 million in the six months ended 30 June 2006 to EUR 128.0 million in the six

23 months ended 30 June 2007. This was primarily a result of increases in energy costs and net increases in the costs of salaries and wages. Adjusted EBITDA increased by 37% from EUR 30.4 million in the year ended 31 December 2004 to EUR 41.8 million in the year ended 31 December 2005 and adjusted profit/(loss) before net financing costs and income tax reversed from a loss of EUR (7.4) million in 2004 to a profit of EUR 13.8 million over the same period, as a result of, among other things, a decrease in depreciation and amortisation and other non-cash expenses following the Auby/Calais restructuring. Adjusted EBITDA increased more than five-fold from EUR 41.8 million in the year ended 31 December 2005 to EUR 249.6 million in the year ended 31 December 2006 and adjusted profit/(loss) before net financing costs and income tax increased from EUR 13.8 million to EUR 222.3 million over the same period, as the increase in adjusted turnover outpaced the increase in operating cash costs. Adjusted EBITDA increased by 40% from EUR 91.8 million in the six months ended 30 June 2006 to EUR 130.2 million in the six months ended 30 June 2007 and adjusted profit/(loss) before net financing costs and income tax increased by 47% from EUR 78.6 million to EUR 117.3 million over the same period in line with the evolution of adjusted gross profit during the same period as described above. This summary should be read together with the more detailed information about the Umicore Carve-out Group’s results of operations contained elsewhere in this prospectus, by which this summary is qualified. For a detailed discussion and analysis of the results of operations of the Umicore Carve-out Group for the years ended 31 December 2004, 2005 and 2006 and the six months ended 30 June 2006 and 2007, see “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group” beginning on page 103.

Recent Developments Bridge Credit Facility On 30 August 2007, Nyrstar entered into a EUR 350 million bridge revolving credit facility agreement with Commerzbank Aktiengesellschaft, Fortis Bank SA/NV, ING Bank N.V. and KBC Bank SA/NV as arrangers, Fortis Bank SA/NV as facility agent and certain lenders named therein. This facility was fully drawn on 31 August 2007 (and currently remains outstanding). Concurrently with its entry into the bridge facility, Nyrstar entered into a mandate letter with the same mandated lead arrangers, pursuant to which they agreed (subject to satisfaction of certain conditions precedent) to arrange and underwrite a revolving credit facility of up to EUR 500 million. It is currently Nyrstar’s intention to limit the size of this new facility to EUR 350 million and to use the proceeds to refinance the bridge facility. See “— Operating and Financial Review and Prospects — Liquidity and Capital Resources — Funding Sources” beginning on page 125.

Contribution of Zinifex Carve-out Group and Umicore Carve-out Group On 31 August 2007, the Zinifex Carve-out Group and the Umicore Carve-out Group were contributed to Nyrstar pursuant to the BCSA. See “Related Party Transactions — Business Combination and Shareholders’ Agreement” beginning on page 265.

Transactional Hedging As at 31 August 2007, Nyrstar inherited an unhedged Metal at Risk position of approximately 100,000 tonnes, consisting in part of the unhedged Metal at Risk of the Zinifex Carve-out Group and in part of the unhedged Metal at Risk originating from certain historically built-up inventories of metal which were permanently tied up in the manufacturing and commercial operation of the Umicore Carve-out Group after fair value step-up and accounting policy alignment. Following receipt of approval from Zinifex and Umicore, on 11 September 2007 the Company commenced a programme to transactionally hedge these inherited Metal at Risk positions. Hedges covering the entire inherited Metal at Risk position were put in place by 13 September 2007. Between 31 August 2007 and 13 September 2007, the underlying zinc price declined from USD 3,070 per tonne to USD 2,766 per tonne, and it then increased to USD 3,050 per tonne at 28 September 2007. Between 31 August 2007 and 13 September 2007, the USD declined versus the euro from 1.37 to 1.39 and it declined further to 1.42 by the end of September 2007. Other than the Metal at Risk position relating to the historically built-up inventories noted above, the Company transactionally hedged all remaining Metal at Risk positions and currency positions of the Umicore Carve-out Group as from 31 August 2007. Between 31 August 2007 and 13 September 2007 (the date of commencement of the Company’s overall hedging programme), the Metal at Risk positions created at the operations acquired from the Zinifex Carve-out Group were not hedged. Full transactional hedging on the Metal at Risk positions and the derived currency positions of the Zinifex Carve-out group was implemented as from 13 September 2007.

24 The financial impact of the delay in the start-up of Nyrstar’s transactional hedging policy cannot be determined at this time since it will depend, among other things, on zinc price and currency rate trends and on the values attributed to the inherited inventories at 31 August 2007 pursuant to the fair value step-up analysis of the Umicore assets expected to be completed in the coming months. See “Operating and Financial Review and Prospects — Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters — Transactional Hedging of Metal Price and Currency Exposure” beginning on page 71.

Foreign Exchange Hedging On 31 August 2007, Nyrstar entered into forward foreign exchange contracts to protect the Company’s exposure on intercompany loans made to enable the acquisition of the Zinifex Carve-out Group’s Australian and U.S. assets. The notional value of the contracts at 31 August 2007 was AUD 982 million and USD 109 million.

Lead Concentrate Contract In September 2007, Nyrstar entered into a long-term contract with an Australian mine to supply lead concentrate to Port Pirie.

Current Trading and Prospects Since 30 June 2007, our overall production level has been slightly ahead of the first half 2007 level. However, there has also been a decline in the price of zinc over this same period. Operational performance has been strong at Balen/Overpelt, Auby, Clarksville, ARA, GM-Metal, Galva 45, Nyrstar Yunnan Zinc Alloys Co., Ltd. and Genesis. Hobart has experienced a decline in demand for EZDA from China, which we believe is only a temporary situation driven largely by a favourable price arbitrage to Chinese consumers between the Chinese domestic zinc price (as quoted on the Shanghai Metal Exchange) and the LME zinc price. Budel has faced some production issues linked to the higher carbon content in the Century concentrates which has led to somewhat lower than expected production levels. See “Business — Business Description — Budel — Production” beginning on page 193. At Port Pirie, we have continued to experience process instability in the sinter plant and this, together with other operational issues such as the derailment of a pallet, have caused metal production levels at Port Pirie to be below anticipated levels.

Zinc prices have declined since 30 June 2007, with the monthly average price of zinc at USD 3,603 per tonne, USD 3,547 per tonne, USD 3,253 per tonne and USD 2,881 per tonne for June, July, August and September, respectively. This drop in price has decreased the value of the free metal gross profit contribution of our zinc smelting assets.

The decline in zinc prices since 30 June 2007 has had a negative impact on the price differentials (QP terms) element of gross profit at the assets acquired from Zinifex until the implementation of full transactional hedging at those assets as from 13 September 2007 (following which there is no longer any such element of gross profit), largely as a result of the impact of the non-hedging of concentrates sourced from the Zinifex mines. See “Operating and Financial Review and Prospects — Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters — Transactional Hedging of Metal Price and Currency Exposure” beginning on page 71. As our first consolidated financial statements, for the six months ending 31 December 2007, will represent a continuation of the Zinifex Carve-out Group’s combined financial statements, they will reflect this impact from 1 July 2007. Global zinc concentrate production continues to increase and spot TCs in September were well above year- to-date realised TCs. We believe that this latter trend is positive for smelters as they head into annual negotiations for the settlement of 2008 benchmark levels. Moreover, the lower zinc prices also do not appear to have had a significant adverse effect on premiums. However, further declines in zinc prices as well as movements in exchange rates, particularly the U.S. dollar/euro and the U.S. dollar/Australian dollar exchange rates, could affect premiums and free metal and by-product revenues. We expect in particular the sharp depreciation of the U.S. dollar to date in the second half of 2007 to have an adverse effect on our result before net financing costs and income tax. Lead prices have increased significantly since 30 June 2007, with the monthly average price of lead at USD 2,426 per tonne, USD 3,084 per tonne, USD 3,119 per tonne and USD 3,227 per tonne for June, July, August and September, respectively.

25 RISK FACTORS

The following risk factors may affect the future operating and financial performance of Nyrstar and the value of an investment in Nyrstar.

You should carefully consider the following risk factors, as well as the other information contained in this prospectus, before you make an investment decision. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us, or that we currently believe to be immaterial, may also affect our business operations.

Risks Relating to Nyrstar’s Business and the Zinc and Lead Smelting and Alloying Industries Our results are largely dependent on commodity prices, which are cyclical and volatile. As a zinc and lead smelter, our profitability is largely determined by the interplay between the price for zinc and lead (which determines the amount of value available to be shared between the miner and the smelter) and treatment charges (“TCs”) (which determine how that value is shared between the miner and the smelter).

We currently do not intend to enter into transactions that seek to hedge or mitigate our exposure to movements in metal prices, other than short-term hedging transactions to cover the timing risk between concentrate purchases and sales of metal and to cover our exposure on fixed-price forward sales of metal to customers. Our results are therefore particularly sensitive to movements in zinc and lead prices as described below.

Our zinc refining activities are exposed to risks deriving mainly from the impact that metal prices have on TCs and on free metal recovered from materials supplied for treatment, both of which are components of our zinc refining margin. Fluctuations in zinc prices affect the TCs we realise both through the effect on the base TC which we negotiate with miners based in part on current and expected zinc price trends, as well as through the effect of escalators and de-escalators, which result in either a positive or negative difference between the quotation (London Metal Exchange or “LME”) zinc price and the agreed basis zinc price. Rising zinc prices typically trigger application of an escalator and result in higher realised TCs (assuming a constant base TC). Conversely, decreases in zinc prices adversely affect our profitability through the deduction, from the base TC, of a de-escalator applied to the negative difference between the quotation (LME) zinc price and the agreed basis zinc price (assuming a constant base TC). Furthermore, zinc prices also directly affect the value of the free metal component of our zinc refining margin, which is the difference between all the zinc recovered and sold by the smelter and the industry standard of 85% of contained zinc in concentrate that is paid for by the smelter. Finally, a third component of our zinc refining margin, the net zinc metal sales revenue, is also affected by zinc prices, as net zinc metal sales revenues are the difference between the commodity price on the LME, which is used as a market reference price in setting the sales price, and the actual price which the smelter achieves on sales of zinc and zinc products produced after deducting its marginal cost of production, its alloying cost, its distribution cost, and its cost of providing credit to the customer. For a more detailed discussion of the key contributors to a smelter’s profit, the components of a smelter’s zinc refining margin and the dynamics of TCs, see “The Zinc and Lead Smelting and Alloying Industries” beginning on page 136 and “Operating and Financial Review and Prospects — Significant Factors Affecting Nyrstar’s Results of Operations” beginning on page 67. For a schematic overview of the components of a smelter’s gross profit and its zinc refining margin, see “The Zinc and Lead Smelting and Alloying Industries — Zinc — Smelter Gross Profit” beginning on page 143. For a more detailed discussion of the risk associated with the sensitivity of our results to TCs, see “— Our results are linked to the level of zinc and lead TCs, which are cyclical in nature” beginning on page 27.

To a lesser extent our results are also sensitive to the effects of zinc metal prices on the pricing of secondary zinc raw materials. In addition, the results of our lead refining business depend on TCs and lead metal prices which are determined using mechanisms similar to those for zinc and which are discussed in more detail in “The Zinc and Lead Smelting and Alloying Industries”.

The price of zinc and lead has historically been subject to wide fluctuations in response to market forces. Factors largely beyond our control, such as the cyclicality of consumption, actual or perceived changes in levels of supply and demand, the availability and cost of substitute materials, inventory levels maintained by producers, trading on the metals market and exchange rates, all influence the price of zinc and lead. For a discussion of the zinc and lead industries, movements in prices of zinc and lead and demand factors, see “The Zinc and Lead Smelting and Alloying Industries” beginning on page 136.

26 Zinc prices have significantly trended upwards over the past three years, the average LME price per tonne having reached USD 3,274 in 2006 and USD 3,560 in the first half of 2007, compared to an average of USD 1,381 in 2005 and USD 1,047 in 2004. This was largely due to an increased demand for zinc products in Asia, particularly in China, that exceeded the rate of zinc supply growth. The zinc price has been particularly volatile in the most recent period, however, and on 28 September 2007, the LME zinc price per tonne was USD 3,058.5. Depending on the future interplay between zinc mine concentrate output, zinc smelter capacity utilisation and the demand for refined zinc, a sustained reversal of these recent trends and a decline in the price of zinc (e.g., as a result of a decrease in demand for zinc or an increase in smelter capacity utilisation or supply of zinc concentrates, in each case especially in China) could have a material adverse effect on our financial position and results of operations.

Lead is trading at historical highs, the average LME price per tonne having reached USD 1,286 in 2006 and USD 1,978 in the first half of 2007, compared to an average of USD 976 in 2005 and USD 886 in 2004. Lead prices are driven by similar factors to those of zinc prices and therefore are similarly exposed to a reversal of recent trends. A sustained reversal of recent trends and a decline in the price of lead could therefore similarly have a material adverse effect on our financial position and results of operations.

Finally, since we also derive revenue from the sale of valuable by-products from the production process at our smelters such as indium, cadmium, copper, silver and gold, our results are affected by fluctuations in the price of these metals and a sustained decline in prices for these metals could have a material adverse effect on our financial position and results of operations.

Our results are linked to the level of zinc and lead TCs, which are cyclical in nature. Our results are directly linked to the levels of TCs that we charge zinc miners to refine their zinc concentrates and lead miners to refine their lead concentrates. TCs are, in effect, paid by the miner to the smelter in the form of a concession (or deduction) on the price of the zinc or lead concentrates that the miner sells to the smelter.

TCs are subject to fluctuations based on the supply and demand dynamics of the global zinc or lead concentrate market. When supplies of zinc or lead concentrates (i.e., the mines’ output) exceed available smelting capacity utilisation, there typically is a positive impact on the TCs realised by the zinc smelters, and the smelters are able to obtain a larger portion of the value of the contained zinc or lead metal. Conversely, when supplies of zinc or lead concentrates are less than available smelting capacity utilisation, there usually is a negative impact on the TCs for zinc or lead smelters, and a greater share of the zinc or lead metal value is retained by miners. Depending on timing and overall circumstance, an increase in smelting capacity utilisation, particularly in regions like China where production costs are lower compared to operations in more mature regions, could therefore significantly and adversely affect TCs.

TCs are typically negotiated annually between individual miners and smelters in view of the anticipated supply and demand of zinc or lead concentrates and the likely zinc or lead price. Realised TCs are normally the largest contributor to the margin we realise through our smelting operations. Accordingly, a decrease in TCs can be expected to have a material adverse effect on our financial position and results of operations.

Realised zinc TCs per tonne of concentrate reached a historical high of USD 390 in 2006 according to Brook Hunt & Associates Ltd. However, TCs are cyclical in nature and Brook Hunt & Associates Ltd forecasts indicate that zinc TCs are expected to decrease from USD 390 to USD 280 over the period from 2006 to 2009. Such a decrease in zinc TCs could adversely affect our results of operations. In the first half of 2007, realised zinc TCs per tonne of concentrate averaged USD 305.

Realised lead TCs per tonne of concentrate currently are at historical highs, having reached USD 163 in 2005, USD 193 in 2006 and USD 191 in the first half of 2007 according to Brook Hunt & Associates Ltd. However, TCs are cyclical in nature and can therefore be expected to decline again. Brook Hunt & Associates Ltd forecasts indicate that lead TCs are expected to decrease from USD 193 to USD 170 over the period from 2006 to 2009. Such a decrease in lead TCs could adversely affect our results of operations.

We are exposed to the shape of the forward price curve for underlying metal prices. While we intend to undertake short-term hedging transactions to cover the timing risk between raw material purchases and sales of metal and to cover our exposure on fixed-price forward sales of metal to customers, we will remain exposed to the shape of the forward price curve for underlying metal prices.

27 The metal price used to determine the amount we pay for metal contained in the raw materials that we purchase is normally an average of the LME price over an agreed period of time, typically a month. Similarly, when we sell our products, a portion of the price we charge is an average of the metal price over an agreed period of time or a fixed forward metal price.

As a result of the lapse of time between the time of purchase of metal in its unprocessed form for conversion into products and the sale of those products, the volatility in the LME price creates differences between the average price we pay for the contained metal and the price we receive for it. Accordingly, we are exposed to any fluctuations in price between the moment we purchase raw material (i.e., when we “price-in” the metal) and the moment we sell our products to our customers (i.e., when we “price-out” the metal). The times at which we “price-in” and “price-out” are also referred to as “Quotational Periods” (“QP”). For a more detailed discussion of the key drivers of metal price volatility, see “— Our results are largely dependent on commodity prices, which are cyclical and volatile” beginning on page 26, “The Zinc and Lead Smelting and Alloying Industries — Zinc — Zinc Price Outlook” beginning on page 150 and “The Zinc and Lead Smelting and Alloying Industries — Lead — Refined Lead Market Outlook and Forecast Lead Prices” beginning on page 157. See also “Operating and Financial Review and Prospects — Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters — Transactional Hedging of Metal Price and Currency Exposure” beginning on page 71.

At any given time we hold metal as work-in-progress or stock on hand that has been “priced in” but not “priced out”. As this difference between the priced-in metal and the priced-out metal (the “net metal position”) remains exposed to fluctuations in the zinc price we call this metal “Metal at Risk”. We monitor Metal at Risk on a regular basis and intend to undertake hedging transactions to seek to mitigate this exposure. No assurance can be given that we will be able to do so fully, both due to the nature of transactional hedging (as described below) and to the complexity of its implementation.

The price of placing transactional hedges is dependent on whether future or “forward” prices are higher or lower than current or “spot” prices, as indicated by the shape of the forward underlying metal price curve. Future prices can be either higher or lower than current prices, depending on a range of factors and can change quite rapidly at times.

The hedges required to hedge our Metal at Risk position will be determined by whether the net position is positive, meaning we have more metal “priced in” than is “priced out”, or alternatively is negative, meaning we have more metal “priced out” than is “priced in”. If our Metal at Risk position is positive, as is currently the case, then we need to offset this net “priced in” exposure by an equivalent “priced out” hedge, by selling metal on the LME. Where future prices are higher than current prices, this hedge will realise an equivalent profit, since the sold hedge will realise a higher price on maturity. If future prices are lower than current prices then this hedge will realise a cost for the reverse reason. If the Metal at Risk position is negative, then the reverse of these hedging strategies would be used.

Consequently, in hedging our Metal at Risk position, the price of hedging can adversely impact the results of our operations, depending on the future prices and the type of Metal at Risk position being hedged.

Our business is exposed to the effects of exchange rate fluctuations. Our assets, earnings and cash flows are influenced by movements in exchange rates of other currencies, particularly the U.S. dollar, the euro, the Australian dollar and the other currencies in which our costs are denominated. Zinc and lead are sold throughout the world principally in U.S. dollars, while our costs are primarily in euro and Australian dollars and, to a lesser extent, in U.S. dollars, Chinese renminbi and Thai baht. As a result, appreciation of the euro, the Australian dollar or such other currencies against the U.S. dollar without an offsetting improvement in U.S. dollar-denominated zinc and lead metal prices could adversely affect our profitability and financial position. A depreciation of the U.S. dollar vis-à-vis the euro by one cent would have a negative impact on our EBITDA of approximately EUR 14 million (based on our 2006 pro forma operating result). An appreciation of the Australian dollar vis-à-vis the euro by one cent would have a negative impact on our EBITDA of approximately EUR 3 million (based on our 2006 pro forma operating result). See “Operating and Financial Review and Prospects — Nyrstar Pro Forma Consolidated Income Statement Data Modified to Reflect the Current Transactional and Structural Hedging Policy of Nyrstar” beginning on page 77. See “Exchange Rates” beginning on page 56 for further information on historical exchange rate movements.

28 We are dependent on a limited number of suppliers for zinc and lead concentrate and a disruption in supply could have a material adverse effect on our production levels and results of operations. Our business is dependent on our ability to source adequate supplies of zinc and lead concentrate. The availability and price of zinc and lead concentrate may be negatively affected by a number of factors largely beyond our control, including interruptions in production by suppliers, decisions by suppliers to allocate supplies of concentrate to other purchasers, price fluctuations and increasing transport costs. We have entered into life-of-mine contracts with Zinifex for zinc and lead concentrates from its Century and Rosebery mines and have other multi-year tonnage contracts with a number of other suppliers in place. These agreements provide that the key commercial terms (including TCs) are renegotiated annually. The foregoing arrangements provide a significant portion of our zinc and lead concentrate needs for the foreseeable future and the remainder of our needs are sourced from other suppliers on an annual basis. Despite our current contractual arrangements, there can be no assurance that in the future we will be able to source as much concentrate as we need. Moreover, should our contractual relationships with any of our suppliers change or terminate without renewal or replacement, we could be left with insufficient supplies of concentrate. To the extent we are unable to obtain adequate supplies of zinc and lead concentrate from alternative sources or if we have to pay higher than anticipated prices, our results of operations may be materially adversely affected.

We are highly dependent on a limited number of suppliers of concentrate with our top five suppliers representing approximately 72% of our current zinc concentrate needs (including Zinifex, which supplies 48% of such needs) and our top three suppliers representing approximately 75% of our current lead concentrate needs. See “Business — Business Description — Sourcing of Raw Materials and Marketing and Sales — Sourcing and Purchasing of Raw Materials” beginning on page 171, “Business — Business Description — Hobart — Feedstocks” beginning on page 178, “Business — Business Description — Port Pirie — Feedstocks” beginning on page 186 and “Business — Business Description — Budel — Feedstocks” beginning on page 191. Any significant disruption for a sustained period of time to the continued operations at any of the mines which our suppliers operate, to infrastructure used to transport zinc concentrates or more generally to the timely delivery of zinc concentrate to our smelters would have a material adverse effect on our financial position and results of operations. This risk is particularly relevant for Zinifex’s Century mine, which operates a single line production system and is the single largest source of concentrate to us. In addition, the efficiency of a smelter’s production over time is affected by the mix of the concentrate grades it processes. In circumstances where we cannot source adequate supplies of the concentrate grades that make up the most efficient mix for our smelters, alternative types of concentrate may be available, but the use thereof may increase our costs of production and adversely affect our results of operations.

An increase in energy costs, in particular electricity costs, or a disruption in the supply of energy for our operations may significantly increase production costs or adversely affect production. The main energy sources for our sites are electricity, coal and natural gas. Electricity in particular represents a very significant part of our production costs and any increase in the price thereof (including as a result of the application of a zinc price-based escalator in our electricity contracts, the imposition of taxes thereon or the implementation of new greenhouse gas emission policies imposed by various governments) would significantly increase our costs and reduce our margin.

General increases in the costs of electricity and the existence of zinc price-based escalators in particular have caused a sharp increase in the costs of electricity at our Budel, Auby and Hobart sites in recent years. In order to address our rising electricity costs, we are currently in the process of forming consortia with a number of other industrial consumers to jointly negotiate and secure long-term electricity supply contracts for certain sites, with a lower cost of electricity that is not linked to the price of zinc. However, the outcome of these negotiations is uncertain and we may not be successful in our attempts to reduce our electricity costs.

In addition, any disruption in the supply of energy may impair our ability to conduct our business and meet customer demands and may have a material adverse effect on our results of operations. Since the number of energy suppliers is generally limited, we may not be able to negotiate favourable terms when our energy supply agreements are up for renewal and we may be required to accept significant increases in the costs of our energy purchases. In many of the countries we operate in we are dependent on monopolist and/or government-controlled companies for a significant portion of our electricity needs. Unexpected changes in a government’s policy of electricity supply may occur from time to time. Such changes may negatively impact our production capacity or our production costs and may adversely affect our results.

29 We are exposed to a number of operating risks. Operating our zinc and lead smelters and our other production facilities is subject to many risks and hazards, including industrial accidents, power interruption, critical equipment failure and fires. Such risks could result in damage to our smelters and other facilities, personal injury, environmental damage, delays in metal production, monetary losses and possible legal liability.

In addition, we are dependent on pipelines, roadways, railways and shipping to source our raw materials and to transport our products to our customers. Any disruption in transport could have a material adverse effect on our operations.

We have entered into various agreements with the Selling Shareholders, which has created a certain level of dependence on the Selling Shareholders. We depend on Zinifex in its capacity as a supplier of zinc and lead concentrate, on Umicore as a customer and on both Selling Shareholders as providers of transitional services. In addition, following the closing of the Offering, our relationship with the Selling Shareholders will be governed by the terms of a Business Combination and Shareholders’ Agreement dated 23 April 2007 (the “BCSA”). See “— We are dependent on a limited number of suppliers for zinc concentrate and a disruption in supply could have a material adverse effect on our production levels and results of operations” beginning on page 29, “— We will have limited recourse against Zinifex and Umicore in respect of the zinc and lead smelting and alloying businesses we acquired with respect to matters that may affect the value of such businesses” beginning on page 35, “Business — Business Description — Intellectual Property and Research and Development — Research and Development” beginning on page 247, “Business — Business Description — Information Technology — Service Level Agreements” beginning on page 249 and “Related Party Transactions” beginning on page 265.

Any disruption in the performance of these agreements by the Selling Shareholders in their capacity as supplier, customer or provider of transitional services may materially impair our production ability or restrict our daily operations. In addition, any such disruption in the performance of the sale agreements by the Selling Shareholders could lead to our having to sell product at whatever market terms are available at the time of such disruption.

These agreements were entered into at a time when our assets were owned by the Selling Shareholders and, therefore, they were not tested in the market. Thus, there can be no assurance that these agreements, including and in particular the terms related to the sale of zinc products to Umicore in these agreements, are equivalent to what could have been negotiated in the market. See “Related Party Transactions — Ancillary Agreements” beginning on page 267.

Our operations are subject to stringent environmental and health laws and regulations which could expose us to significant increased compliance costs and litigation relating to environmental and health issues. We have production sites in a number of countries. Due to the nature of the zinc and lead smelting processes and the associated by-products, emissions (including greenhouse gases) and wastes generated from these processes, our operations are subject to stringent environmental and health laws and regulations. Many of the substances we process or create are required to be treated, disposed or handled in accordance with stringent standards and procedures contained in current environmental and health laws and regulations. Compliance with these environmental and health regulations requires ongoing expenditure and considerable capital commitments. In addition, many of our sites have been operating in their current capacity for relatively long periods of time including during periods when environmental and health laws and regulations were not as stringent as they are today. This may further increase compliance costs.

Furthermore, soil and/or groundwater contamination presently exists on most of our sites and, in some instances, in areas surrounding our sites, and in the future may be discovered at levels that require remediation over and above actions that are currently underway or presently contemplated.

Nyrstar is solely liable for its environmental liabilities and obligations vis-à-vis third parties, irrespective of the period to which the claims of third parties relate. See “— We will have limited recourse against Zinifex and Umicore in respect of the zinc and lead smelting and alloying businesses we acquired with respect to matters that may affect the value of such businesses” beginning on page 35.

We may incur significant additional costs to comply with new environmental regulations, including the costs associated with the implementation of preventive or remedial measures. There can be no assurance that

30 future changes in laws and regulations will not require us to install additional controls for certain of our emission sources, to undertake changes in our manufacturing processes or to remediate soil and groundwater contamination in areas where such clean-up is not currently required. Third parties may also file direct claims requesting that a court orders us to clean up our property and/or pay compensation for damages incurred as a result of the contamination or use of our products. In particular, there is a risk that actions could be brought against us alleging adverse effects of lead or other substances on health or the environment in areas surrounding our sites. Our Port Pirie operations have, in the past, been subject to such claims. If any such claims are brought against us and are successful, the outcome could have a material adverse effect on our financial position and results of operations.

There is a risk that our past, present or future operations do not or will not meet environmental requirements and that the modifications we are currently seeking or may need to seek in the future will not be granted. If we are unsuccessful in these efforts or otherwise breach these environmental requirements, we may incur fines or penalties, be required to curtail or cease operations and/or be subject to significantly increased compliance costs or significant costs for rehabilitation or rectification works which have not been previously planned, at one or more of our sites. In addition, environmental regulation of lead and certain of our other products and by-products is generally becoming more onerous. Increased environmental regulation of our products and activities or any changes to the environmental regulations we currently face could have an adverse effect on our financial position and results of operations.

While the remediation programme at some of the sites is a first step to address closure, closure of any of our smelters or other installations could trigger significant environmental closure costs, rehabilitation expense and other costs. We do not book closure provisions in our financial statements for our sites until a plan for closure is effected. Moreover, in the event one or more of our sites is closed earlier than anticipated, we will be required to fund the closure costs on an expedited basis, which could have an adverse effect on our financial position and results of operations. In addition, the risk exists that claims will be made against us arising from environmental remediation upon closure of one or more of our sites.

All estimates of environmental rectification and remediation costs contained in this prospectus, including in “Business — Business Description — Environment, Health and Safety”, should be read subject to the above risks.

Our business could be adversely affected if we fail to obtain, maintain or renew necessary licences and permits, or fail to comply with the terms of our licences or permits. In many of the jurisdictions where we operate our smelters and other installations, we are required to have licences or permits covering several of our activities. Regulatory authorities can exercise considerable discretion in the timing of licence issuances and renewal and the monitoring of licensees’ compliance with licence terms. Compliance with requirements imposed by these authorities, which require us, among other things, to comply with numerous industrial standards, recruit qualified personnel, maintain necessary equipment and quality control systems, monitor our operations, make appropriate filings and, upon request, submit appropriate information to licensing authorities, may be costly and time-consuming and may result in delays in the commencement or continuation of production operations. In addition, the applicable requirements can be amended and new requirements can be imposed, which may require us to modify our working practices and could restrict our ability to conduct our business as we see fit. Moreover, our compliance with the terms of our licences may be subject to challenge by regulatory authorities, competitors, or in some cases, members of the public, and our licences may be invalidated, may not be issued or renewed, or if issued or renewed, may not be issued or renewed in a timely fashion. The occurrence of any of these events may require us to incur substantial costs or may restrict our ability to conduct our operations or to do so profitably.

Our products may face the risk of substitution. Our products may be subject to substitution by other products. Substitution can be technology-induced when technological improvements render alternative products more attractive for first-use or end-use than our products. More significantly, price-induced substitution could also occur when a sustained increase in zinc or lead prices leads to partial substitution of zinc or lead respectively by a less expensive product. Such substitution would negatively affect our financial performance and results of operations. See “The Zinc and Lead Smelting and Alloying Industries — Introduction — Zinc” beginning on page 136.

In addition, almost all of the lead we produce is used in the production of lead acid batteries for use in the automotive industry. If the demand for electric or hybrid vehicles increases compared to traditional vehicles and such hybrid vehicles do not use lead acid batteries, our results may be adversely affected.

31 In the event that we are unable to sell certain by-products that we produce during the zinc and lead smelting process, we may be required to limit or reduce our overall production levels. We generate large quantities of by-products such as sulphur dioxide gas in our zinc and lead production process, as well as solid residues with non-zinc or lead metal values. In order to maximise recovery of resource components, minimise emissions and comply with our environmental commitments, we process these by-products in forms that facilitate further metals recovery and/or render them suitable for sale to external parties. While we currently sell these products, there can be no assurance that we will be able to maintain our sales of these products. In the event that we are unable to sell substantially all of these by-products, we may be required to reduce our overall zinc or lead production levels or invest in new treatment processes in order to reduce production of these by-products. Should we be required to reduce our overall zinc or lead production levels, that would have a material adverse effect on our business and results of operations.

Our growth strategy relies in part on acquisitions, which involve risks. Facilitating and contributing to industry consolidation is an aspect of our growth strategy. We believe we will grow less quickly if we are unable to implement our acquisition strategy, including failing to identify suitable targets, failing to outbid competing bidders or failing to finance acquisitions on acceptable terms or for any other reason. Furthermore, any acquisitions or similar arrangements may harm our business if we are unsuccessful in the integration process or fail to achieve the synergies and savings we expect.

The acquisition and integration of new companies and businesses may also pose significant risks to our existing operations. These risks include the difficulty of integrating the operations and personnel of the acquired business, issues with minority shareholders in acquired companies and their material subsidiaries, the potential disruption of our then-current businesses, the assumption of liabilities (including in relation to tax and environmental matters) relating to the acquired assets or businesses which may not have been disclosed during due diligence investigations and the possibility that any indemnification agreements with the sellers of those assets may be unenforceable or insufficient to cover potential tax, environmental or other liabilities.

We have ownership interests in companies that we do not fully control and may acquire other non-controlling interests in the future, which may make it difficult to implement our strategy for some of those businesses. We have non-controlling ownership interests in Australian Refined Alloys Pty Ltd, Australian Refined Alloys (Sales) Pty Ltd, Galva 45 S.A., Genesis Recycling Technology (BVI) Limited and Nyrstar Yunnan Zinc Alloys Co., Ltd. We also have a minority interest in Padaeng Industry Public Company Limited, a Thai listed company. As a result of these non-controlling interests we may be limited in our ability to manage or influence the control of those companies or to implement our strategy for those companies.

For example, our joint venture agreement in Nyrstar Yunnan Zinc Alloys Co., Ltd, which is with a Chinese state-owned entity, requires the unanimous consent of all directors for various matters. We therefore depend on the willingness of our joint venture or other partners to approve certain measures and implement our business strategies. In certain circumstances we may also be faced with deadlock situations which could impair our ability to run our operations on a daily basis or to implement our strategy.

In the future, we may purchase interests in companies that we do not control, including joint ventures and minority interests in publicly-traded companies. Such investments would carry the same risks as those noted above.

We will require a significant amount of cash to fund our capital investments, including investments to update or upgrade our existing facilities. If we are unable to generate this cash through our operations or through external sources, we may not be able to implement our business strategy. Our business is, and will continue to be, capital-intensive. A number of our plants have operated for many years and many of our capital expenditures focus on the repair and reconstruction of existing facilities and the construction of new production systems. In the past, we generated the majority of the cash necessary for capital investment projects through our internal operations, and we expect to continue to do so in the foreseeable future. If our cash flows are reduced, however, we may need to seek to fund these requirements through asset divestitures, share or debt issues or bank debt. Our ability to raise equity or debt or to divest some of our assets and the terms upon which such transactions would be made are uncertain. If we are not able to obtain alternative

32 sources of external financing at an acceptable cost or in the amounts required, our planned capital investments may be substantially delayed or interrupted, which could have a material adverse effect on our business or our results of operations.

We are subject to significant legal and regulatory requirements that differ among the different jurisdictions where we operate. Through both production sites and commercial offices, we operate in a challenging and constantly changing international environment. The regulations to which we are subject differ from one jurisdiction to the other, as may the implementation or interpretation of seemingly similar regulations. Moreover, these regulations are often highly complex and are subject to changes in both substance and interpretation. In particular, areas such as taxes (and especially VAT) and environmental compliance are characterised by a high degree of complexity. While it is our corporate policy to comply with all applicable laws and regulations in each jurisdiction in which we operate, breaches of or deviations from such laws and regulations may occur. In such a case, we could be subject to liability or censure, including the imposition of fines or penalties, which could have a material adverse effect on our business or results of operations.

We have substantial international operations and are therefore subject to certain risks, which may include unfavourable political, regulatory, labour and tax conditions in other countries. We have operational sites in seven countries. Risks inherent in international operations, in particular in emerging markets such as China and Thailand, include amongst others the following: • Agreements may be difficult to enforce and receivables difficult to collect through a foreign country’s legal system; • Foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs or adopt other restrictions on foreign trade or investment, including currency exchange controls; • Export licences may be difficult to obtain and maintain; • Intellectual property rights may be more difficult to enforce in foreign countries; • General economic conditions in the countries in which we operate could have an adverse effect on the earnings from operations in those countries; and • Unexpected adverse changes in foreign laws or regulatory requirements may occur, including those regarding export duties and quotas.

Changes in investment policies or shifts in the prevailing political climate in any of the countries in which we operate, buy from or sell to could result in the introduction of increased government regulations with respect to, among other things: • Price controls; • Export, import and throughput controls; • Income and other taxes; • Electricity and energy supply; • Environmental legislation; • Foreign ownership restrictions; • Foreign exchange and currency controls; • Labour and welfare benefit policies; and • Land and water use.

If any of these changes occur, our ability to run our business as we see fit may be impaired and such changes could have a material adverse effect on our business or results of operations.

We face intense competition and our failure to compete effectively could have a material adverse effect on our results of operations and financial position. The markets for zinc and lead products are intensely competitive and we have numerous competitors worldwide. The zinc and lead industries are subject to technological advancements and the introduction of new

33 production processes using new technologies. Our competitors may develop technologies and processing methods that are more effective or less costly than our existing technologies and processing methods. Some of our competitors are integrated miners and smelters or conglomerates and have substantially more resources and a greater marketing scale than we do. Competitive activity in the markets we serve can have a significant impact on the price we realise for our products, and could therefore have a material adverse effect on our results of operations or financial position. For a discussion of the competitive forces in the zinc and lead industries, see “The Zinc and Lead Smelting and Alloying Industries” beginning on page 136.

Our competitive position and future prospects depend on our senior management’s experience and expertise and our ability to recruit and retain qualified personnel. Our ability to maintain our competitive position and to implement our business strategy is dependent to a large degree on our senior management team. The loss or diminution in the services of members of our senior management team, or an inability to attract and retain additional senior management personnel, could have a material adverse effect on our business, financial position, results of operations or prospects. Competition for personnel with relevant expertise is intense due to the relatively small number of qualified individuals, and this situation seriously affects our ability to retain existing senior management and attract additional qualified senior management personnel. If we were to experience difficulties in recruiting or retaining qualified senior management, it could have a significant adverse effect on our business and financial results.

We are subject to the risk of industrial relations actions which may disrupt our operations. Approximately 54% of our workforce is covered by collective bargaining arrangements. Historically, the operations of certain of our sites have from time to time experienced work stoppages and other forms of industrial action. There can be no assurance that our operations will not be affected by industrial relations actions in the future, and there can be no assurance that work stoppages or other labour-related developments will not adversely affect our results of operations or financial position in the future.

Our insurance coverage may prove inadequate to satisfy potential claims. We currently have insurance coverage for our operating risks which include all risk property damage (including certain aspects of business interruption for certain sites), operational and product liability, marine stock and transit and directors’ and officers’ liability. However, we may become subject to liability (including in relation to pollution, occupational illnesses or other hazards) against which we have not insured or cannot insure, including those in respect of past activities. Should we suffer a major uninsured loss, future earnings could be materially adversely affected. In addition, insurance may not continue to be available at economically acceptable premiums. As a result, our insurance coverage may not cover the full scope and extent of claims against us or losses that we incur, including, but not limited to, claims for environmental or industrial accidents, occupational illnesses, pollution and product liability and business interruption. A successful claim against us may have a material adverse effect on our revenues. Moreover, defending ourselves against such claims may cause a considerable strain on management resources, require us to incur significant legal fees and may adversely affect our reputation.

Risks Relating to Nyrstar as a New Entity We are a newly incorporated company with no operating history of our own. Nyrstar has been in existence as a separate holding company for Zinifex’s zinc and lead smelting and alloying business and Umicore’s zinc smelting and alloying business only since 31 August 2007. Prior to that, our operations were conducted separately as part of Zinifex and as part of Umicore. Consequently, Nyrstar does not yet have an established track record in its own right. The Nyrstar brand name and our reputation as a stand- alone company are not yet well established.

We may face start-up and integration issues as we transition to being an independent company. We may face issues integrating the operation of assets acquired from Zinifex and assets acquired from Umicore. Following the Offering, Nyrstar will operate on a stand-alone basis and neither Umicore nor Zinifex will have any obligation to provide assistance to Nyrstar, except in limited circumstances pursuant to the BCSA or the ancillary agreements thereto. While we have established independent Nyrstar departments for functions such as accounting and consolidation, finance, legal, taxation, information systems and human resources, made up of personnel sourced from Zinifex and Umicore along with externally hired individuals, and have also entered into transitional services agreements with Zinifex and Umicore for the provision of certain IT, accounting,

34 administrative and other services, we may nonetheless experience difficulties and additional costs relating to conducting our business as a stand-alone entity. We may also face difficulties in integrating our various IT platforms. Integration of business systems will require substantial effort and expense. For instance, the integration of the two current SAP systems is expected to require an investment of approximately EUR 10 million over three years. See “Business — Business Description — Information Technology — SAP” beginning on page 249 and “Business — Business Description — Information Technology — Service Level Agreements” beginning on page 249. We have created a transition plan for our SAP applications that we believe is key for invoicing and financial reporting. Any delay in implementing that plan or in establishing or integrating our other internal procedures may have a material adverse effect on our revenues and profitability.

Although we were able to attract key managers from Zinifex and Umicore and those managers have extensive experience in the zinc and lead industries, our management team has worked together as an integrated team for only a relatively short period of time. Integration issues may impose significant strain on our management and divert management time and resources away from the daily operation of our business, which may have a material adverse effect on our results of operation.

We have an obligation to indemnify the Selling Shareholders for all losses incurred by them in respect of the businesses transferred to us. The BCSA provides that we have a contractual obligation to indemnify Zinifex and Umicore for all losses incurred by them (including losses relating to environmental matters) in respect of the businesses we acquired on 31 August 2007. We thereby assumed all contingent liabilities attached to the businesses transferred to us, regardless of whether such liabilities arose or the circumstances giving rise to the liabilities occurred prior to, on or after 31 August 2007. Consequently, we may be subject to claims from the Selling Shareholders should they be required to make any payments to any third party in respect of the businesses they transferred to us, even if such claims relate to circumstances that originated prior to 31 August 2007.

We will have limited recourse against Zinifex and Umicore in respect of the zinc and lead smelting and alloying businesses we acquired with respect to matters that may affect the value of such businesses. Zinifex transferred its zinc and lead smelting and alloying business and Umicore transferred its zinc smelting and alloying business to us on 31 August 2007 pursuant to the BCSA. Under the terms of this agreement, except as expressly set forth therein, we acquired these businesses of Zinifex and Umicore on an “as-is” basis, without any representations or warranties from Zinifex or Umicore. Consequently, except for certain limited, specific indemnities granted to us, we bear all risks associated with such businesses and do not have any recourse against Zinifex or Umicore for any matters that may affect the value of our business. In general, Nyrstar is solely liable for its liabilities and obligations vis-à-vis third parties (whether environmental, financial or otherwise and irrespective of the period to which the claims of third parties relate), without any right of recourse against Zinifex or Umicore in respect of the businesses transferred to Nyrstar. Accordingly, if there are previously unknown problems related to our business, we will bear their full financial and reputational impact, which could have a material adverse effect on our business and results of operations.

The limited audited historical financial information available for the Zinifex Carve-out Group and the Umicore Carve-out Group does not form the basis for the discussion under “Operating and Financial Review and Prospects” included in this prospectus, no audited historical financial information is available for Nyrstar as a stand-alone entity and the Nyrstar Pro Forma Consolidated Financial Information may not be representative of our results. Nyrstar is a holding company that only acquired its assets on 31 August 2007. As a result, there is no audited historical financial information available for Nyrstar as such. The Nyrstar Pro Forma Consolidated Financial Information included in this prospectus reflects the consolidated results and financial position of the Zinifex Carve-out Group and the Umicore Carve-out Group as managed by the Selling Shareholders, subject to certain adjustments. With the exception of the Audited Zinifex Carve-out Group Combined Financial Statements as of and for the financial year ended 30 June 2007 and the Audited Umicore Carve-out Group Combined Financial Statements as of and for the six months ended 30 June 2007, both of which are the subject of qualified audit reports and neither of which form the basis for the discussion under “Operating and Financial Review and Prospects” in this prospectus, the financial information relating to the Zinifex Carve-out Group and the Umicore Carve-out Group as managed by the Selling Shareholders has not been audited. It was not feasible to prepare audited financial statements for the Zinifex Carve-out Group and the Umicore Carve-out Group for the periods discussed in this prospectus, since certain of the zinc and lead alloying, refining and smelting operations of the Zinifex Carve-out Group did not exist or did not exist as separate legal entities during such periods and the zinc

35 alloying, refining and smelting operations of the Umicore Carve-out Group were operated as a segment of an unincorporated business unit and did not exist as separate legal entities during such periods. The financial information reflected in the Nyrstar Pro Forma Consolidated Financial Information is for illustrative purposes only and may not be representative of the results that we would have actually obtained as a separate public company during the periods presented and is not necessarily indicative of the results that we may obtain in future periods. Moreover, the Nyrstar Pro Forma Consolidated Financial Information does not reflect certain adjustments since they are either not sufficiently factually supportable or calculable at this time. These include purchase price and IPO price-related adjustments pursuant to the BCSA and incremental corporate costs, such as overheads, attributable to Nyrstar as a stand-alone entity. See “Selected Financial Information — Selected Unaudited Nyrstar Pro Forma Consolidated Financial Information” beginning on page 60 and the notes on PF-14 and PF-16 for an estimate of these costs. See also “Cautionary Note Regarding the Presentation of Financial Information Included in this Prospectus” beginning on page i and “Presentation of Financial and Other Information” beginning on page 44.

A change in underlying economic conditions or adverse business performance may result in impairment charges. The acquisition by Nyrstar of the Zinifex Carve-out Group and the Umicore Carve-out Group has been accounted for as a reverse acquisition in accordance with the requirements of International Financial Reporting Standard 3 Business Combinations (“IFRS 3”). The Zinifex Carve-out Group has been identified as the acquirer for accounting purposes while Nyrstar and the Umicore Carve-out Group (including the equity-accounted investment in Padaeng Industry Public Company Limited) have been considered as the acquirees for accounting purposes.

In accordance with IFRS 3, the Company has allocated the purchase price of the Umicore Carve-Out Group assets to identified assets acquired and liabilities assumed based on their estimated fair values. See note 2 to the Nyrstar Pro Forma Consolidated Financial Information beginning on page PF-1. In determining the fair value of the acquired assets and assumed liabilities, management has made estimates and assumptions that affect the recorded amounts. Estimates used in valuing acquired assets and liabilities include, but are not limited to current and expected future commodity prices and exchange rates, future capital expenditure requirements and operating performance which will drive expected future cash flows, and appropriate discount rates and market comparables. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain.

International Accounting Standard 36 requires that management regularly review assets for indicators of value impairment. Indicators of value impairment may trigger an impairment review. If the impairment review indicates that the carrying value of the asset is not recoverable, an asset is impaired and a charge is made to the income statement of the difference between the carrying value of the asset and the assessed value of the asset.

The fair value of the Umicore assets was determined at a historical high point of the commodity cycle. The asset values reflect the underlying economic environment at the time the fair value was determined. A fall in commodity prices or other changes in economic conditions underlying the Company’s business performance, compared to the estimates adopted, may lead to the incurrence of substantial impairment charges.

Risks Relating to the Offering There has been no prior public trading market for the ordinary shares of the Company, and an active trading market may not develop or be sustained in the future. Prior to the Offering, there has been no public trading market for the ordinary shares of the Company. We can give no assurance that an active trading market for the ordinary shares will develop or, if developed, can be sustained following the closing of the Offering. If an active trading market is not developed or maintained, the liquidity and trading price of the ordinary shares could be adversely affected.

Publicly traded securities from time to time experience significant price and volume fluctuations that may be unrelated to the operating performance of the companies that have issued them. In addition, the market price of the ordinary shares may prove to be highly volatile. The market price of the ordinary shares may fluctuate significantly in response to a number of factors, many of which are beyond our control, including: zinc prices, lead prices, exchange rates, variations in operating results in our reporting periods, changes in financial estimates by securities analysts, changes in market valuation of similar companies, announcements by us of significant contracts, acquisitions, strategic alliances, joint ventures or capital commitments, loss of major customers, additions or departures of key personnel, any shortfall in revenue or net income or any increase in losses from levels expected by securities analysts, future issues or sales of ordinary shares and stock market price and volume fluctuations. Any of these events could result in a material decline in the price of our ordinary shares.

36 If the Selling Shareholders retain residual shareholdings, they may exercise influence over the Company, and the interests of the Selling Shareholders may not always be aligned with the interests of the Company or the Company’s other shareholders. Following the closing of the Offering, Zinifex and Umicore may retain residual shareholdings in the Company. See “Major Shareholders” beginning on page 271 for further information on the proportionate manner in which the Selling Shareholders will sell down their shares in the Company. Depending on the exact number of shares held by Zinifex and Umicore, the composition of the Company’s share ownership by other shareholders and attendance and the number of votes cast at Shareholders’ Meetings, the ability of other shareholders to influence shareholders’ decisions may be limited. The interests of each of the Selling Shareholders in exercising their voting rights at the Shareholders’ Meeting may be different from the interests of the Company’s other shareholders.

In addition, the Selling Shareholders may exercise influence over the Company through their de facto representatives on the Board of Directors (i.e., directors of the Company that are also directors of the Selling Shareholders), and Belgian law may not prescribe a formal procedure to deal with conflicts of interests at the level of the Board of Directors. See “Related Party Transactions” beginning on page 265 and “Management and Corporate Governance — Corporate Governance” beginning on page 256.

Depending on the exact number of shares held by Zinifex and Umicore, the composition of the Company’s share ownership by other shareholders and attendance and the number of votes cast at Shareholders’ Meetings, in some circumstances Zinifex may have de facto exclusive control. In such cases, subject to certain exceptions, a committee of three independent Directors assisted by an independent expert must render an opinion on all transactions between Zinifex and Nyrstar prior to the Board of Directors’ decision on such transaction.

In addition, the Selling Shareholders’ residual shareholdings may be significant without them being required to launch a mandatory takeover bid for the Company’s shares. For a description of the Belgian law provisions governing public takeover bids, see “Description of Nyrstar’s Shares and Articles of Association — Legislation and Jurisdiction — Public Takeover Bids” beginning on page 278. The Selling Shareholders’ residual shareholdings may also have the effect of delaying or deterring a change of control over the Company or a takeover bid on the Company’s shares by a third party, may deprive shareholders of an opportunity to receive a premium for their ordinary shares as part of a sale of the Company and might affect the share price and liquidity of the Company’s ordinary shares.

Future sales of ordinary shares in the public market could cause the price of our ordinary shares to fall. We are unable to predict whether substantial amounts of the ordinary shares of the Company will be sold in the open market following the admission to trading on the Eurolist of Euronext Brussels. Sales of a substantial number of the ordinary shares in the public market after admission, or the perception that these sales might occur, could depress the market price of the ordinary shares and could impair our ability to raise capital through the sale of additional equity securities. If the Selling Shareholders retain significant residual shareholdings in the Company, the effective or anticipated sale by the Selling Shareholders of their shares in the Company after the expiration of the lock-up period may have a negative effect on the share price of the Company’s shares. See “Underwriting and Plan of Distribution — Lock-up Arrangements” beginning on page 290.

We may not be able to pay dividends in accordance with our stated dividend policy. The Company’s current intention is to pay an annual gross dividend to shareholders based on a target payout ratio of a minimum of 30% of consolidated net profit after tax. See “Dividend Policy” beginning on page 55. No assurance can be given, however, that the Company will make dividend payments in the future. Such payments will depend upon a number of factors, including our prospects, strategies, results of operations, earnings, capital requirements and surplus, general financial conditions, contractual restrictions and other factors considered relevant by the Company’s Board of Directors. Pursuant to Belgian law, the calculation of amounts available for distribution to shareholders, as dividends or otherwise, must be determined on the basis of the Company’s non-consolidated Belgian GAAP financial statements. In accordance with Belgian company law, the Company’s articles of association also require that the Company allocate each year at least 5% of its annual net profits to its legal reserve, until the legal reserve equals at least 10% of the Company’s share capital. As a consequence of these factors, there can be no assurance as to whether dividends or similar payments will be paid out in the future or, if they are paid, their amount.

37 The shares offered do not qualify as VVPR shares pursuant to which the dividends paid or attributed would benefit from a reduced dividend withholding tax of 15% in Belgium. The dividends paid on or attributed to the shares are therefore, as a general rule, subject to a 25% dividend withholding tax in Belgium. See “Taxation — Belgian Tax Regime — Belgian Residents — Dividends — Withholding Tax” beginning on page 280.

Any dividend payments will be announced in euro and any investor whose principal currency is not the euro will be subject to exchange rate fluctuations. The ordinary shares of the Company are, and any dividends to be announced in respect of them will be, denominated in euro. An investment in the ordinary shares by an investor whose principal currency is not the euro exposes the investor to currency exchange rate risk which may impact the value of the investment in the ordinary shares or any dividends.

The ordinary shares of the Company will be listed and traded on the Eurolist of Euronext Brussels on an “if-and-when-delivered” basis as from the listing date until the envisaged closing date. Euronext Brussels may annul all transactions effected in the ordinary shares if the ordinary shares are not delivered on the closing date. As of the listing date until the envisaged closing date, the ordinary shares of the Company will be listed and traded on the Eurolist of Euronext Brussels on an “if-and-when-delivered” basis, meaning that trading of the ordinary shares will begin prior to the closing of the Offering. The closing date is expected to occur on the third trading day following the day on which conditional trading is expected to commence (T+3). Investors that wish to enter into transactions in the ordinary shares prior to the envisaged closing date, whether such transactions are effected on the Eurolist of Euronext Brussels or otherwise, should be aware that the closing date may not take place on 1 November 2007, or not at all, if certain conditions or events referred to in the Underwriting Agreement are not satisfied or waived or do not occur on or prior to such date. Such conditions include the receipt of officers’ certificates and legal opinions and such events include the suspension of trading on the Eurolist of Euronext Brussels or a material adverse change in our financial position or business affairs or in the financial markets. Euronext Brussels has indicated that it will annul all transactions effected in the ordinary shares if the ordinary shares are not delivered on the envisaged closing date and that it cannot be held liable for any damage arising from the listing and trading on an “if-and-when-delivered” basis as of the listing date until the envisaged closing date.

Investors resident in countries other than Belgium may suffer dilution if they are unable to participate in future preferential subscription rights offerings. Under Belgian law shareholders have a waivable and cancellable preferential subscription right to subscribe, pro rata to their existing shareholdings, to the issuance, against a contribution in cash, of new shares or other securities entitling the holder thereof to new shares. The exercise of preferential subscription rights by certain shareholders not residing in Belgium may be restricted by applicable law, practice or other considerations, and such shareholders may not be entitled to exercise such rights unless under applicable law a registration statement is effective with respect to such rights and shares, an exemption from registration is available or the rights and shares are qualified for sale. Shareholders in jurisdictions outside Belgium who are not able or permitted to exercise their preferential subscription rights in the event of a future preferential subscription rights offering may suffer dilution of their shareholdings.

Investors’ rights as shareholders will be governed by Belgian law and differ in some respects from the rights of shareholders under the laws of other countries. Nyrstar SA/NV is a limited liability company (société anonyme/naamloze vennootschap) organised under the laws of Belgium. The rights of holders of the Company’s ordinary shares are governed by Belgian law and by the Company’s articles of association. These rights may differ in material respects from the rights of shareholders in companies organised outside of Belgium. In addition, our directors and members of senior management may not be resident in the jurisdiction of investors and our assets and the assets of our directors and senior management may be located outside the jurisdiction of investors. As a result, it may be difficult for investors to prevail in a claim against us, or to enforce liabilities predicated upon the securities laws of jurisdictions outside of Belgium and, in general, for investors outside of Belgium to serve process on or enforce foreign judgments against us, our directors or our senior management. See “Enforcement of Foreign Judgments and Service of Process” beginning on page 54.

38 FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements. All statements in this prospectus that do not relate to historical facts and events are “forward-looking statements”. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “would”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “continue”, “goal”, “intention”, “objective”, “aim”, “strategy”, “budget”, “proposed”, “schedule” or the negative of such terms or other similar expressions. By their nature, forward-looking statements are subject to inherent risks and uncertainties, both general and specific, and the predictions, forecasts, projections and other forward-looking statements contained in this prospectus could be materially different from what actually occurs in the future.

In addition, this prospectus contains estimates of growth in our markets that have been obtained from independent, third party studies and reports. These estimates assume that certain events, trends and activities will occur. Although we believe that these estimates are generally indicative of the matters reflected in those studies and reports, these estimates are also subject to risks and uncertainties and investors are cautioned to read these estimates in conjunction with the rest of the disclosure in this prospectus, particularly “Risk Factors” beginning on page 26.

Although we believe that our expectations with respect to forward-looking statements are based on reasonable assumptions within the bounds of our knowledge of our business and operations at the date of this prospectus, we caution investors that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. Some of these factors are discussed under “Risk Factors” and elsewhere in this prospectus and include, among other things: • Our results are largely dependent on commodity prices, which are cyclical and volatile; • Our results are linked to the level of zinc and lead TCs, which are cyclical in nature; • We are dependent on a limited number of suppliers for zinc and lead concentrate and a disruption in supply could have a material adverse effect on our production levels and results of operations; • Our operations are subject to stringent environmental and health laws and regulations which could expose us to significant increased compliance costs and litigation relating to environmental and health issues; • Our products may face the risk of substitution; • Our growth strategy relies in part on acquisitions, which involve risks; • Our business is exposed to the effects of exchange rate fluctuations; • We will require a significant amount of cash to fund our capital investments, including investments to update or upgrade our existing facilities. If we are unable to generate this cash through our operations or through external sources, we may not be able to implement our business strategy; • We are subject to significant legal and regulatory requirements that differ among the different jurisdictions where we operate; • We have substantial international operations and are therefore subject to certain risks, which may include unfavourable political, regulatory, labour and tax conditions in other countries; • We face intense competition and our failure to compete effectively could have a material adverse effect on our results of operations and financial position; and • Expectations with regard to our business, growth, profitability and general economic conditions in which we operate our business and other risks and uncertainties described in this prospectus.

The forward-looking statements contained in this prospectus speak only at the date of this prospectus or, if obtained from third party studies or reports, the date of the corresponding study or report and are expressly qualified in their entirety by the cautionary statements included in this prospectus. Without prejudice to our obligations under Belgian law in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur.

39 IMPORTANT INFORMATION

Responsibility Statements In accordance with Article 61, §1 and 2 of the Belgian Law of 16 June 2006 concerning the public offering of securities and the admission of securities to trading on a regulated market (Loi relative aux offres publiques d’instruments de placement et aux admissions d’instruments de placement à la négociation sur des marchés réglementés / Wet op de openbare aanbieding van beleggingsinstrumenten en de toelating van beleggingsinstrumenten tot de verhandeling op een gereglementeerde markt) (the “Prospectus Law”), the Selling Shareholders and the Company, each represented by its respective Board of Directors, jointly assume responsibility for the content of this prospectus. However, under the BCSA the Selling Shareholders have agreed to indemnify the Company for any losses incurred by the latter as a result of the inclusion in this prospectus of misleading or deceptive information or the omission from this prospectus of information required to be included in this prospectus, except insofar as such losses relate to forward-looking statements made by the Company in this prospectus (see “Related Party Transactions — Business Combination and Shareholders’ Agreement — Liability relating to the Prospectus and Related Offering Documents” beginning on page 267). The Selling Shareholders and the Company declare that, having taken all reasonable care to ensure that such is the case, the information contained in this prospectus is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. The Underwriters make no representation or warranty, express or implied, as to the accuracy or completeness of the information in this prospectus, and nothing in this prospectus is, or shall be relied upon as, a promise or representation by the Underwriters.

The information contained in this prospectus was furnished by the Company and the Selling Shareholders. This prospectus is intended to provide information to potential investors in the context of and for the sole purpose of evaluating a possible investment in the Company’s ordinary shares. It contains selected and summarised information, does not express any commitment or acknowledgement or waiver and does not create any right, expressed or implied, towards anyone other than a potential investor. It cannot be used except in connection with the Offering and the admission to trading of the Company’s ordinary shares. The content of this prospectus is not to be construed as an interpretation of the rights and obligations of the Company and its subsidiaries, of the market practices of or of contracts entered into by the Company and its subsidiaries.

The Selling Shareholders, the Company and the Underwriters reserve the right to reject any offer to purchase, other than offers to retail investors in Belgium, in whole or in part, for any reason, or to sell less than all of the maximum number of ordinary shares offered hereby. Any reproduction or distribution of this prospectus, in whole or in part, and any disclosure of its contents or use of any information herein for any purpose other than considering an investment in the Company’s ordinary shares offered hereby is prohibited. By accepting delivery of this prospectus, prospective investors agree to the foregoing.

No person has been authorised to give any information or to make any representation in connection with the Offering or sale of the Company’s ordinary shares other than those contained in this prospectus, and, if given or made, such information or representation must not be relied upon as having been authorised. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities to which it relates or an offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation would be unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs or that all information contained herein is correct at any time subsequent to the date hereof.

The Selling Shareholders and the Company will update the information provided in this prospectus by means of a supplement hereto if a significant new factor that may affect the evaluation of the Offering by prospective investors occurs prior to the end of the offering period or the commencement of trading. Any prospectus supplement is subject to approval by the Belgian Banking, Finance and Insurance Commission (Commission bancaire, financière et des assurances / Commissie voor het bank-, financie- en assurantiewezen) (the “CBFA”) in the same manner as the prospectus and will be made public as will be determined by the CBFA. If a supplement to the prospectus is published, investors shall have the right to withdraw their subscriptions made prior to the publication of the supplement. Such withdrawal must be done within the time limits set forth in the supplement (which shall not be shorter than two business days after publication of the supplement). Any such supplement will be published in the Belgian press or made available by any other permitted method of distribution. If the Selling Shareholders and the Company do not provide an update with respect to such event, the CBFA may suspend the Offering until such event has been made public.

40 Approval of the Prospectus On 12 October 2007, the CBFA approved the English version of this prospectus for the purposes of the public offering in Belgium and the admission to trading of the Company’s ordinary shares on the Eurolist of Euronext Brussels in accordance with Article 23 of the Prospectus Law. The CBFA’s approval does not imply any judgment on the merits or the quality of the Offering, the situation of the person effecting the Offering or of the ordinary shares. This prospectus has been prepared in English and has been translated into French and Dutch. The Selling Shareholders and the Company jointly assume responsibility for the consistency between the English, French and Dutch versions. In connection with the public offering in Belgium, the English, French and Dutch versions of the prospectus are legally binding.

The Offering and this prospectus have not been submitted for approval to any supervisory authority outside Belgium. Therefore, no steps may be taken that would constitute, or result in, a public offering of the ordinary shares outside Belgium. The distribution of this prospectus and the offer and sale of the ordinary shares may be restricted by law in certain jurisdictions. None of the Company and the Selling Shareholders nor the Underwriters represent that this prospectus or any other Offering-related documents may be lawfully distributed, or that the ordinary shares may be lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant to any exemption available thereunder, or assumes any responsibility for facilitating such distribution or offering. Accordingly, the ordinary shares may not be offered or sold, directly or indirectly, and neither this prospectus nor any other Offering-related documents may be distributed or published in any jurisdiction, except in circumstances that will result in the compliance with all applicable laws and regulations. This prospectus does not constitute an offer to sell, or constitute a solicitation of an offer to purchase, any of the ordinary shares to any person in any jurisdiction in which it is unlawful to make such an offer or solicitation to such person. Persons into whose possession this prospectus or any ordinary shares come must inform themselves about and observe any such restrictions. See “Selling and Transfer Restrictions” beginning on page 296.

This document is a prospectus for the purposes of Article 3 of the Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC (together with any applicable implementing measures in any Member State of the European Economic Area, the “Prospectus Directive”).

IN MAKING AN INVESTMENT DECISION, PROSPECTIVE INVESTORS MUST RELY UPON THEIR OWN EXAMINATION OF OUR COMPANY AND THE TERMS OF THIS PROSPECTUS, INCLUDING THE RISKS INVOLVED. SEE “RISK FACTORS” BEGINNING ON PAGE 26.

In connection with this Offering, UBS Limited may over-allot shares or effect transactions that stabilise or maintain the market price of the ordinary shares of the Company at levels above those which might otherwise prevail in the open market. Such transactions may be effected on the Eurolist of Euronext Brussels, in the over-the-counter market or otherwise. There is no assurance that such stabilisation will be undertaken and, if it is, it may be discontinued at any time. See “Underwriting and Plan of Distribution — Greenshoe and Price Stabilisation” beginning on page 291.

To the extent that the offer of the Company’s ordinary shares is made in any Member State of the European Economic Area (other than Belgium) that has implemented the Prospectus Directive before the date of publication of a prospectus in relation to the Company’s ordinary shares which has been approved by the competent authority in that Member State in accordance with the Prospectus Directive (or, where appropriate, published in accordance with the Prospectus Directive and notified to the competent authority in that Member State in accordance with the Prospectus Directive), the offer (including any offer pursuant to this document) is only addressed to qualified investors in that Member State within the meaning of Article 2(1)(e) of the Prospectus Directive, or otherwise has been or will be made in circumstances that do not require the publication of a prospectus pursuant to the Prospectus Directive.

Neither the United States Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the ordinary shares or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offence in the United States.

No other national securities regulator has approved or disapproved of the ordinary shares and no national securities regulator has determined that this prospectus is accurate or complete.

41 Notice to United States Investors The ordinary shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States for offer or sale as part of their distribution and, subject to certain exceptions, may not be offered or sold in the United States. The ordinary shares are being offered and sold in the United States only to qualified institutional buyers in reliance on Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and outside the United States in reliance on Regulation S. Prospective investors are hereby notified that the seller of the ordinary shares may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. The ordinary shares are not transferable except in accordance with the restrictions described herein. See “Selling and Transfer Restrictions” beginning on page 296.

Notice to New Hampshire Residents Neither the fact that a registration statement or an application for a licence has been filed under Chapter 421-B of the New Hampshire Revised Statutes (“RSA 421-B”) with the state of New Hampshire nor the fact that a security is effectively registered or a person is licensed in the state of New Hampshire constitutes a finding by the secretary of state of the state of New Hampshire that any document filed under RSA 421-B is true, complete and not misleading. Neither any such fact nor the fact that an exemption or exception is available for a security or a transaction means the secretary of the state of New Hampshire has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, security, or transaction. It is unlawful to make, or cause to be made, to any prospective purchaser, customer or client any representation inconsistent with the provisions of this paragraph.

Notice to Investors in the European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any ordinary shares which are the subject of the Offering contemplated by this prospectus may not be made in that Relevant Member State other than the offer contemplated in the prospectus in Belgium unless the prospectus has been approved by the competent authority in such Member State and published in accordance with the Prospectus Directive as implemented in such Relevant Member State except that an offer to the public in that Relevant Member State of any ordinary shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: • To legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; • To any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year, (ii) a total balance sheet of more than EUR 43,000,000 and (iii) an annual net turnover of more than EUR 50,000,000, as shown in its last annual or consolidated accounts; • To fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Joint Global Coordinators for any such offer; or • In any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of ordinary shares shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to the public” in relation to any ordinary shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any ordinary shares to be offered so as to enable an investor to decide to purchase any ordinary shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State.

In the case of any ordinary shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will also be deemed to have represented, acknowledged and agreed that the ordinary shares acquired by it in the Offering have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to persons in circumstances which may give rise to an offer of any ordinary shares to the public other than their offer or resale in a relevant member state to qualified investors as so defined or in circumstances in which the prior consent of the Underwriters has been obtained to each such proposed offer or resale. The Company, the Underwriters and their affiliates will rely upon the truth and accuracy of the foregoing representation, acknowledgement and

42 agreement. Notwithstanding the above, a person who is not a qualified investor and who has notified the Underwriters of such fact in writing may, with the consent of the Underwriters, be permitted to subscribe for or purchase ordinary shares in the Offering.

Notice to United Kingdom Investors In the United Kingdom, this prospectus is being distributed only to, and is directed only at, persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or who are high net worth entities falling within Article 49 of the Order, and other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). The Offering and any related investment or investment activity to which this document relates is available only to relevant persons in the United Kingdom.

Notice to French Investors Neither this prospectus nor any other offering material relating to the Company’s ordinary shares has been submitted to the clearance procedures of the Autorité des marchés financiers in France. The Company’s ordinary shares have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the Company’s ordinary shares has been or will be (i) released, issued, distributed or caused to be released, issued or distributed to the public in France or (ii) used in connection with any offer for subscription or sale of the Company’s ordinary shares to the public in France. Such offers, sales and distributions will be made in France only to (i) qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d’investisseurs), in each case investing for their own account, all as defined in and in accordance with Article L.411-2, D.411-1 to 411-4, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier and/or to (ii) to investment service providers authorised to engage in portfolio management on a discretionary basis on behalf of third parties, or (iii) in a transaction that, in accordance with Article L.411-2-II-1°-or-2°-or-3° of the French Code monétaire et financier and Article 211-2 of the General Regulations (Règlement Général)oftheAutorité des marchés financiers, does not constitute a public offer (appel public à l’épargne), in each case in compliance with Articles L.341-1 to L.341-17 of the French Code monétaire et financier. The Company’s ordinary shares may be resold only in compliance with Articles L.411-1, L.411-2, L. 412-1 and L.621-8 to L.621-8-3 of the French Code monétaire et financier. Investors in France and persons who come into possession of offering materials are required to inform themselves about and observe any such restrictions.

Notice to Japanese Investors The Company’s ordinary shares have not been and will not be registered under the Securities and Exchange Law of Japan. No person may offer or sell, directly or indirectly, any securities in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except (i) pursuant to an exemption from the registration requirements of the Securities and Exchange Law of Japan and (ii) in compliance with any other applicable requirements of Japanese law.

Notice to Canadian Investors The ordinary shares have not been nor will be qualified by prospectus for sale to the public in Canada under applicable Canadian securities laws and, accordingly, any offer or sale of the ordinary shares in Canada will be made pursuant to an exemption from the applicable prospectus filing requirements, and otherwise in compliance with applicable Canadian laws. Investors in Canada should refer to “Selling and Transfer Restrictions — Selling Restrictions — Canada” beginning on page 296 and Ontario purchasers in particular should refer to “Selling and Transfer Restrictions — Selling Restrictions — Canada — Rights of Action for Damages or Rescission (Ontario)” beginning on page 298. The offer price, financial statements and certain other financial information disclosed in this prospectus are presented in euro. On 10 October 2007, EUR 1.00 = CAD 1.3892, based on the Bank of Canada noon exchange rate.

Notice to Australian Investors This prospectus has not been, and will not be, lodged with the Australian Securities & Investments Commission. Accordingly, the Company’s ordinary shares will not be offered for sale in Australia unless offers for sale are made in reliance on one of the exemptions from disclosure contained in section 708 of the Corporations Act 2001 of Australia. These exemptions permit the Company’s ordinary shares to be offered for sale in Australia to “sophisticated investors” (within the meaning of section 708 (8) of the Corporations Act) and to “professional investors” (within the meaning of section 708 (11) of the Corporations Act).

43 PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Use of Key Terms Nyrstar NV was formed on 13 April 2007 for the purpose of acquiring, holding and operating the zinc and lead smelting, alloying and refining assets and operations of Zinifex Limited (“Zinifex”) and Umicore SA/NV (“Umicore”), pursuant to a Business Combination and Shareholders’ Agreement between Zinifex, Umicore and the Company dated 23 April 2007 (the “BCSA”).

References to “Nyrstar” and the “Company” herein are references to Nyrstar NV and, unless the context otherwise requires or indicates, its consolidated subsidiaries. References to the “Zinifex Carve-out Group” and the “Umicore Carve-out Group” herein are references to the zinc and lead smelting, alloying and refining assets and operations of Zinifex and Umicore, respectively, that were transferred to Nyrstar on 31 August 2007.

References to the “Company”, “we”, “us” and “our” herein are, in respect of periods prior to transfer of the Zinifex Carve-out Group and the Umicore Carve-out Group to Nyrstar, references to the Zinifex Carve-out Group and the Umicore Carve-out Group, as the context requires, and, in respect of periods subsequent to the transfer of the Zinifex Carve-out Group and the Umicore Carve-out Group to Nyrstar, references to Nyrstar and, unless the context otherwise requires or indicates, its consolidated subsidiaries.

References to “IFRS” are references to International Financial Reporting Standards as issued by the International Accounting Standards Board.

References to “U.S. GAAP” are references to generally accepted accounting principles in the United States of America.

References to “LME” are references to the London Metal Exchange.

References to “tonnes” are references to metric tons.

References to “ounces” are reference to troy ounces.

Summary of Overall Approach to Presentation of Financial Information and Data We present in this prospectus the following financial information: • Unaudited historical carve-out financial information for the Zinifex Carve-out Group as of and for the years ended 31 December 2005 and 2006, as of and for the six months ended 31 December 2004 and as of and for the six months ended 30 June 2006 and 2007 (the “Zinifex Carve-out Group Combined Selected Historical Financial Information”). See “— Zinifex Carve-out Group Unaudited Combined Selected Historical Financial Information” beginning on page 45; • Unaudited historical carve-out financial information for the Umicore Carve-out Group as of and for the years ended 31 December 2004, 2005 and 2006 and as of and for the six months ended 30 June 2006 and 30 June 2007 prepared on the basis of the Audited Umicore Carve-out Group Combined Financial Statements (as defined below) (the “Umicore Carve-out Group Combined Selected Historical Financial Information”). See “— Umicore Carve-out Group Unaudited Combined Selected Historical Financial Information” beginning on page 46; • Audited carve-out combined financial statements for the Zinifex Carve-out Group as of and for the financial year ended 30 June 2007. See “— Audited Zinifex Carve-out Group Combined Financial Statements and Audited Umicore Carve-out Group Combined Financial Statements” beginning on page 47; • Audited carve-out combined financial statements for the Umicore Carve-out Group as of and for the six months ended 30 June 2007. See “— Audited Zinifex Carve-out Group Combined Financial Statements and Audited Umicore Carve-out Group Combined Financial Statements” beginning on page 47; and • Unaudited pro forma consolidated financial information for Nyrstar for the year ended 31 December 2006 and as of and for the six months ended 30 June 2007 (the “Nyrstar Pro Forma Consolidated Financial Information”). See “— Nyrstar Unaudited Pro Forma Consolidated Financial Information” beginning on page 48.

44 The Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information together comprise the “Historical Carve-out Financial Information”. The Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information were prepared on different bases. Accordingly, any discussion and analysis of the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information in this prospectus should be read separately and the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information cannot and should not be directly compared across the same reporting periods or similarly titled line items. You are urged to read the notes to the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information beginning on page F-1 and page F-8 respectively for a discussion of the different bases of preparation and accounting policies used.

For purposes of the discussion and analysis set forth in the section “Operating and Financial Review and Prospects — Results of Operations of the Umicore Carve-out Group” beginning on page 103, we have first excluded from the unaudited Umicore Carve-out Group Combined Selected Historical Financial Information the effects of (i) certain items that management considers to be non-recurring and (ii) IAS 39 impacts, consistent with Umicore’s financial reporting and communications, and we have also excluded the effect of the “structural” metal price and currency hedging engaged in by Umicore. See “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Presentation of Adjusted Results for the Umicore Carve-out Group” beginning on page 104.

While this prospectus includes audited combined historical financial statements for each of the Zinifex Carve-out Group and the Umicore Carve-out Group for the twelve and six-month periods ended 30 June 2007, respectively, such financial statements do not form the basis for the review and analysis of the historical performance of the Zinifex Carve-out Group or the Umicore Carve-out Group included herein. Rather, the principal historical financial information included in this prospectus is comprised of unaudited combined selected historical financial information which has been carved-out and derived from the accounting records and management accounts of each of Zinifex Limited and Umicore SA/NV, and we have based our review and analysis of historical results principally upon such unaudited information, after modifying the Umicore Carve-out Group financial information as described above.

Zinifex Carve-out Group Unaudited Combined Selected Historical Financial Information The Zinifex Carve-out Group Combined Selected Historical Financial Information has been prepared from the books and records maintained by Zinifex and its subsidiaries, for illustrative purposes only, to present the combined results of the Zinifex Carve-out Group after giving effect to the separation of the zinc and lead alloying, refining and smelting businesses of Zinifex. This financial information is presented in EUR and in accordance with IFRS principles of recognition and measurement. As Zinifex’s financial year ends on 30 June, the Zinifex Carve-out Group Combined Selected Historical Financial Information (i) as of and for the six months ended 31 December 2004 was derived from the financial statements of Zinifex for the same period, (ii) as of and for the year ended 31 December 2005 was derived by aggregating the results for Zinifex for the 12-month period ended 30 June 2005 and the six-month period ended 31 December 2005 and deducting the results of the six-month period ended 31 December 2004, (iii) as of and for the year ended 31 December 2006 was derived by aggregating the results for Zinifex for the 12-month period ended 30 June 2006 and the six-month period ended 31 December 2006 and deducting the results of the six-month period ended 31 December 2005, (iv) as of and for the six months ended 30 June 2006 was derived by deducting the results for Zinifex for the six-month period ended 31 December 2005 from the 12-month period ended 30 June 2006 and (v) as of and for the six months ended 30 June 2007 was derived by deducting the results for Zinifex for the six-month period ended 31 December 2006 from the 12-month period ended 30 June 2007. Unless otherwise indicated, amounts were translated from AUD to EUR at the following exchange rates:

EUR/AUD EUR/AUD Period Period end Average Six months ended 31 December 2004 ...... 0.57277 0.58210 Year ended 31 December 2005 ...... 0.62380 0.61276 Six months ended 30 June 2006 ...... 0.58420 0.60427 Year ended 31 December 2006 ...... 0.60130 0.59995 Six months ended 30 June 2007 ...... 0.62950 0.60807

45 As Zinifex was formed on 5 April 2004, the Zinifex Carve-out Group Combined Selected Historical Financial Information for 2004 is only available for the six months ended 31 December 2004 and is therefore not comparable with the other periods presented. Since no comparative information is provided, this financial information does not form the basis of any discussion included in this prospectus.

The Zinifex Carve-out Group Combined Selected Historical Financial Information does not include income statement information below profit before net financing costs and income tax. The pro forma tax profile and gearing of Nyrstar may differ substantially from that of the Zinifex Carve-out Group, which, historically, has been operated under different corporate structures and, therefore, a comparison of historical net financing cost and income tax expense is not considered to be meaningful, appropriate or representative. For the same reason, only limited cash flow information has been presented in relation to both operating activities before financing and capital expenditure.

The Zinifex Carve-out Group Combined Selected Historical Financial Information is not necessarily indicative of the future operating results or financial status of the assets comprised therein and does not purport to be indicative of what the operating results and financial status of such assets would have been if the Zinifex Carve-out Group had been operated as a separate entity as of the dates or for the periods presented.

The Zinifex Carve-out Group Combined Selected Historical Financial Information includes, in the opinion of Zinifex, all significant adjustments necessary to present fairly the results of the Zinifex Carve-out Group for the periods presented. The adjustments and certain assumptions are described in the notes to the Zinifex Carve-out Group Combined Selected Historical Financial Information beginning on page F-1. Interim results are not necessarily indicative of the results that may be expected for any other interim period or for the full year.

You should read the unaudited Zinifex Carve-out Group Combined Selected Historical Financial Information in conjunction with the notes thereto and the information contained in “Cautionary Note Regarding the Presentation of Financial Information Included in this Prospectus”, “Risk Factors” beginning on page 26, “Operating and Financial Review and Prospects” beginning on page 65 and this “Presentation of Financial and Other Information” section.

Additional adjustments were made to the Zinifex Carve-out Group Combined Selected Historical Financial Information in order to prepare the unaudited Nyrstar Pro Forma Consolidated Financial Information. See notes 1.3 and 2 to the Nyrstar Pro Forma Consolidated Financial Information beginning on page PF-1.

Umicore Carve-out Group Unaudited Combined Selected Historical Financial Information The Umicore Carve-out Group Combined Selected Historical Financial Information as of and for the years ended 31 December 2004, 2005 and 2006 and as of and for the six months ended 30 June 2006 has been derived from segment information as reported in the audited financial statements for Umicore as of and for the years ended 31 December 2004, 2005 and 2006 and the unaudited financial information for Umicore as of and for the six months ended 30 June 2007, in each case prepared in EUR and in accordance with IFRS principles of recognition and measurement. In particular, the Umicore Carve-out Group Combined Selected Historical Financial Information has been derived from Umicore’s Zinc Specialties segment, as adjusted to reflect certain activities and assets of that segment which were not transferred to Nyrstar, such as Umicore’s Zinc Chemicals and Building Products businesses and a 22% stake in Padaeng Industry Public Company Limited that was retained by Umicore. The fact that segment information is used for 2004, 2005 and 2006 stems from the fact that Umicore’s principal carve-out assets and operations in Belgium and France were only transferred to separate legal entities on 30 November 2006 with a retroactive accounting and tax opening of 1 July 2006. The Umicore Carve-out Group Combined Selected Historical Financial Information as of and for the six months ended 30 June 2007 has been prepared on the basis of the Audited Umicore Carve-out Group Combined Financial Statements excluding comparative period information. See “— Audited Zinifex Carve-out Group Combined Financial Statements and Audited Umicore Carve-out Group Combined Financial Statements” beginning on page 47.

The Umicore Carve-out Group Combined Selected Historical Financial Information does not include income statement information below profit before net financing costs and income tax because many of the businesses of the Umicore Carve-out Group transferred to Nyrstar did not previously operate as separately incorporated entities. As a result, historical information below profit before net financing costs and income tax does not exist for those businesses. In addition, the pro forma tax profile and gearing of Nyrstar may differ substantially from that of the Umicore Carve-out Group, which, historically, has been operated under different

46 corporate structures and, therefore, a comparison of historical net financing costs and income tax expense is not considered to be meaningful, appropriate or representative. For the same reason, only limited cash flow information has been presented in relation to both operating activities before financing and capital expenditure.

The Umicore Carve-out Group Combined Selected Historical Financial Information is not necessarily indicative of the future operating results or financial status of the assets comprised therein and does not purport to be indicative of what the operating results and financial status of such assets would have been if the Umicore Carve-out Group had been operated as a separate entity as of the dates or for the periods presented.

The Umicore Carve-out Group Combined Selected Historical Financial Information includes, in the opinion of Umicore, all adjustments necessary to present fairly the results of the Umicore Carve-out Group, for the periods presented. The adjustments and certain assumptions are described in the notes to the Umicore Carve-out Group Combined Selected Historical Financial Information beginning on page F-8. Interim results are not necessarily indicative of the results that may be expected for any other interim period or for the full year.

You should read the unaudited Umicore Carve-out Group Combined Selected Historical Financial Information in conjunction with the notes thereto and the information contained in “Cautionary Note Regarding the Presentation of Financial Information Included in this Prospectus”, “Risk Factors” beginning on page 26, “Operating and Financial Review and Prospects” beginning on page 65 and this “Presentation of Financial and Other Information” section.

In the section titled “Operating and Financial Review and Prospects”, for purposes of the comparison between periods, the Umicore Carve-out Group combined selected historical financial information has been adjusted to exclude the effects of (i) certain items that management considers to be non-recurring, (ii) “structural” metal price and currency hedging engaged in by Umicore and (iii) application of IAS 39. See “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Presentation of Adjusted Results for the Umicore Carve-out Group” beginning on page 104.

This adjusted information is a non-GAAP measure and has not been determined under IFRS or any other generally accepted accounting principles, may not be comparable to other similarly titled measures used by other companies, and should not be considered as substitutes for the unadjusted historical Umicore financial information contained in this prospectus.

Audited Zinifex Carve-out Group Combined Financial Statements and Audited Umicore Carve-out Group Combined Financial Statements The combined financial statements of the Zinifex Carve-out Group prepared in accordance with IFRS as of and for the year ended 30 June 2007 (the “Audited Zinifex Carve-out Group Combined Financial Statements”), beginning on page A-1, have been audited by KPMG, Zinifex’s independent auditors, as stated in their qualified audit report appearing herein, which was qualified as to the requirements for IAS 1 “Presentation of Financial Statements”. The combined financial statements of the Umicore Carve-out Group prepared in accordance with IFRS as of and for the six months ended 30 June 2007 (the “Audited Umicore Carve-out Group Combined Financial Statements”), beginning on page A-34, have been audited by PricewaterhouseCoopers Bedrijfsrevisoren / Reviseurs d’Entreprises, Umicore’s independent auditors, as stated in their qualified audit report appearing herein, which was qualified as to the requirements for IAS 1 “Presentation of Financial Statements” and IFRS 7 “Financial Instruments: Disclosures” and the amendment to IAS 1 “Presentation of Financial Statements: Capital Disclosures”.

The Audited Zinifex Carve-out Group Combined Financial Statements and the Audited Umicore Carve-out Group Combined Financial Statements are not used as the basis of the discussion in this prospectus of the historical performance of the Zinifex Carve-out Group for the year ended 30 June 2007 and the Umicore Carve-out Group for the six months ended 30 June 2007, respectively, since they do not include comparative information for the respective prior financial periods. It was not feasible to prepare audited financial statements for the respective prior comparative periods, since the zinc alloying, refining and smelting operations of the Umicore Carve-out Group did not exist as a separate legal entity prior to July 2006. Moreover, the Audited Zinifex Carve-out Group Combined Financial Statements are presented on the basis of Zinifex’s financial year, which ends on 30 June. Nyrstar’s financial year-end is 31 December.

You are urged to read the notes to the Audited Zinifex Carve-out Group Combined Financial Statements and the Audited Umicore Carve-out Group Combined Financial Statements beginning on page A-1 and page A-34 respectively for a discussion of their bases of preparation and accounting policies used.

47 Nyrstar Unaudited Pro Forma Consolidated Financial Information The unaudited Nyrstar pro forma consolidated balance sheet is based on the Audited Zinifex Carve-out Group Combined Financial Statements and the Audited Umicore Carve-out Group Combined Financial Statements, in each case prepared in accordance with IFRS, and the unaudited Nyrstar pro forma consolidated income statement data is based on the unaudited Zinifex Carve-out Group Combined Selected Historical Financial Information and the unaudited Umicore Carve-out Group Combined Selected Historical Financial Information, in each case prepared in accordance with IFRS principles of recognition and measurement, as adjusted for, among other things, (i) the revised valuation of the assets of the Umicore Carve-out Group contributed to Nyrstar, (ii) the elimination of any intercompany transactions, (iii) conformity with the accounting policies of Nyrstar, (iv) conformity with the line item definitions of Nyrstar, and (v) the alignment to Nyrstar net debt levels pursuant to the terms of the BCSA. The unaudited Nyrstar Pro Forma Consolidated Financial Information is not necessarily indicative of our future operating results or financial position and does not purport to be indicative of what our operating results and financial position would have been if we had operated as a single entity, or if the Zinifex Carve-out Group or the Umicore Carve-out Group had been operated as stand- alone entities, as of the dates or for the periods presented.

The unaudited Nyrstar Pro Forma Consolidated Financial Information gives pro forma effect to the transfers of the Zinifex Carve-out Group and the Umicore Carve-out Group to Nyrstar as if they had occurred on 1 January 2006 in respect of the pro forma consolidated income statement and as if they had occurred on 30 June 2007 in respect of the pro forma consolidated balance sheet.

The acquisition by Nyrstar of the Zinifex Carve-out Group and the Umicore Carve-out Group has been accounted for as a reverse acquisition in accordance with IFRS 3. Considering the relative sizes of the net assets and operations of the businesses respectively contributed by Zinifex and by Umicore to the Company, the Zinifex Carve-out Group has been identified as the acquirer for accounting purposes while Nyrstar and the Umicore Carve-out Group (including the equity-accounted 24.9% investment in Padaeng Industry Public Company Limited) have been considered as the acquirees for accounting purposes. The assets and liabilities of the Zinifex Carve-out Group have been accounted for in the Nyrstar Pro Forma Consolidated Financial Information based on their pre-combination carrying amounts, restated to comply with Nyrstar accounting policies, while the assets and liabilities of Nyrstar and the Umicore Carve-out Group have been recorded at their fair values. A final determination of the estimated fair values of the assets and liabilities of the Umicore Carve-out Group will be based on the actual assets acquired as of the date of completion of the business combination.

Due to this accounting treatment, Nyrstar’s first consolidated financial statements following the Offering will represent a continuation of the combined financial statements of the Zinifex Carve-out Group, as accounting parent, and will present the six-month period ending 31 December 2007 alongside the Zinifex Carve-out Group’s combined financial statements for the twelve-month period ended 30 June 2007, as comparatives. In addition, Nyrstar’s first consolidated financial statements following the Offering, for the six-month period ending 31 December 2007, will include only four months of Nyrstar’s and the Umicore Carve-out Group’s results, from the date of completion of the business combination.

The unaudited Nyrstar Pro Forma Consolidated Financial Information includes, in the opinion of Nyrstar management, all significant adjustments necessary to reflect Nyrstar’s pro forma financial results for the periods indicated in accordance with the assumptions and notes described herein. The unaudited Nyrstar Pro Forma Consolidated Financial Information does not, however, include an adjustment for incremental corporate costs, such as overheads, attributable to Nyrstar as a stand-alone entity, which have been estimated at between EUR 15 million and EUR 20 million, as such costs are not considered at this stage to be sufficiently factually supportable. See “Selected Financial Information — Selected Unaudited Nyrstar Pro Forma Consolidated Financial Information” beginning on page 60.

In addition, in accordance with the BCSA, certain modifications in respect of modelled working capital, net current tax liabilities and net debt are currently being calculated to the purchase price for the acquisition of the Zinifex Carve-out Group and the Umicore Carve-out Group as described in note 1.3 to the Nyrstar Pro Forma Consolidated Financial Information. These adjustments are not reflected in the unaudited Nyrstar Pro Forma Consolidated Financial Information as they cannot be quantified at this time. This information is expected to be available during the last quarter of 2007 and will primarily affect cash, inventories and accounts receivable.

As described in note 1.3 to the unaudited Nyrstar Pro Forma Consolidated Financial Information, the BCSA also provides that Nyrstar will pay purchase price adjustments to Zinifex and to Umicore in the event that the value of Nyrstar as inferred from this Offering exceeds the aggregate values for which the Zinifex Carve-out

48 Group and the Umicore Carve-out Group were acquired on 31 August 2007 by more than 5 per cent. Such purchase price adjustments would be financed by way of an additional capital increase to be subscribed for in cash by Zinifex and Umicore. Nyrstar will use the proceeds of the additional capital increase to pay to Zinifex and to Umicore the related purchase price adjustments. As Nyrstar is currently unable to estimate the amounts of these purchase price adjustments, if any, they have not been reflected in the unaudited Nyrstar Pro Forma Consolidated Financial Information. Any such adjustment would not affect the number of ordinary shares outstanding, but would affect Nyrstar’s shareholders’ equity, to the extent that the additional capital increase relates to the acquisition of the Umicore Carve-out Group following the reverse acquisition mechanism, and would correspondingly increase acquisition goodwill. See also “Related Party Transactions — Business Combination and Shareholders’ Agreement — Additional Capital Increase — Purchase Price Adjustment Based on IPO Proceeds” beginning on page 266.

The pro forma adjustments are based on estimates, currently available information and certain assumptions that we believe are reasonable, and which will be revised as additional information becomes available in relation to the closing of the business combination. The pro forma adjustments and certain assumptions are described in the notes to the Nyrstar Pro Forma Consolidated Financial Information.

The unaudited Nyrstar Pro Forma Consolidated Financial Information has been prepared and is intended for illustrative purposes only, addresses a hypothetical situation, and does not purport to represent the results of operations and financial position that we would actually have obtained during the periods presented and is not necessarily indicative of results we expect in future periods. The Nyrstar Pro Forma Consolidated Financial Information has been prepared in accordance with Commission Regulation (EC) No. 809/2004. For the avoidance of doubt, it does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the U.S. Securities and Exchange Commission.

The unaudited Nyrstar Pro Forma Consolidated Financial Information should be read in conjunction with the notes thereto and the Historical Carve-out Financial Information and the notes thereto and “Cautionary Note Regarding the Presentation of Financial Information Included in this Prospectus”, “Risk Factors” beginning on page 26, “Capitalisation and Indebtedness” beginning on page 59, “Operating and Financial Review and Prospects” beginning on page 65 and this “Presentation of Financial and Other Information” section.

For a detailed discussion of the basis of presentation of the Zinifex Carve-out Group Combined Selected Historical Financial Information, the Umicore Carve-out Group Combined Selected Historical Financial Information and the unaudited Nyrstar Pro Forma Consolidated Financial Information, see the Historical Carve-out Financial Information and the notes thereto beginning on page F-1 and the Nyrstar Pro Forma Consolidated Financial Information and the notes thereto beginning on page PF-1.

We have also included modified pro forma information (not within the scope of our auditors’ examination or review procedures) which is intended to present the hypothetical impact of hedging arrangements in line with practices that we currently implement, although this has been done for illustrative purposes only, and there can be no guarantee that actual results would have been as reflected or that Nyrstar will continue these practices in the future. Further, the Nyrstar modified pro forma information presented herein also includes a “pro forma changes in working capital” measure for which the bases for calculation is bespoke. See “Operating and Financial Review and Prospects — Nyrstar Pro Forma Consolidated Income Statement Data Modified to Reflect the Current Transactional and Structural Hedging Policy of Nyrstar” beginning on page 77.

Föhl China Co., Ltd Unlike all of the other Zinifex Carve-out Group and Umicore Carve-out Group assets, Föhl China Co., Ltd was not transferred to Nyrstar on 31 August 2007, the date on which the other assets and liabilities were transferred, Umicore and Nyrstar Netherlands (Holdings) B.V. instead entered into a share purchase agreement on such date providing for the sale by Umicore of its 50% shareholding in Föhl China Co., Ltd. to Nyrstar Netherlands (Holdings) B.V. Completion is subject to (i) the waiver by Adolf Föhl Verwaltungs- und Beteiligungs GmbH of its purchase option with respect to the shares Umicore intends to sell to Nyrstar Netherlands (Holdings) B.V., and (ii) the approval by the Chinese examination and approval authority of the sale by Umicore of its shares in Föhl China Co., Ltd. to Nyrstar Netherlands (Holdings) B.V.

On the date of this prospectus, neither the waiver by Adolf Föhl Verwaltungs- und Beteiligungs GmbH of its purchase option nor the subsequent approval of the sale by the Chinese examination and approval authority has been obtained. Whilst it is the joint intention of Umicore and Nyrstar to complete the sale of the shares in

49 Föhl China Co., Ltd., no assurance can be given as to whether the shares in Föhl China Co., Ltd. will effectively be transferred to Nyrstar Netherlands (Holdings) B.V. and when such transfer will occur.

Nyrstar intends to account for its interest in the Föhl China Co., Ltd. joint venture using the equity method. The unaudited Nyrstar Pro Forma Consolidated Financial Information has been prepared to give effect to the intended transfer of the shares in Föhl China Co., Ltd. to Nyrstar Netherlands (Holdings) B.V. In the event that such transfer cannot, for any reason, ultimately be effected, the line item “investment in associates and joint ventures” in the Nyrstar Pro Forma Consolidated Balance Sheet as at 30 June 2007 would be decreased by the accounting value of Nyrstar’s anticipated investment in Föhl China Co., Ltd. in an amount of EUR 8 million. A corresponding increase in the line item “cash and cash equivalents” would be effected to reflect the fact that Umicore has then contributed cash instead of its 50% shareholding in Föhl China Co., Ltd. The line item “share of profit of equity accounted investees” in the Nyrstar Pro Forma Consolidated Income Statement before Net Financing Costs and Income Tax for the six month period ended 30 June 2007 and for the period ended 31 December 2006 would be affected by the non-inclusion of the contribution by Föhl China Co., Ltd. to Nyrstar’s results, i.e., a loss of EUR 0.1 million and EUR 0.3 million respectively.

Given the limited impact of the contribution of Föhl China Co., Ltd. to the Umicore Carve-out Group’s results of operations, the impact of a potential absence of transfer of the shares in Föhl China Co., Ltd. to Nyrstar Netherlands (Holdings) B.V. on the discussion and analysis of the Umicore Carve-out Group’s results of operations in “Operating and Financial Review and Prospects” has not been quantified separately.

Non-IFRS Financial Measures In this prospectus, we present certain non-IFRS financial measures, particularly EBITDA, in describing the operating results and financial position of each of Nyrstar, the Zinifex Carve-out Group and the Umicore Carve-out Group.

EBITDA is a measure of operating performance, which we believe is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the zinc and lead smelting, refining and alloying industries. EBITDA has limitations as an analytical tool, and investors should not consider it in isolation, or as a substitute for analysis of our operating results as reported under IFRS. Some of these limitations are as follows: • EBITDA does not reflect the impact on our operating performance of financing costs, which can be significant and could further increase if we incur more debt; • EBITDA does not reflect the impact of income taxes on our operating performance; • EBITDA does not reflect the impact of depreciation and amortisation on our operating performance; and • Other companies in our industry may calculate EBITDA differently or may use it for different purposes than the Company, limiting its usefulness as a comparative measure.

We rely primarily on our IFRS operating results and use EBITDA only supplementally. EBITDA is not defined by, or presented in accordance with, IFRS. EBITDA is not a measurement of our operating performance under IFRS and should not be considered as an alternative to revenue or any other measure of performance under IFRS or as an alternative to results from operating activities nor to cash flow from operating activities or as a measure of the Company’s liquidity. In particular, EBITDA should not be considered as a measure of discretionary cash available to the Company to invest in the growth of its business.

For information regarding how the Umicore Carve-out Group and the Zinifex Carve-out Group defined and how we define other non-IFRS measures, see “Selected Financial Information” beginning on page 60 and “Operating and Financial Review and Prospects” beginning on page 65.

This prospectus also includes a significant number of adjustments, modifications and non-GAAP financial measures and data in addition to the GAAP-based historical financial information to facilitate analysis of the financial performance of our businesses. By their nature, these non-GAAP and adjusted measures have not been determined under IFRS or any other generally accepted accounting principles, may not be comparable to other similarly titled measures used by other companies, and should not be considered as substitutes for the historical and pro forma financial information contained in this prospectus.

50 Financial Year Our financial year is the calendar year ending 31 December. The Umicore Carve-out Group had a financial year ending 31 December. Since the financial year of Zinifex ends on 30 June, the Zinifex Carve-out Group Combined Selected Historical Financial Information has been prepared on an “annualised” basis, as discussed above under “— Zinifex Carve-out Group Combined Selected Historical Financial Information”.

Our first consolidated financial statements will represent a continuation of the Zinifex Carve-out Group’s combined financial statements, as accounting parent, and will present the six-month period ending 31 December 2007 alongside the Zinifex Carve-out Group’s combined financial statements for the twelve-month period ended 30 June 2007, as comparatives. Nyrstar’s first consolidated financial statements following the Offering, for the six-month period ending 31 December 2007, will include only four months of Nyrstar’s and the Umicore Carve-out Group’s results, from 1 September 2007.

Annualisation Where data in this prospectus has been restated to an annualised (i.e., calendar year) basis, the annualisation was done for comparative purposes only. Actual results may differ from these annualised figures.

Currencies and Exchange Rates In this prospectus, unless otherwise indicated, all amounts are expressed in euro. Unless otherwise indicated, we have translated, for your convenience, certain euro amounts presented in this prospectus from Australian dollars using the following euro / Australian dollar exchange rates:

Period end rate Average rate Financial year ended 31 December 2006 ...... 0.6013 0.6000 31 December 2005 ...... 0.6238 0.6128 Six months ended 30 June 2007 ...... 0.6295 0.6081 30 June 2006 ...... 0.5842 0.6043 31 December 2004 ...... 0.5728 0.5821

You should not view such translations into U.S. dollars or Australian dollars as representations that such euro amounts could be or could have been converted into U.S. dollars or Australian dollars, respectively, at the rates indicated or at any other rates.

In this prospectus, references to “euro” or “EUR” are references to the euro, the single currency of the participating member states in the Third Stage of European Economic and Monetary Union of the Treaty Establishing the European Community, as amended from time to time. References to “U.S. dollar”, “U.S. dollars” or “USD” are references to the United States dollar, the lawful currency of the United States of America (the “United States”). References to “Australian dollar”, “Australian dollars” or “AUD” are references to the Australian dollar, the lawful currency of the Commonwealth of Australia (“Australia”). References to “renminbi” or “RMB” are references to the renminbi, the lawful currency of the People’s Republic of China (“China”). References to “Thai baht” or “THB” are references to the baht, the lawful currency of the Kingdom of Thailand (“Thailand”).

Rounding Certain amounts that appear in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be arithmetic aggregations of the figures that precede them.

51 Industry and Other Statistical Information We obtained the market data used in this prospectus from industry sources and currently available information. The main source for information on the zinc and lead industries was Brook Hunt & Associates Ltd (“Brook Hunt”), metal industry consultants. We also obtained macroeconomic and foreign exchange data from the Federal Reserve Bank of New York and the European Central Bank. We accept responsibility for having correctly reproduced information from industry publications or public sources, and, so far as we are aware and have been able to ascertain from information published by those industry publications or public sources, no facts from such industry publications or public sources have been omitted which would render the reproduced information inaccurate or misleading. However, each prospective investor should keep in mind that we have not independently verified information that we have obtained from industry and government sources. Certain market share information and other statements in this prospectus regarding the zinc and lead industries and our position relative to our competitors may not be based on published statistical data or information obtained from independent third parties. Rather, such information and statements reflect our best estimates based upon information obtained from trade and business organisations and associations and other contacts within the zinc and lead industries. This information from our internal estimates and surveys has not been verified by any independent sources.

No contents of any of our websites or the websites of Umicore or Zinifex form any part of this prospectus.

On 26 June 2007, Zinifex despatched to its shareholders an Explanatory Memorandum (the “Explanatory Memorandum”) seeking their approval for the transfer of the Zinifex Carve-out Group to Nyrstar and certain related matters. The Explanatory Memorandum was issued by Zinifex only to its shareholders and only for this purpose. Any purchase of the Company’s ordinary shares in the Offering should be made on the basis of this prospectus alone and prospective investors must not rely on the Explanatory Memorandum or any part thereof. None of Nyrstar, Nyrstar’s Board of Directors, Umicore, Zinifex (except to the extent set forth in the Explanatory Memorandum) or the Joint Bookrunners make any warranty or representation, express or implied, with respect to, accept any responsibility with respect to, or express any opinion on the contents of the Explanatory Memorandum or any part thereof or any statements, views or opinions expressed therein.

52 AVAILABLE INFORMATION

The Company has agreed that, for so long as any of the Company’s ordinary shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, it will, during any period in which it is neither subject to Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”), nor exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, provide to any holder or beneficial owner of such restricted securities or to any prospective purchaser of such restricted securities designated by such holder or beneficial owner, on the request of such holder, beneficial owner or prospective purchaser, the information required to be provided to such persons pursuant to Rule 144A(d)(4) under the Securities Act.

This prospectus is available to retail investors in Belgium in English, French and Dutch. The prospectus will be made available to investors at no cost at our registered office, Zinkstraat 1, 2490 Balen. In Belgium, the prospectus will also be made available to investors at KBC Bank and KBC Securities, telephone number +32 (0)3 283 29 70, Fortis Bank, telephone number +32 (0)800 90 301, Deutsche Bank, telephone number +32 (0)78 152 244, Bank Degroof, telephone number +32 (0)2 287 94 59, ING Belgium, telephone numbers +32 (0)2 464 61 01 (Dutch), +32 (0)2 464 61 02 (French) and +32 (0)2 464 61 04 (English), Petercam, telephone number +32 (0)2 229 64 46 and CBC Banque, telephone number +32 (0)800 920 20. Subject to certain conditions, this prospectus and the French and Dutch versions of the summary are also available to investors in Belgium only, on the IPO website of the Company (www.nyrstarenbourse.be and www.nyrstarbeursgang.be), and on the websites of KBC Bank (www.kbc.be), KBC Securities (www.kbcsecurities.be and www.bolero.be), Fortis Bank (www.fortisbanking.be/sparenenbeleggen and www.fortisbanking.be/epargneretplacer), Deutsche Bank (www.deutschebank.be), Bank Degroof (www.degroof.be), ING Belgium (www.ing.be), Petercam (www.petercam.be) and CBC Banque (www.cbc.be). The prospectus is also available on the Euronext website (www.euronext.com) and on the CBFA website (www.cbfa.be).

The posting of this prospectus and the summary on the internet does not constitute an offer to sell or a solicitation of an offer to buy any of the ordinary shares to or from any person in any jurisdiction in which it is unlawful to make such offer or solicitation to such person. The electronic version may not be copied, made available or printed for distribution. This prospectus is valid only if circulated in compliance with applicable laws. Information on our website (www.nyrstar.com) or any other website does not form part of this prospectus.

We have filed our deed of incorporation and we must file our restated articles of association and all other deeds that are to be published in the Annexes to the Belgian State Gazette with the clerk’s office of the commercial court of Turnhout, where they are available to the public. We are registered with the register of legal entities under enterprise number 0888.728.945. A copy of our most recently restated articles of association and corporate governance charter will also be available on our website after completion of this Offering.

In accordance with Belgian law, we must also prepare annual audited statutory and consolidated financial statements. The annual statutory and consolidated financial statements and the reports of the Board of Directors and statutory auditor relating thereto will be filed with the Belgian National Bank, where they will be available to the public. Furthermore, as a listed company we have to publish summaries of our annual and semi-annual financial statements. These summaries will generally be made publicly available in the financial press in Belgium in the form of a press release. Copies will also be available on our website.

We will also have to disclose price sensitive information, information about our shareholders’ structure and certain other information to the public. In accordance with the Belgian Royal Decree of 31 March 2003 relating to the obligations of issuers of financial instruments admitted to trading on a Belgian regulated market (Arrêté royal relatif aux obligations des émetteurs d’instruments financiers admis aux négociations sur un marché réglementé belge / Koninklijk besluit betreffende de verplichtingen van emittenten van financiële instrumenten die zijn toegelaten tot de verhandeling op een Belgische gereglementeerde markt), such information and documentation will be made available through press releases, the financial press in Belgium, our website (in accordance with the conditions set forth in Article 14 of the Belgian Royal Decree of 31 March 2003), the communication channels of Euronext Brussels or a combination of these media.

53 ENFORCEMENT OF FOREIGN JUDGMENTS AND SERVICE OF PROCESS

United States We are a limited liability company incorporated under the laws of Belgium and the majority of our directors and senior executives reside outside the United States. As a result, it may be difficult for investors to effect service of process within the United States on such persons. In addition, most of our assets are located outside the United States, and it therefore may be difficult to enforce a judgment against us in the United States.

It may also be difficult to enforce against any of our directors or senior executives or us, either inside or outside the United States, judgments obtained in U.S. courts, or to enforce in U.S. courts judgments obtained in courts in jurisdictions outside the United States, in any action based on civil liabilities under the U.S. federal securities laws. There is doubt as to the enforceability in Belgium, whether in original actions or in actions to enforce judgments of U.S. courts, of liabilities based solely on the U.S. federal securities laws.

54 DIVIDEND POLICY

It is the Board of Directors’ present intention to recommend to the Shareholders’ Meeting an annual gross dividend based on a target payout ratio of a minimum of 30% of consolidated net profit after tax. This policy will be reviewed by the Company on at least an annual basis and if the policy changes the Company will inform the market accordingly.

No assurance can be given, however, that the Company will make dividend payments in the future. Such payments will depend upon a number of factors, including our prospects, strategies, results of operations, earnings, capital requirements and surplus, general financial conditions, contractual restrictions and other factors considered relevant by the Board of Directors. Pursuant to Belgian law, the calculation of amounts available for distribution to shareholders, as dividends or otherwise, must be determined on the basis of the Company’s non-consolidated Belgian GAAP financial statements. In accordance with Belgian company law, the Company’s articles of association also require that the Company allocate each year at least 5% of its annual net profits to its legal reserve, until the legal reserve equals at least 10% of the Company’s share capital. As a consequence of these factors, there can be no assurance as to whether dividends or similar payments will be paid out in the future or, if they are paid, their amount. See “Risk Factors — Risks Relating to the Offering — We may not be able to pay dividends in accordance with our stated dividend policy” beginning on page 37.

55 EXCHANGE RATES

The following table sets forth, for the periods and dates indicated, the period-end, average, high and low noon buying rate information as determined by the Federal Reserve Bank of New York for euro from 1 January 2004 through 10 October 2007 expressed in U.S. dollars per euro. This exchange rate information is provided only for your information and does not represent the exchange rates used in the preparation of the financial information included in this prospectus.

Period-end Average rate rate(1) High Low (U.S. dollars per euro) 2004 ...... 1.354 1.248 1.363 1.180 2005 ...... 1.184 1.240 1.348 1.167 2006 ...... 1.320 1.266 1.333 1.186 2007 January ...... 1.300 1.299 1.329 1.290 February ...... 1.323 1.308 1.325 1.293 March ...... 1.337 1.325 1.337 1.309 April ...... 1.366 1.351 1.366 1.336 May...... 1.345 1.352 1.362 1.342 June ...... 1.352 1.342 1.353 1.330 July ...... 1.371 1.373 1.383 1.359 August ...... 1.364 1.363 1.381 1.340 September ...... 1.423 1.392 1.422 1.361 October (through 10 October) ...... 1.416 1.415 1.423 1.409 Note: (1) The average rate is calculated as the average of the month-end figures for the relevant year-long period or the average of the noon buying rates on each business day for the relevant month-long period.

The noon buying rate for the euro on 10 October 2007 was USD 1.416 = EUR 1.00.

The following table sets forth, for the periods and dates indicated, the period-end, average, high and low noon buying rate information as determined by the Federal Reserve Bank of New York for Australian dollars from 1 January 2004 through 10 October 2007 expressed in U.S. dollars per Australian dollar. This exchange rate information is provided only for your information and does not represent the exchange rates used in the preparation of the financial information included in this prospectus.

Period-end Average rate rate(1) High Low (U.S. dollars per Australian dollar) 2004 ...... 0.781 0.738 0.798 0.684 2005 ...... 0.734 0.762 0.797 0.726 2006 ...... 0.788 0.758 0.791 0.706 2007 January ...... 0.774 0.783 0.796 0.772 February ...... 0.789 0.783 0.793 0.773 March ...... 0.810 0.793 0.810 0.773 April ...... 0.833 0.827 0.837 0.813 May...... 0.827 0.825 0.835 0.819 June ...... 0.849 0.842 0.849 0.831 July ...... 0.859 0.868 0.884 0.851 August ...... 0.816 0.829 0.786 0.862 September ...... 0.866 0.848 0.886 0.824 October (through 10 October) ...... 0.899 0.893 0.900 0.885 Note: (1) The average rate is calculated as the average of the month-end figures for the relevant year-long period or the average of the noon buying rates on each business day for the relevant month-long period.

The noon buying rate for the Australian dollar on 10 October 2007 was USD 0.899 = AUD 1.00.

56 The following table sets forth, for the periods and dates indicated, the period-end, average, high and low Australian dollar/euro reference exchange rates as determined by the European Central Bank (“ECB”) from 1 January 2004 through 10 October 2007 expressed in Australian dollars per euro. This exchange rate information is provided only for your information and does not represent the exchange rates used in the preparation of the financial information included in this prospectus.

Period-end Average rate rate(1) High Low (Australian dollars per euro) 2004 ...... 1.746 1.691 1.767 1.578 2005 ...... 1.611 1.632 1.735 1.559 2006 ...... 1.669 1.667 1.726 1.597 2007 January ...... 1.679 1.660 1.679 1.638 February ...... 1.676 1.671 1.682 1.661 March ...... 1.648 1.670 1.695 1.646 April ...... 1.643 1.634 1.643 1.622 May...... 1.627 1.638 1.656 1.624 June ...... 1.589 1.593 1.621 1.582 July ...... 1.595 1.581 1.612 1.554 August ...... 1.669 1.644 1.721 1.596 September ...... 1.607 1.644 1.676 1.607 October (through 10 October) ...... 1.576 1.586 1.602 1.568 Note: (1) The average rate is calculated as the average of the daily rates on each business day for the relevant year- long or month-long period.

The Australian dollar/euro reference exchange rate on 10 October 2007 was AUD 1.576 = EUR 1.00.

57 USE OF PROCEEDS

The Selling Shareholders will receive all of the net proceeds of the Offering, after deduction of underwriting, selling and management commissions and other expenses payable by the Selling Shareholders. The Company will not receive any proceeds from the Offering.

58 CAPITALISATION AND INDEBTEDNESS

The table below sets forth Nyrstar’s unaudited pro forma cash and cash equivalents and capitalisation at 30 June 2007. Since 30 June 2007 Nyrstar’s net debt has not increased and its shareholders’ equity has not decreased. You should read this table in conjunction with “Use of Proceeds” beginning on page 58, “Selected Financial Information” beginning on page 60 and “Operating and Financial Review and Prospects” beginning on page 65 as well as “Nyrstar Pro Forma Consolidated Financial Information” and the notes thereto.

30 June 2007 Pro forma (EUR million) Cash and cash equivalents ...... 100.0 Total current debt(1) ...... 350.0 Guaranteed ...... — Secured ...... — Unguaranteed/Unsecured ...... 350.0 Total debt ...... 350.0 Minority interests ...... 19.9 Shareholders’ Equity(2) ...... 1,423.7 Total equity ...... 1,443.6 Total capitalisation ...... 1,793.6 Net debt(3) ...... 250.0

Notes: (1) For a description of the terms of Nyrstar’s debt, see “Operating and Financial Review and Prospects — Liquidity and Capital Resources — Funding Sources” beginning on page 125. (2) Under the terms of the BCSA, the values of the Selling Shareholders’ respective zinc businesses may be adjusted to reflect the value of Nyrstar as inferred from the Offering. Any adjustment will be achieved by way of an additional capital increase to be effected following the end of the book-building period and subsequent pricing of the ordinary shares offered in the Offering. This adjustment will not affect the number of ordinary shares outstanding, but will affect Nyrstar’s shareholders’ equity, to the extent that the additional capital increase relates to the acquisition of the Umicore Carve-out Group following the reverse acquisition mechanism. For further details regarding this adjustment, see “Related Party Transaction — Business Combination and Shareholders’ Agreement — Additional Capital Increase — Purchase Price Adjustment Based on IPO Proceeds” beginning on page 266. (3) Net debt is equal to total debt less cash and cash equivalents.

59 SELECTED FINANCIAL INFORMATION

Selected Unaudited Nyrstar Pro Forma Consolidated Financial Information The selected unaudited Nyrstar Pro Forma Consolidated Financial Information presented below for the year ended 31 December 2006 and as of and for the six months ended 30 June 2007 has been extracted from the Nyrstar Pro Forma Consolidated Financial Information, included elsewhere in this prospectus. See “Presentation of Financial and Other Information — Nyrstar Unaudited Pro Forma Consolidated Financial Information” beginning on page 48.

The unaudited Nyrstar Pro Forma Consolidated Financial Information includes, in the opinion of Nyrstar management, all significant adjustments necessary to reflect Nyrstar’s pro forma financial results for the periods indicated in accordance with the assumptions and notes described therein. The unaudited Nyrstar Pro Forma Consolidated Financial Information does not, however, include an adjustment for incremental corporate costs, such as overheads, attributable to Nyrstar as a stand-alone entity, which have been estimated at between EUR 15 million and EUR 20 million, as such costs are not considered at this stage to be sufficiently factually supportable.

In addition, in accordance with the BCSA, certain adjustments in respect of modelled working capital, net current tax liabilities and net debt are currently being calculated to the purchase price for the acquisition of the Zinifex Carve-out Group and the Umicore Carve-out Group as described in note 1.3 to the Nyrstar Pro Forma Consolidated Financial Information. These adjustments are not reflected in the unaudited Nyrstar Pro Forma Consolidated Financial Information as they cannot be quantified at this time. This information is expected to be available during the last quarter of 2007 and will primarily affect cash, inventories and accounts receivable. Moreover, as described in note 1.3 to the Nyrstar Pro Forma Consolidated Financial Information, the BCSA also provides that Nyrstar will pay purchase price adjustments to Zinifex and to Umicore in the event that the value of Nyrstar as inferred from this Offering exceeds the aggregate values for which the Zinifex Carve-out Group and the Umicore Carve-out Group were acquired on 31 August 2007 by more than 5 per cent. Such purchase price adjustments would be financed by way of an additional capital increase to be subscribed for in cash by Zinifex and Umicore. Nyrstar will use the proceeds of the additional capital increase to pay to Zinifex and to Umicore the related purchase price adjustments. As Nyrstar is currently unable to estimate the amounts of these purchase price adjustments, if any, which would affect shareholders’ equity and goodwill, they have not been reflected in the unaudited Nyrstar Pro Forma Consolidated Financial Information. See also “Related Party Transactions — Business Combination and Shareholders’’ Agreement — Additional Capital Increase — Purchase Price Adjustment Based on IPO Proceeds” beginning on page 266.

The pro forma adjustments are based on estimates, currently available information and certain assumptions that we believe are reasonable, and which will be revised as additional information becomes available in relation to the closing of the business combination. The pro forma adjustments and certain assumptions are described in the notes to the Nyrstar Pro Forma Consolidated Financial Information beginning on page PF-1.

The selected unaudited Nyrstar Pro Forma Consolidated Financial Information presented below has been prepared and is intended for illustrative purposes only, addresses a hypothetical situation, does not purport to represent the historical results of operations and financial position that we would actually have obtained during the periods presented and is not necessarily indicative of results we expect in future periods. Such information does not purport to be in compliance with Article 11 of Regulation S-X under the Securities Act.

The selected unaudited Nyrstar Pro Forma Consolidated Financial Information should be read in conjunction with the Nyrstar Pro Forma Consolidated Financial Information, notes and supplementary information thereto and the Historical Carve-out Financial Information and the notes thereto and “Cautionary Note Regarding the Presentation of Financial Information Included in this Prospectus”, “Risk Factors” beginning on page 26, “Presentation of Financial and Other Information” beginning on page 44, “Capitalisation and Indebtedness” beginning on page 59 and “Operating and Financial Review and Prospects” beginning on page 65.

60 Year ended Six months ended 31 December 2006 30 June 2007 (EUR million) Pro forma consolidated income statement data(1) Revenue ...... 3,173.3 2,008.9 Result from operating activities before depreciation and amortisation ...... 436.0 182.7 Depreciation and amortisation ...... (70.8) (39.1) Result from operating activities ...... 365.2 143.6 Share of profit of equity accounted investees ...... 15.1 7.5 Result before net financing costs and income tax(2) ...... 380.3 151.1 of which Group share ...... 379.6 149.8 Minority share ...... 0.7 1.3

Notes: (1) See notes 1.3 and 2 to the Nyrstar Pro Forma Consolidated Financial Information beginning on page PF-1 for a presentation and discussion of the adjustments that were made to the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information to prepare the Nyrstar Pro Forma Consolidated Financial Information. (2) The pro forma consolidated income statement has been provided only to the result before net financing costs and income tax level. The pro forma tax profile and gearing of Nyrstar may differ substantially from that of the Zinifex Carve-out Group and the Umicore Carve-out Group, which, historically, have been operated under different corporate structures and, therefore, a comparison of historical net financing cost and income tax expense is not considered to be meaningful, appropriate or representative.

Pro forma consolidated balance sheet data(1)

As of 30 June 2007 (EUR million) Assets Non-current assets Goodwill ...... 188.2 Intangible assets ...... 0.7 Property, plant and equipment ...... 835.7 Investment in associates and joint ventures ...... 95.4 Deferred tax assets ...... 130.5 Other assets ...... 0.9 Total non-current assets ...... 1,251.4 Current assets Inventories ...... 598.9 Trade and other receivables ...... 461.2 Other financial assets ...... 17.6 Current tax assets ...... 8.2 Other assets ...... 8.4 Cash and cash equivalents ...... 100.0 Total current assets ...... 1,194.3 Total assets ...... 2,445.7

61 As of 30 June 2007 (EUR million) Equity and Liabilities Equity Equity attributable to equity holders of the parent ...... 1,423.7 Minority interests ...... 19.9 Total equity ...... 1,443.6 Non-current liabilities Retirement and benefit obligation ...... 33.5 Non-current provisions ...... 127.2 Deferred tax liabilities ...... 154.8 Total non-current liabilities ...... 315.5 Current liabilities Borrowings ...... 350.0 Trade and other payables ...... 259.4 Other financial liabilities ...... 23.5 Current tax liabilities ...... 20.1 Current provisions ...... 33.6 Total current liabilities ...... 686.6 Total liabilities ...... 1,002.1 Total equity and liabilities ...... 2,445.7

Note: (1) See notes 1.3 and 2 to the Nyrstar Pro Forma Consolidated Financial Information beginning on page PF-1 for a presentation and discussion of the adjustments that were made to the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information to prepare the Nyrstar Pro Forma Consolidated Financial Information.

Selected Unaudited Historical Carve-out Financial Information The selected Historical Carve-out Financial Information for the Zinifex Carve-out Group presented below as of and for the years ended 31 December 2005 and 2006 and as of and for the six months ended 30 June 2006 and 2007 has been extracted from the Zinifex Carve-out Group Combined Selected Historical Financial Information, included elsewhere in this prospectus. See “Presentation of Financial and Other Information — Zinifex Carve-out Group Unaudited Combined Selected Historical Financial Information” beginning on page 45.

The selected Historical Carve-out Financial Information for the Umicore Carve-out Group presented below as of and for the years ended 31 December 2004, 2005 and 2006 and as of and for the six months ended 30 June 2006 has been extracted from the Umicore Carve-out Group Combined Selected Historical Financial Information, included elsewhere in this prospectus. The selected Historical Carve-out Financial Information for the Umicore Carve-out Group as of and for the six months ended 30 June 2007 has been extracted from the Audited Umicore Carve-out Group Combined Financial Statements, included elsewhere in this prospectus. See “Presentation of Financial and Other Information — Umicore Carve-out Group Unaudited Combined Selected Historical Financial Information” beginning on page 46.

The accounting policies, presentations and definitions applied in the Zinifex Carve-out Group historical financial information (including measures not prepared in accordance with generally accepted accounting principles (“non-GAAP”), such as “EBITDA”) differ in certain significant respects from those applied in the Umicore Carve-out Group historical financial information, and accordingly such information is not directly comparable. In addition, neither the Zinifex Carve-out Group Combined Selected Historical Financial Information nor the Umicore Carve-out Group Combined Selected Historical Financial Information is necessarily indicative of our future operating results or financial position and neither purports to be indicative of what our operating results and financial position would have been if we had operated as a single entity, or if the Zinifex Carve-out Group or the Umicore Carve-out Group had been operated as stand-alone entities, as of any of the dates or for any of the periods presented.

62 The Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information include, in the opinion of Zinifex and Umicore, respectively, all significant adjustments necessary to present fairly the results of the Zinifex Carve-out Group and the Umicore Carve-out Group, respectively, for the periods presented. The adjustments and certain assumptions are described in the notes to the Historical Carve-out Financial Information beginning on page F-1.

You should read the unaudited selected Historical Carve-out Financial Information and operating data presented below in conjunction with the information contained in “Cautionary Note Regarding the Presentation of Financial Information Included in this Prospectus”, “Risk Factors”, “Presentation of Financial and Other Information” and “Operating and Financial Review and Prospects”, as well as the Historical Carve-out Financial Information and the notes thereto.

Zinifex Carve-out Group Selected Unaudited Income Statement Information before Net Financing Costs and Income Tax

Six months ended Year ended Six months ended 31 December 31 December 30 June 2004 2005 2006 2006 2007 (EUR million) Revenue ...... 476.2 1,134.1 2,126.8 954.3 1,242.7 Profit from operating activities before depreciation and amortisation (EBITDA)(1) ...... 23.8 88.1 387.5 153.5 131.5 Depreciation and amortisation ...... 14.4 (29.6) (37.4) (17.4) (21.6) Profit from operating activities ...... 9.4 58.5 350.1 136.1 109.9 Share of profit of equity accounted investees ...... — — — — — Profit before net financing costs and income tax ..... 9.4 58.5 350.1 136.1 109.9 Note: (1) The Zinifex Carve-out Group defines EBITDA as profit before net financing costs, income tax and depreciation and amortisation (or “profit from operating activities before depreciation and amortisation”). This measure is presented as we believe that it and similar measures are frequently used in the zinc and lead smelting, refining and alloying industries as a means of evaluating a company’s operating performance. Because not all companies calculate EBITDA identically, the presentation of Zinifex Carve-out Group EBITDA may not be comparable to other similarly titled measures of other companies. The calculation of Zinifex Carve-out Group EBITDA is different from the calculation of Umicore Carve-out Group EBITDA, in that EBITDA as determined by Zinifex includes non-cash expenses in profit before net financing costs and income tax. The non-cash expenses included in profit before net financing costs and income tax include other non-cash expenses of EUR 11.0 million in the year ended 31 December 2005 and EUR 9.8 million in the year ended 31 December 2006, and EUR 4.7 million in each of the six month periods ended 30 June 2006 and 2007. EBITDA is a non-GAAP measure, is not a measure of financial position, liquidity or profitability and should not be considered as an alternative to net profit/(loss) or operating cash flows determined in accordance with GAAP. See “Presentation of Financial and Other Information” beginning on page 44.

63 Umicore Carve-out Group The following table sets forth the Umicore Carve-out Group selected historical financial information. As noted elsewhere, this financial information does not form the basis of the discussion of the Umicore Carve-out Group’s results of operations in the section “Operating and Financial Review and Prospects — Results of Operations of the Umicore Carve-out Group”, which instead is based on financial information adjusted to exclude the effects of (i) certain items that management considers to be non-recurring, (ii) “structural” metal price and currency hedging engaged in by Umicore and (iii) application of IAS 39. See “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group” beginning on page 103.

Selected Unaudited Income Statement Information before Net Financing Costs and Income Tax

Year ended Six months ended 31 December 30 June 2004 2005 2006 2006 2007 (EUR million) Turnover ...... 712.8 713.2 1,107.6 531.7 798.7 Profit/(loss) from operating activities before amortisation, depreciation and other non-cash expenses ...... 87.9 23.1 23.2 (6.8) 45.8 EBITDA(1) ...... 89.0 25.9 32.4 (1.3) 49.1 Depreciation and amortisation ...... 34.4 39.2 25.4 12.1 10.7 Other non-cash expenses(2) ...... 5.3 30.4 32.8 — (17.0) Profit/(loss) from operating activities ...... 48.2 (46.5) (35.0) (18.9) 52.1 Share of profits in investments accounted for using the equity method ...... 1.1 2.8 9.2 5.5 3.3 Profit/(loss) before net financing costs and income tax ...... 49.3 (43.7) (25.8) (13.4) 55.4 Notes: (1) The Umicore Carve-out Group defines EBITDA as profit/(loss) before net financing costs, income tax, and depreciation and amortisation, excluding non-cash expenses. EBITDA includes share of profits in investments accounted for using the equity method. This measure is presented as we believe that it and similar measures are frequently used in the zinc and lead smelting, refining and alloying industries as a means of evaluating a company’s operating performance. Because not all companies calculate EBITDA identically, the presentation of the Umicore Carve-out Group’s EBITDA may not be comparable to other similarly titled measures of other companies. The calculation of Umicore Carve-out Group EBITDA is different from the calculation of Zinifex Carve-out Group EBITDA, in that EBITDA as determined by Umicore excludes non-cash expenses in profit/(loss) before net financing costs and income tax and therefore must be added back in to calculate EBITDA. EBITDA is a non-GAAP measure, is not a measure of financial position, liquidity or profitability and should not be considered as an alternative to net profit/(loss) or operating cash flows determined in accordance with GAAP. See “Presentation of Financial and Other Information” beginning on page 44. (2) Other non-cash expenses primarily comprise increases/reversals in provisions and changes in IAS 39 effects. See “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Combined Results of Operations for the Umicore Carve-out Group” beginning on page 105.

64 OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis should be read in conjunction with the unaudited Historical Carve-out Financial Information and the notes thereto included elsewhere in this prospectus, the unaudited Nyrstar Pro Forma Consolidated Financial Information and the notes thereto included elsewhere in this prospectus and the unaudited information included in “Selected Financial Information”. For a description of the basis of preparation of the unaudited Historical Carve-out Financial Information and the unaudited Nyrstar Pro Forma Consolidated Financial Information, see “Basis of Preparation” in the unaudited Zinifex Carve-out Group Combined Selected Historical Financial Information beginning on page F-1, “Basis of Preparation” in the unaudited Umicore Carve-out Group Combined Selected Historical Financial Information beginning on page F-8 and note 2 to the unaudited Nyrstar Pro Forma Consolidated Financial Information beginning on page PF-1 and “Presentation of Financial and Other Information” beginning on page 44.

Audited Zinifex Carve-out Group Combined Financial Statements for the year ended 30 June 2007 and Audited Umicore Carve-out Group Combined Financial Statements for the six months ended 30 June 2007 are included in Appendix III to this prospectus. These financial statements are not used as the basis of the discussion in this section, since they do not include comparative information for the prior financial periods. Rather, we have based the following operating and financial review principally on the Zinifex Carve-out Group Combined Selected Historical Financial Information and, after adjustment for certain items further described below, the Umicore Carve-out Group Combined Selected Historical Financial Information. Moreover, the Audited Zinifex Carve-out Group Combined Financial Statements are presented on the basis of Zinifex’s financial year, which ends on 30 June. Nyrstar’s financial year-end is 31 December.

The Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information were prepared on different bases, as discussed in “Presentation of Financial and Other Information” beginning on page 44.

For purposes of the discussion and analysis set forth herein, we have first excluded from the unaudited Umicore Carve-out Group Combined Selected Historical Financial Information the effects of (i) certain items that management considers to be non-recurring and (ii) IAS 39 impacts, consistent with Umicore’s financial reporting and communications, and we have also excluded the effect of the “structural” metal price and currency hedging engaged in by Umicore. Accordingly, the discussion and analysis of the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information should be read separately and the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information cannot and should not be directly compared across the same reporting periods or similarly titled line items. You are urged to read the notes to the Zinifex Carve-out Group Combined Selected Historical Financial Information, the Umicore Carve-out Group Combined Selected Historical Financial Information, the Audited Zinifex Carve-out Group Combined Financial Statements and the Audited Umicore Carve-out Group Combined Financial Statements included elsewhere in this prospectus, as well as explanations of the adjustments made to the Umicore Carve-out Group Selected Historical Financial Information included below under “— Results of Operations for the Umicore Carve-out Group — Presentation of Adjusted Results for the Umicore Carve-out Group” beginning on page 104 for a discussion of the different bases of preparation and accounting policies used.

Moreover, further adjustments have been made to each of the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information in order to prepare the unaudited Nyrstar Pro Forma Consolidated Financial Information. As a result, the unaudited Nyrstar Pro Forma Consolidated Financial Information is not directly comparable to either the Zinifex Carve-out Group Combined Selected Historical Financial Information or the Umicore Carve-out Group Combined Selected Historical Financial Information in respect of the same reporting periods or similarly titled line items.

In addition, for purposes of presenting pro forma results in a manner consistent with the way management views and anticipates managing the combined Nyrstar business, we have also presented and discussed below certain pro forma and modified pro forma information. The unaudited Nyrstar Pro Forma Consolidated Financial Information illustrates what Nyrstar’s results might have been had the acquisition by Nyrstar of the Zinifex Carve-out Group and the Umicore Carve-out Group taken place at the beginning of the relevant period. This information is also presented after further modifications to illustrate what Nyrstar’s results might have been had Nyrstar’s metal price risk and currency risk hedging practices and policies been in effect at Umicore. (the

65 “Unaudited Modified Nyrstar Pro Forma Financial Information”). Such modifications are intended to depict the hypothetical impact of variations in the historic hedging arrangements otherwise reflected in the Umicore Carve-out Group Combined Selected Historical Financial Information, which forms part of the basis for the Unaudited Modified Nyrstar Pro Forma Financial Information.

The following discussion is based on unaudited information and contains certain forward-looking statements that reflect the plans, estimates and beliefs of the Company. The actual results of the Company may differ materially from those discussed in these forward-looking statements. See “Forward-Looking Statements” beginning on page 39. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this prospectus, including “Risk Factors” beginning on page 26.

Overview of Nyrstar Nyrstar was established on 13 April 2007 to be the holding company for the Zinifex Carve-out Group and the Umicore Carve-out Group. The Zinifex Carve-out Group and the Umicore Carve-out Group were contributed to Nyrstar on 31 August 2007. Prior to that contribution, Nyrstar had minimal assets and conducted no operations.

The acquisition by Nyrstar of the Zinifex Carve-out Group and the Umicore Carve-out Group has been accounted for as a reverse acquisition in accordance with IFRS 3. Considering the relative sizes of the net assets and operations of the businesses respectively contributed by Zinifex and by Umicore to the Company, the Zinifex Carve-out Group has been identified as the acquirer for accounting purposes while Nyrstar and the Umicore Carve-out Group (including the equity-accounted 24.9% investment in Padaeng Industry Public Company Limited) have been considered as the acquirees for accounting purposes. Accordingly, the assets and liabilities of the Zinifex Carve-out Group have been accounted for in the Nyrstar Pro Forma Consolidated Financial Information based on their pre-combination carrying amounts, restated to comply with the Nyrstar accounting policies, while the assets and liabilities of Nyrstar and the Umicore Carve-out Group have been recorded at their fair values. A final determination of the estimated fair values of the assets and liabilities of the Umicore Carve-out Group will be based on the actual assets acquired as of the date of completion of the business combination.

Due to this accounting treatment, Nyrstar’s first consolidated financial statements following the Offering will represent a continuation of the combined financial statements of the Zinifex Carve-out Group, as accounting parent, and will present the six-month period ending 31 December 2007 alongside the Zinifex Carve-out Group’s combined financial statements for the twelve-month period ended 30 June 2007, as comparatives. In addition, Nyrstar’s first consolidated financial statements following the Offering, for the six-month period ending 31 December 2007, will include only four months of Nyrstar’s and the Umicore Carve-out Group’s results, from 1 September 2007.

Nyrstar smelts, refines and alloys zinc, lead and other metals. Our operations include zinc smelters previously owned and operated by Zinifex and Umicore, including Hobart (Australia), Budel (the Netherlands), Clarksville (United States), Balen (Belgium) and Auby (France) and a lead smelter in Port Pirie (Australia). We also fully own Overpelt (Belgium) (alloying, casting and oxide washing facility) and GM-Metal (zinc reprocessing and recycling operation in France), have major shares in the joint ventures Galva 45 (zinc galvanising in France), Australian Refined Alloys (“ARA”) (lead acid battery recycling in Australia), Genesis Alloys (zinc alloying in China), Nyrstar Yunnan Zinc Alloys (zinc smelting and alloying in China) and Föhl China (die-casting in China) and own an interest in Padaeng Industry Public Company Limited (zinc smelting and mining in Thailand). For a discussion of the legal ownership of Föhl China and corresponding effect on the financial information presented in this prospectus, see “Presentation of Financial and Other Information — Föhl China Co., Ltd” beginning on page 49.

In 2006 and the first half of 2007, on a pro forma basis, the Company was the world’s largest producer by volume of refined zinc and zinc alloys, producing over 1.0 million tonnes and 540,000 tonnes, respectively. We are also a leading primary lead smelting and refining company, having produced approximately 224,000 tonnes in 2006 and 116,000 tonnes in the first half of 2007 on a pro forma basis. Although our principal products are zinc and lead metal, given the polymetallic nature of the zinc and lead concentrates that we process, we are also one of the world’s largest producers of refined silver and produce substantial amounts of other valuable by-products such as indium, copper, gold, cadmium and sulphuric acid. For the year ended 31 December 2006,

66 on a pro forma basis, Nyrstar had revenue of EUR 3,173.3 million and it generated EBITDA of EUR 451.1 million. In the six months ended 30 June 2007, on a pro forma basis, Nyrstar had revenue of EUR 2,008.9 million and EBITDA of EUR 190.2 million.

Significant Factors Affecting Nyrstar’s Results of Operations Our zinc and lead smelters are essentially processing businesses that generate earnings on the concentrates and other feedstocks they convert to metal. The gross profits we are able to realise through the production and sale of zinc and lead metal are affected by a number of interrelated factors, most notably the commodity prices for zinc and lead and the treatment charges (“TCs”) for processing of zinc and lead concentrates. These pricing dynamics are conceptually similar but differ in specifics for zinc, lead and other base metals. The focus in the discussion below is on zinc, since refined zinc metal is by far our primary product.

Zinc Prices The market price of zinc is the primary factor affecting our results of operations. It directly affects our cost of sales through the price of the zinc concentrates and secondaries that we purchase to produce our refined metal, as well as the concessions we receive from TCs and the revenues we receive from sales of “free metal” (as described below under “— Gross profit realised by zinc smelters”). The relationship between the supply of zinc metal contained in zinc concentrates and secondary materials and the demand for zinc metal by the industries that use zinc in the production of their products (the so-called “first use” industries) is critical in determining the global market price of zinc. The market price for zinc is typically quoted as the daily cash seller and settlement price established by the London Metal Exchange (the “LME”). Most of our zinc business is conducted with reference to this price. Our Chinese businesses, however, reference the zinc price quoted by the Shanghai Metal Market, the Shanghai Non-ferrous Metals Market and the Guangdong Non-ferrous Metals Market in pricing their raw materials and products. LME zinc prices are influenced by the global supply of and demand for zinc metal. The supply of zinc metal is a function of the amount of zinc concentrates and secondary materials produced and the availability of smelting capacity to convert them to refined metal. The demand for zinc metal is driven by numerous factors, including general economic activity both globally and regionally, industrial production, conditions in end-use markets such as the housing, construction and automotive industries, and other factors. Zinc production growth has historically been closely correlated with global industrial production growth. Trends in the rate of worldwide industrial production growth overall and the rate of growth in the particular markets in which zinc end users operate (e.g., the automotive and construction sectors) affect demand for our products and significantly influence our performance. According to Brook Hunt, from 2002 to 2009, the average annual global zinc consumption growth will be 4.5%, driven by strong growth in zinc consumption in China and other developing economies. China has been in recent years and continues to be an increasingly important source of both zinc consumption and supply. China was the fastest growing zinc consumer in the world in 2006 according to Brook Hunt. China has also become the largest zinc mining country in the world, accounting for 27% of global zinc mine output in 2006, as well as the largest smelting country, accounting for 30% of global smelter output in 2006. Accordingly, the dynamics of the Chinese market, including political and economic policies adopted by the Chinese government, can have a very significant effect on the global zinc market.

LME zinc prices have been characterised by significant fluctuations over the last 20 years, predominantly as a result of the interplay between the supply of and demand for zinc, as summarised above. The zinc price can also be affected, and appears to have been to a significant extent in recent years, by the participation of financial investors (as opposed to consumers of zinc) in the market. The volatility of LME zinc prices means that our sales and raw materials purchase costs may vary considerably from period to period. Movements in zinc prices also influence the amount of revenue we actually receive from TCs (the “realised treatment charge”), as discussed in “— Gross profit realised by zinc smelters — Treatment charges” below.

LME prices for zinc have been at very high levels recently, with average LME prices in 2006 and the first half of 2007 more than twice as high as they were in 2005. The table below sets forth historical zinc prices in U.S. dollars per tonne since 2000:

Six months ended 2000 2001 2002 2003 2004 2005 2006 30 June 2007 LME price (nominal) ...... 1,128 885 778 827 1,047 1,381 3,274 3,560 LME price (real) ...... 1,353 1,033 893 929 1,145 1,461 3,256 3,635 Source: Brook Hunt Note: Nominal prices are adjusted to real prices using the U.S. 2007 consumer price index.

67 Brook Hunt forecast a rise in average zinc prices from 2006 to 2007 before prices start to decline in 2008 and decline significantly in 2009. As of 28 September 2007, the LME price was U.S. dollar 3,058.5 per tonne. For a further discussion of the zinc price dynamics and trends, both historical and forecast, see “The Zinc and Lead Smelting and Alloying Industries” beginning on page 136.

Gross Profit Realised by Zinc Smelters Zinc smelters are essentially processing businesses that achieve a margin on the concentrates and other feedstocks they process while in large part the price for the underlying metal is effectively passed through from the miner supplying the concentrate or the other feedstock supplier to the smelter’s customer. The gross profit realised by the smelting and refining of zinc is composed of: • TCs, penalties paid by the miner to the smelter and location advantage concessions; • The value of “free” zinc (i.e., refined zinc produced by the smelter over and above the metal content the smelter has paid for in concentrates it purchases from the miner); • Metal premiums (i.e., sales of refined metal made by the smelter above the LME zinc reference price); and • By-product sales.

While the contributors to smelter margins will vary according to the relationship between zinc prices and TCs, we and other smelters typically obtain the majority of our margins from TCs and thereafter from free metal, metal premiums and by-product sales. Due to market conditions in the period under review and currently, however, with zinc prices and other metal prices having risen sharply and currently being well above historical highs, and with regional supply balances strained in certain areas such as Europe, resulting in conditions favourable to premium pricing, free metal, metal premiums and by-product sales have become increasingly important contributors to smelter margins. By-product sales can vary significantly from year to year, as a result of fluctuations in prices and production volumes. The impact of penalties and location advantage concessions is usually relatively small.

The following chart breaks down the relative contributions of TCs, free metal, metal premiums and by-product sales to the gross profit of zinc smelters:

700

600

500

400

300 USD/t concUSD/t

200

100

0 1997 1999 2001 2003 2005

TC Bonus Zinc Net zinc premia By-product credits

Source: Brook Hunt

The relative contributions of the elements of Nyrstar’s pro forma gross profit for 2006 were, in order of magnitude, treatment charges (49%), free metal (22%), net zinc premia (12%) and by-product credits (17%).

68 Treatment Charges The market price of zinc is a key component in determining the value of the zinc contained in concentrate. The dynamics of how that value is shared between the mining companies, as suppliers of zinc concentrates, and smelters are driven primarily by the relationship between the global supply of zinc concentrate by the mining companies and the global demand for zinc concentrate by the smelters. In a market situation where the demand for zinc concentrates is greater than the supply, a greater share of the zinc metal value typically goes to the miner. Conversely, when concentrates are relatively abundant, the opposite occurs and a greater share typically goes to the smelter.

Negotiation of the TC is the key mechanism that enables the value of the contained zinc in concentrate to shift between the miner and the smelter.

As is customary in the industry, we generally negotiate TCs with each supplier of zinc concentrate annually, early in the contract year, based on our and the miner’s expectations of future market conditions. In any given year, TCs (negotiated by us and other smelters) tend to settle around norms established through negotiations between the major buyers and sellers of concentrate. These norms are commonly referred to as the “Western benchmark” TC.

The TC is treated as a concession by the miner to the smelter and is deducted from the price payable for zinc concentrate by the smelter. The TC typically involves a base charge, which is agreed at a reference zinc basis price. Contracts will usually contain a formula that causes the agreed base TC to be increased or decreased by a fixed percentage of each U.S. dollar that the zinc price used to calculate the price of the concentrate is above or below the agreed zinc basis price. These upward and downward adjustments are typically referred to as “escalators” and “de-escalators”, respectively.

The base TCs in the industry and in our concentrate contracts were lower in 2006 than in 2005, after making allowance for the changed basis price, due to the fact that global supplies of concentrate were tighter in 2006. Due to the sharp increase in zinc prices during 2006, however, there was a substantial increase in the realised TC (the actual TC achieved after giving effect to the escalators and de-escalators) generally and in our own concentrate contracts in 2006 as compared to 2005. In 2007, we and the industry in general have fixed the base TCs, zinc basis prices and escalator and de-escalator percentages at levels quite different from those in place in 2006 and after taking account of the effect of actual zinc prices, our realised TCs in 2007 to date have been lower than those achieved in 2006.

Our actual realised TC going forward will be affected by the relative increases in concentrate supply and smelter capacity utilisation as well as zinc price trends. For a discussion of the dynamics underlying TCs and recent and forecast trends in TCs, see “The Zinc and Lead Smelting and Alloying Industries” beginning on page 136.

Penalties In some cases, concentrates contain impurities, such as iron, that cause difficulties in the refining process. In these circumstances, the concentrate purchase contract will typically allow the smelter to take a deduction from the price it pays for the concentrate. Smelters and miners will negotiate the level of this deduction, known as the “penalty”, having regard to the same factors that affect the annual TC negotiations. The penalty is therefore essentially a further concession on the price of the concentrate. In 2005, 2006 and the first half of 2007, penalties had only a small effect on our gross profit.

Location Advantage Concessions It is customary for miners to bear the costs of transporting concentrate to the port of discharge nearest to the smelter. Smelters that are located close to mines, for example our Hobart smelter which is close to the Zinifex Rosebery mine, or to regional concentrate shipping hubs, such as Antwerp, as is the case for our European smelters, are well-placed to negotiate advantageous commercial terms reflecting a share of the transportation cost savings the miner will achieve by not sending the concentrate to more distant smelters. Most of our smelters have benefited from this practice, including our Auby, Balen, Hobart and Port Pirie smelters. We have also started to benefit from such arrangements at Clarksville with the reopening of the nearby Tennessee Valley mines in 2007. See “Business — Business Description — Clarksville” beginning on page 198.

69 Free Zinc Free zinc is the value of the difference between the amount of zinc that is paid for in the concentrates and the total zinc recovered for sale by the smelter. In a typical concentrate contract, we pay the miner for 85% of the contained zinc. 85% is the industry standard and has been for many years. We do not currently anticipate any change in this standard. Depending on concentrate quality and production efficiencies, Nyrstar’s zinc smelters currently achieve zinc recoveries of between 91% and 98%. The value of the free zinc is retained by the smelter. The profit we obtain from free zinc is a factor of our total production of refined zinc tonnage and the realised zinc price. In 2005, 2006 and the first half of 2007, the significant increase in zinc prices has had the most pronounced effect on the margin we received from free zinc, and the percentage of our gross profit generated by free zinc sales increased substantially over the period.

We are planning to further upgrade some of our smelters to increase their efficiency and recovery rate, with the intention of increasing the amount of free zinc that we recover.

Premiums The premium obtained on zinc sales is the difference between the base LME price and the higher price which smelters can achieve on sales of the refined zinc metal after deducting distribution costs and accounting for the cost of providing credit to the customer. The premium reflects a combination of factors, including the service provided by the smelter in delivering zinc of a certain size, shape or quality specified by its customers and transportation costs, as well as the supply and demand conditions prevailing in the regional or local market where the metal is sold. Premiums tend to vary from region to region as transportation costs and the value attributable to customer specifications tend to be influenced by regional or local customs rather than being a function of global dynamics. A further factor influencing premiums is that zinc metal producers are increasingly manufacturing specific zinc alloys that target niche markets in galvanising, die-casting and other smaller segments. These alloys have in recent years and currently continue to attract premiums above commodity zinc prices that reflect the additional costs of production and intangible factors such as brand and market perception. As production of such alloys increases, however, premiums could come under pressure. Premiums for our zinc products are generally negotiated annually for one-year periods, with customers having the ability to vary monthly volume deliveries within an agreed range depending on their production requirements. We produce a range of products, including value-added alloys, on which we are typically able to earn a premium per tonne over the LME base price and to differentiate our products based on quality. These products include our ZAMAK, Overcor, Dinslaken, EZDA and GZ brands, which are produced primarily at Balen and Overpelt, Hobart and Genesis and are used for zinc die-casting. We intend to build on our leading position in the supply of zinc alloys to the galvanising steel industry by identifying new customers and markets for our value- added products and increasing the proportion of these products in our sales portfolio. See “Business — Strategy” beginning on page 165. In 2006, on a pro forma basis and excluding sales in the U.S., Nyrstar estimates that the average premium per tonne to the LME zinc price that it obtained on SHG zinc products sold by it ranged from USD 200 to USD 300, the premium per tonne for galvanising alloys sold by it was 20% to 40% higher than this SHG premium per tonne and the premium per tonne for die-cast alloys sold by it was 35% to 50% higher than this SHG premium per tonne.

By-products Although our principal products are zinc and lead metal, we also sell silver, copper, gold, sulphuric acid and other by-products of the process of refining zinc and lead. The quantity of by-products we produce is dependent on a number of factors including the chemical composition of the concentrate and the recovery rates we achieve. Concentrates from some mines contain higher levels of by-product metals than concentrates from other mines. In addition, the higher the recovery rate, the greater the amount of by-product that can be produced to be sold. The revenue we generate from sales of by-products is also dependent on the market prices for those products. The effect of sales of by-products on our operating results can therefore be highly variable.

We are one of the leading refined silver producers in the world. In 2005, 2006 and the first half of 2007, on a pro forma basis, we produced approximately 13.5 million troy ounces, 11.5 million troy ounces and 5.5 million troy ounces of refined silver, respectively. Our refined silver is produced primarily at Port Pirie and is sourced from silver contained in the concentrates we purchase as well as from processing residues from Hobart. A significant portion of the silver content contained in both zinc and lead concentrates is normally included in the price we pay to the miner. As a result, we do not get the full benefit of the value of the refined silver we produce, as we do with some of the other by-product metals. The silver price has been trending upwards since 2005,

70 although there has not been a constant rise in the price. The benchmark London Bullion Market Association spot fixing price hit a 25-year high of USD 14.94 per troy ounce in May 2006 and the average price for 2006 was USD 11.55 per troy ounce, the highest annual average since 1980. We sell most of our silver under contracts that are renewed annually.

Another important by-product is sulphuric acid which is manufactured from the sulphur dioxide gas generated from roasting zinc concentrates. While the zinc smelters use sulphuric acid in their leach plants, almost all of this requirement is generated in the electrolysis plant and only small amounts of the sulphuric acid produced by our roasters is used in our facilities, leaving the rest available for sale. Apart from the acid we produce at our Hobart and Port Pirie smelters, which is sold pursuant to a long-term off-take arrangement, the sulphuric acid we produce is sold under annual contracts, most of which have been in place for many years.

We currently produce indium as a by-product and are seeking to increase our recovery of it as it has become increasingly valuable. Global demand for indium has increased substantially over recent years, driven by its main application as indium tin oxide used in flat panel television and video displays. As of 30 June 2007, refined 99.7% indium was trading at approximately USD 710 per kilogramme. We have an indium recovery plant at Auby that after an initial ramp-up phase is expected to achieve target output levels by the end of 2007. We expect to produce indium concentrate from this process, which we expect to sell under a long-term off-take agreement to Umicore’s refining business.

Transactional Hedging of Metal Price and Currency Exposure The majority of our concentrates and metal purchases are based on the London Metal Exchange (“LME”) reference price in U.S. dollars. The underlying metal price used to determine the amount we pay for metal in the raw materials that we purchase is normally an average of the LME price over an agreed period of time, typically a month. Similarly, when we sell our products, a portion of the price we charge is an average of the underlying metal price over an agreed period of time or a fixed forward metal price. If the underlying metal price were to be constant or flat, the price we pay for the metal contained in the raw materials we purchase would be passed through to our customers as part of the price we charge them for our products. However, because of the lapse of time between the conversion of purchased raw materials into products and the sale of products, the volatility in the LME price creates differences between the average price we pay for the contained metal and the price we receive for it. Accordingly, we are exposed to any fluctuations in price between the moment we purchase raw materials (i.e., when we “price-in” the metal) and the moment we sell our products to our customers (i.e., when we “price-out” the metal). The times at which we “price-in” and “price-out” are also referred to as “Quotational Periods” (“QP”).

At any given time we are likely to hold metal, either as work-in-progress or stock on hand, that has been “priced in” but not “priced out”. As this metal remains exposed to fluctuations in the underlying metal price until it is “priced out”, we call this metal “Metal at Risk”. The actual Metal at Risk at any given point in time will fluctuate with deliveries of raw materials and production levels. To the extent we are unable to effectively manage (or hedge) our Metal at Risk, the results of our operations may be materially adversely affected. We monitor Metal at Risk on a regular basis and intend to undertake hedging to mitigate the metal price exposure and the related currency exposure in what we refer to as “transactional hedging”.

Both Zinifex (although not with respect to concentrates it sourced from its own mines and approximately 25% of the raw materials it sourced from non-Zinifex mines) and Umicore (although not with respect to metal permanently tied up in the majority of Umicore’s key operations) hedged their Metal at Risk by transactional hedging. The impact of Zinifex’s unhedged exposure is found in the “Price differentials (QP terms)” component of gross profit in the discussion of the Zinifex Carve-out Group’s results below. Except with respect to the quantities of metal treated as permanent inventory noted above, the Umicore Carve-out Group hedged all of its paid and recovered metal, including zinc and silver, and therefore does not have a similar component of gross profit, nor will Nyrstar as it similarly intends to hedge all of its paid and recovered metal.

Except with respect to hedges of the Zinifex Carve-out Group related to well-identified fixed price sales, neither of the carve-out groups qualified for IAS 39 hedge accounting on their transactional hedging activities. The absence of hedge accounting means that the hedging instruments are measured at fair value (i.e., marked to market) at each financial statement date while the underlying hedged items are carried at cost. This mismatch introduces an element of non-cash volatility in results. Accordingly, in the discussion of the Umicore Carve-out Group results below, the effects of the non-application of IAS 39 hedge accounting are separately quantified as “IAS 39 effects” and excluded from the results that are the basis of the detailed discussion. These effects are not

71 separately quantified and discussed in the discussion of the Zinifex Carve-out Group results below as they were not significant (due in part to the substantially lower volume of transactional hedging conducted historically by the Zinifex Carve-out Group, given the natural hedge it enjoyed through internal sourcing of concentrates).

Structural Hedging of Metal Price and Currency Exposure In addition to the transactional hedging discussed above, Umicore historically hedged a substantial portion of its future exposure to the risk of fluctuations in zinc and other metal prices. It engaged in a practice which it referred to as “structural hedging” and which is referred to as “cash-flow hedging” for IFRS purposes, which is the forward hedging of metal price exposure that derives from the impact that metal prices have on TCs and on free metal recovered from materials supplied for treatment and refining. Specifically, it forward hedged its forecasted exposure to metal prices and currency risk when metal prices expressed in euro or exchange rates were above their historical averages and were at levels where attractive margins could be secured. This structural hedging included the use of forward contracts on metals and forward contracts on currencies. Zinifex did not engage in structural hedging, but engaged only in transactional hedging. Nyrstar currently engages only in transactional hedging as outlined above. Nyrstar currently does not undertake structural hedging, meaning that whilst our Metal at Risk exposure and related currency exposure are hedged, our results are still exposed to the effect of fluctuations in zinc, lead and other metal prices and currency exchange rates. Given this current practice of Nyrstar, in the discussion of the Umicore Carve-out Group’s results of operations below, the aggregate effect of structural metal hedging and the structural hedging of currency exposure has been separately quantified and excluded from the detailed discussion of “adjusted” results. The effect of structural metal hedging and the structural hedging of currency exposure was not, however, excluded in the preparation of the Nyrstar Pro Forma Consolidated Financial Information included elsewhere in this prospectus, although for illustrative purposes only, the unaudited Nyrstar Pro Forma Consolidated Financial Information modified to reflect Nyrstar’s transactional and structural hedging policy is set forth below under “— Nyrstar Financial and Operating Data — Nyrstar Modified Pro Forma Consolidated Income Statement Data”. Nyrstar may review its hedging policy from time to time and if its policy changes it will inform the market accordingly.

Gross Profit Realised by our Port Pirie Lead Smelter In broad terms, the various economic factors influencing the gross profit we earn at our Port Pirie smelter are comparable to those applicable to our zinc smelters, as are the mechanics of allocating the value of the metal in lead concentrates between the miner and the smelter. The gross profit of our lead smelter has the same components as the gross profit of our zinc smelters. There are, however, certain significant differences between the contributors to the gross profit earned at Port Pirie compared to a zinc smelter, including the amounts of the metals that we pay for and the relative contributions of the by-products.

Lead Price Lead is the most widely recycled of all base metals. Brook Hunt estimates that approximately 60% of all refined lead is sourced from recycling. As refined lead prices have historically been one of the lowest of the base metals, the value of lead concentrates has also been low. Consequently, lead concentrates have been produced primarily as by-products of predominantly zinc mines, except where there is significant precious metal content which increases the value of the lead concentrate and provides an incentive to mine for it.

While historically relatively low, LME prices for lead have been at very high levels recently, with average LME prices more than 30% higher in 2006 than in 2005 and average prices for 2007 (through the end of September) more than 84% higher than for 2006.

Brook Hunt forecasts that lead prices will continue to rise during 2007, declining in 2008 and then declining still further in 2009. For a further discussion of the lead price dynamics and trends (both historical and forecast), see “The Zinc and Lead Smelting and Alloying Industries — Lead” beginning on page 154.

Lead Treatment Charges Owing to the historically low refined lead price and the degree of lead recycling, there has been little incentive to develop new lead mines. The rate of industrialisation in China (and other developing countries) has seen a strong increase in demand for lead metal over the past few years. As a consequence, there has been an increase in lead smelting capacity which has in turn caused a significant global shortage of lead concentrate resulting in more favourable pricing terms for miners. As a result, the benchmark TC has declined and been restructured so that there is currently no price participation (i.e., no escalators or de-escalators) in the realised TC for lead smelters. Brook Hunt estimates that realised TCs for lead will increase in 2008 and 2009 as concentrate availability starts to rise.

72 For a discussion of trends in lead TCs, see “The Zinc and Lead Smelting and Alloying Industries — Lead” beginning on page 154.

Free Lead In a standard lead concentrate contract, we pay the supplier for 95% of the value of the lead metal or, if a lower payment will result, deduct 3 percentage points from the actual lead content. Accordingly, the proportion of free lead metal we obtain (being the difference between the amount of refined lead metal recovered for sale and the amount of lead metal paid for) is less than for zinc.

For this reason, our lead smelter, as with other lead smelters, receives less benefit from the free metal component of gross profit. At Port Pirie lead recoveries are typically approximately 98% to 99%, meaning that the amount of free metal is approximately 3% to 4% of the lead in the raw materials.

Premiums We earn premiums on all our lead products and on some of our specialist alloys the premiums are substantially higher than for the commodity grade “99.97” lead. On average lead premiums are substantially lower than those for zinc.

By-products At our Port Pirie smelter, the majority of the zinc we produce is sourced for free from unpaid metal in lead concentrates, by-products from processing residues from the Hobart smelter or other external residues such as electric arc furnace (“EAF”) dust. We also receive a treatment charge for processing EAF dust. Zinc consequently is treated as a by-product for the Port Pirie site.

As noted above, our refined silver is produced primarily at Port Pirie and is sourced from silver contained in the concentrates we purchase as well as from processing residues from Hobart.

Another important by-product is sulphuric acid which is manufactured from the sulphur dioxide gas generated from sintering lead concentrates.

The significant rise in prices for zinc, silver and other by-product metals has meant that in the period under review, by-product sales have been the largest component of Port Pirie’s gross profit.

Costs of Production Our principal cost of production is raw materials, in particular zinc and lead concentrates and recycled zinc secondaries, such as zinc oxides and recycled lead-acid batteries. Other significant costs of production include energy, especially electricity, labour costs and transportation costs.

Raw Materials Zinc and Lead Concentrate As outlined above, concentrate prices are principally a factor of the LME metal price and TCs. Although increases in the LME price will increase the price we pay for concentrate, those increases are generally passed through to our customers or are hedged. Changes in concentrate prices resulting from changes in TCs can, however, affect our gross profit. We have life-of-mine concentrate purchase agreements with Zinifex’s Century and Rosebery mines which are together expected to supply concentrate in amounts equal to approximately 48% of Nyrstar’s zinc concentrate feedstock requirements at the time of its formation. The balance of our feedstock is currently secured under a combination of “frame” (fixed period) and “evergreen” (continuous) contracts which typically have cancellation notice periods of one or two years. See “Business — Business Description — Sourcing of Raw Materials and Marketing and Sales” beginning on page 171.

Zinc Secondaries Our Balen, Auby, Budel and Clarksville smelters are capable of processing significant quantities of secondary materials. Zinc sourced from suppliers of secondary material currently represents approximately 20% of our total zinc feedstock on a pro forma basis. These materials are largely produced by specialist steel recyclers

73 and tend to be less expensive than zinc concentrate. Our Overpelt plant serves as a central washing facility for the pre-treatment of purchased secondaries prior to their consumption by some of the Company’s smelters, mainly Balen where zinc oxides washed at the Overpelt plant accounted for approximately 22% of its feedstock in 2006. Increasing the use of secondaries throughout the Company and leveraging off the facility we have at Overpelt to supply all of our European smelters is an important element of our strategy, both to diversify our raw materials sources and to decrease their cost. See “Business — Strategy” beginning on page 165.

The principal drivers of the price of zinc secondaries, as for concentrates, are the LME zinc price and a rebate, which can take the form of a TC that generally follows the same trends as that for zinc concentrates, although it is not pegged to or precisely correlated with the TC of zinc concentrates, or a reduction of the percentage of zinc payable. Prices are also affected by the quality of the secondaries (both the grade and the degree of contamination) and the distance of the supplier from the smelter, as the supplier is normally responsible for the cost of transporting the secondaries to the smelter.

Although it is primarily a lead smelter, our Port Pirie smelter has multi-metal production capabilities and as such we source a wide range of residue or secondary materials for which there are few, if any, alternative outlets in Australia.

Until recently, Port Pirie had been accepting all of the Hobart by-product, paragoethite, which accounted for approximately 15% of Port Pirie’s feedstock through to the end of 2006 and which contains approximately 17% zinc. Our Hobart smelter is now selling this material directly to China while Port Pirie is focussed on consuming an accumulated on-site stockpile of paragoethite. Once that stockpile is depleted (currently expected to be in 2010), we expect Port Pirie to return to accepting the full production of paragoethite from Hobart. Another of the main secondary feedstocks accepted at Port Pirie is zinc-containing EAF dust from Australian steel companies, which Port Pirie sources under long-term supply agreements and processes through its slag fuming furnaces.

Lead Secondaries The Company recycles used lead acid batteries, at ARA, its joint venture lead recycling facility. ARA makes spot purchases of lead acid batteries as they become available. The price of lead acid batteries has increased significantly since the last quarter of 2006 and remained high in the first half of 2007 as a result of the increased lead price and the export of used lead acid batteries to Asia where demand for them is high.

Energy Electricity is the major source of energy for our zinc smelters while coke is the principal energy source for our lead smelter.

Electricity On a pro forma basis, energy costs were approximately 37% of our operating costs in 2006 and approximately 30% of our operating costs in the first half of 2007. Our electricity costs increased substantially at several sites during the period under review, due both to increases in market prices of electricity as well as to specific features of our electricity supply contracts. In particular, we have had, and continue in some instances to have, contractual provisions indexing the price of electricity to market prices of electricity and/or zinc, both of which rose generally during the period under review.

Our electricity costs also depend on regional pricing dynamics. Electricity prices are generally higher in Europe than in the other locations in which we have operations. Furthermore, in China, we are dependent on government-controlled companies for a significant portion of our electricity needs, which limits our ability to mitigate the effect of any price increases.

We have taken and are continuing to take steps designed to mitigate the impact of rising electricity costs, including focusing on improvements to our production efficiencies, such as increasing our use of recyclable secondary materials which require less energy to process, and renegotiating our contracts to remove (or not continue) zinc-price indexation. We are also actively assessing means of leveraging our position as a major electricity purchaser in Europe, which include joining with other European industrial producers to form various energy consortia. These consortia aim to negotiate secure, lower cost electricity supply contracts, including by developing dedicated generating capacity. It is premature, however, to anticipate a material reduction in electricity costs as a result of these consortia since the timing of their implementation is uncertain.

74 Coke and Coal Coke and coal are important inputs at our Port Pirie operation where coke is used in the lead blast furnace to convert lead oxide to metallic lead bullion and coal is used in our slag fuming furnaces to extract zinc oxide for subsequent processing in the zinc plant. Coke and coal are sourced on annual contracts from a number of suppliers. Along with other energy costs, both coke and coal prices have increased significantly since 2004 and have remained high (although varying from year to year) through the first half of 2007. For further information about our use of coke and coal, see “Business — Business Description — Port Pirie — Energy” beginning on page 188.

Natural Gas We also use natural gas in our production processes. We typically source gas under annual or multi-year contracts from providers located near our various sites. Prices under these contracts are normally pegged to the market price and therefore we have been, and will continue to be, exposed to any changes in natural gas prices.

Labour Costs In 2006 and the first half of 2007, on a pro forma basis, labour costs comprised approximately 29% and 26% of our operating costs, respectively. 2006 saw an increase in the demand and competition for skilled workers in the smelting industry, especially in Australia as high zinc, lead and other metal prices led to increased activity in the natural resources sector. This resulted in a general increase in the wages of skilled labour in Australia in 2006, which continued in the first half of 2007. Labour costs in Europe and the U.S. were relatively stable in this period. While we believe competition for skilled workers will remain high, we expect to be able to hire adequate skilled personnel.

Transport It is customary for miners to bear the costs of transporting concentrate to the port of discharge nearest to the smelter. Only in circumstances where a smelter is disadvantageously located is it forced to bear some of this cost, generally the portion that is incremental to the best alternative delivery point. Our Clarksville smelter has been in this situation since the closure of the Gordonsville and Clinch Valley mines in 2003 and 2004, respectively. With the reopening of mines in the Tennessee valley we expect this effect to decrease. See “— Gross Profit Realised by Zinc Smelters — Location advantage concessions” beginning on page 69.

For delivery of our products, we rely on a variety of transport methods, including ship, road and rail, choosing the ones that we feel are most appropriate for each site. We endeavour to target customers close to each of our sites, in order to reduce transport costs. Accordingly, we tend, where feasible, to serve Asian customers from our Asian and Australian operations, European customers from our European operations and North American customers from our Clarksville operation.

In general, our transport costs are higher in Europe than in the United States, Asia or Australia.

Shutdowns Our results of operations are affected by the planned shutdowns of our plants and equipment for periodic maintenance and/or improvements. During these shutdowns, which can vary in length, the plants and equipment are off-line and based on the extent of the site affected, production of metal can cease or be severely limited. The roasters at our Auby, Balen, Hobart and Clarksville sites are shut down once every two years for a few weeks for periodic planned maintenance. Maintenance shutdowns of roasters at Hobart and Clarksville are scheduled for February 2008 and late 2008, respectively, and are expected to last for 21 and 14 days, respectively. In addition, more lengthy shutdowns are required with less frequency for more extensive maintenance. Several of these longer shutdowns occurred in 2006: our Hobart site was subject to a once-every-30-years major shutdown that lasted 58 days to refurbish the roaster and replace the acid plant and our Port Pirie site was subject to a once- every-20-years major shutdown that lasted 49 days to replace a blast furnace hearth and install a new copper drossing furnace (both of which were over 20 years old). Although the Hobart shutdown took longer than expected, all these shutdowns were planned. These shutdowns resulted in significant decreases in production at each of these sites during 2006. Another effect of maintenance shutdowns is an increase in depreciation and amortisation expense, since the maintenance capital expenditure is capitalised and amortised over the life of the improvement.

75 Exchange Rates We use the euro as our functional currency and reporting currency for financial reporting purposes. As we have revenue and costs denominated in U.S. dollars, Australian dollars and, to a lesser extent, in Chinese renminbi and Thai baht as well as euro, exchange rate fluctuations affect our reported results of operations. Our costs are generally denominated in euro, Australian dollars, U.S. dollars, Chinese renminbi and Thai baht, depending on the currency of the country in which the operations are located, although some costs are either expressed in U.S. dollars, such as concentrate prices and sea freight charges, or linked to the U.S. dollar price of metals and other commodities, such as natural gas and coking coal, regardless of where the operation is located. Most of our revenue, however, is denominated in U.S. dollars as that is the currency in which zinc, lead and most of our by-products are priced. As a result, movements in the U.S. dollar/euro, U.S. dollar/Australian dollar and Australian dollar/euro exchange rates will affect our reported results of operations. We are able to mitigate the impact of exchange rate movements to a certain extent as both our purchases of zinc and lead concentrates and our sales of refined zinc and lead metal are generally priced in U.S. dollars. In addition, at Budel both our sales and the majority of our costs are priced in euro. Beyond those situations, however, we have only limited opportunities to match the currencies of our revenues and costs. In addition, to the extent we borrow in a currency other than the euro, we will be exposed to any movement of the euro against that currency. In 2005, 2006 and the first half of 2007, the Australian dollar and the euro have appreciated significantly against the U.S. dollar. The increase in LME metal prices, which are quoted in U.S. dollars, over this same period has partially offset the impact of such appreciation on our financial results.

The Chinese renminbi is not readily convertible outside of China. Within China, official exchange rates are determined daily by the People’s Bank of China. The translation of amounts recorded in Chinese renminbi into euro should not be construed as a representation that the Chinese renminbi amounts have been, could be, or will in the future be convertible into euro at the exchange rates used or at any other exchange rate.

Zinifex did not actively manage its currency exposure. Umicore did engage in hedging of its transactional and structural currency exposure, mainly with respect to the U.S. dollar/euro exchange rate, through the use of forward currency contracts. Nyrstar does not currently hedge its structural currency exposure. Given this current practice of Nyrstar, in the discussion of the Umicore Carve-out Group’s results of operations below, the aggregate effect of the structural hedging of currency exposure and structural metal hedging has been separately quantified and excluded from the detailed discussion of results. Nyrstar may review its hedging policy from time to time and if its policy changes it will inform the market accordingly.

See “Exchange Rates” beginning on page 56 for tables that set forth exchange rates for the U.S. dollar against the Australian dollar and the euro and the Australian dollar against the euro in 2005, 2006 and to date in 2007.

Environmental Costs Our smelters operate under licences issued by governmental authorities that require that emissions meet minimum standards. Additionally, each operation, when it ultimately ceases operations permanently, will need to be rehabilitated. As a result of the long histories of our sites, some of which have been the site of metal smelting activities for more than 50 to 100 years, and changes in regulatory standards over time, we have been required to incur, and will continue to incur significant expenditures in respect of (i) remediation of soil and groundwater contamination, (ii) upgrading of pollution control equipment for air and water emissions, (iii) upgrading of facilities to reduce fugitive air emissions and prevent soil contamination and (iv) by-product and waste management at some of our facilities. We also expect to make further investments to reduce our environmental impact in the areas in which we operate and to ensure that we are able to comply with environmental standards. In addition, we intend to introduce the safety policies and standards from our European sites to our sites in China. New environmental regulations are currently under consideration in China and Europe and we are continuously evaluating our obligations relating to new and changing legislation. The likelihood and extent of liabilities relating to environmental obligations under proposed or any future legislation and the amounts we may need to spend in order to comply with any new environmental standards cannot be reasonably estimated at present but could be material.

Our management makes estimates, if determinable, of the anticipated costs that may be necessitated by environmental laws and regulations. Provision is made for the present value of anticipated costs for future restoration and rehabilitation of smelting sites and other environmental related expenditure to the extent there is a present obligation, it is probable that the expenditure will be made and a reliable estimate can be made of the amount of the obligation. As of 30 June 2007, on a pro forma basis, the Company had total provisions relating to environmental matters of EUR 129 million.

76 Defined Benefit Pension Plans We have defined benefit pension plans at a number of our operations. We are compliant with applicable local regulations regarding our funding obligations in respect of these plans. In line with such local regulations, some of these plans are not fully funded, with the unfunded portion being provisioned. In 2006, we made an additional contribution to the Clarksville pension plan to ensure that the fund complies with U.S. pension funding regulations that were enacted in 2006 and which will require it to be fully funded by the end of a seven-year period beginning in 2008.

Restructurings and impairments Our results can be affected by significant events such as plant restructurings and asset impairments. Our Auby smelter, for example, underwent a major restructuring in early 2005 under which its roaster at Calais and half of its cell house capacity at Auby were decommissioned. Material amounts of provisions and impairment losses related to this restructuring were booked mainly in 2005. Umicore has categorised such charges as “non- recurring”. While these “non-recurring” items have been separately quantified and excluded from the detailed discussion below, Nyrstar does not currently intend to distinguish between “non-recurring” and “recurring” items in its financial reporting going forward.

Taxes We operate in a number of countries where the tax rate is higher or lower than the Belgian tax rate. The main tax jurisdictions in which we operate are Australia, Belgium, France, the United States and the Netherlands. As a result, we expect our blended statutory tax rate to range from 33% to 35% based on the proportion of our income from each of these jurisdictions. Through the implementation of tax planning strategies, we estimate our effective tax rate to be approximately 30% under normal circumstances and before any application of tax-loss carry forwards. We have accumulated tax losses in some of the jurisdictions where we operate and deferred tax benefits have been recognised to the extent it is likely that future taxable amounts will be available. We expect to benefit from these deferred tax benefits through a decrease in our actual cash tax payments until such deferred tax benefits are used up or expire.

Segmental Presentation Nyrstar has the following accounting segments: Auby, Balen (including Overpelt and Nyrstar Germany GmbH which acts as a sales office for Balen), Budel, Clarksville, Hobart, Port Pirie, Chinese Operations (comprising the Company’s 60% interest in Nyrstar Yunnan Zinc Alloys Co. Ltd. and the Company’s 50% equity interests in Genesis Recycling Technologies (BVI) Limited and Föhl China Co. Ltd. (see “Presentation of Financial and Other Information — Föhl China Co., Ltd” beginning on page 49)), Other Operations (comprising GM-Metal SAS, the Company’s 66% interest in Galva 45 S.A. and the Company’s 50% and 24.9% equity interests in ARA and Padaeng Industry Public Company Limited, respectively) and Corporate.

The discussion and analysis of the Zinifex Carve-out Group’s results of operations below is based on its accounting segments, which were: Hobart, Budel, Port Pirie, Clarksville, ARA (comprising the Company’s 50% interest in ARA) and Other (including the Company’s 50% equity interest in Genesis Recycling Technologies (BVI) Limited).

The discussion and analysis of the Umicore Carve-out Group’s results of operations below is based on specifically compiled data whereby Umicore’s existing accounting segment “Zinc Specialties” was broken down first into the Umicore Carve-out Group and secondly in accordance with the segments that will be presented at the Nyrstar level, as follows: Balen/Overpelt (comprising Balen and Overpelt), Auby, Chinese Operations (comprising the Company’s 60% interest in Nyrstar Yunnan Zinc Alloys Co. Ltd. and the Company’s 50% interest in Föhl China Co. Ltd.), GM-Metal/Galva 45 (comprising GM-Metal SAS and the Company’s 66% interest in Galva 45 S.A.) and Other (comprising the Company’s 24.9% equity interest in Padaeng Industry Public Company Limited).

Nyrstar Pro Forma Consolidated Income Statement Data Modified to Reflect the Current Transactional and Structural Hedging Policy of Nyrstar As noted above, Umicore did not hedge transactionally its exposure to fluctuations in zinc prices with respect to certain historically built up inventories of metal, which were permanently tied up in the manufacturing and commercial operations of the Umicore Carve-out Group. Zinifex did not transactionally hedge its exposure

77 to concentrate purchases from Zinifex mines and transactionally hedged approximately 75% of its concentrate purchases from third parties. Since Nyrstar’s current policy is to produce a return linked to floating metal prices through the transactional hedging of all of its inventories and concentrate purchases, a modification has been made to the Nyrstar historical pro forma information to illustrate what the Nyrstar results might have been had Nyrstar’s anticipated hedging policies been in effect at Umicore and Zinifex. In addition, Umicore implemented “structural” or “cash flow” hedging of zinc price movements, which is the forward hedging of metal price exposure that derives from the impact that metal prices have on TCs and on free metal recovered from materials supplied for treatment and refining. Specifically, it forward hedged its forecasted exposure to metal prices and currency risk when metal prices expressed in euro or exchange rates were above their historical averages and were at levels where attractive margins could be secured. This structural hedging included the use of forward contracts on metals and forward contracts on currencies. As a result of the increase in zinc prices to a level above that locked in by the hedging instruments, the settlement of these instruments in 2006 resulted in an accumulated negative pre-tax impact on the Umicore Carve-out Group of EUR 215.8 million in 2006, being the difference between the contract zinc prices of the hedging instruments and the spot metal prices at the settlement date of these hedging instruments. See “— Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters — Transactional Hedging of Metal Price and Currency Exposure” beginning on page 71 and “— Significant Factors Affecting Nyrstar’s Results of Operations — Structural Hedging of Metal Price and Currency Exposure” beginning on page 72. Zinifex, on the other hand, did not engage in structural hedging as its strategy was to remain exposed to fluctuations in commodity prices. To achieve this outcome, Zinifex entered into derivatives to unfix contract prices in forward sales arrangements with customers. As a result, the Zinifex Carve-out Group undertook “fair value” hedging in respect of its unrecognised firm commitments to ensure it remained exposed to fluctuations in commodity prices between the sales contract date and the date the transaction was settled. This differs from “cash flow” hedging where the objective is to remove the risk of volatility in future metal prices. A modification has been made to remove the effect of structural metal price hedging effected at the level of the Umicore Carve-out Group since Nyrstar does not currently engage in structural metal price hedging. Nyrstar is therefore exposed to the risk of fluctuations in zinc and other metal prices. While such information should not be interpreted as what would have happened, we believe it assists in understanding the effects on our results.

The unaudited Nyrstar Modified Pro Forma Consolidated Financial Information presented below sets forth selected items from the Nyrstar Pro Forma Consolidated Financial Information for the year ended 31 December 2006 and for the six months ended 30 June 2007, and shows how they are modified as summarised in the preceding paragraph.

Year ended 31 December 2006 Six months ended 30 June 2007 Transactional Structural Pro Forma Transactional Structural Pro Forma Hedging Hedging as Hedging Hedging as Pro Forma Modification(1) Modification(2) Modified(3) Pro Forma Modification(1) Modification(2) Modified(3) (EUR million) Revenue ...... 3,173.3 — 215.8 3,389.1 2,008.9 — 81.1 2,090.0 Depreciation and amortisation . . (70.8) — — (70.8) (39.1) — — 39.1 Result before net financing costs and income tax...... 380.3 (134.0) 215.8 462.1 151.1 86.8 81.1 319.0 EBITDA(4) ..... 451.1 (134.0) 215.8 532.9 190.2 86.8 81.1 358.1 Notes: (1) Modified to reflect retroactive application of Nyrstar’s transactional hedging policy to all Umicore Carve-out Group inventories and all Zinifex Carve-out Group concentrate purchases. (2) Modified to remove the effect of structural hedging effected by the Umicore Carve-out Group, which is the forward hedging of metal price exposure that results from the impact that metal prices have on TCs and on free metal recovered from materials supplied for treatment and refining. See “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Presentation of Adjusted Results for the Umicore Carve-out Group — Structural Metal Price and Currency Risk Hedging” beginning on page 105. (3) The modified amounts are non-GAAP measures and are presented as we believe they are useful information for investors as a means of evaluating our operating performance within the context of this particular transaction. These measures are not measurements under IFRS or other generally accepted accounting principles and may not be comparable to other non-GAAP measures used by other companies.

78 (4) EBITDA as presented above is pro forma result before net financing costs plus depreciation and amortisation. Pro forma EBITDA presented herein differs from historical EBITDA as calculated by both the Zinifex and Umicore Carve-out Groups.

Gross Profit To illustrate the significance of the above factors on our consolidated pro forma gross profit, we have also included certain modified pro forma information below. While such information does not purport to represent the results of operations and financial position that we would actually have obtained during the periods presented, we believe that this information read in conjunction with our historic and pro forma financial data assists in understanding the impact of Nyrstar’s current and anticipated metal price and currency risk management policy. The following table sets forth the key components of Nyrstar’s modified pro forma gross profit which has been derived from the unaudited management accounts for the year ended 31 December 2006 and for the six months ended 30 June 2007 and reconciles the Nyrstar modified pro forma gross profit for the year ended 31 December 2006 and the six months ended 30 June 2007 with the Nyrstar pro forma gross profit for the corresponding periods.

Year ended 31 December 2006 Six months ended 30 June 2007 Transac- Transac- tional Structural tional Structural Hedging Hedging Pro Hedging Hedging Pro Pro Modifica- Modifica- Forma as Pro Modifica- Modifica- Forma as Forma tion(1) tion(2) Modified(3) Forma tion(1) tion(2) Modified(3) (EUR million) Gross profit Treatment charge (base and escalator) ...... 461.1 — 127.3 588.4 286.0 43.8 329.8 Premium ...... 144.6 — — 144.6 99.5 — — 99.5 Free metal ...... 176.5 — 88.5 265.0 125.2 37.3 162.5 By-products ...... 208.9 — — 208.9 131.9 — — 131.9 Price differentials (QP terms)(4) ...... 113.0 (113.0) — — (86.8) 86.8 — Other(5) ...... (42.3) (21.0) — (63.3) (2.8) — — (2.8) Total ...... 1,061.8 (134.0) 215.8 1,143.6 553.0 86.8 81.1 720.9

Notes: (1) Modified to reflect retroactive application of Nyrstar’s transactional hedging policy to all Umicore Carve-out Group inventories and all Zinifex Carve-out Group concentrate purchases, had they actually been held or made by Nyrstar. (2) Modified to remove the effect of structural hedging effected by the Umicore Carve-out Group, which is the forward hedging of metal price exposure that results from the impact that metal prices have on TCs and on free metal recovered from materials supplied for treatment and refining. See “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Presentation of Adjusted Results for the Umicore Carve-out Group — Structural Metal Price and Currency Risk Hedging” beginning on page 105. (3) Nyrstar modified pro forma gross profit is derived by aggregating the totals of gross profit of each of the Zinifex Carve-out Group and the Umicore Carve-out group subject to the adjustments and modifications set forth in the following tables. Modified pro forma gross profit is a non-GAAP measure and is presented as we believe that it is useful information to investors as a means of evaluating our operating performance within the context of this particular transaction. This measure is not a measurement under IFRS or other generally accepted accounting principles and may not be comparable to other non-GAAP measures used by other companies. (4) The “Price differentials (QP terms)” component of gross profit comprises (i) the effect of the Umicore Carve-out Group’s unhedged exposure to fluctuations in zinc prices with respect to certain historically built up inventories of metal, which were permanently tied up in the manufacturing and commercial operations of the Umicore Carve-out Group after fair value step-up and accounting policy alignment (such effect totalled approximately EUR 73 million in 2006 and EUR (31) million in the six months ended 30 June 2007), and (ii) the effect of the Zinifex Carve-out Group’s unhedged exposure to concentrate purchases from Zinifex mines and to approximately 25% of its concentrate purchases from third parties (such effect which totalled approximately EUR 40.4 million in 2006 and EUR (55.6) million in the six months ended 30 June 2007)

79 Nyrstar’s current hedging policy is to produce a return linked to floating metal prices, all Umicore Carve-out Group inventories and Zinifex Carve-out Group concentrate purchases, had they actually been held or made by Nyrstar, would have been subjected to a transactional hedge. If transactional hedging had been applied to all these inventories and concentrate purchases, there would have been no “Price differentials (QP terms)” component of gross profit in 2006 and in the six months ended 30 June 2007. Nyrstar currently engages only in transactional hedging and not structural hedging. Nyrstar may review its hedging policy from time to time and if its policy changes it will inform the market accordingly. (5) The “Other” component of Nyrstar’s gross profit comprises (i) the gains/losses on QP differentials remaining after the execution of transactional hedging (i.e., the impact of hedge ineffectiveness), freight costs and commissions, (ii) the gain or loss from not being able to charge customers for the small quantities of alloying metals (such as aluminum, tin and nickel) in our zinc alloy products as a result of the commercial terms of our contracts and instead charging the customers for such quantities of alloying metals as if their prices were equivalent to zinc prices, (iii) the gains/losses from one-off sales of historically built-up metal quantities permanently tied up in manufacturing and commercial operations, (iv) the total gross profit of the Chinese Operations and GM-Metal/Galva 45, (v) sales realisation expenses, (vi) where applicable, the costs of aluminum and other alloying metals, and (vii) the total gross profit of ARA.

The following tables set forth a reconciliation of the Zinifex Carve-out Group gross profit and the adjusted Umicore Carve-out Group gross profit to the Nyrstar pro forma gross profit:

Year ended 31 December 2006 Six months ended 30 June 2007 Reversal Reversal of of elimina elimina tion of tion of Back Accoun- IAS 39 Impact Back Accoun- IAS 39 Impact Zinifex Umicore Out ting effects of Zinifex Umicore Out ting effects of Carve- Carve- Struc- policy and non- business Carve- Carve- Struc- policy and non- business out out tural align- recurring combina- Pro out out tural align- recurring combina- Pro Group Group(1) Hedge(2) ment(3) items(4) tion(5) Forma Group Group(1) Hedge(2) ment(3) items(4) tion(5) Forma Gross Profit Treatment charge (base and escalator) ...... 362.2 229.0 (127.3) (2.8) — — 461.1 194.2 112.0 (43.8) 23.6 — — 286.0 Premium ...... 74.6 70.0 — — — — 144.6 44.5 55.0 — — — — 99.5 Free metal ...... 156.8 110.0 (88.5) (1.8) — — 176.5 98.9 59.0 (37.3) 4.6 — — 125.2 By-products ...... 178.4 30.5 — — — — 208.9 109.9 22.0 — — — — 131.9 Price differentials (QP terms)(6) ...... 40.4 — — 72.6 — — 113.0 (55.6) — — (31.2) — — (86.8) Other(7) ...... (39.0) 38.9 — (4.1) (24.6) (13.5) (42.3) (21.8) 6.9 — (0.5) 20.7 (8.1) (2.8) Total ...... 773.4 478.4 (215.8) 63.9 (24.6) (13.5) 1,061.8 370.1 254.9 (81.1) (3.5) 20.7 (8.1) 553.0

Notes: (1) The Umicore Carve-out Group’s gross profit has been derived from the unaudited management accounts of the Umicore Carve-out Group and adjusted for the elimination of the impact of structural hedging, IAS 39 effects and other items that management of the Umicore Carve-out Group considers to be non-recurring, for the year ended 31 December 2006 and the 6 months ended 30 June 2007. (2) The Umicore Carve-out Group engaged in structural hedging of metal prices and US Dollar/Euro exchange rates. Nyrstar does not currently intend to engage in structural hedging. The Umicore Carve-out Group gross profit as derived from the unaudited management accounts eliminates the loss from this structural hedging. The loss amounting to EUR 215.8 million and EUR 81.1 million, for the year ended 31 December 2006 and the six months ended 30 June 2007 respectively, has been realized by the Umicore Carve-out Group and therefore needs to be reinstated to reflect the actual historical results of the Umicore Carve-out Group. The reinstatement of the loss from structural hedging had a negative effect of EUR 127.3 million and EUR 43.8 million, for the year ended 31 December 2006 and the six months ended 30 June 2007 respectively, on gross profit related to treatment charges and a negative effect of EUR 88.5 million and EUR 37.3 million for the year ended 31 December 2006 and the six months ended June 2007 respectively, on the gross profit related to free metal. (3) To prepare the Nyrstar pro-forma consolidation for the year ended 31 December 2006 and the six-month period ended 30 June 2006, the accounting policies as applied by both carve-out groups had to be aligned. This alignment had a positive effect on gross profit of EUR 63.9 million and a negative effect on gross profit of EUR 3.5 million for the year ended 31 December 2006 and the six months ended 30 June 2007, respectively. The accounting policy alignments impacting the gross profit from treatment charges and free metal are mainly related to inventory valuation differences and revenue recognition differences. The adjustments to the price differentials derive from inventory valuation differences. For more information about the accounting policy adjustments, see the Nyrstar Pro Forma Consolidated Financial Information beginning on page PF-1. The adjustments to the “Other” component of gross profit derive mainly from the effects of accounting policy alignments on the valuation of the non-metal part of the Umicore Carve-out Group inventories.

80 (4) The adjustments to the “Other” component of gross profit are related to the elimination of the IAS 39 effects and other items that the Umicore Carve-out Group management considers as non-recurring. (5) The Zinifex Carve-out Groups accounts for joint ventures using the proportionate consolidation method whereas Nyrstar accounts for joint ventures using the equity method. This difference in accounting policies results in the elimination of the gross profit attributable to the ARA joint venture. (6) The “Price differentials (QP terms)” component of gross profit comprises (i) the effect of the Umicore Carve-out Group’s unhedged exposure to fluctuations in zinc prices with respect to certain historically built up inventories of metal, which are permanently tied up in the manufacturing and commercial operations of the Umicore Carve-out Group, and (ii) the effect of the Zinifex Carve-out Group’s unhedged exposure to concentrate purchases from Zinifex mines and to approximately 25% of its concentrate purchases from third parties. (7) The “Other” component of Nyrstar’s gross profit comprises (i) the gains/losses on QP differentials remaining after the execution of transactional hedging (i.e., the impact of hedge ineffectiveness), freight costs and commissions, (ii) the gain or loss from not being able to charge customers for the small quantities of alloying metals (such as aluminium, tin and nickel) in our zinc alloy products as a result of the commercial terms of our contracts and instead charging the customers for such quantities of alloying metals as if their prices were equivalent to zinc prices, (iii) the gains/losses from one-off sales of historically built-up metal quantities permanently tied up in manufacturing and commercial operations, (iv) the total gross profit of the Chinese Operations and GM-Metal/Galva 45, (v) sales realisation expenses, and (vi) where applicable, the costs of aluminium and other alloying metals.

Nyrstar’s pro forma operating costs are equivalent to its modified pro forma operating costs. Nyrstar’s modified pro forma operating costs for the year ended 31 December 2006, excluding equity accounted investments and excluding raw materials costs and credits for by-products, amounted to EUR 625.8 million, of which energy costs, employee costs (including employee salaries and benefits but excluding the costs of contractors) and other costs (including the costs of contractors, consultants and consumables and stock movements) represented approximately 37%, 29% and 34%, respectively. This EUR 625.8 million includes EUR 42.6 million of non-cash charges.

Nyrstar’s modified pro forma operating costs for the six month period ended 30 June 2007, excluding equity accounted investments and excluding raw materials costs and credits for by-products, amounted to EUR 370.3 million, of which energy costs, employee costs (including employee salaries and benefits but excluding the costs of contractors) and other costs (including costs of contractors, consultants and consumables and stock movements) represented approximately 30%, 26% and 44%, respectively. This EUR 370.3 million includes EUR 12.3 million of non-cash income.

As discussed above, Nyrstar’s results are significantly affected by changes in metal prices and metal treatment charges, as well as in exchange rates. Sensitivities to variations in these parameters are depicted in the following table which sets forth the estimated impact on Nyrstar’s pro forma EBITDA for the year ended 31 December 2006 as a result of a change in each of the parameters below, taken separately, using as a basis the 2006 average for such parameter.

Size and direction of Variable change in variable EBITDA change (EUR million) Change in zinc price ...... +/-USD 100 per tonne 26 /(25) Change in lead price ...... +/-USD 100 per tonne 3 /(3) Change in USD / EUR exchange rate ...... +/-EUR0.01 14 /(14) Change in AUD / EUR exchange rate ...... +/-EUR0.01 (3) / 3 Change in zinc treatment charge ...... +/-USD25pertonne 36 /(36) Change in lead treatment charge ...... +/-USD 100 per tonne 8 /(8)

The above sensitivities were developed by modelling Nyrstar’s 2006 pro forma operating results. Each parameter is based on the 2006 average and was varied in isolation to determine the EBITDA impact. Sensitivities are: • Not cumulative. These sensitivities do not reflect the impact of varying more than one parameter in isolation and cannot be added together; • Expressed as linear values within a relevant range. Outside the range listed for each variable, the impact of changes may be significantly different from the results outlined; and

81 • Based on Nyrstar’s pro forma financial information for the year ended 31 December 2006. These sensitivities may not be representative of EBITDA sensitivity to any of the variations going forward.

Results of Operations for the Zinifex Carve-out Group Explanation of Certain Key Income Statement Items and Other Operational Data for the Zinifex Carve-out Group Sales Realisation Expenses Sales realisation expenses primarily comprise transportation and freight costs.

Raw Materials Costs Raw materials costs primarily comprise costs of zinc concentrates, lead concentrates and zinc and lead secondaries. As the final value of concentrates can only be determined from weights, assays, prices and exchange rates applying after a shipment has been received, concentrate costs are recorded at estimated values pursuant to contract terms, with adjustments being subsequently recognised in the period when final values are determined.

Operating Costs Operating costs primarily comprise energy costs (including costs of electricity, natural gas and coke), employee expenses (including costs of employee salaries and benefits), contracting and consulting expenses (including costs of contractors and consulting services), costs of consumables and other materials needed in production (also referred to as “stores”), changes in inventories of finished goods and work in progress and maintenance costs. It also includes “other expenses”, such as travel, insurance, training costs and certain corporate management changes and “other income” which comprises income other than revenue from sales of products, such as gains from the sale of property, plant and equipment.

Share of Profit of Equity Accounted Investees Share of profit of equity accounted investees comprises the profit from the Zinifex Carve-out Group’s 50% interest in Genesis which was accounted for using the equity method of accounting in 2005, 2006 and the first six months of 2007. The amounts were insignificant during these periods.

Depreciation and Amortisation Depreciation is on a straight-line basis of 40 years for buildings and 5 to 15 years for plant and equipment. However, capitalised expenses incurred in connection with shutdowns are generally written off over a shorter period of 3 to 4 years. The Zinifex Carve-out Group’s property, plant and equipment were acquired at their fair market value at the time of Zinifex’s initial public offering in 2004.

Gross Profit Gross profit comprises (i) TCs, penalties paid by the miner to the smelter and location advantage concessions, (ii) the value of “free zinc (i.e., refined zinc produced by the smelter over and above the metal content the smelter has paid for in concentrates its purchases from the miner), (iii) metal premiums (i.e., sales of refined metal made by the smelter above the LME zinc reference price), and (iv) by product sales.

Other Non-cash Expenses Other non-cash expenses comprise changes in provisions for annual leave, long service leave, defined benefit pension plans, site rehabilitation and embedded derivatives of electricity contracts indexed to zinc prices.

EBITDA EBITDA is profit before net financing costs and income tax plus depreciation and amortisation. EBITDA includes other non-cash expenses.

Capital Employed Capital employed is total assets less total liabilities.

82 For information on gross profit, see “— Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters” beginning on page 68 and “— Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Our Port Pirie Lead Smelter” beginning on page 72.

Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Six Months Ended 30 June 2006 and 2007 Combined Results of Operations for the Zinifex Carve-out Group The following table sets forth unaudited selected income statement information before net financing costs and income tax and EBITDA for the Zinifex Carve-out Group for the six months ended 30 June 2006 and 2007: Six months ended 30 June 2006 2007 (EUR million) Revenue ...... 954.3 1,242.7 Gross profit ...... 347.3 370.1 Operating costs ...... (193.8) (238.6) Profit from operating activities before depreciation and amortisation(1) (EBITDA) ...... 153.5 131.5 Depreciation and amortisation ...... (17.4) (21.6) Profit from operating activities ...... 136.1 109.9 Share of profit of equity accounted investees ...... 0.0 0.0 Profit before net financing costs and income tax ...... 136.1 109.9 Note: (1) Includes other non-cash expenses of EUR 4.7 million in each of the six month periods ended 30 June 2006 and 2007. The following table sets forth the key components of the Zinifex Carve-out Group’s gross profit which has been derived from the unaudited management accounts for the six months ended 30 June 2006 and 2007: Six months ended 30 June 2006 2007 (EUR million) Gross profit Treatment charge (base and escalator) ...... 176.0 194.2 Premium ...... 31.3 44.5 Free metal ...... 69.4 98.9 By-products ...... 85.3 109.9 Price differentials (QP terms)(1) ...... 4.8 (55.6) Other(2) ...... (19.5) (21.8) Total ...... 347.3 370.1

Notes: (1) The Zinifex Carve-out Group did not hedge concentrate purchases from Zinifex mines and hedged approximately 75% of its concentrate purchases from third parties. The impact of this unhedged exposure is found in the “Price differentials (QP terms)” component of gross profit. (2) The “Other” component of gross profit comprises sales realisation expenses and, where applicable, the costs of aluminium and other alloying metals. “Other” also includes the total gross profit of ARA. The following table sets forth the Zinifex Carve-out Group’s operating costs for the six months ended 30 June 2006 and 2007: Six months ended 30 June 2006 2007 (EUR million) Stores ...... (26.0) (29.0) Employee benefits expense ...... (56.7) (55.4) Energy expenses ...... (71.0) (66.6) Contracting and consulting expenses ...... (23.3) (32.5) Changes in inventories of finished goods and work in progress ...... 1.0 (7.3) Other income ...... 3.5 8.7 Other expenses ...... (21.3) (56.5) Total ...... (193.8) (238.6)

83 Revenue The Zinifex Carve-out Group’s revenue increased by 30%, from EUR 954.3 million in the six months ended 30 June 2006 to EUR 1,242.7 million in the six months ended 30 June 2007. This increase was primarily due to increases in revenue at the Hobart, Budel, Clarksville, Port Pirie and ARA sites, primarily driven by the higher average LME zinc, lead and other metal prices experienced in the six months ended 30 June 2007.

Profit from Operating Activities before Depreciation and Amortisation (EBITDA) The Zinifex Carve-out Group’s profit from operating activities before depreciation and amortisation decreased by 14%, from EUR 153.5 million in the six months ended 30 June 2006 to EUR 131.5 million in the six months ended 30 June 2007. This decrease was primarily due to decreases in the results of Hobart and Clarksville more than offsetting an improved result at Budel. For a discussion of the results of our Hobart, Clarksville and Budel operations, see “— Segment Results of Operations for the Zinifex Carve-out Group — Hobart”, “— Segment Results of Operations for the Zinifex Carve-out Group — Clarksville” and “— Segment Results of Operations for the Zinifex Carve-out Group — Budel” below.

Operating costs increased by 23% from EUR 193.8 million in the six months ended 30 June 2006 to EUR 238.6 million in the six months ended 30 June 2007. This was principally due to an increase in other expenses attributable to (i) the effects of foreign exchange movements, in particular the depreciation of the U.S. dollar against the Australian dollar and the euro (EUR 14.8 million), (ii) higher corporate charges, including an allocation to the Zinifex Carve-out Group of Zinifex senior management remuneration (which included bonus and incentive arrangements (EUR 3 million) and CEO departure costs (EUR 5.5 million)) and (iii) an increase in the rehabilitation provision for Port Pirie (EUR 5.2 million).

Other Non-cash Expenses The Zinifex Carve-out Group’s other non-cash expenses remained constant at EUR 4.7 million in both the six months ended 30 June 2006 and the six months ended 30 June 2007. In both periods, the principal factor was an increase in employee entitlement provisions at all major sites. In the six months ended 30 June 2007, a EUR 4.6 million gain relating to a change in the fair value of an embedded derivative linked to Hobart’s electricity contract was more than offset by a EUR 5.2 million increase in environmental rehabilitation provisioning at Port Pirie.

Depreciation and Amortisation The Zinifex Carve-out Group’s depreciation and amortisation increased by 24%, from EUR 17.4 million in the six months ended 30 June 2006 to EUR 21.6 million in the six months ended 30 June 2007. This increase was attributable to capitalised expenses incurred in connection with the planned shutdowns and production capacity works undertaken at certain of the sites during the year ended 31 December 2006, including major once-in-every 30 years and once-in-every 20 years shutdowns at the Hobart and Port Pirie sites, respectively.

Profit from Operating Activities and Profit before Net Financing Costs and Income Tax As a result of the foregoing, the Zinifex Carve-out Group’s profit from operating activities and profit before net financing costs and income tax each decreased by 19%, from EUR 136.1 million in the six months ended 30 June 2006 to EUR 109.9 million in the six months ended 30 June 2007.

Segment Results of Operations for the Zinifex Carve-out Group The following table sets forth certain financial information, by segment, of the Zinifex Carve-out Group for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Revenue ...... 954.3 1,242.7 Hobart ...... 255.3 355.2 Port Pirie ...... 219.4 300.2 ARA ...... 10.6 13.0 Budel ...... 337.7 389.8 Clarksville ...... 152.5 205.6 Other (including Genesis and intersegment eliminations) ...... (21.2) (21.1)

84 Six months ended 30 June 2006 2007 (EUR million) Gross Profit ...... 347.3 370.1 Hobart ...... 112.9 90.7 Port Pirie ...... 79.2 94.3 ARA ...... 7.6 8.1 Budel ...... 109.7 133.4 Clarksville ...... 41.3 45.7 Other (including Genesis and intersegment eliminations) ...... (3.4) (2.1) Operating costs(1) ...... (193.8) (238.6) Hobart ...... (46.3) (55.2) Port Pirie ...... (57.8) (73.1) ARA ...... (3.0) (3.0) Budel ...... (59.7) (72.9) Clarksville ...... (27.9) (35.4) Other (including Genesis and intersegment eliminations) ...... 0.9 1.0 EBITDA ...... 153.5 131.5 Hobart ...... 66.6 35.5 Port Pirie ...... 21.4 21.2 ARA ...... 4.6 5.1 Budel ...... 50.0 60.5 Clarksville ...... 13.4 10.3 Other (including Genesis and intersegment eliminations) ...... (2.5) (1.1) Depreciation and amortisation ...... (17.4) (21.6) Hobart ...... (7.3) (7.5) Port Pirie ...... (4.7) (6.5) ARA ...... (0.9) (0.9) Budel ...... (2.8) (3.3) Clarksville ...... (1.7) (3.4) Other (including Genesis and intersegment eliminations) ...... 0.0 0.0 Profit before net financing costs and income tax ...... 136.1 109.9 Hobart ...... 59.3 28.0 Port Pirie ...... 16.7 14.7 ARA ...... 3.7 4.2 Budel ...... 47.2 57.2 Clarksville ...... 11.7 6.9 Other (including Genesis and intersegment eliminations) ...... (2.5) (1.1) Capital expenditure(2) ...... 50.1 40.1 Hobart ...... 19.9 15.3 Port Pirie ...... 16.8 13.6 ARA ...... 0.3 0.2 Budel ...... 11.0 7.2 Clarksville ...... 2.1 3.8 Other (including Genesis and intersegment eliminations) ...... 0.0 0.0 Capital employed at end of period ...... 398.7 699.8 Working capital at end of period(2) ...... 266.8 432.8 Hobart ...... 67.3 91.1 Port Pirie ...... 61.9 109.8 ARA ...... 2.7 4.0 Budel ...... 73.4 145.8 Clarksville ...... 61.9 74.4 Other (including Genesis and intersegment eliminations) ...... (0.4) 7.8

Notes: (1) Includes other non-cash expenses of EUR 4.7 million in each of the six month periods ended 30 June 2006 and 2007. (2) Converted at the EUR/AUD exchange rates of 0.6043 and 0.6081 for the six months ended 30 June 2006 and 2007, respectively.

85 Hobart The following table sets forth the Hobart site’s revenue, sales realisation expenses, raw materials costs, gross profit, operating costs, EBITDA, depreciation and amortisation and profit before net financing costs and income tax for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Revenue ...... 255.3 355.2 Sales realisation expenses ...... (6.0) (9.1) Raw materials costs ...... (136.4) (255.3) Gross profit ...... 112.9 90.7 Operating costs(1) ...... (46.3) (55.2) EBITDA ...... 66.6 35.5 Depreciation and amortisation ...... (7.3) (7.5) Profit before net financing costs and income tax ...... 59.3 28.0 Note: (1) Includes other non-cash expenses/(income) in the six months ended 30 June 2006 and 2007 of EUR 2.4 million and EUR (3.2) million, respectively.

The following table sets forth the key components of the Hobart site’s gross profit which has been derived from unaudited management accounts for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Gross profit Treatment charge (base and escalator) ...... 58.3 84.6 Premium ...... 12.8 10.0 Free metal ...... 10.8 24.6 By-products ...... 14.0 18.4 Price differentials (QP terms) ...... 29.9 (36.9) Other(1) ...... (12.9) (10.0) Total ...... 112.9 90.7

Note: (1) The “Other” component of gross profit comprises sales realisation expenses and, where applicable, the costs of aluminium and other alloying metals.

Zinc metal sales volumes from our Hobart site in the six months ended 30 June 2007 were 124,073 tonnes in comparison to 101,924 tonnes in the six months ended 30 June 2006, representing an increase of 22%. This increase was primarily due to the fact that the 2006 period production levels were affected by a once- every-30-years planned maintenance shutdown. This shutdown lasted for 58 days between February and April 2006 and resulted in significantly reduced production volumes in the six months to 30 June 2006.

Revenue at our Hobart site increased by 39%, from EUR 255.3 million in the six months ended 30 June 2006 to EUR 355.2 million in the six months ended 30 June 2007. This was primarily a result of the increased production levels and the impact of a higher average LME zinc price on zinc sales in the 2007 period. These factors more than offset a EUR (36.9) million price differential attributable to QP terms. This loss primarily results from Zinifex’s policy of not transactionally hedging QP differentials arising in its smelters from purchases of concentrates from Zinifex mines. Nyrstar intends to transactionally hedge these QP differentials and so Nyrstar is not expected to be exposed to gains or losses of such magnitude. Revenue from the sales of by-products also increased during the six months ended 30 June 2007 due to the sale of previously accumulated residues the value of which had increased due to higher metal prices and continued high prices for silver and other by-products.

Sales to China in the six months ended 30 June 2007 decreased as a result of a change at the end of 2006 to Chinese tax rules regarding die-cast alloys which allowed producers in China to increase the amount of die-cast alloys sold domestically. Moreover, metal index prices on the Shanghai Metal Market, the Shanghai Non-ferrous

86 Metals Market and the Guangdong Non-ferrous Metals Market, which are typically used as the reference price by Chinese producers, are generally lower than LME prices. As a result, die-cast alloys produced in China tend to be cheaper than imported alloys. Output at Hobart has been switched to focus more on Continuous Galvanising Grade (“CGG”) and Special High Grade (“SHG”) in response to this situation.

Sales realisation expenses increased by 51% from EUR 6.0 million in the six months ended 30 June 2006 to EUR 9.1 million in the six months ended 30 June 2007, primarily due to additional transport costs associated with the sale of previously accumulated residues the value of which had increased due to higher metal prices, higher production levels and increased oil prices. This increase was offset in part by transport cost savings achieved through a change in contract terms with a key customer.

Raw materials costs increased by 87% from EUR 136.4 million in the six months ended 30 June 2006 to EUR 255.3 million in the six months ended 30 June 2007. The increase was mainly due to an increase in raw material volume purchases due to the return to normal production levels, the higher average LME zinc price experienced in the six months ended 30 June 2007 and lower industry-wide base TC terms, which collectively increased the cost of purchasing zinc concentrate and offset the positive impact of TC escalators.

The following table sets forth the Hobart site’s operating costs for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Stores ...... 5.5 7.6 Employee benefits expense ...... 13.7 13.7 Energy expenses ...... 15.7 12.5 Contracting and consulting expenses ...... 7.2 10.3 Changes in inventories of finished goods and work in progress ...... (1.6) (0.6) Other income ...... (0.8) (0.8) Other expenses ...... 6.6 12.5 Total ...... 46.3 55.2

Operating costs increased by 19% from EUR 46.3 million in the six months ended 30 June 2006 to EUR 55.2 million in the six months ended 30 June 2007. Contracting and consulting expenses increased reflecting expenditure to facilitate the removal and sale of previously accumulated residues, the value of which had increased due to higher metal prices and a revegetation project undertaken in the six months ended 30 June 2007, together with an increase in other expenses primarily attributable to higher corporate charges which include the charge out to the site of Zinifex senior management remuneration (including bonus and incentive arrangements and CEO departure costs). See “— Combined Results of Operations for the Zinifex Carve-out Group — Profit from Operating Activities before Depreciation and Amortisation (EBITDA)” beginning on page 84. These expense items more than offset reductions in Hobart’s energy expenses achieved due to a reduction in the expected future costs of the embedded derivative linked to the expiration of Hobart’s electricity contract. Hobart’s existing electricity contract, which expires on 31 December 2007, links the price we pay for electricity to average LME zinc prices. This is separately accounted for as an embedded derivative.

Depreciation and amortisation increased from EUR 7.3 million in the six months ended 30 June 2006 to EUR 7.5 million in the six months ended 30 June 2007.

As a result of the foregoing, profit before net financing costs and income tax at our Hobart site decreased from EUR 59.3 million in the six months ended 30 June 2006 to EUR 28.0 million in the six months ended 30 June 2007.

87 Budel The following table sets forth the Budel site’s revenue, sales realisation expenses, raw materials costs, gross profit, operating costs, EBITDA, depreciation and amortisation and profit before net financing costs and income tax for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Revenue ...... 337.7 389.8 Sales realisation expenses ...... (2.5) (3.5) Raw materials costs ...... (225.5) (252.9) Gross profit ...... 109.7 133.4 Operating costs(1) ...... (59.7) (72.9) EBITDA ...... 50.0 60.5 Depreciation and amortisation ...... (2.8) (3.3) Profit before net financing costs and income tax ...... 47.2 57.2 Note: (1) Includes other non-cash expenses in the six months ended 30 June 2006 and 2007 of EUR 0.4 million and EUR 0.2 million, respectively.

The following table sets forth the key components of the Budel site’s gross profit which has been derived from unaudited management accounts for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Gross profit Treatment charge (base and escalator) ...... 68.6 63.6 Premium ...... 9.5 24.3 Free metal ...... 35.1 40.0 By-products ...... 15.7 23.0 Price differentials (QP terms) ...... (16.8) (10.9) Other(1) ...... (2.4) (6.6) Total ...... 109.7 133.4

Note: (1) The “Other” component of gross profit comprises sales realisation expenses and, where applicable, the costs of aluminium and other alloying metals.

Zinc metal sales volumes from our Budel site in the six months ended 30 June 2007 were 112,851 tonnes, in line with sales volumes of 113,208 tonnes in the six months ended 30 June 2006. This result was achieved despite reduced roaster output as a result of sub-optimal feedstock and a related 10-day maintenance shutdown of the roasters during the six months ended 30 June 2007.

Revenue at our Budel site increased by 15%, from EUR 337.7 million in the six months ended 30 June 2006 to EUR 389.8 million in the six months ended 30 June 2007. This was primarily a result of higher premiums achieved due to improved market conditions for Budel’s higher priced premium 7% aluminium zinc die-casting alloys in Europe, together with the positive impact of the higher average zinc and other LME metal prices on free zinc sales and on by-product sales, respectively.

Sales realisation expenses increased by 40% from EUR 2.5 million in the six months ended 30 June 2006 to EUR 3.5 million in the six months ended 30 June 2007, primarily due to increased oil prices.

Raw materials costs increased by 12% from EUR 225.5 million in the six months ended 30 June 2006 to EUR 252.9 million in the six months ended 30 June 2007. The increase was mainly due to the higher average LME zinc price experienced in the six months ended 30 June 2007 and lower industry wide base TC terms, which together increased the cost of purchasing zinc concentrate and offset the positive impact of TC escalators.

88 The following table sets forth the Budel site’s operating costs for the six months ended 30 June 2006 and 2007: Six months ended 30 June 2006 2007 (EUR million) Stores ...... 5.6 7.4 Employee benefits expense ...... 13.7 14.3 Energy expenses ...... 29.7 29.5 Contracting and consulting expenses ...... 5.3 7.9 Changes in inventories of finished goods and work in progress ...... 0.9 2.2 Other income ...... (1.2) (1.5) Other expenses ...... 5.7 13.1 Total ...... 59.7 72.9

Operating costs increased by 22% from EUR 59.7 million in the six months ended 30 June 2006 to EUR 72.9 million in the six months ended 30 June 2007, mainly due to the charge out to the site of Zinifex senior management remuneration (which includes bonus and incentive arrangements and CEO departure costs (see “— Combined Results of Operations for the Zinifex Carve-out Group — Profit from Operating Activities before Depreciation and Amortisation (EBITDA)” beginning on page 84)), foreign exchange losses (arising from Budel’s purchases and sales of metal in U.S. dollars while its accounts are in euro) and an increase in contracting and consulting expenses in part attributable to the shutdown referred to above. Depreciation and amortisation increased from EUR 2.8 million in the six months ended 30 June 2006 to EUR 3.3 million in the six months to 30 June 2007. As a result of the foregoing, profit before net financing costs and income tax at our Budel site increased from EUR 47.2 million in the six months ended 30 June 2006 to EUR 57.2 million in the six months ended 30 June 2007.

Clarksville The following table sets forth the Clarksville site’s revenue, sales realisation expenses, raw materials costs, gross profit, operating costs, EBITDA, depreciation and amortisation and profit before net financing costs and income tax for the six months ended 30 June 2006 and 2007: Six months ended 30 June 2006 2007 (EUR million) Revenue ...... 152.5 205.6 Sales realisation expenses ...... (4.0) (4.3) Raw materials costs ...... (107.2) (155.6) Gross profit ...... 41.3 45.7 Operating costs(1) ...... (27.9) (35.4) EBITDA ...... 13.4 10.3 Depreciation and amortisation ...... (1.7) (3.4) Profit before net financing costs and income tax ...... 11.7 6.9

Note: (1) Includes other non-cash expenses in the six months ended 30 June 2006 and 2007 of EUR 0.0 million and EUR 0.4 million, respectively. The following table sets forth the key components of the Clarksville site’s gross profit which has been derived from unaudited management accounts for the six months ended 30 June 2006 and 2007: Six months ended 30 June 2006 2007 (EUR million) Gross profit Treatment charge (base and escalator) ...... 24.5 21.6 Premium ...... 6.1 8.4 Free metal ...... 9.8 16.0 By-products ...... 5.3 4.9 Price differentials (QP terms) ...... (0.5) (2.1) Other(1) ...... (3.9) (3.1) Total ...... 41.3 45.7

89 Note: (1) The “Other” component of gross profit comprises sales realisation expenses and, where applicable, the costs of aluminium and other alloying metals.

Zinc metal sales volumes from our Clarksville site in the six months ended 30 June 2007 were 69,833 tonnes in comparison to 64,402 tonnes in the six months ended 30 June 2006, representing an increase of 8%. This increase reflects a return to more normal production and sales levels after a fall in the six months ended 30 June 2006 caused by a shortage of zinc oxide materials and was achieved despite ongoing slow demand in the U.S. markets during the six months ended 30 June 2007.

Revenue at our Clarksville site increased by 35%, from EUR 152.5 million in the six months ended 30 June 2006 to EUR 205.6 million in the six months ended 30 June 2007. This was primarily a result of the positive impact on revenue of the higher average LME zinc price on zinc sales, as well as the higher sales levels.

Sales realisation expenses increased by 8% from EUR 4.0 million in the six months ended 30 June 2006 to EUR 4.3 million in the six months ended 30 June 2007, primarily reflecting the increased sales volumes achieved in the six months ended 30 June 2007 and higher oil prices.

Raw materials costs increased by 45% from EUR 107.2 million in the six months ended 30 June 2006 to EUR 155.6 million in the six months ended 30 June 2007. The increase was mainly due to an increase in raw material volume purchases due to the return to more normal production levels, the higher average LME zinc price experienced in the six months ended 30 June 2007 and lower industry-wide base TC terms, which collectively increased the cost of purchasing zinc concentrate and offset the positive impact of TC escalators.

The following table sets forth the Clarksville site’s operating costs for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Stores ...... 5.6 4.2 Employee benefits expense ...... 8.1 7.5 Energy expenses ...... 8.2 8.1 Contracting and consulting expenses ...... 2.4 3.5 Changes in inventories of finished goods and work in progress ...... 0.3 1.5 Other income ...... (0.4) (0.1) Other expenses ...... 3.7 10.7 Total ...... 27.9 35.4

Operating costs increased by 27% from EUR 27.9 million in the six months ended 30 June 2006 to EUR 35.4 million in the six months ended 30 June 2007, mainly due to the charge out to the site of Zinifex senior management remuneration (which includes bonus and incentive arrangements and CEO departure costs (see “— Combined Results of Operations for the Zinifex Carve-out Group — Profit from Operating Activities before Depreciation and Amortisation (EBITDA)” beginning on page 84)), and foreign exchange losses.

Depreciation and amortisation increased from EUR 1.7 million in the six months ended 30 June 2006 to EUR 3.4 million in the six months to 30 June 2007 due to the amortisation of capital expenditures incurred in connection with the shutdown in October 2006.

As a result of the foregoing, profit before net financing costs and income tax at our Clarksville site decreased from EUR 11.7 million in the six months ended 30 June 2006 to EUR 6.9 million in the six months ended 30 June 2007.

Port Pirie Port Pirie is principally a lead smelter but it also produces a significant amount of by-products, including zinc, silver, gold and copper. The following table sets forth the Port Pirie site’s revenue, sales realisation

90 expenses, raw materials costs, gross profit, operating costs, EBITDA, depreciation and amortisation and profit before net financing costs and income tax for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Revenue ...... 219.4 300.2 Sales realisation expenses ...... (3.1) (1.6) Raw materials costs ...... (137.1) (204.3) Gross profit ...... 79.2 94.3 Operating costs(1) ...... (57.8) (73.1) EBITDA ...... 21.4 21.2 Depreciation and amortisation ...... (4.7) (6.5) Profit before net financing costs and income tax ...... 16.7 14.7 Note: (1) Includes other non-cash expenses in the six months ended 30 June 2006 and 2007 of EUR 1.9 million and EUR 7.1 million, respectively.

The following table sets forth the key components of the Port Pirie site’s gross profit which has been derived from unaudited management accounts for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Gross profit Treatment charge (base and escalator) ...... 24.7 24.4 Premium ...... 2.9 1.8 Free metal(1) ...... 13.7 18.3 By-products ...... 50.3 63.6 Price differentials (QP terms) ...... (7.8) (5.7) Other(2) ...... (4.6) (8.1) Total ...... 79.2 94.3

Notes: (1) Free metal includes lead only. Other metals are included in the “By-products” line item. (2) The “Other” component of gross profit comprises sales realisation expenses and, where applicable, the costs of aluminium and other alloying metals

Volumes of lead metal sold in the six months ended 30 June 2007 were 107,616 tonnes, a decrease of 11,028 tonnes or 9% from 118,644 tonnes in the six months ended 30 June 2006. The decrease in sales by volume of lead metal was primarily a result of the impact on production of an eight day blast furnace shutdown combined with process instability in the sinter plant as a result of disruptions in raw materials supply due to incidents of mine instability and weather-related transport problems. Volumes of zinc metal sold in the six months ended 30 June 2007 were 19,167 tonnes, an increase of 1,799 tonnes, or 10%, from 17,368 tonnes in the six months ended 30 June 2006. The increase in zinc volume sales was principally achieved by processing existing zinc fume stocks. Sales volumes of refined silver, copper and gold decreased from 190 tonnes, 2,234 tonnes and 269 kilograms, respectively, in the six months ended June 2006 to 162 tonnes, 2,112 tonnes and 258 kilograms, respectively, in the six months ended 30 June 2007, due to lower contents of these metals, especially silver, in the lead concentrates processed and a 13 day planned shutdown of the copper plant in June 2007.

Revenue from our Port Pirie site increased by 37%, from EUR 219.4 million in the six months ended 30 June 2006 to EUR 300.2 million in the six months ended 30 June 2007. This increase was primarily a result of the positive impact of increased zinc sales volumes, the higher average LME prices for zinc and other by-product metals, such as copper, silver and gold, on revenue from by-product sales, together with the rising LME lead price. The effect of the higher metal prices on metal sales more than offset the decrease in sales volumes of lead, copper, silver and gold.

Sales realisation expenses decreased by 48% from EUR 3.1 million in the six months ended 30 June 2006 to EUR 1.6 million in the six months ended 30 June 2007, primarily due to transport cost savings achieved through a change in contract terms with a key customer which more than offset higher oil prices.

91 Raw materials costs increased by 49%, from EUR 137.1 million in the six months ended 30 June 2006 to EUR 204.3 million in the six months ended 30 June 2007 primarily due to increases in the LME lead price in the six months ended 30 June 2007.

The following table sets forth the Port Pirie site’s operating costs for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Stores ...... 8.1 9.4 Employee benefits expense ...... 18.7 17.3 Energy expenses ...... 17.2 16.3 Contracting and consulting expenses ...... 8.0 9.6 Changes in inventories of finished goods and work in progress ...... (0.6) 4.2 Other income ...... (0.8) (0.2) Other expenses ...... 7.2 16.5 Total ...... 57.8 73.1

Operating costs increased by 26%, from EUR 57.8 million in the six months ended 30 June 2006 to EUR 73.1 million in the six months ended 30 June 2007.

This increase was primarily a result of an additional EUR 5.2 million environmental rehabilitation provision included in other expenses for the future restoration and rehabilitation of the site, a EUR 4.2 million change in inventories of finished goods and work in progress resulting primarily from a reduction in sinter stocks in the period and the charge out to the site of Zinifex senior management remuneration (which includes bonus and incentive arrangements and CEO departure costs (see “— Combined Results of Operations for the Zinifex Carve-out Group — Profit from Operating Activities before Depreciation and Amortisation (EBITDA)” beginning on page 84)). These items more than offset reductions achieved in employee and energy expenses.

Depreciation and amortisation increased by 38%, from EUR 4.7 million in the six months ended 30 June 2006 to EUR 6.5 million in the six months ended 30 June 2007 due to the amortisation of capital expenditures incurred in connection with a planned, once-every-20-years smelter maintenance shutdown which occurred in July and August 2006.

As a result of the foregoing, profit before net financing costs and income tax at our Port Pirie site decreased by 12%, from EUR 16.7 million in the six months ended 30 June 2006 to EUR 14.7 million in the six months ended 30 June 2007.

Australian Refined Alloys (“ARA”) ARA is a lead acid battery recycling business. It is the largest lead acid battery recycling business in Australia by number of batteries recycled and currently operates facilities in Sydney and Melbourne. The Company owns 50% of ARA and accounts for its interest using the equity method of accounting. All the figures in the following discussion are those attributable to the Company’s 50% ownership of ARA.

The following table sets forth ARA’s revenue, sales realisation expenses, raw materials costs, gross profit, operating costs, EBITDA, depreciation and amortisation and profit before net financing costs and income tax for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Revenue ...... 10.6 13.0 Sales realisation expenses ...... (0.5) (0.2) Raw materials costs ...... (2.5) (4.7) Gross profit ...... 7.6 8.1 Operating costs(1) ...... (3.0) (3.0) EBITDA ...... 4.6 5.1 Depreciation and amortisation ...... (0.9) (0.9) Profit before net financing costs and income tax ...... 3.7 4.2

92 Note: (1) These are all cash expenses.

ARA sold 8,620 tonnes of lead metal in the six months ended 30 June 2007, a decrease of 1,226 tonnes, or 12.5%, from the 9,846 tonnes sold in the six months ended 30 June 2006. This was primarily a result of a decrease in production volumes as a result of the lower availability of lead acid battery feedstocks and planned maintenance at both ARA sites.

Despite the decrease in sales volumes, revenue increased by 23%, from EUR 10.6 million in the six months ended 30 June 2006 to EUR 13.0 million in the six months ended 30 June 2007. This increase was mainly due to the higher LME lead metal price in the six months ended 30 June 2007.

Raw materials costs increased by 88%, from EUR 2.5 million in the six months ended 30 June 2006 to EUR 4.7 million in the six months ended 30 June 2007 primarily due to increases in lead prices, offset in part by lower quantities of feedstocks purchased.

Operating costs remained constant at EUR 3.0 million in both six months ended 30 June 2006 and 2007.

As a result of the foregoing, profit before net financing costs and income tax increased by 14%, from EUR 3.7 million in the six months ended 30 June 2006 to EUR 4.2 million in the six months ended 30 June 2007.

Genesis Alloys Ningbo (“Genesis”) Genesis is a zinc die-cast alloy producer located in China, of which we own 50% of the shares. Genesis became operational in January 2006 and produced approximately 1,325 tonnes and 11,151 tonnes of zinc alloys in the six months ended 30 June 2006 and 2007, respectively. A change to Chinese tax rules regarding die-cast alloys at the end of 2006 allowed producers in China to increase the amount of die-cast alloys sold domestically. Genesis has benefited from this change in the law. In the six months ended 30 June 2007, our 50% interest in Genesis contributed approximately EUR 0.38 million to profit before net financing costs and income tax. See “Business — Business Description — Genesis” beginning on page 231.

Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Years Ended 31 December 2005 and 2006 Combined Results of Operations for the Zinifex Carve-out Group The following table sets forth unaudited selected income statement information before net financing costs and income tax and EBITDA for the Zinifex Carve-out Group for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Revenue ...... 1,134.1 2,126.8 Gross profit ...... 421.8 773.4 Operating costs ...... (333.6) (386.0) Profit from operating activities before depreciation and amortisation(1) (EBITDA) ..... 88.1 387.5 Depreciation and amortisation ...... (29.6) (37.4) Profit from operating activities ...... 58.5 350.1 Share of profit of equity accounted investees ...... 0 0 Profit before net financing costs and income tax ...... 58.5 350.1

Note: (1) Includes other non-cash expenses in 2005 and 2006 of EUR 11.0 million and EUR 9.8 million, respectively.

93 The following table sets forth the key components of the Zinifex Carve-out Group’s gross profit which has been derived from unaudited management accounts for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Gross profit Treatment charge (base and escalator) ...... 198.3 362.2 Premium ...... 74.6 74.6 Free metal ...... 74.9 156.8 By-products ...... 110.5 178.4 Price differentials (QP terms) ...... (2.9) 40.4 Other(1) ...... (33.6) (39.0) Total ...... 421.8 773.4

Note: (1) The “Other” component of gross profit comprises sales realisation expenses and, where applicable, the costs of aluminium and other alloying metals. “Other” also includes the total gross profit of ARA.

The following table sets forth the Zinifex Carve-out Group’s operating costs for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Stores ...... (51.1) (53.8) Employee benefits expense ...... (106.9) (112.7) Energy expenses ...... (118.0) (147.3) Contracting and consulting expenses ...... (35.1) (48.6) Changes in inventories of finished goods and work in progress ...... 1.2 8.3 Other income ...... 12.6 1.1 Other expenses ...... (36.3) (33.0) Total ...... (333.6) (386.0)

Revenue The Zinifex Carve-out Group’s revenue increased by 88%, from EUR 1,134.1 million in the year ended 31 December 2005 to EUR 2,126.8 million in the year ended 31 December 2006. This increase was primarily due to increases in revenue at the Hobart, Budel, Clarksville and Port Pirie sites, primarily driven by the increases in lead, zinc and other metal prices.

Profit from Operating Activities before Depreciation and Amortisation (EBITDA) The Zinifex Carve-out Group’s profit from operating activities before depreciation and amortisation increased more than four-fold, from EUR 88.1 million in the year ended 31 December 2005 to EUR 387.5 million in the year ended 31 December 2006. This increase was primarily due to increases in the results from operating activities of the Hobart, Budel, Clarksville and Port Pirie sites, as increases in revenue more than offset increases in raw materials costs and energy costs. Operating costs increased by 16% from EUR 333.6 million in the year ended 31 December 2005 to EUR 386.0 million in the year ended 31 December 2006. This was principally due to an increase in energy expenses and contracting and consulting expenses.

Other Non-cash Expenses The Zinifex Carve-out Group’s other non-cash expenses decreased by 11%, from EUR 11.0 million in the year ended 31 December 2005 to EUR 9.8 million in the year ended 31 December 2006, primarily due to decreases in other non-cash expenses at Hobart and Port Pirie.

94 Depreciation and Amortisation The Zinifex Carve-out Group’s depreciation and amortisation increased by 26%, from EUR 29.6 million in the year ended 31 December 2005 to EUR 37.4 million in the year ended 31 December 2006, primarily due to increases in depreciation and amortisation at the Hobart, Port Pirie and Clarksville sites as a result of capitalised expenses incurred in connection with the planned shutdowns, including major once-every-20-years and once- every-30-years shutdowns of the Port Pirie and Hobart sites, respectively.

Profit from Operating Activities and Profit Before Net Financing Costs and Income Tax As a result of the foregoing, the Zinifex Carve-out Group’s profit from operating activities and profit before net financing costs and income tax each increased more than five-fold, from EUR 58.5 million in the year ended 31 December 2005 to EUR 350.1 million in the year ended 31 December 2006.

Segment Results of Operations for the Zinifex Carve-out Group The following table sets forth certain financial information, by segment, of the Zinifex Carve-out Group for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Revenue ...... 1,134.1 2,126.8 Hobart ...... 314.0 682.6 Port Pirie ...... 340.2 425.7 ARA ...... 16.4 19.2 Budel ...... 322.0 752.4 Clarksville ...... 149.2 300.9 Other (including Genesis and intersegment eliminations) ...... (7.7) (54.0) Gross Profit ...... 421.8 773.4 Hobart ...... 118.2 272.8 Port Pirie ...... 122.8 153.7 ARA ...... 12.0 13.4 Budel ...... 126.6 260.7 Clarksville ...... 43.0 79.3 Other (including Genesis and intersegment eliminations) ...... (0.8) (6.5) Operating costs(1) ...... (333.6) (386.0) Hobart ...... (89.3) (98.3) Port Pirie ...... (100.7) (110.2) ARA ...... (6.3) (5.8) Budel ...... (97.2) (120.4) Clarksville ...... (42.0) (51.0) Other (including Genesis and intersegment eliminations) ...... 1.7 (0.3) EBITDA ...... 88.1 387.5 Hobart ...... 28.9 174.5 Port Pirie ...... 22.1 43.5 ARA ...... 5.7 7.7 Budel ...... 29.4 140.3 Clarksville ...... 1.0 28.3 Other (including Genesis and intersegment eliminations) ...... 1.0 (6.8) Depreciation and amortisation ...... (29.6) (37.4) Hobart ...... (11.2) (15.5) Port Pirie ...... (9.3) (10.3) ARA ...... (2.1) (1.8) Budel ...... (5.1) (6.0) Clarksville ...... (1.9) (3.8) Other (including Genesis and intersegment eliminations) ...... 0 0

95 Year ended 31 December 2005 2006 (EUR million) Profit before net financing costs and income tax ...... 58.5 350.1 Hobart ...... 17.8 159.0 Port Pirie ...... 12.8 33.2 ARA ...... 3.6 5.9 Budel ...... 24.3 134.3 Clarksville ...... (0.9) 24.5 Other (including Genesis and intersegment eliminations) ...... 0.9 (6.9) Capital expenditure(2) ...... 47.5 79.0 Hobart ...... 19.5 23.5 Port Pirie ...... 11.9 35.8 ARA ...... 0.4 0.4 Budel ...... 11.4 13.2 Clarksville ...... 4.2 6.1 Other (including Genesis and intersegment eliminations) ...... 0 0 Capital employed at end of period ...... 285.6 588.3 Working capital at end of period(2) ...... 192.7 487.2 Hobart ...... 41.4 119.8 Port Pirie ...... 67.6 102.7 ARA ...... 2.1 3.5 Budel ...... 40.1 168.1 Clarksville ...... 41.5 87.7 Other (including Genesis and intersegment eliminations) ...... 0 5.5 Notes: (1) Includes other non-cash expenses of EUR 11.0 million and EUR 9.8 million in the years ended 31 December 2005 and 2006, respectively. (2) Converted at the EUR/AUD exchange rates of 0.6128 and 0.6000 for the years ended 31 December 2005 and 2006, respectively.

Hobart The following table sets forth the Hobart site’s revenue, sales realisation expenses, raw materials costs, gross profit, operating costs, EBITDA, depreciation and amortisation and profit before net financing costs and income tax for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Revenue ...... 314.0 682.6 Sales realisation expenses ...... (13.0) (14.3) Raw materials costs ...... (182.8) (395.5) Gross profit ...... 118.2 272.8 Operating costs(1) ...... (89.3) (98.3) EBITDA ...... 28.9 174.5 Depreciation and amortisation ...... (11.2) (15.5) Profit before net financing costs and income tax ...... 17.8 159.0 Note: (1) Includes other non-cash expenses in 2005 and 2006 of EUR 6.4 million and EUR 4.8 million, respectively.

96 The following table sets forth the key components of the Hobart site’s gross profit which has been derived from unaudited management accounts for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Gross profit Treatment charge (base and escalator) ...... 75.3 149.8 Premium ...... 28.4 26.7 Free metal ...... 22.7 35.8 By-products ...... 18.7 30.5 Price differentials (QP terms) ...... (2.6) 55.3 Other(1) ...... (24.3) (25.3) Total ...... 118.2 272.8

Note: (1) The “Other” component of gross profit comprises sales realisation expenses and, where applicable, the costs of aluminium and other alloying metals.

Zinc metal sales volumes from our Hobart site in 2006 were 233,320 tonnes in comparison to 258,681 tonnes in 2005, representing a decrease of 9.8%. This decrease was primarily a result of a major once- every-30-years shutdown of the Hobart site for planned maintenance which lasted for 58 days between February and April 2006 and which resulted in significantly reduced production volumes.

Nevertheless, revenue at our Hobart site increased by 117%, from EUR 314.0 million in 2005 to EUR 682.6 million in 2006. This was largely a result of the positive impact on revenue of the rising LME zinc metal price on zinc sales and favourable QP terms. The price differential attributable to QP terms resulted in a gain of EUR 55.3 million in 2006 due to Zinifex’s policy of not transactionally hedging QP differentials arising in its smelters from purchases of concentrate from Zinifex mines. Nyrstar currently transactionally hedges these QP differentials and so Nyrstar is not expected to be exposed to gains or losses of such magnitude. Revenue from the sales of by-products also increased as prices of silver and other by-products increased in 2006.

Sales realisation expenses increased by 10%, from EUR 13.0 million in 2005 to EUR 14.3 million in 2006, primarily due to higher oil prices in 2006. Higher oil prices resulted in higher fuel surcharges being levied by governmental authorities which resulted in higher freight fuel costs. In addition, certain of our transportation contracts include derivative elements that link transportation prices to oil prices and therefore the increase in oil prices led to an increase in freight and transportation costs in 2006.

Raw materials costs increased by 116%, from EUR 182.8 million in 2005 to EUR 395.5 million in 2006. The increase was mainly due to the increase in LME zinc prices in 2006, which increased the cost of purchasing zinc concentrate and which more than offset the decrease in raw material volumes that were purchased as a result of the 58-day shutdown and the positive impact of TC escalators. The increase was also a result of the lower base TCs set for 2006 as a result of the scarcity of concentrate supply.

The following table sets forth the Hobart site’s operating costs for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Stores ...... 12.3 13.1 Employee benefits expense ...... 26.5 27.2 Energy expenses ...... 29.4 35.1 Contracting and consulting expenses ...... 11.0 13.6 Changes in inventories of finished goods and work in progress ...... 0.1 (0.4) Other income ...... 0.0 (0.4) Other expenses ...... 10.1 10.1 Total ...... 89.3 98.3

97 Operating costs increased by 10%, from EUR 89.3 million in 2005 to EUR 98.3 million in 2006, primarily due to increased energy costs, maintenance costs and upward wage pressure as a result of prevailing industry conditions. Hobart’s existing electricity contract, which expires on 31 December 2007, links the price we pay for electricity to average LME zinc prices. LME zinc prices increased significantly in 2006, which led to an increase in electricity costs that more than offset the decrease in electricity usage as a result of the major shutdown. The new contracts, which will take effect on 1 January 2008, will not have a provision linking electricity price with LME zinc prices, which, depending on the price of zinc at the time the existing contract ends, could mean we will pay less for electricity than we currently do. Wage inflation in Australia in 2006 was approximately 3% and was higher for workers in the resources industry where demand for skilled and experienced workers has exceeded supply. The major shutdown between February and April 2006 also led to increased costs of external services such as higher paid third party contractors who supplied much of the maintenance activities conducted during the shutdown, which offset the savings from a general reduction in the number of full-time equivalent workers as a result of efficiency gains achieved through productivity initiatives.

Depreciation and amortisation increased by 38%, from EUR 11.2 million in 2005 to EUR 15.5 million in 2006, principally due to initial amortisation of the EUR 7.8 million capital expenditures related to the major 58-day shutdown between February and April 2006.

As a result of the foregoing, profit before net financing costs and income tax at our Hobart site increased more than eight-fold, from EUR 17.8 million in 2005 to EUR 159.0 million in 2006.

Budel The following table sets forth the Budel site’s revenue, sales realisation expenses, raw materials costs, gross profit, operating costs, EBITDA, depreciation and amortisation and profit before net financing costs and income tax for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Revenue ...... 322.0 752.4 Sales realisation expenses ...... (5.9) (5.5) Raw materials costs ...... (189.5) (486.2) Gross profit ...... 126.6 260.7 Operating costs(1) ...... (97.2) (120.4) EBITDA ...... 29.4 140.3 Depreciation and amortisation ...... (5.1) (6.0) Profit before net financing costs and income tax ...... 24.3 134.3 Note: (1) Includes other non-cash expenses in 2005 and 2006 of EUR 0 million and EUR 0.6 million, respectively.

The following table sets forth the key components of the Budel site’s gross profit which has been derived from unaudited management accounts for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Gross profit Treatment charge (base and escalator) ...... 61.5 130.4 Premium ...... 23.0 32.1 Free metal ...... 37.1 91.1 By-products ...... 21.2 31.0 Price differentials (QP terms) ...... (8.8) (17.0) Other(1) ...... (7.4) (6.9) Total ...... 126.6 260.7

Note: (1) The “Other” component of gross profit comprises sales realisation expenses and, where applicable, the costs of aluminium and other alloying metals.

98 Zinc metal sales volumes from our Budel site in the year ended 31 December 2006 were 231,396 tonnes, an increase of 1,216 tonnes over 2005. This increase was driven by the growth in zinc alloy demand during this period and an expansion in overall production capacity by 30,000 tonnes per annum to 260,000 tonnes per annum as a result of the completion in May 2006 of certain de-bottlenecking measures. Although production was reduced while the improvement works were occurring, this reduction was more than offset by the general increase in production.

Revenue at Budel increased by 134%, from EUR 322.0 million in 2005 to EUR 752.4 million in 2006. This was largely a result of the impact of rising LME zinc metal price on zinc sales, the impact of rising metal prices on by-product sales and the increased production and sale of higher priced premium 7% aluminium zinc die-casting alloys. Zinc premiums increased in 2006 compared with 2005, reflecting the continued high level of demand for zinc in Europe in 2006.

Sales realisation expenses decreased by 7%, from EUR 5.9 million in 2005 to EUR 5.5 million in 2006, as a result of the increased proportion of total sales volumes made to nearby customers and hence reduced freight costs.

Raw materials costs increased by 157%, from EUR 189.5 million in 2005 to EUR 486.2 million in 2006, primarily as a result of higher LME zinc metal prices which increased the costs of zinc concentrate purchases and offset the positive impact of TC escalators. In addition, we increased our purchases of refined zinc metal during the improvement works in order to meet delivery requirements under customer orders. The increase was also a result of lower base TCs set for 2006 as a result of the scarcity of concentrate supply.

The following table sets forth the Budel site’s operating costs for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Stores ...... 10.0 11.9 Employee benefits expense ...... 27.0 28.0 Energy expenses ...... 46.0 65.1 Contracting and consulting expenses ...... 8.3 11.1 Changes in inventories of finished goods and work in progress ...... 0.2 (3.5) Other income ...... 0.8 0.2 Other expenses ...... 4.9 7.6 Total ...... 97.2 120.4

Operating costs increased by 24%, from EUR 97.2 million in 2005 to EUR 120.4 million in 2006. The increase was primarily due to increased energy costs for the smelter under its current electricity contract that indexes prices to market electricity prices, which increased significantly in 2006. Budel’s electricity contract expires at the end of 2007 and contract renewal negotiations are ongoing. Employee benefits expense increased slightly despite a reduction in the number of full-time equivalent workers due to an efficiency programme, as redundancy costs were incurred and salary costs increased in line with prevailing industry conditions.

Depreciation and amortisation increased from EUR 5.1 million in the year ended 31 December 2005 to EUR 6.0 million in the year ended 31 December 2006.

As a result of the foregoing, profit before net financing costs and income tax of our Budel site increased more than five-fold, from EUR 24.3 million in 2005 to EUR 134.3 million in 2006.

99 Clarksville

The following table sets forth the Clarksville site’s revenue, sales realisation expenses, raw materials costs, gross profit, operating costs, EBITDA, depreciation and amortisation and profit before net financing costs and income tax for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Revenue ...... 149.2 300.9 Sales realisation expenses ...... (7.0) (7.3) Raw materials costs ...... (99.2) (214.3) Gross profit ...... 43.0 79.3 Operating costs(1) ...... (42.0) (51.0) EBITDA ...... 1.0 28.3 Depreciation and amortisation ...... (1.9) (3.8) Profit before net financing costs and income tax ...... (0.9) 24.5 Note: (1) Includes other non-cash expenses in 2005 and 2006 of EUR 0 million and EUR 0.4 million, respectively.

The following table sets forth the key components of the Clarksville site’s gross profit which has been derived from unaudited management accounts for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Gross profit Treatment charge (base and escalator) ...... 20.8 40.4 Premium ...... 9.0 10.6 Free metal ...... 8.4 16.3 By-products ...... 10.3 10.2 Price differentials (QP terms) ...... 1.0 9.1 Other(1) ...... (6.5) (7.3) Total ...... 43.0 79.3

Note: (1) The “Other” component of gross profit comprises sales realisation expenses and, where applicable, the costs of aluminium and other alloying metals.

Zinc metal sales volumes from our Clarksville site in 2006 were 110,775 tonnes, a decrease of 2,134 tonnes from 2005. This decrease was principally due to reduced production volumes as a result of the planned maintenance shutdown of the roaster in October 2006. The decrease in production as a result of the roaster shutdown was partially offset by the increased use of purchased, already roasted zinc oxides which supplemented production volumes from zinc concentrates.

Despite the decrease in sales volumes, revenue at our Clarksville site increased by 102%, from EUR 149.2 million in 2005 to EUR 300.9 million in 2006. This was largely a result of the positive impact on Clarksville’s revenue of the rising LME zinc metal price on zinc sales.

Sales realisation expenses increased by 4%, from EUR 7.0 million for the year ended 31 December 2005 to EUR 7.3 million for the year ended 31 December 2006, primarily due to the higher cost of freight fuel in 2006.

Raw materials costs increased by 116%, from EUR 99.2 million in 2005 to EUR 214.3 million in 2006. This was mainly a result of increased LME zinc prices which increased the costs of zinc concentrate purchases and lower base TCs in 2006 as a result of the scarcity of concentrate supply and which together offset the positive impact of TC escalators.

100 The following table sets forth the Clarksville site’s operating costs for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Stores ...... 11.6 10.8 Employee benefits expense ...... 13.3 15.7 Energy expenses ...... 13.5 15.2 Contracting and consulting expenses ...... 2.0 4.7 Changes in inventories of finished goods and work in progress ...... 0.0 (1.6) Other income ...... 0.0 (0.5) Other expenses ...... 1.7 6.7 Total ...... 42.0 51.0

Operating costs increased by 21%, from EUR 42.0 million in 2005 to EUR 51.0 million in 2006. Operating costs were affected by upward wage pressure as a result of prevailing industry conditions and an increase in energy costs as a result of higher unit electricity prices. Additional contributions to the Clarksville site’s medical and pension plans in 2006, which reduced in part the deficit in the pension plans, also increased operating costs.

Depreciation and amortisation increased by 100%, from EUR 1.9 million in 2005 to EUR 3.8 million in 2006 due to initial amortisation of the capital expenditures made during the planned shutdown in 2006.

As a result of the foregoing, profit before net financing costs and income tax of our Clarksville site increased by EUR 25.4 million, from a loss of EUR 0.9 million in 2005 to a profit of EUR 24.5 million in 2006.

Port Pirie The following table sets forth the Port Pirie site’s revenue, sales realisation expenses, raw materials costs, gross profit, operating costs, EBITDA, depreciation and amortisation and profit before net financing costs and income tax for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Revenue ...... 340.2 425.7 Sales realisation expenses ...... (8.4) (5.6) Raw materials costs ...... (209.0) (266.4) Gross profit ...... 122.8 153.7 Operating costs(1) ...... (100.7) (110.2) EBITDA ...... 22.1 43.5 Depreciation and amortisation ...... (9.3) (10.3) Profit before net financing costs and income tax ...... 12.8 33.2 Note: (1) Includes other non-cash expenses in 2005 and 2006 of EUR 4.4 million and EUR 3.9 million, respectively.

The following table sets forth the key components of the Port Pirie site’s gross profit which has been derived from unaudited management accounts for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Gross profit Treatment charge (base and escalator) ...... 40.7 41.6 Premium ...... 14.2 5.2 Free metal(1) ...... 6.7 13.6 By-products ...... 60.4 106.7 Price differentials (QP terms) ...... 7.4 (7.0) Other(2) ...... (6.6) (6.4) Total ...... 122.8 153.7

101 Notes: (1) Free metal includes lead only. Other metals are included in the “By-products” line item. (2) The “Other” component of gross profit comprises sales realisation expenses and, where applicable, the costs of aluminium and other alloying metals.

Volumes of lead metal sold in 2006 were 206,521 tonnes, a decrease of 23,232 tonnes, or 10.1%, from 229,753 tonnes in 2005. Volumes of zinc metal sold in 2006 were 32,862 tonnes, a decrease of 5,931 tonnes, or 15.3%, from 38,793 tonnes in 2005. The decrease in sales by volume of lead and zinc metal was primarily a result of a decrease in production volumes of lead and zinc due to a major once-every-20-years smelter maintenance shutdown in July and August 2006 and process instability in the sinter plant in the latter part of 2006 as a result of disruptions in raw materials supply due to incidents of mine instability and weather-related transport problems. The shutdown also resulted in decreased sales volumes of refined silver, copper and gold. Sales volumes of refined silver, copper and gold decreased from 13.558 million troy ounces, 3,884 tonnes and 19,226 troy ounces in 2005 to 11.317 million troy ounces, 3,413 tonnes and 16,365 troy ounces in 2006, respectively.

Nevertheless, revenue for our Port Pirie site increased by 25%, from EUR 340.2 million in 2005 to EUR 425.7 million in 2006. This increase was primarily a result of the positive impact of rising prices for zinc and other by-product metals, such as copper, silver and gold, on revenue from by-product sales. The effect of rising prices on metal sales for zinc, copper, silver and gold more than offset the decrease in sales volumes. High LME lead prices in 2006, especially price spikes in January and April of 2006 had a favourable effect on free lead metal sales, which also contributed to the increase in revenue. Premiums decreased as a result of decreased production of value-added products such as lead alloys and an increase in production of commodity lead to meet the commodity lead delivery requirements of our contract with Trafigura. See “Business — Business Description — Sourcing of Raw Materials and Marketing and Sales — Sales of Metal and By-products” beginning on page 172. Losses from quotational period terms were a result of increased transactional hedging losses.

Sales realisation expenses decreased by 33%, from EUR 8.4 million in 2005 to EUR 5.6 million in 2006. Costs of transportation generally increased in 2006 but this increase was more than offset by an increase in the proportion of total sales to customers “at the factory gate” where the customer incurs all freight costs, as a result of changes to contractual terms.

Raw materials costs increased by 27%, from EUR 209.0 million in 2005 to EUR 266.4 million in 2006 due primarily to increases in LME lead prices in 2006 offsetting the positive impact of TC escalators.

The following table sets forth the Port Pirie site’s operating costs for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Stores ...... 15.6 16.2 Employee benefits expense ...... 35.0 36.4 Energy expenses ...... 28.6 31.5 Contracting and consulting expenses ...... 12.2 17.6 Changes in inventories of finished goods and work in progress ...... (1.4) (2.8) Other income ...... (0.9) (1.3) Other expenses ...... 11.6 12.6 Total ...... 100.7 110.2

Operating costs increased by 9%, from EUR 100.7 million in the year ended 31 December 2005 to EUR 110.2 million in the year ended 31 December 2006. This increase was primarily a result of upward wage pressure as a result of prevailing industry conditions, costs of EUR 5.4 million incurred during the planned shutdown and an increase in energy costs as a decision to utilise higher grade fuel sources to improve production efficiency led to increased coal and coke costs. Shutdown costs included costs related to the increased use of external services such as third party contractors engaged to undertake the planned maintenance. In addition, redundancy costs offset the savings from a reduction in the number of full-time equivalent workers due to an efficiency programme.

102 Depreciation and amortisation increased by 11%, from EUR 9.3 million in 2005 to EUR 10.3 million in 2006, due to the initial amortisation of the capital expenditures made during the shutdown.

As a result of the foregoing, profit before net financing costs and income tax at our Port Pirie site increased by 159%, from EUR 12.8 million in the year ended 31 December 2005 to EUR 33.2 million in 2006.

ARA The Company owns 50% of ARA and accounts for its interest using the equity method of accounting. All the figures in the following discussion are those attributable to the Company’s 50% ownership of ARA.

The following table sets forth the 50% of ARA’s revenue, sales realisation expenses, raw materials costs, gross profit, operating costs, EBITDA, depreciation and amortisation and profit before net financing costs and income tax attributable to the Company’s 50% ownership of ARA for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Revenue ...... 16.4 19.2 Sales realisation expenses ...... 0.0 (0.9) Raw materials costs ...... (4.4) (4.8) Gross profit ...... 12.0 13.4 Operating costs(1) ...... (6.3) (5.8) EBITDA ...... 5.7 7.7 Depreciation and amortisation ...... (2.1) (1.8) Profit before net financing costs and income tax ...... 3.6 5.9

Note: (1) These are all cash expenses.

ARA sold 17,969 tonnes of lead metal in 2006, a decrease of 1,894 tonnes, or 10.1%, from the 19,863 tonnes sold 2005. This was primarily a result of the decrease in production volumes as a result of the lower availability of lead acid battery feedstocks.

Despite the decrease in sales volumes, revenue increased by 17%, from EUR 16.4 million in 2005 to EUR 19.2 million in 2006. This increase was mainly due to high LME lead metal prices in 2006, especially the price spikes in January and April 2006.

Raw materials costs increased by 9%, from EUR 4.4 million in 2005 to EUR 4.8 million in 2006 largely in line with the LME lead metal price rise.

Operating costs decreased by 8%, from EUR 6.3 million in 2005 to EUR 5.8 million in 2006, reflecting operational efficiencies at the ARA facilities.

As a result of the foregoing, profit before net financing costs and income tax increased by 64%, from EUR 3.6 million in 2005 to EUR 5.9 million in 2006.

Genesis Genesis is a zinc die-cast alloy producer located in China, of which we own 50% of the shares. Genesis became operational in 2006 and produced approximately 8,564 tonnes of zinc alloys in 2006 in total. In 2006, our 50% interest in Genesis contributed approximately EUR 1.0 million to profit before net financing costs and income tax. See “Business — Buinsess Description — Genesis” beginning on page 231.

Results of Operations for the Umicore Carve-out Group Explanation of Certain Key Income Statement Items and Other Operational Data for the Umicore Carve-out Group

Turnover Turnover is the term used by the Umicore Carve-out Group to refer to what Nyrstar and the Zinifex Carve-out Group refer to as revenue.

103 Share of Profits in Investments Accounted for Using the Equity Method Share of profits in investments accounted for using the equity method comprises the share of profit, after tax, from interests in Padaeng and Föhl China.

Gross Profit Gross profit comprises (i) TCs, penalties paid by the miner to the smelter and location advantage concession, (ii) the value of “free zinc (i.e., refined zinc produced by the smelter over and above the metal content the smelter has paid for in concentrates its purchases from the miner), (iii) metal premiums (i.e., sales of refined metal made by the smelter above the LME zinc reference price), and (iv) by product sales.

Operating Cash Costs Operating cash costs comprise “salaries and social charges” (salary and benefits costs for all staff, including social security costs, except for certain shared service departments), “energy” costs and “other” costs (such as contractor services costs related to maintenance work, the costs of consumables and spare parts, the salary and social charges of certain shared service departments and the non-salary general and administrative expenses of the Umicore Carve-out Group, and the costs of legal, human resources, finance, information systems, logistics and other administrative departments of Umicore charged to the Umicore Carve-out Group).

Depreciation and Amortisation Depreciation is on a straight-line basis of 10 to 40 years for buildings and 5 to 10 years for plant and equipment. The Umicore Carve-out Group’s property, plant and equipment were acquired at cost and have been depreciated over their estimated useful lives in accordance with this depreciation policy.

Other Non-cash Expenses Other non-cash expenses primarily comprise increases/reversals in provisions and changes in IAS 39 effects. IAS 39 effects relate to non-cash timing differences due to the non-application of or impossibility of obtaining IAS 39 hedge accounting.

EBITDA EBITDA is profit/(loss) before net financing costs and income tax plus depreciation and amortisation plus other non-cash expenses. EBITDA includes share of profits in investments accounted for using the equity method.

Capital Employed Capital employed is composed mainly of property, plant and equipment, provisions, inventories, accounts receivables and payables and the currency translation differences. Equity, net debt components, deferred tax assets and liabilities and assets and liabilities connected to the recognition of fair value reserves and the IAS 39 effects are excluded.

Presentation of Adjusted Results for the Umicore Carve-out Group The discussion and analysis of the results of operations of the Umicore Carve-out Group in this section “— Results of Operations of the Umicore Carve-out Group” is based on results that have been adjusted to exclude the effects of (i) certain items that management considers to be non-recurring and (ii) IAS 39 impacts, consistent with Umicore’s financial reporting and communications, and (iii) the “structural” metal price and currency hedging engaged in by Umicore. These adjustments, the effects of which are quantified in the introduction to the discussion of each of the periods below, relate to the following principal items:

Non-recurring Items Umicore has in the past categorised as “non-recurring” items related to restructuring measures and impairment of assets and other income or expenses arising from events or transactions that management considered to be clearly distinct from the ordinary activities of the Umicore Carve-out Group. While “non-recurring” items have been separately quantified and excluded from the detailed discussion below, Nyrstar does not currently intend to distinguish between “non-recurring” and “recurring” items in its financial reporting going forward.

104 Structural Metal Price and Currency Risk Hedging The Umicore Carve-out Group engaged in structural hedging of metal prices and currency risk to limit its exposure to fluctuations in metal prices and exchange rates on TCs and free zinc sales. It forward hedged its forecasted exposure to metal prices and currency risk when metal prices expressed in euro or exchange rates were above their historical averages and were at levels where attractive margins could be secured. This structural hedging included the use of forward contracts on metals and forward contracts on currencies. Upon the formation of Nyrstar, all of the structural hedges of the Umicore Carve-out Group were repurchased by Umicore. Whereas the Umicore Carve-out Group engaged in structural hedging, Nyrstar does not currently engage in structural hedging, although it may review this policy in the future. Accordingly, the results that are analysed in the detailed discussion below reflect a separate quantification of structural hedging of metal prices and currency .

IAS 39 Effects IAS 39 fair value hedge accounting allows hedged items to be measured at fair value at the balance sheet date. In the absence of IAS 39 hedge accounting, hedging instruments are measured at fair value (i.e., “marked to market”) at each financial statement date with changes in fair value reflected in earnings, while the underlying hedged items are carried at cost. As the Umicore Carve-out Group did not apply IAS 39 hedge accounting to its transactional hedges or the embedded derivatives in certain of its electricity contracts (resulting from the hedging of zinc price exposure in contracts with zinc price indexation clauses), its results were affected by non-cash volatility in the income statement. These effects have been separately quantified below as “IAS 39 effects” and excluded from the detailed discussion of results of operations.

For information on gross profit, see “— Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters” beginning on page 68.

Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Six Months Ended 30 June 2006 and 2007 Combined Results of Operations for the Umicore Carve-out Group The table below sets forth the Umicore Carve-out Group’s unaudited selected income statement information before net financing costs and income tax and EBITDA for the six months ended 30 June 2006, both on an as reported basis and as adjusted for the elimination of the impact of structural hedging, IAS 39 effects and other items that management of the Umicore Carve-out Group considers to be non-recurring. The discussion in this section following the reconciliation table below is of the adjusted results.

Six months ended 30 June 2006 Reversal of Reversal of Reversal of structural IAS 39 non-recurring Historical hedging effects items Adjusted (EUR million) Turnover ...... 531.7 93.1 — — 624.8 External ...... 283.7 93.1 — — 376.8 From sales to Umicore ...... 248.0 — — — 248.0 Profit/(loss) from operating activities before amortisation, depreciation and other non-cash expenses ...... (6.8) 93.1 — — 86.3 EBITDA ...... (1.3) 93.1 — — 91.8 Depreciation and amortisation ...... 12.1 — (0.8) — 11.3 Other non-cash expenses ...... — — 4.8 (2.9) 1.9 Profit/(loss) from operating activities ...... (18.9) 93.1 (4.0) 2.9 73.1 Share of profits in investments accounted for using the equity method ...... 5.5 — — — 5.5 Profit/(loss) before net financing costs and income tax .... (13.4) 93.1 (4.0) 2.9 78.6

The EUR 4 million “IAS 39 impact” in the first six months of 2006 on profit before net financing costs and income tax was due to positive timing differences related to the absence of IAS 39 hedge accounting on zinc transactional hedging. Non-recurring items of EUR 3 million in the first six months of 2006 related primarily to an upward revision in the provisions for the restructuring of Auby and the closure of the Calais roaster in 2005. Non-recurring items also included a reversal of previous provisions for a restructuring of Balen in 2005 and an increase in provisions for employee benefits at Galva 45. The negative EUR 93 million effect of structural hedging was primarily a result of structural hedging of zinc metal prices as well as the hedging of U.S. dollar/ euro exchange rate movements.

105 The table below sets forth the Umicore Carve-out Group’s unaudited selected income statement information before net financing costs and income tax and EBITDA for the six months ended 30 June 2007, both on an as reported basis and as adjusted for the elimination of the impact of structural hedging, IAS 39 effects and other items that management of the Umicore Carve-out Group considers to be non-recurring. The discussion in this section following the reconciliation table below is of the adjusted results.

Six months ended 30 June 2007 Reversal of Reversal of Reversal of structural IAS 39 non-recurring Historical hedging effects items Adjusted (EUR million) Turnover ...... 798.7 81.1 — — 879.8 External ...... 495.7 81.1 — — 576.8 From sales to Umicore ...... 303.0 — — — 303.0 Profit/(loss) from operating activities before amortisation, depreciation and other non-cash expenses ...... 45.8 81.1 — — 126.9 EBITDA ...... 49.1 81.1 — — 130.2 Depreciation and amortisation ...... 10.7 — 1.4 — 12.1 Other non-cash expenses ...... (17.0) — 19.8 (2.0) 0.8 Profit/(loss) from operating activities ...... 52.1 81.1 (21.2) 2.0 114.0 Share of profits in investments accounted for using the equity method ...... 3.3 — — — 3.3 Profit/(loss) before net financing costs and income tax .... 55.4 81.1 (21.2) 2.0 117.3

The EUR 21 million “IAS 39 impact” in the first six months of 2007 on profit before net financing costs and income tax was due to positive timing differences related to the absence of IAS 39 hedge accounting on zinc transactional hedging. Almost all of the effect was related to the cancellation of Auby’s zinc-indexed electricity contract, which linked electricity prices in part to the price of zinc. The rest of the IAS 39 effect was a result of timing differences related to zinc transactional hedging. Non-recurring items in the first half of 2007 of EUR 2 million related primarily to provisions for Auby and Balen for environmental matters such as the repair of containment ponds and the clean up of soil contamination, respectively. The negative EUR 81 million effect of structural hedging was primarily a result of structural hedging of zinc metal prices as well as the hedging of U.S. dollar/euro exchange rate movements.

The following table sets forth the key components of the Umicore Carve-out Group’s gross profit, as adjusted for the elimination of the impact of structural hedging, IAS 39 effects and other items that management of the Umicore Carve-out Group considers to be non-recurring, for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Gross profit Treatment charge (base and escalator) ...... 103.0 112.0 Premium ...... 32.0 55.0 Free metal ...... 52.0 59.0 By-products ...... 14.0 22.0 Other(1) ...... 0.7 6.9 Total ...... 201.7 254.9

Note: (1) The “Other” component of gross profit comprises (i) the gains/losses on QP differentials remaining after the execution of transactional hedging (i.e., the impact of hedge ineffictiveness), freight costs and commissions, (ii) the gain or loss from the small quantities of alloying metals (such as aluminium, tin and nickel) in our zinc alloys that are charged to our customers as if their prices were equivalent to zinc prices as a result of the commercial terms of our contracts, which price differential is charged to the customer via the “premium” component of gross profit, and (iii) the gains/losses from one-off sales of historically built-up metal quantities permanently tied up in manufacturing and commercial operations. “Other” also includes the total gross profit of the Umicore Carve-out Group’s Chinese Operations and GM-Metal/Galva 45.

106 The following table sets forth the Umicore Carve-out Group’s operating cash costs for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Salaries and social charges ...... (37.1) (42.7) Energy ...... (39.8) (44.6) Other(1) ...... (38.5) (40.7) Total ...... (115.4) (128.0)

Note: (1) The “Other” component of operating cash costs comprises contractor services costs related to maintenance work, the costs of consumables and spare parts, general and administrative expenses of the Umicore Carve-out Group and the costs of legal, human resources, finance, information systems, logistics and other administrative departments of Umicore charged to the Umicore Carve-out Group.

Discussion of Adjusted Results Turnover The Umicore Carve-out Group’s turnover increased by 40%, from EUR 625 million in the six months ended 30 June 2006 to EUR 878 million in the six months ended 30 June 2007. This increase was primarily due to increased turnover at Balen/Overpelt, Auby and GM-Metal/Galva 45, primarily driven by the increase in LME zinc prices, as well as the start of operations in China in the second half of 2006, which generated turnover of EUR 75 million in the first half of 2007. In the first half of 2007, turnover from sales to non-carve-out Umicore businesses accounted for approximately 35% of total turnover as compared to 40% of total turnover in the first half of 2006. Nyrstar will continue to make sales to Umicore pursuant to contracts entered into prior to the contribution of the Umicore Carve-out Group to Nyrstar. See “Related Party Transactions” beginning on page 265. Operating cash costs increased 11% from EUR (115.4) million in the first half of 2006 to EUR (128.0) million in the first half of 2007 primarily as a result of the start of the Chinese operations in the second half of 2006, increases in salaries and social charges at Balen/Overpelt and Auby and increases in energy costs at Balen/Overpelt.

Profit/(loss) from Operating Activities before Amortisation, Depreciation and other Non-cash Expenses As a result of the foregoing, the Umicore Carve-out Group’s profit/(loss) from operating activities before amortisation, depreciation and other non-cash expenses increased by 47%, from EUR 86 million in the six months ended 30 June 2006 to EUR 127 million in the six months ended 30 June 2007. Cash operating costs increased by 11% from EUR 115.4 million in the six months ended 30 June 2006 to EUR 128.0 million in the six months ended 30 June 2007. This was principally due to an increase in salaries and social charges and energy costs.

EBITDA As a result of the foregoing, the Umicore Carve-out Group’s EBITDA increased by 42%, from EUR 91.8 million in the six months ended 30 June 2006 to EUR 130.2 million in the six months ended 30 June 2007.

Depreciation and Amortisation The Umicore Carve-out Group’s depreciation and amortisation remained relatively constant at EUR 11.3 million in the six months ended 30 June 2006 and EUR 12.1 million in the six months ended 30 June 2007.

Other Non-cash Expenses The Umicore Carve-out Group’s other non-cash expenses remained relatively constant at EUR 1.9 million in the six months ended 30 June 2006 and EUR 0.8 million in the six months ended 30 June 2007.

107 Profit/(loss) from Operating Activities The Umicore Carve-out Group’s profit/(loss) from operating activities increased by 56%, from EUR 73.1 million in the six months ended 30 June 2006 to EUR 114.0 million in the six months ended 30 June 2007. This increase was primarily due to the increase in zinc prices and the attendant effect on TC escalators and free zinc sales, the effects of increases in other metal prices on by-product sales and the increase in premiums, especially for Balen, as a result of a shortage of finished zinc products in the European market.

Share of Profits in Investments Accounted for Using the Equity Method The Umicore Carve-out Group’s share of profit of equity accounted investees decreased by 40%, from EUR 5.5 million in the six months ended 30 June 2006 to EUR 3.3 million in the six months ended 30 June 2007. This decrease was primarily due to the decreased contribution from Padaeng as a result of a decrease in the profits of Padaeng in the first half of 2007.

Profit/(loss) before Net Financing Costs and Income Tax As a result of the foregoing, the Umicore Carve-out Group’s profit before net financing costs and income tax increased by 49%, from EUR 78.6 million in the six months ended 30 June 2006 to EUR 117.3 million in the six months ended 30 June 2007.

Segment Results of Operations for the Umicore Carve-out Group The following table sets forth certain financial information, excluding the impact of structural hedging, IAS 39 effects and non-recurring items, by segment, of the Umicore Carve-out Group for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Unaudited Turnover ...... 624.8 879.8 Balen/Overpelt ...... 416.5 569.3 Auby ...... 182.1 199.4 Chinese Operations ...... — 75.2 GM-Metal/Galva 45 ...... 26.2 35.9 Gross profit ...... 201.7 254.9 Balen/Overpelt ...... 114.1 168.3 Auby ...... 72.8 63.9 Chinese Operations ...... — 10.6 GM-Metal/Galva 45 ...... 14.8 12.1 Contribution to gross profit of companies accounted for using the equity method (Padaeng) ...... 5.5 3.3 Operating cash costs ...... (115.4) (128.0) Balen/Overpelt ...... (71.2) (73.1) Auby ...... (34.9) (37.6) Chinese Operations ...... — (8.2) GM-Metal/Galva 45 ...... (9.3) (9.1) EBITDA ...... 91.8 130.2 Balen/Overpelt ...... 42.9 95.2 Auby ...... 37.9 26.3 Chinese Operations ...... — 2.4 GM-Metal/Galva 45 ...... 5.5 3.0 Contribution to EBITDA of companies accounted for using the equity method (Padaeng) ...... 5.5 3.3 Depreciation and amortisation ...... (11.3) (12.1) Balen/Overpelt ...... (5.2) (5.5) Auby ...... (4.6) (4.6) Chinese Operations ...... — (0.8) GM-Metal/Galva 45 ...... (1.5) (1.2)

108 Six months ended 30 June 2006 2007 (EUR million) Unaudited Contribution to depreciation and amortisation of companies accounted for using the equity method (Padaeng) ...... — — Other non-cash expenses ...... (1.9) (0.8) Profit/(loss) before net financing costs and income tax ...... 78.6 117.3 Balen/Overpelt ...... 36.9 89.5 Auby ...... 32.2 21.2 Chinese Operations ...... — 1.5 GM-Metal/Galva 45 ...... 4.0 1.8 Contribution to profit/(loss) before net financing costs and income tax of companies accounted for using the equity method (Padaeng) ...... 5.5 3.3 Capital expenditure ...... 12.5 14.1 Balen/Overpelt ...... 7.3 8.8 Auby ...... 4.8 4.2 Chinese Operations ...... — 0.3 GM-Metal/Galva 45 ...... 0.4 0.8 Capital employed at end of period ...... 310.8 456.6 Working capital at end of period ...... 226.7 330.6 Balen/Overpelt ...... 160.9 217.4 Auby ...... 56.1 81.8 Chinese Operations ...... — 16.0 GM-Metal/Galva 45 ...... 9.7 15.4

The financial information and discussion set forth below in this “Segment Results of Operations for the Umicore Carve-out Group” section excludes the impact of structural hedging, IAS 39 effects and non-recurring items.

Balen/Overpelt The following table sets forth Balen/Overpelt’s adjusted turnover, gross profit, operating cash costs, EBITDA, depreciation and amortisation, other non-cash expenses and profit/(loss) before net financing costs and income tax for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Turnover ...... 416.5 569.3 Gross profit ...... 114.1 168.3 Operating cash costs ...... (71.2) (73.1) EBITDA ...... 42.9 95.2 Depreciation and amortisation ...... (5.2) (5.5) Other non-cash expenses ...... (0.8) (0.2) Profit/(loss) before net financing costs and income tax ...... 36.9 89.5

The following table sets forth the key components of Balen/Overpelt’s adjusted gross profit for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Gross profit Treatment charge (base and escalator) ...... 70.0 71.0 Premium ...... 27.0 53.0 Free metal ...... 36.0 38.0 By-products ...... 8.0 15.0 Other(1) ...... (26.9) (8.7) Total ...... 114.1 168.3

109 Note: (1) The “Other” component of gross profit comprises (i) the gains/losses on QP differentials remaining after the execution of transactional hedging (i.e., the impact of hedge ineffictiveness), freight costs and commissions, (ii) the gain or loss from the small quantities of alloying metals (such as aluminium, tin and nickel) in our zinc alloys that are charged to our customers as if their prices were equivalent to zinc prices as a result of the commercial terms of our contracts, which price differential is charged to the customer via the “premium” component of gross profit, and (iii) the gains/losses from one-off sales of historically built-up metal quantities permanently tied up in manufacturing and commercial operations.

The general scarcity of zinc concentrate supplies resulted in slightly lower production volumes at Balen in the first half of 2007 compared with the first half of 2006. Nevertheless, due to the increase in zinc prices, turnover rose 37% from EUR 416.5 million in the six months ended 30 June 2006 to EUR 569.3 million in the six months ended 30 June 2007. In the first half of 2006, the turnover of Balen/Overpelt and the turnover of Auby were affected by the existence of certain sales distribution agreements between Balen/Overpelt (which includes Nyrstar Germany GmbH Balen’s sales office in Germany) and Auby whereby the production of one site sold in the country of the other site was first sold intra-group by the former to the latter which then in turn invoiced the ultimate third party customer. This arrangement was used for a significant portion of the production volumes of Auby sold by Balen/Overpelt into the Belgian and German markets in the first half of 2006. This arrangement was terminated in the second half of 2006 and therefore had no effect on Balen/Overpelt’s turnover in the first half of 2007. The positive impact of such sales on Balen/Overpelt’s turnover was approximately EUR 13 million in the first half of 2006.

Increased contributions from the TC escalator and free zinc sales as a result of the high LME zinc prices, a significant increase in by-product sales as a result of increases in the prices of silver and lead, and a significant increase in premiums for metal products as a result of a shortage of finished zinc products in the European market drove a 48% increase in gross profit from EUR 114.1 million in the six months ended 30 June 2006 to EUR 168.3 million in the six months ended 30 June 2007.

The “other” component of gross profit was affected by transactional hedging carried out by Balen/Overpelt. The Umicore Carve-out Group’s transactional metal hedging for all segments is executed entirely via Balen/ Overpelt by means of spot and forward LME contracts with metal brokers. The settlements of these hedging instruments (LME difference accounts) with the brokers are consequently executed and booked at Balen and the settlement of the hedges entered into for the non-Balen/Overpelt segments are not re-invoiced to them. This means that all QP price differentials of Auby’s and the other segments’ physical transactions are compensated by hedging instrument settlements booked and kept at Balen. The “other” component of gross profit of Balen/ Overpelt contains the compensating settlements of the LME hedging instruments concluded to hedge Auby’s and the other segments’ physical transactions. Such settlements totalled EUR 10.3 million and EUR (2.1) million, respectively, in the first half of 2006 and 2007. See “— Auby” beginning on page 111. Without that impact, the “other” component of Balen/Overpelt’s gross profit would have totalled EUR (16.7) million and EUR (10.8) million, respectively, in the first half of 2006 and 2007. The negative variance was due to our decreased ability to pass on to our customers cost increases in alloying metals and higher transport costs. We do not expect to be able to fully pass on such cost increases to our customers in the near future.

The following table sets forth Balen/Overpelt’s operating cash costs for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Salaries and social charges ...... (21.8) (24.4) Energy ...... (24.0) (25.3) Other ...... (25.4) (23.4) Total ...... (71.2) (73.1)

Salaries and social charges increased 12%, from EUR 21.8 million in the six months ended 30 June 2006 to EUR 24.4 million in the six months ended 30 June 2007. This was mainly a result of including personnel, who deal with non-concentrate purchasing and transport issues, onto Balen/Overpelt’s payroll as a result of the carve-out of certain of the Umicore assets in advance of the creation of Nyrstar. Previously, the costs of the services provided by these personnel were invoiced by Umicore to Balen/Overpelt and were billed as an overhead expense.

110 Energy costs at the Balen/Overpelt sites increased by 5%, from EUR 24.0 million in the first half of 2006 to EUR 25.3 million in the first half of 2007. This was primarily due to a small increase in electricity prices. The Balen/Overpelt sites currently purchase electricity under a contract that will expire in December 2007. Pricing conditions were generally favourable in 2006 and the first half of 2007 since the terms of this contract were negotiated prior to the increase in market electricity prices at the beginning of 2006. The Balen and Overpelt sites have entered into a new electricity supply contract covering 2008 and 2009 with pricing terms based on the forward prices of the Belgian electricity market.

Other costs decreased from EUR 25.4 million in the first half of 2006 to EUR 23.4 million in the first half of 2007, primarily due to a decrease in overhead costs as a result of the transfer of the non-concentrate purchasing and transport personnel to the Balen/Overpelt payroll.

Auby The following table sets forth the Auby site’s adjusted turnover, gross profit, operating cash costs, EBITDA, depreciation and amortisation, other non-cash expenses and profit/(loss) before net financing costs and income tax for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Turnover ...... 182.1 199.4 Gross profit ...... 72.8 63.9 Operating cash costs ...... (34.9) (37.6) EBITDA ...... 37.9 26.3 Depreciation and amortisation ...... (4.6) (4.6) Other non-cash expenses ...... (1.1) (0.5) Profit/(loss) before net financing costs and income tax ...... 32.2 21.2

The following table sets forth the key components of the Auby site’s adjusted gross profit for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Gross profit Treatment charge (base and escalator) ...... 33.0 41.0 Premium ...... 5.0 2.0 Free metal ...... 16.0 21.0 By-products ...... 6.0 7.0 Other(1) ...... 12.8 (7.1) Total ...... 72.8 63.9

Note: (1) The “Other” component of gross profit comprises (i) the gains/losses on QP differentials remaining after the execution of transactional hedging, freight costs and commissions, (ii) the gain or loss from the small quantities of alloying metals (such as aluminium, tin and nickel) in our zinc alloys that are charged to our customers as if their prices were equivalent to zinc prices as a result of the commercial terms of our contracts, which price differential is charged to the customer via the “premium” component of gross profit, and (iii) the gains/losses from one-off sales of historically built-up metal quantities permanently tied up in manufacturing and commercial operations.

The shift in the focus of production from alloys to zinc cathodes as a result of the restructuring of the Auby site which began in 2005 and which was completed in 2006 resulted in almost no production of alloys in the first half of 2007. Despite the decrease in premiums, turnover increased 10% from EUR 182.1 million in the six months ended 30 June 2006 to EUR 199.4 million in the six months ended 30 June 2007, primarily due to the increase in zinc prices.

The turnover of Balen/Overpelt and Auby was affected by the existence of certain sales distribution agreements under which the production of one site sold in the country of the other site is first sold intra-group

111 from the former to the latter which then in turn invoiced the ultimate third party customer. This arrangement was used predominantly for production volumes of Auby sold by Balen/Overpelt and Nyrstar Germany GmbH into the Belgian and German markets. This arrangement was terminated in the second half of 2006 and therefore had no effect on Auby’s turnover for the first half of 2007. The positive effect of such sales on Auby’s turnover was approximately EUR 28 million in the first half of 2006.

High LME zinc prices and silver and lead prices in the first half of 2007 led to increased gross profit from the TC escalator, from free zinc sales and from the sale of by-products. However, decreased gross profit from premiums in the first half of 2007 offset the effects of the TC escalator, free zinc sales and by-product sales and contributed to a 12% decrease in gross profit from EUR 72.8 million in the six months ended 30 June 2006 to EUR 63.9 million in the six months ended 30 June 2007. The decrease in gross profit from premiums was a result of the reduced production of alloys in the first half of 2007, as discussed above. In the first half of 2006, inventories of alloy products remaining at the end of 2005 were sold. As a result, there was a decrease in premiums in the first half of 2007, as zinc cathodes typically do not command the same level of premiums as zinc alloys.

The “other” component of Auby’s gross profit totalled EUR 12.8 million and EUR (7.1) million in the first half of 2006 and 2007, respectively, which included QP price differentials on underlying physical transactions of EUR (10) million and EUR 2.1 million, respectively, in the first half of 2006 and 2007 for which the compensating settlements of the LME hedging instruments were booked and kept at Balen. See “— Balen/ Overpelt” beginning on page 109. Without these QP price differentials, the “other” component of Auby’s gross profit was EUR (2.8) million in the first half of 2006 and EUR (5.1) million in the first half of 2007.

The following table sets forth the Auby site’s operating cash costs for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Salaries and social charges ...... (9.8) (11.4) Energy ...... (15.0) (14.0) Other ...... (10.1) (12.2) Total ...... (34.9) (37.6)

Salaries and social charges increased by 16%, from EUR 9.8 million in the first half of 2006 to EUR 11.4 million in the first half of 2007. This was mainly a result of including personnel, who deal with non-concentrate purchasing and transport issues onto Auby’s payroll as a result of the carve-out of certain of the Umicore assets in advance of the creation of Nyrstar. Previously, the costs of the services provided by these personnel were invoiced by Umicore to Auby and were billed as an overhead expense. The increase was also due to the payment to employees of higher company performance-related bonuses required by French law as a result of Auby’s improved results.

Energy costs at the Auby site decreased by 7%, from EUR 15.0 million in the first half of 2006 to EUR 14.0 million in the first half of 2007. This was primarily due to the decrease in operations and amount of electricity used as a result of the restructuring of Auby. In addition, the first half of 2006 included approximately EUR 0.9 million in energy costs incurred but not recorded in 2005.

Other costs increased by 20%, from EUR 10.1 million in the first half of 2006 to EUR 12.2 million in the first half of 2007. This was primarily the result of an increase in a local tax payable in France that is based on, among other things, added value that is realised by French operations. Increased zinc prices led to an increase in added value and therefore an increase in the amount of such tax payable.

Chinese Operations The following table sets forth the adjusted turnover, gross profit, operating cash costs, EBITDA, depreciation and amortisation, other non-cash expenses and profit/(loss) before net financing costs and income

112 tax of the Company’s 60% interest in Nyrstar Yunnan Zinc Alloys Co. Ltd. and the Company’s 50% interest in Föhl China Co. Ltd. for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Turnover ...... — 75.2 Gross profit ...... — 10.6 Operating cash costs ...... — (8.2) EBITDA ...... — 2.4 Depreciation and amortisation ...... — (0.8) Other non-cash expenses ...... — (0.1) Profit/(loss) before net financing costs and income tax ...... — 1.5

The following table sets forth operating cash costs for the six months ended 30 June 2006 and 2007 of the Company’s 60% interest in Nyrstar Yunnan Zinc Alloys Co. Ltd. and the Company’s 50% interest in Föhl China Co., Ltd.:

Six months ended 30 June 2006 2007 (EUR million) Salaries and social charges ...... — (1.6) Energy ...... — (4.6) Other ...... — (2.0) Total ...... — (8.2)

These Chinese operations only became operational in the second half of 2006.

GM-Metal/Galva 45 The following table sets forth the adjusted turnover, gross profit, operating cash costs, EBITDA, depreciation and amortisation, other non-cash expenses and profit/(loss) before net financing costs and income tax of GM-Metal SAS and the Company’s fully consolidated interest in Galva 45 S.A. for the six months ended 30 June 2006 and 2007:

Six months ended 30 June 2006 2007 (EUR million) Turnover ...... 26.2 35.9 Gross profit ...... 14.8 12.1 Operating cash costs ...... (9.3) (9.1) EBITDA ...... 5.5 3.0 Depreciation and amortisation ...... (1.5) (1.2) Other non-cash expenses ...... 0 0 Profit/(loss) before net financing costs and income tax ...... 4.0 1.8

The following table sets forth operating cash costs for the six months ended 30 June 2006 and 2007 of GM-Metal SAS and the Company’s 66% interest in Galva 45 S.A.:

Six months ended 30 June 2006 2007 (EUR million) Salaries and social charges ...... (5.5) (5.3) Energy ...... (0.8) (0.7) Other ...... (3.0) (3.1) Total ...... (9.3) (9.1)

The 37% increase in turnover from EUR 26.2 million in the six months ended 30 June 2006 to EUR 35.9 million in the six months ended 30 June 2007 was primarily a result of increased turnover at

113 GM-Metal, as a result of higher zinc prices. However, a provision for a marked to market adjustment in inventories had a negative effect on gross profit. Gross profit was also negatively affected in the first half of 2007 by the use of an increased amount of lower quality zinc cathodes which required the use of greater amounts of higher grade zinc in the production of GM-Metal’s ZAMAK product. Operating cash costs of GM-Metal and Galva 45 remained relatively constant at EUR 9.3 million in the first half of 2006 and EUR 9.1 million in the first half of 2007.

Other Padaeng’s contribution to profit decreased from EUR 5.5 million in the six months ended 30 June 2006 to EUR 3.3 million in the six months ended 30 June 2007. Total sales volumes increased 3% to 51,965 tonnes as compared to the same period in 2006 primarily due to increased exports to other countries in Southeast Asia. Local demand was 10% lower in the first half of 2007 than in the same period in 2006, primarily due to a decrease in demand for pure zinc grade. Average zinc prices increased approximately 29%. However, due to the appreciation of the Thai baht against the U.S. dollar, zinc prices in Thai baht increased by only 17% in the first six months of 2007 compared with the same period in 2006. Padaeng’s results were adversely affected by low TCs, higher costs of imported raw materials, low premiums for its export products, increased inventories and the decreased use of concentrate from its Mae Sot mine as a result of quality issues, which have since been resolved.

Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Years Ended 31 December 2005 and 2006 Combined Results of Operations for the Umicore Carve-out Group The table below sets forth the Umicore Carve-out Group’s unaudited selected income statement information before net financing costs and income tax and EBITDA for the year ended 31 December 2005, both on an as reported basis and as adjusted for the elimination of the impact of structural hedging, IAS 39 effects and other items that management of the Umicore Carve-out Group considers to be non-recurring. The discussion in this section following the reconciliation table below is of the adjusted results.

Year ended 31 December 2005 Reversal of Reversal of Reversal of structural IAS 39 non-recurring Historical hedging effects items Adjusted (EUR million) Turnover ...... 713.2 15.9 — — 729.1 External ...... 487.5 15.9 — — 503.4 From sales to Umicore ...... 225.7 — — — 225.7 Profit/(loss) from operating activities before amortisation, depreciation and other non-cash expenses ...... 23.1 15.9 — — 39.0 EBITDA ...... 25.9 15.9 — — 41.8 Depreciation and amortisation ...... 39.2 — (1.7) (12.3) 25.2 Other non-cash expenses ...... 30.4 — (2.9) (24.7) 2.8 Profit/(loss) from operating activities ...... (46.5) 15.9 4.6 37.0 11.0 Share of profits in investments accounted for using the equity method ...... 2.8 — — — 2.8 Profit/(loss) before net financing costs and income tax ...... (43.7) 15.9 4.6 37.0 13.8

The absence of IAS 39 compliant hedge accounting had a negative effect on profit before net financing costs and income tax of EUR 4.6 million in 2005. All of the effect was due to timing differences in revenue recognition related to zinc transactional hedging. Non-recurring items of EUR 37.0 million in 2005 related primarily to the reduction of commodity zinc production at Auby and the closure of the roaster in Calais in the fourth quarter of 2005 and the related impairment of fixed assets, provisioning for penalties incurred upon the cancellation of certain commercial contracts, redundancy costs and demolition and rehabilitation costs. The negative EUR 15.9 million effect of structural hedging was primarily a result of structural hedging of zinc metal prices as well as the hedging of U.S. dollar/euro exchange rate movements.

114 The table below sets forth the Umicore Carve-out Group’s unaudited selected income statement information before net financing costs and income tax and EBITDA for the year ended 31 December 2006, both on an as reported basis and as adjusted for the elimination of the impact of structural hedging, IAS 39 effects and other items that management of the Umicore Carve-out Group considers to be non-recurring. The discussion in this section following the reconciliation table below is of the adjusted results.

Year ended 31 December 2006 Reversal of Reversal of Reversal of structural IAS 39 non-recurring Historical hedging effects items Adjusted (EUR million) Turnover ...... 1,107.6 215.5 — — 1,323.1 External ...... 595.1 215.5 — — 810.6 From sales to Umicore ...... 512.5 — — — 512.5 Profit/(loss) from operating activities before amortisation, depreciation and other non-cash expenses ...... 23.2 215.5 — 1.7 240.4 EBITDA ...... 32.4 215.5 — 1.7 249.6 Depreciation and amortisation ...... 25.4 — 1.1 (0.2) 26.3 Other non-cash expenses ...... 32.8 — (27.8) (4.0) 1.0 Profit/(loss) from operating activities ...... (35.0) 215.5 26.7 5.9 213.1 Share of profits in investments accounted for using the equity method ...... 9.2 — — — 9.2 Profit/(loss) before net financing costs and income tax ...... (25.8) 215.5 26.7 5.9 222.3

The absence of IAS 39 compliant hedge accounting had a negative effect on profit before net financing costs and income tax of EUR 26.7 million in 2006. In 2006, EUR 3 million of the effect was a result of timing differences related to zinc transactional hedging, while the remaining EUR 24 million related to the embedded derivative in Auby’s electricity contract which links electricity prices in part to the price of zinc. As IAS 39 hedge accounting was not applied to this embedded derivative, the negative fair value impact of the higher zinc prices in 2006 was recognised, while the fair value of the underlying contracted electricity price was not. Non-recurring items in 2006 of EUR 5.9 million related primarily to revised estimates of rehabilitation provisions for Auby and Calais stemming from the Auby restructuring and the closure of the roaster in Calais in 2005. The negative EUR 215.5 million effect of structural hedging was primarily a result of structural hedging of zinc metal prices as well as the hedging of U.S. dollar/euro exchange rate movements, with the magnitude of the effect due primarily to the sharp increase in zinc prices during the year. As a result of the increase in zinc prices to a level above that locked in by the hedging instruments, the settlement of these instruments in 2006 resulted in an accumulated negative pre-tax impact of EUR (215.5) million in 2006, being the difference between the contract zinc prices of the hedging instruments and the spot metal prices at the settlement date of these hedging instruments.

The following table sets forth the key components of the Umicore Carve-out Group’s gross profit which has been derived from the unaudited management accounts of the Umicore Carve-out Group, as adjusted for the elimination of the impact of structural hedging, IAS 39 effects and other items that management of the Umicore Carve-out Group considers to be non-recurring, for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Gross profit Treatment charge (base and escalator) ...... 130.7 229.0 Premium ...... 60.0 70.0 Free metal ...... 74.0 110.0 By-products ...... 11.0 30.5 Other(1) ...... (4.1) 38.9 Total ...... 271.6 478.4

115 Note: (1) The “Other” component of gross profit comprises (i) the gains/losses on QP differentials remaining after the execution of transactional hedging (i.e., the impact of hedge ineffictiveness), freight costs and commissions, (ii) the gain or loss from the small quantities of alloying metals (such as aluminium, tin and nickel) in our zinc alloys that are charged to our customers as if their prices were equivalent to zinc prices as a result of the commercial terms of our contracts, which price differential is charged to the customer via the “premium” component of gross profit, and (iii) the gains/losses from one-off sales of historically built-up metal quantities permanently tied up in manufacturing and commercial operations. “Other” also includes the total gross profit of the Umicore Carve-out Group’s Chinese Operations and GM-Metal/Galva 45.

The following table sets forth the Umicore Carve-out Group’s operating cash costs for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Salaries and social charges ...... (83.1) (78.1) Energy ...... (70.2) (81.8) Other ...... (79.3) (78.1) Total ...... (232.6) (238.0)

Discussion of Adjusted Results Turnover The Umicore Carve-out Group’s turnover increased by 81%, from EUR 729 million in 2005 to EUR 1,323.1 million in 2006. This increase was primarily due to increased turnover at the Balen/Overpelt and Auby sites, primarily driven by the increase in LME zinc prices in 2006, as well as the start of operations in China in 2006, which generated turnover of EUR 80.1 million. The increase in turnover in 2006 occurred notwithstanding lower sales volumes as a result of declines in production volumes in the second half of 2006, especially at Balen, due to decreased availability of zinc concentrates and secondaries, and lower sales volumes at Auby in 2006, as a result of the closing of the Calais roaster and the restructuring of the Auby site in 2005. In 2006, turnover from sales to non-carve-out Umicore businesses accounted for approximately 39% of total turnover as compared to 31% of total turnover in 2005. Nyrstar will continue to make sales to Umicore pursuant to contracts entered into prior to the contribution of the Umicore Carve-out Group to Nyrstar. See “Related Party Transactions” beginning on page 265. Operating cash costs increased by 2% from EUR (232.6) million in 2005 to EUR (238.0) million in 2006 mainly due to increases in energy costs, especially at Balen/Overpelt, and the start of the Chinese operations in 2006.

Profit/(loss) from Operating Activities before Amortisation, Depreciation and other Non-cash Expenses As a result of the foregoing, the Umicore Carve-out Group’s profit/(loss) from operating activities before amortisation, depreciation and other non-cash expenses increased from EUR 39.0 million in 2005 to EUR 240.4 million in 2006. Operating costs increased by 2% from EUR 232.6 million in the year ended 31 December 2005 to EUR 238.0 million in the year ended 31 December 2006. This was principally due to an increase in energy costs.

EBITDA As a result of the foregoing, the Umicore Carve-out Group’s EBITDA increased from EUR 41.8 million in 2005 to EUR 249.6 million in 2006.

Depreciation and Amortisation The Umicore Carve-out Group’s depreciation and amortisation remained relatively constant at EUR 25.2 million in 2005 and EUR 26.3 million in 2006.

Other Non-cash Expenses The Umicore Carve-out Group’s other non-cash expenses decreased from EUR 2.8 million in 2005 to EUR 1.0 million in 2006. This decrease was primarily due to lower provisioning for pensions and similar benefits.

116 Profit/(loss) from Operating Activities The Umicore Carve-out Group’s profit from operating activities increased more than nineteen-fold, from EUR 11.0 million in 2005 to EUR 213.1 million in 2006. This increase was primarily due to the increase in zinc prices in 2006 and the attendant effect on TC escalators and free zinc sales and the effects of increases in other metal prices on by-product sales, and occurred notwithstanding the reduced base TCs in 2006 as a result of tight concentrate supplies and notwithstanding lower production volumes following the 2005 restructuring at Auby.

Share of Profits in Investments Accounted for Using the Equity Method The Umicore Carve-out Group’s share of profit of equity accounted investees tripled from EUR 2.8 million in 2005 to EUR 9.2 million in 2006 due to the increased contribution from Padaeng.

Profit/(loss) before Net Financing Costs and Income Tax As a result of the foregoing, the Umicore Carve-out Group’s profit before net financing costs and income tax increased from EUR 13.8 million in 2005 to EUR 222.3 million in 2006.

Segment Results of Operations for the Umicore Carve-out Group The following table sets forth certain financial information, excluding the impact of structural hedging, IAS 39 effects and non-recurring items, by segment, of the Umicore Carve-out Group for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Turnover ...... 729.1 1,323.1 Balen/Overpelt ...... 503.3 833.5 Auby ...... 191.4 355.9 Chinese Operations ...... — 80.1 GM-Metal/Galva 45 ...... 34.4 53.7 Gross profit ...... 271.6 478.4 Balen/Overpelt ...... 146.8 281.2 Auby ...... 102.7 159.9 Chinese Operations ...... — 11.9 GM-Metal/Galva 45 ...... 22.1 25.4 Contribution to gross profit of companies accounted for using the equity method (Padaeng) ...... 2.8 9.2 Operating cash costs ...... (232.6) (238.0) Balen/Overpelt ...... (124.5) (133.0) Auby ...... (90.1) (75.8) Chinese Operations ...... — (12.0) GM-Metal/Galva 45 ...... (18.0) (17.2) EBITDA ...... 41.8 249.6 Balen/Overpelt ...... 22.3 148.2 Auby ...... 12.6 84.1 Chinese Operations ...... — (0.1) GM-Metal/Galva 45 ...... 4.1 8.2 Contribution to EBITDA of companies accounted for using the equity method (Padaeng) ...... 2.8 9.2 Depreciation and amortisation ...... (25.2) (26.3) Balen/Overpelt ...... (11.2) (13.0) Auby ...... (12.0) (9.7) Chinese Operations ...... — (0.9) GM-Metal/Galva 45 ...... (2.0) (2.7)

117 Year ended 31 December 2005 2006 (EUR million) Contribution to depreciation and amortisation of companies accounted for using the equity method (Padaeng) ...... — — Other non-cash expenses ...... (2.8) (1.0) Profit/(loss) before net financing costs and income tax ...... 13.8 222.3 Balen/Overpelt ...... 8.3 134.2 Auby ...... 0.6 74.4 Chinese Operations ...... — (1.0) GM-Metal/Galva 45 ...... (2.1) 5.5 Contribution to profit/(loss) before net financing costs and income tax of companies accounted for using the equity method (Padaeng) ...... 2.8 9.2 Capital expenditure ...... 22.4 29.5 Balen/Overpelt ...... 9.9 15.3 Auby ...... 5.7 12.3 Chinese Operations ...... — 0.6 GM-Metal/Galva 45 ...... 6.8 1.3 Capital employed at end of period ...... 187.3 436.5 Working capital at end of period ...... 108.6 317.4 Balen/Overpelt ...... 78.8 215.1 Auby ...... 28.0 64.3 Chinese Operations ...... — 22.3 GM-Metal/Galva 45 ...... 1.8 15.7

The financial information and discussion set forth below in this “Segment Results of Operations for the Umicore Carve-out Group” section excludes the impact of structural hedging, IAS 39 effects and non-recurring items.

Balen/Overpelt The following table sets forth Balen/Overpelt’s adjusted turnover, gross profit, operating cash costs, EBITDA, depreciation and amortisation, other non-cash expenses and profit/(loss) before net financing costs and income tax for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Turnover ...... 503.3 833.5 Gross profit ...... 146.8 281.2 Operating cash costs ...... (124.5) (133.0) EBITDA ...... 22.3 148.2 Depreciation and amortisation ...... (11.2) (13.0) Other non-cash expenses ...... (2.8) (1.0) Profit/(loss) before net financing costs and income tax ...... 8.3 134.2

The following table sets forth the key components of Balen/Overpelt’s adjusted gross profit for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Gross profit Treatment charge (base and escalator) ...... 64.7 154.0 Premium ...... 48.0 63.0 Free metal ...... 42.0 72.0 By-products ...... 4.0 17.5 Other(1) ...... (11.9) (25.3) Total ...... 146.8 281.2

118 Note: (1) The “Other” component of gross profit comprises (i) the gains/losses on QP differentials remaining after the execution of transactional hedging (i.e., the impact of hedge ineffictiveness), freight costs and commissions, (ii) the gain or loss from the small quantities of alloying metals (such as aluminium, tin and nickel) in our zinc alloys that are charged to our customers as if their prices were equivalent to zinc prices as a result of the commercial terms of our contracts, which price differential is charged to the customer via the “premium” component of gross profit, and (iii) the gains/losses from one-off sales of historically built-up metal quantities permanently tied up in manufacturing and commercial operations.

Despite Balen’s use of zinc oxides washed at the Overpelt plant for approximately 22% of its feedstock, the general scarcity of zinc concentrate supplies in 2006 resulted in lower production and sales volumes at Balen in 2006 compared with 2005. Nevertheless, due to the increase in zinc prices, turnover rose 66% from EUR 503.3 million in 2005 to EUR 833.5 million in 2006. The turnover of Balen/Overpelt and the turnover of Auby were affected by the existence of certain sales distribution agreements between Balen/Overpelt (which includes Nyrstar Germany GmbH, Balen’s sales office in Germany) and Auby whereby the production of one site sold in the country of the other site was first sold intra-group by the former to the latter which then in turn invoiced the ultimate third party customer. This arrangement was used for a significant portion of the production volumes of Auby sold by Balen/Overpelt into the Belgian and German markets in 2005. The effect of this arrangement was also more significant in 2005 because after the restructuring of Auby in 2005, most of Auby’s production volumes sold as in 2006 were sold in the French domestic market. The impact of such sales on Balen/ Overpelt’s turnover was approximately EUR 38 million and EUR 14 million in 2005 and 2006, respectively.

Lower base TCs in 2006 and Balen/Overpelt’s purchases of a greater amount of refined metal in 2006 to meet its contractual obligations to its customers as a result of the scarcity of zinc concentrates had a negative effect on gross profit. However, increased contributions from the TC escalator, free zinc sales, by-product sales and higher premiums for metal products, all stemming from the high LME zinc prices in 2006, more than offset these effects and drove a 92% increase in gross profit from EUR 146.8 million in 2005 to EUR 281.2 million in 2006.

The “other” component of gross profit of Balen/Overpelt contains the compensating settlements of the LME hedging instruments concluded to hedge Auby’s and the other segments’ physical transactions. See “— Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Umicore Carve-out Group — Balen/ Overpelt” beginning on page 109. Such settlements totalled EUR 7 million and EUR (13) million, respectively, in 2005 and 2006. See “— Auby” beginning on page 120. Without that impact, the “other” component of Balen/ Overpelt’s gross profit would have totalled EUR (18.9) and (12.3) million, respectively, in 2005 and 2006. The positive variance was due to a decrease in losses on the costs of alloying metals in zinc alloy products and lower transport costs.

The following table sets forth Balen/Overpelt’s operating cash costs for 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Salaries and social charges ...... (43.6) (42.7) Energy ...... (38.0) (46.3) Other ...... (42.9) (44.0) Total ...... (124.5) (133.0)

Salaries and social charges decreased 2%, from EUR 43.6 million in 2005 to EUR 42.7 million in 2006. This was mainly a result of decreased headcount as a result of increased use of outsourcing. This was also due to changes in Belgian law which reduced the required level of social security and other benefits payments by employers.

Energy costs at the Balen/Overpelt sites increased by 22%, from EUR 38.0 million in 2005 to EUR 46.3 million in 2006. This was primarily due to an increase in electricity prices in 2006.

Other costs increased slightly from EUR 42.9 million in 2005 to EUR 44.0 million in 2006. This increase was mainly due to the commencement of compacting of paragoethite, a by-product of the zinc smelting process, to increase the storage capacity of the paragoethite containment ponds and increased related contractors’ costs.

119 Auby The following table sets forth the Auby site’s adjusted turnover, gross profit, operating cash costs, EBITDA, depreciation and amortisation, other non-cash expenses and profit/(loss) before net financing costs and income tax for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Turnover ...... 191.4 355.9 Gross profit ...... 102.7 159.9 Operating cash costs ...... (90.1) (75.8) EBITDA ...... 12.6 84.1 Depreciation and amortisation ...... (12.0) (9.7) Other non-cash expenses ...... 0 0 Profit/(loss) before net financing costs and income tax ...... 0.6 74.4

The following table sets forth the key components of the Auby site’s adjusted gross profit for 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Gross profit Treatment charge (base and escalator) ...... 66.0 75.0 Premium ...... 12.0 7.0 Free metal ...... 32.0 38.0 By-products ...... 7.0 13.0 Other(1) ...... (14.3) 26.9 Total ...... 102.7 159.9

Note: (1) The “Other” component of gross profit comprises (i) the gains/losses on QP differentials remaining after the execution of transactional hedging, freight costs and commissions, (ii) the gain or loss from the small quantities of alloying metals (such as aluminium, tin and nickel) in our zinc alloys that are charged to our customers as if their prices were equivalent to zinc prices as a result of the commercial terms of our contracts, which price differential is charged to the customer via the “premium” component of gross profit, and (iii) the gains/losses from one-off sales of historically built-up metal quantities permanently tied up in manufacturing and commercial operations.

The reduction in capacity and the shift in the focus of production from alloys to zinc cathodes as a result of the restructuring of the Auby site which began in 2005 and which was completed in 2006 resulted in significantly lower production volumes and sales volumes at Auby in 2006 compared with 2005. See “Business — Business Description — Auby” beginning on page 216. The decrease in production of alloys in 2006 also led to a decrease in turnover from premiums in 2006, as zinc cathodes typically do not command the premiums of zinc alloys. Despite the decrease in production, turnover increased 86% from EUR 191.4 million in 2005 to EUR 355.9 million in 2006 primarily due to the increase in zinc prices.

The turnover of Balen/Overpelt and Auby was affected by the existence of certain sales distribution agreements under which the production of one site sold in the country of the other site is first sold intra-group from the former to the latter which then in turn invoiced the ultimate third party customer. This arrangement was used predominantly for production volumes of Auby sold by Balen/Overpelt and Nyrstar Germany GmbH into the Belgian and German markets. The arrangement also had a more significant effect in 2005 as compared to 2006 because after the restructuring of Auby in 2005, most of Auby’s production volumes in 2006 were sold in the French domestic market. The negative effect of such sales on Auby’s turnover was approximately EUR 53 million and EUR 28 million in 2005 and 2006, respectively.

The general scarcity of zinc concentrate supplies in 2006 also contributed to lower base TCs in 2006. However, increased gross profit from the TC escalator, from free zinc sales and from by-product sales, all stemming from the high LME zinc prices in 2006, more than offset the effects of the lower base TCs and resulted in a 56% increase in gross profit from EUR 102.7 million in 2005 to EUR 159.9 million in 2006.

120 The “other” component of Auby’s gross profit totalled EUR (14.3) million and EUR 26.9 million in 2005 and 2006, respectively, which included QP price differentials on underlying physical transactions of EUR (7) million and EUR 13 million, respectively, in 2005 and 2006 for which the compensating settlements of the LME hedging instruments were booked and kept at Balen. See “— Balen/Overpelt” beginning on page 118. The positive variance between the periods resulted mainly from a profit of EUR 21 million recorded in 2006 from the one-off sale of historically built-up metal quantities permanently tied up in manufacturing and commercial operations that were no longer required following the 2005 restructuring and partly also triggered by the re-negotiation of Auby’s off-take agreements with, among other entities, Umicore’s Building Products business.

The following table sets forth the Auby site’s operating cash costs for 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Salaries and social charges ...... (29.4) (21.7) Energy ...... (31.3) (28.0) Other ...... (29.4) (26.1) Total ...... (90.1) (75.8)

Salaries and social charges decreased by 26%, from EUR 29.4 million in 2005 to EUR 21.7 million in 2006. This was mainly a result of the closing of the roaster in Calais and the restructuring of part of the Auby site during 2005, which led to a reduction in headcount.

Energy costs at the Auby site decreased by 11%, from EUR 31.3 million in 2005 to EUR 28.0 million in 2006. This was primarily due to the decrease in production and operations following the restructuring of Auby, which more than offset the substantial increase in the price of electricity due to zinc price indexation clauses in Auby’s electricity supply contract. In December 2006 the French government created a new regulated tariff regime known as TRTAM (Tarif Réglementé Transitoire d’Ajustement du Marché) in order to facilitate the transition from regulated electricity prices to higher liberalised market prices. Auby has subscribed to this TRTAM tariff for the period from 30 June 2007 to 30 June 2009 because it will be lower than Auby’s current electricity price. Once Auby is no longer eligible for the TRTAM tariff (as of 1 July 2009), its electricity prices will for a remaining period of six months be determined by the current contract terms, which includes the indexing of electricity prices to zinc prices.

Other costs decreased by 13%, from EUR 29.4 million in 2005 to EUR 26.1 million in 2006. The decrease in maintenance costs as a result of the Auby restructuring and the reduced operations was partially offset by an increase in a local tax payable in France that is based on, among other things, added value that is realised by French operations. Increased zinc prices in 2006 led to an increase in added value and therefore an increase in the amount of such tax payable.

Chinese Operations Nyrstar Yunnan Zinc Alloys Co. Ltd. and Föhl China Co. Ltd. only became operational in May 2006. The following table sets forth the adjusted turnover, gross profit, operating cash costs, EBITDA, depreciation and amortisation, other non-cash expenses and profit/(loss) before net financing costs and income tax of the Company’s 60% interest in Nyrstar Yunnan Zinc Alloys Co. Ltd. and the Company’s 50% interest in Föhl China Co. Ltd. for the year ended 31 December 2006:

Year ended 31 December 2005 2006 (EUR million) Turnover ...... — 80.1 Gross profit ...... — 11.9 Operating cash costs ...... — (12.0) EBITDA ...... — (0.1) Depreciation and amortisation ...... — (0.9) Other non-cash expenses ...... — 0 Profit/(loss) before net financing costs and income tax ...... — (1.0)

121 The following table sets forth operating cash costs for 2006 of the Company’s 60% interest in Nyrstar Yunnan Zinc Alloys Co. Ltd. and the Company’s 50% interest in Föhl China Co., Ltd.:

Year ended 31 December 2005 2006 (EUR million) Salaries and social charges ...... — (3.7) Energy ...... — (6.1) Other ...... — (2.2) Total ...... — (12.0)

GM-Metal/Galva 45 The following table sets forth the adjusted turnover, gross profit, operating cash costs, EBITDA, depreciation and amortisation, other non-cash expenses and profit/(loss) before net financing costs and income tax of GM-Metal SAS and the Company’s fully consolidated interest in Galva 45 S.A. for the years ended 31 December 2005 and 2006:

Year ended 31 December 2005 2006 (EUR million) Turnover ...... 34.4 53.7 Gross profit ...... 22.1 25.4 Operating cash costs ...... (18.0) (17.2) EBITDA ...... 4.1 8.2 Depreciation and amortisation ...... (2.0) (2.7) Other non-cash expenses ...... 0 0 Profit/(loss) before net financing costs and income tax ...... 2.1 5.5

The following table sets forth operating cash costs for 2005 and 2006 for GM-Metal SAS and the Company’s interest in Galva 45 S.A.:

Year ended 31 December 2005 2006 (EUR million) Salaries and social charges ...... (10.0) (10.0) Energy ...... (1.0) (1.4) Other ...... (7.0) (5.8) Total ...... (18.0) (17.2)

The 56% increase in turnover from EUR 34.4 million in 2005 to EUR 53.7 million in 2006 was primarily a result of increased turnover at GM-Metal as a result of higher zinc prices, which led to higher turnover from free zinc sales and treatment charges, and higher premiums in 2006 for its ZAMAK product. Lower sales volumes at GM-Metal because of feedstock supply issues were more than offset by these higher premiums. During this period of tight concentrate supply, GM-Metal also benefited from its recycling capabilities and ability to use secondaries. Galva 45 increased sales to the agricultural sector in 2006 which also contributed to turnover.

Other Higher zinc prices in 2006 led to a tripling of Padaeng’s contribution to turnover from EUR 2.8 million in 2005 to EUR 9.2 million in 2006. In 2006, Padaeng’s total sales of zinc metal totalled 94,823 tonnes, an increase of 4% compared to 2005, despite a slowdown in the local economy, including zinc-related industries such as sheet and pipe galvanising, as a result of higher interest rates, floods, violence in southern Thailand and a decline in exports due to a stronger Thai baht. In 2006, local zinc consumption increased only 1.6% from 2005 to approximately 114,971 tonnes. As a result of the weak demand for zinc in the local market, Padaeng increased the proportion of zinc exported, especially in the fourth quarter of 2006.

122 Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Year Ended 31 December 2004 and 2005 Results of Operations for the Umicore Carve-out Group The table below sets forth the Umicore Carve-out Group’s unaudited selected income statement information before net financing costs and income tax and EBITDA for the year ended 31 December 2004, both on an as reported basis and as adjusted for the elimination of the impact of structural hedging, IAS 39 effects and other items that management of the Umicore Carve-out Group considers to be non-recurring. The discussion in this section following the reconciliation table below is of the adjusted results.

Year ended 31 December 2004 Reversal of Reversal of Reversal of structural IAS 39 non-recurring Historical hedging effects items Adjusted (EUR million) Turnover ...... 712.8 (54.3) — — 658.5 External ...... 532.0 (54.3) — — 477.7 From sales to Umicore ...... 180.8 — — — 180.8 Profit/(loss) from operating activities before amortisation, depreciation and other non-cash expenses ...... 87.9 (54.3) — (4.3) 29.3 EBITDA ...... 89.0 (54.3) — (4.3) 30.4 Depreciation and amortisation ...... 34.4 — — (3.5) 30.9 Other non-cash expenses ...... 5.3 — — 1.6 6.9 Profit/(loss) from operating activities ...... 48.2 (54.3) — (2.4) (8.5) Share of profits in investments accounted for using the equity method ...... 1.1 — — — 1.1 Profit/(loss) before net financing costs and income tax ...... 49.3 (54.3) — (2.4) (7.4)

There were no IAS 39 effects in 2004 because IAS 39 hedge accounting was not applicable until 2005. Non-recurring items of EUR 2.4 million in 2004 related primarily to insurance proceeds received for a fire that destroyed one of the lines at Galva 45, which were offset by the impairment of certain equipment at Auby and the reversal of part of the provisions for the Balen restructuring in 2003. The positive EUR 54.3 million effect of structural hedging was a result of the structural hedging of U.S. dollar/euro exchange rate movements.

The table below sets forth the Umicore Carve-out Group’s unaudited selected income statement information before net financing costs and income tax and EBITDA for the year ended 31 December 2005, both on an as reported basis and as adjusted for the elimination of the impact of structural hedging, IAS 39 effects and other items that management of the Umicore Carve-out Group considers to be non-recurring. The discussion in this section following the reconciliation table below is of the adjusted results.

Year ended 31 December 2005 Reversal of Reversal of Reversal of structural IAS 39 non-recurring Historical hedging effects items Adjusted (EUR million) Turnover ...... 713.2 15.9 — — 729.1 External ...... 487.5 15.9 — — 503.4 From sales to Umicore ...... 225.7 — — — 225.7 Profit/(loss) from operating activities before amortisation, depreciation and other non-cash expenses ...... 23.1 15.9 — — 39.0 EBITDA ...... 25.9 15.9 — — 41.8 Depreciation and amortisation ...... 39.2 — (1.7) (12.3) 25.2 Other non-cash expenses ...... 30.4 — (2.9) (24.7) 2.8 Profit/(loss) from operating activities ...... (46.5) 15.9 4.6 37.0 11.0 Share of profits in investments accounted for using the equity method ...... 2.8 — — — 2.8 Profit/(loss) before net financing costs and income tax ...... (43.7) 15.9 4.6 37.0 13.8

123 The absence of IAS 39 compliant hedge accounting had a negative effect on profit before net financing costs and income tax of EUR 4.6 million in 2005. All of the effect was due to timing differences in revenue recognition related to zinc transactional hedging. Non-recurring items of EUR 37.0 million in 2005 related primarily to the reduction of commodity zinc production at Auby and the closure of the roaster in Calais in the fourth quarter of 2005 and the related impairment of fixed assets, provisioning for penalties incurred upon the cancellation of certain commercial contracts, redundancy costs and demolition and rehabilitation costs. The negative EUR 15.9 million effect of structural hedging was primarily a result of structural hedging of zinc metal prices as well as the hedging of U.S. dollar/euro exchange rate movements.

Discussion of Adjusted Results Turnover The Umicore Carve-out Group’s turnover increased by 11%, from EUR 658.9 million in the year ended 31 December 2004 to EUR 729.1 million in the year ended 31 December 2005. This increase was primarily driven by the increase in LME zinc prices. The increase in turnover in 2005 occurred notwithstanding a decrease in production volumes in 2005, due to the restructuring of Auby. In 2005, turnover from sales to non-carve-out Umicore businesses accounted for approximately 31% of total turnover as compared to 25% of total turnover in 2004. Nyrstar will continue to make sales to Umicore pursuant to contracts entered into prior to the contribution of the Umicore Carve-out Group to Nyrstar. See “Related Party Transactions” beginning on page 265. Depreciation and amortisation decreased by 19% and other non-cash expenses decreased by 57%.

Profit/(loss) from Operating Activities before Amortisation, Depreciation and other Non-cash Expenses As a result of the foregoing, the Umicore Carve-out Group’s profit/(loss) from operating activities before amortisation, depreciation and other non-cash expenses increased by 33%, from EUR 29.3 million in the year ended 31 December 2004 to EUR 39.0 million in the year ended 31 December 2005.

EBITDA As a result of the foregoing, the Umicore Carve-out Group’s EBITDA increased by 37%, from EUR 30.4 million in the year ended 31 December 2004 to EUR 41.8 million in the year ended 31 December 2005.

Depreciation and Amortisation The Umicore Carve-out Group’s depreciation and amortisation decreased by 18%, from EUR 30.9 million in the year ended 31 December 2004 to EUR 25.2 million in the year ended 31 December 2005, primarily due to impairment of certain assets at Auby.

Other Non-cash Expenses The Umicore Carve-out Group’s other non-cash expenses decreased by 59%, from EUR 6.9 million in the year ended 31 December 2004 to EUR 2.8 million in the year ended 31 December 2005. This decrease was primarily due to lower provisioning for pensions and similar benefits and for certain environmental matters, such as containment ponds.

Profit/(loss) from Operating Activities The Umicore Carve-out Group’s profit/(loss) from operating activities changed from a loss of EUR (8.5) million in the year ended 31 December 2004 to a gain of EUR 11.0 million in the year ended 31 December 2005. This was primarily due the increase in zinc prices in 2005 and the attendant effect on TC escalators, free zinc sales and premiums and the effects of increases in other metal prices on by-product sales, and occurred notwithstanding lower production volumes following the 2005 restructuring at Auby.

Share of Profits in Investments Accounted for Using the Equity Method The Umicore Carve-out Group’s share of profit of equity accounted investees increased almost threefold from EUR 1.1 million in the year ended 31 December 2004 to EUR 2.8 million in the year ended 31 December 2005. This increase was primarily due to the increased contribution from Padaeng.

124 Profit/(loss) before Net Financing Costs and Income Tax As a result of the foregoing, the Umicore Carve-out Group’s profit/(loss) before net financing costs and income tax changed from a loss of EUR (7.4) million in the year ended 31 December 2004 to a gain of EUR 13.8 million in the year ended 31 December 2005.

Liquidity and Capital Resources Funding Sources Nyrstar funds its operations primarily through net cash from operations and proceeds from debt financings. These funds are used primarily to finance Nyrstar’s working capital and capital expenditure requirements, acquisitions and dividend payments to shareholders.

As of 1 September 2007, Nyrstar had EUR 350 million of debt and EUR 100 million of cash and cash equivalents.

On 30 August 2007, Nyrstar entered into a EUR 350 million bridge revolving credit facility agreement with Commerzbank Aktiengesellschaft, Fortis Bank SA/NV, ING Bank N.V. and KBC Bank SA/NV as arrangers, Fortis Bank SA/NV as facility agent and certain lenders named therein. This facility was fully drawn on 31 August 2007 (and currently remains outstanding). EUR 250 million of the proceeds was used to finance in part the acquisition of the zinc businesses of Umicore and Zinifex with the remaining EUR 100 million being used to constitute Nyrstar’s minimum cash balance as required under the BCSA. The facility agreement contains customary representations, undertakings and events of default, including a mandatory prepayment in the case of a change of control. The facility is repayable in full on 30 November 2007 but can be extended at Nyrstar’s option until 21 December 2007. Interest accrues at the rate of EURIBOR or LIBOR plus a margin of 0.15% per annum; the margin will be increased to 0.20% if the facility is extended past 30 November 2007.

Concurrently with its entry into the bridge facility, Nyrstar entered into a mandate letter with the same mandated lead arrangers, Commerzbank Aktiengesellschaft, Fortis Bank SA/NV, ING Bank N.V. and KBC Bank SA/NV, pursuant to which they agreed to arrange and underwrite a revolving credit facility of up to EUR 500 million, divided into a tranche of EUR 200 million with a term of five years and a tranche of EUR 300 million with a term of two years. It is currently Nyrstar’s intention to limit the size of this new facility to EUR 350 million and to divide it into a tranche of EUR 200 million with a term of two years and a tranche of EUR 150 million with a term of three years. The undertaking to arrange and underwrite this new facility is subject to certain customary conditions precedent, including the absence of any material adverse change in relation to Nyrstar and, to the extent that they could prejudice the success of the syndication of the facility, conditions in the debt or equity capital markets. Interest on the new facility will accrue at a rate of EURIBOR or LIBOR plus 0.275% per annum, in the case of the first tranche, and 0.225% per annum, in the case of the second tranche, subject in each case to a margin ratchet depending on Nyrstar’s leverage ratio (being the ratio of consolidated net debt to EBITDA). The proceeds of the intended drawings will be used to repay the EUR 350 million bridge revolving credit facility currently in place. Under the new facility, the company will be required to maintain a leverage ratio (total net debt to EBITDA) that does not exceed 3.0, a gearing ratio (total net debt to shareholders’ equity) that is not more than 1.0 and an interest cover ratio (EBITDA to interest cost) of at least 4.0. The revolving credit facility contains customary representations, negative covenants, undertakings and events of default.

In addition, Nyrstar is currently negotiating bilateral short-term credit lines with various banks in an aggregate amount of EUR 300 million. These credit lines would be used to finance Nyrstar’s working capital requirements as they may arise and to the extent they cannot be financed otherwise.

Pro Forma Cash Flow Data This prospectus contains certain pro forma income statement information, including pro forma EBITDA, for the year ended 31 December 2006 and the six months ended 30 June 2007, which gives effect to the transfers of the Zinifex Carve-out Group and the Umicore Carve-out Group to Nyrstar as if such transfers occurred as of 1 January 2006. This prospectus also contains a pro forma balance sheet which includes working capital components and which gives effect to the transfers of the Zinifex Carve-out Group and the Umicore Carve-out Group to Nyrstar as if such transfers had occurred as of 30 June 2007. This prospectus does not include a pro forma balance sheet as of any other date. By their nature, the pro forma income statement information and the pro forma balance sheet information presented herein assume different effective dates for the transfers of the

125 businesses and are prepared and presented independently of each other. Therefore, any derivation of pro forma cash flow statement elements (such as “change in working capital”), other than a simple combination of net cash balances or movements will, by its nature, be inconsistent with elements of the pro forma balance sheet and income statement information presented herein.

As described elsewhere in this Prospectus, EBITDA as calculated by the Zinifex Carve-out Group differs from EBITDA as calculated by the Umicore Carve-out Group. In addition, many comparable companies do not include the share of profit of equity accounted investees in the determination of EBITDA. The Umicore Carve-out Group Combined Selected Historical Financial information presents a line “Profit/(loss) from operating activities before depreciation, amortisation and other non cash expenses”. To align the presentation between the Zinifex Carve-out Group’s and the Umicore Carve-out Group’s “result from operating activities before depreciation and amortisation”, the information presented herein uses the Zinifex definition of “result from operating activities before depreciation and amortisation” which includes other non-cash expenses.

“Pro forma changes in working capital” is not a measure calculated in accordance with professional guidance, regulatory rules or requirements, nor is it a pro forma measure which is widely used in practice. Therefore, it is unlikely that this measure is comparable to other similarly titled measures as reported by other companies. This pro forma measure is not intended and should not be assumed to be what Nyrstar’s actual cash flow statement elements would have been had we operated as a single entity, or if the Zinifex Carve-out Group or the Umicore Carve-out Group had been operated as stand-alone entities, as of any of the dates or for any of the periods presented.

To illustrate the significance on selected cash flow elements of combining the Zinifex Carve-out Group and the Umicore Carve-out Group, we provide the following selected pro forma cash flow information for Nyrstar for the year ended 31 December 2006 and the six months ended 30 June 2007:

Pro Forma

Year ended Six months ended 31 December 2006 30 June 2007 (EUR million) Result from operating activities before depreciation and amortisation (“EBITDA”)(1) ...... 451.1 190.2 Change in working capital(1) ...... (573.1) 54.4 Capital expenditure(2) ...... (108.5) (54.2) Notes: (1) For the purposes of calculating our “pro forma EBITDA” and “pro forma changes in working capital” for the year ended 31 December 2006 and the six months ended 30 June 2007, we have added together the historical EBITDA and changes in working capital, as derived from the selected historical carve out financial information for each of Zinifex Carve-out Group and the Umicore Carve-out Group, and given effect to the pro forma adjustments to derive pro forma operating results. We have also adjusted our result from operating activities before depreciation and amortisation to conform the treatment of equity accounted for investees in reported pro forma EBITDA.

In addition, certain management adjustments have been made to the pro forma changes in working capital to give effect to the business combination and the alignment of accounting policies, in particular to remove the non-cash IAS 39 effects recorded at the Umicore level. These adjustments are further detailed in the reconciliation below. The adjustments have been made to reflect the calculation of changes in working capital at the Nyrstar Pro Forma level, being the difference in the balances of “Trade Debtors and Other Receivables”, “Inventory” and “Trade Creditors and Other Payables” calculated as if pro forma balance sheets had been prepared giving effect to the acquisition as if it had occurred on both 31 December 2006 and 30 June 2007. The management adjusted pro forma change in working capital is EUR (551 million) at 31 December 2006 and EUR 72 million at 30 June 2007. This calculation should not be taken together with pro forma modified EBIT or EBITDA to infer what pro forma operating cash flows might have been; it is not intended to be, nor should it be construed as a proxy for movement in cash flow or any component thereof.

126 The detailed calculation of “pro forma EBITDA” and “pro forma changes in working capital” is as follows:

Year ended Six months ended 31 December 2006 30 June 2007 (EUR million) Historical result from operating activities before depreciation and amortisation Zinifex ...... 387.5 131.5 Umicore ...... (9.6) 62.8 Pro forma adjustments thereto(a) ...... 65.8 (6.5) Share of profits of equity accounted investees, net ...... 7.4 2.4 Pro forma result from operating activities before depreciation and amortisation (“EBITDA”) ...... 451.1 190.2 Historical changes in working capital Zinifex ...... (298.5) 61.1 Umicore ...... (208.8) (13.2) Pro forma adjustments thereto ...... (65.8) 6.5 Pro forma changes in working capital ...... (573.1) 54.4 Modifications related to IAS 39 effects(b) ...... 27.1 (21.5) Modifications related to purchase accounting(c) ...... (5.7) 39.4 Pro forma changes in working capital as modified ...... (551.7) 72.3

Notes: (a) The following table sets forth the pro forma adjustments: Pro-forma adjustments

Year ended Six months ended 31 December 2006 31 June 2007 (EUR million) Revenue recognition(i) ...... (4.7) — Lower of Cost or Market(ii) ...... 1.9 (3.0) Non-metal inventory valuation(iii) ...... (4.0) 26.6 Metal inventory valuation(iv) ...... 72.6 (30.1) Pro forma adjustments thereto ...... 65.8 (6.5)

Notes: (i) Under Umicore accounting policies, revenue from refining activities was recognised when the metal reference stage (cathode) was reached. The Nyrstar policy is to recognise revenue only when the significant risks and rewards of ownership pass/have been transferred to a third party. (ii) The Umicore Carve-out Group measured and recorded Lower of Cost or Market (“LoCoM”) charges on metal inventory within the income statement notwithstanding the fact that these LoCoM charges were potentially compensated by the gross margins to be realised upon the sale of the finished products containing this metal. (iii) The non-metal part of the Umicore inventories, composed of non-paid metal, treatment charges and conversion costs was valued at the annual weighted average price. Nyrstar accounting policies require the non-paid metal and the treatment charges to be valued using the first-in, first-out (“FIFO”) principle and the conversion costs to be valued at the three month average cost. (iv) The Umicore Carve-out Group holds inventories of metal containing base products. The metal contents are classified in categories reflecting their specific nature and business use. Each category is valued using the weighed average price. Nyrstar does not use these categories and values all metal inventory at the weighted average price. Metal inventories of the Umicore Carve-out Group were valued at the rolling monthly average zinc price whereas Nyrstar accounting policies require it to be valued using the weighted average method. (b) Umicore’s working capital definition does not take into account accruals and deferrals related to IAS 39 effects. The Nyrstar working capital definition takes such effects into account. The IAS 39 effects are mainly related to the Auby electricity contract which linked electricity prices to the zinc price. As IAS 39 hedge accounting was not applied to this embedded derivative, the negative fair value impact of the higher zinc prices was recognised in 2006. This result was reversed in the first half of 2007.

127 (c) Modifications relate to the fair value step-up of Umicore inventories and accounting policy alignments. (2) Pro forma capital expenditure is derived by aggregating the totals of capital expenditure of each of the Zinifex Carve-out Group and the Umicore Carve-out Group presented in the respective historical selected carve-out financial information for the period presented as included elsewhere in this prospectus:

Year ended Six months ended 31 December 2006 30 June 2007 (EUR million) Zinifex historical capital expenditures ...... (79.0) (40.1) Umicore historical capital expenditures ...... (29.5) (14.1) Combined historical capital expenditures(a) ...... (108.5) (54.2) Note: (a) The total combined historical capital expenditures include EUR 0.4 million of ARA capital expenditure, which was proportionately consolidated by Zinifex. Nyrstar accounts for its joint venture with ARA using the equity method and therefore the Nyrstar pro forma capital expenditures do not include this amount.

Capital Expenditures We make capital expenditures on an ongoing basis to maintain our operations and to undertake business improvements and expansions.

The table below sets forth our capital expenditures on a pro forma basis for 2005, 2006 and the first six months of 2007.

Six months ended Year ended 31 December 30 June 2005 2006 2007 (EUR million) Environment, health and safety ...... 19.9 17.2 22.8 Asset management ...... 27.2 48.5 21.9 Periodic maintenance (shutdowns) ...... 8.4 20.8 3.8 Growth ...... 14.5 21.6 5.5 Total ...... 70.0 108.5(1) 54.2(1)

Note: (1) Amounts have been subject to rounding adjustments. Accordingly, figures shown as totals are not arithmetic aggregations of the figures that precede them.

Nyrstar’s pro forma capital expenditures for 2006 were affected by shutdowns at a number of sites. For a discussion of our capital expenditure on an asset-by-asset basis for the years ended 31 December 2005 and 2006 and the six months ended 30 June 2007, see “Capital Expenditure Profile” in the description of each site in “Business” beginning on page 160.

We expect to have substantial capital expenditure in the near to mid-term. In particular, we are planning to (i) upgrade our smelters to increase the use of recyclable secondary materials, which is a cleaner and less energy intensive process, (ii) increase the utilisation rate of our smelters through de-bottlenecking and other process improvements and thereby increase their production capacity, and (iii) increase the efficiency of our smelters and thus increase the amount of recovered metal to be sold. Expected maintenance capital expenditures include a scheduled shutdown of the Hobart roaster for 21 days in February 2008, a scheduled shutdown of the Clarksville roaster for 14 days in late 2008 and structural improvements at several of our sites. See “— Significant Factors Affecting Nyrstar’s Results of Operations — Costs of Production — Shutdowns” beginning on page 75 and “Capital Expenditure Profile” in the description of each site in “Business” beginning on page 160. Growth projects include a change at Hobart to the goethite process aimed at improving zinc recovery, a planned increase in capacity by 25,000 tonnes to 160,000 tonnes at Auby and the planned construction of an oxide washing facility at Clarksville to treat a variety of oxides. See “Capital Expenditure Profile” in the description of each site in “Business” beginning on page 160.

128 We also expect to have capital expenditure in relation to environmental, health and safety-related projects. See “Business — Business Description — Environment, Health and Safety” beginning on page 174 and “Capital Expenditure Profile” and “Environmental Management” in the description of each site in “Business” beginning on page 160.

Nyrstar has budgeted approximately EUR 128 million and EUR 150 million for capital expenditures for 2007 and 2008, respectively. Most of the 2007 budgeted amount that has not already been spent is committed in respect of projects which have already been commenced or in respect of which binding agreements have been entered into. Nyrstar intends to finance these capital expenditures primarily through cash from operating activities. The following table breaks down planned capital expenditure for full-year 2007 and 2008 by category:

Year ending 31 December 2007 2008 (EUR million) Environment, health and safety ...... 45.0 45.0 Current maintenance ...... 47.0 55.0 Periodic maintenance (shutdowns) ...... 13.0 15.0 Growth ...... 23.0 35.0 Total ...... 128.0 150.0

Working Capital The Zinifex Carve-out Group’s working capital comprises the net of trade and other receivables, inventories (including raw materials, work in progress and finished metal) and trade and other amounts payable. Working capital excludes non-current loans or amounts receivable, non-current loans or accounts payable, provisions for employee benefits and retirement benefit obligations, property, plant and equipment and intangible assets.

The Zinifex Carve-out Group’s working capital was EUR 432.8 million as of 30 June 2007 compared to EUR 266.8 million as of 30 June 2006. This increase was due primarily to the impact of higher zinc and lead prices on the value of inventories and receivables at 30 June 2007 together with a reduction in payables due to a change in the timing of purchases of concentrate from the Century mine by the Budel smelter, which affected the levels of Budel’s payables and inventories.

The Zinifex Carve-out Group’s change in working capital was EUR (61.1) million in the six months ended 30 June 2007 and EUR 76.9 million in the six months ended 30 June 2006. The cash inflow of EUR 61.1 million in the six months to 30 June 2007 was due primarily to the impact of falling zinc prices on the value of inventories, partly offset by a decrease in payables due to the change in timing of purchases of concentrate from the Century mine referred to above and an increase in receivables caused primarily by sales and debtor timing differences at Clarksville and the increasing LME price for lead on Port Pirie’s receivables’ balance.

The Zinifex Carve-out Group’s working capital at the end of 2006 was EUR 487.2 million compared to EUR 192.7 million at the end of 2005. This increase in working capital was due primarily to an increase in inventories, the impact of increased zinc and lead prices on the value of inventories and an increase in receivables as a result of the increase in the prices of lead, zinc and other metals in 2006.

The Umicore Carve-out Group’s working capital comprises the net of trade and other receivables (excluding accruals/deferrals related to cash-flow hedges and IAS 39 effects), inventories (including raw materials, work in progress and finished metal and stocks of consumables and spare parts) and trade and other accounts payable (excluding accruals/deferrals related to fair value cash-flow hedges and IAS 39 effects).

The Umicore Carve-out Group’s working capital was EUR 331 million as of 30 June 2007 compared to EUR 227 million as of 30 June 2006. This increase in working capital was due primarily to the impact of increased zinc prices on the value of inventories and the net of accounts receivable and payable, as well as to an increase in inventory volumes and to the full impact on accounts receivable of the entry into new product sales agreements with non-carved out Umicore businesses in connection with the creation of Nyrstar, providing for longer payment cycles.

The Umicore Carve-out Group’s change in working capital was EUR 13.2 million in the six months ended 30 June 2007 and EUR 118.0 million in the six months ended 30 June 2006. The decrease in the cash outflow

129 related to working capital between periods was due primarily to the impact of falling zinc prices during the first six months of 2007 compared to rising zinc prices in the comparable six months of 2006 on the value of inventories and the net of receivables and payables. This was partially offset by increases in inventory quantities during the first six months of 2007 compared to decreases in the comparable six months of 2006 and by increases in receivable credit terms, caused primarily by the new product sales agreements with certain non-carved out Umicore businesses in the first six months of 2007 compared to unchanged credit terms in the first six months of 2006.

The Umicore Carve-out Group’s working capital was EUR 317 million at the end of 2006 compared to EUR 109 million at the end of 2005. This increase in working capital was due primarily to the impact of increased zinc prices on the value of accounts payable and accounts receivable, as well as its impact on the value of inventories. The increase was partially due also to the initial effects of the new payment terms in place with non-carved out Umicore businesses as discussed above.

The Umicore Carve-out Group’s working capital was EUR 109 million at the end of 2005 compared to EUR 51 million at the end of 2004. This increase in working capital was due primarily to the impact of increased zinc prices on the value of inventories, as well as to an increase in inventory volumes.

As for the Zinifex Carve-out Group and the Umicore Carve-out Group, Nyrstar’s working capital comprises trade and other receivables, inventories, trade and other payables. Nyrstar’s working capital requirements will depend on a number of factors, such as commodity prices, which are outside of Nyrstar’s control.

Nyrstar’s pro forma increase in working capital in 2006 was EUR 573.1 million. This was primarily due to the impact of increased zinc prices on the value of inventories. Nyrstar’s pro forma working capital was EUR 800.7 million as of 30 June 2007, which differs from the working capital of the Zinifex Carve-out Group and the Umicore Carve-out Group because of fair value step-up, alignment of accounting policies and presentation as well as the exclusion of intercompany balances.

In Nyrstar’s opinion, its working capital is sufficient for its present requirements and for the 12 month period following the date of this prospectus.

Contractual Obligations and Commitments The following table sets forth, by major category of commitment and obligation, Nyrstar’s material contractual obligations and their maturity on a pro forma basis as of 30 June 2007:

Payment due by period Less than 1to3 3to5 More than Total 1 year years years 5 years (EUR million) Contractual Obligations Debt obligations ...... 350.0 350.0 — — — Capital lease obligations ...... 3.2 1.1 2.1 — — Total ...... 353.2 351.1 2.1 — —

Other Commercial and Regulatory Commitments Nyrstar has certain other commercial commitments, that are not on its balance sheet, in the amount of EUR 49.6 million which consist of letter of credit facilities entered into with a number of banks that serve as credit support for the obligations of certain of its subsidiaries in Australia and Europe under agreements for the purchase of raw materials and other production supplies.

Nyrstar also has EUR 27.1 million of guarantees, that are not on its balance sheet, made to local governmental authorities for the payment of certain tax and remediation obligations.

Nyrstar also has various contracts for materials, supplies and items of permanent investment incidental to the ordinary course of business. See “Business — Business Description — Sourcing of Raw Materials and Marketing and Sales” beginning on page 171.

130 Related Party Transactions For a description of all material transactions between ourselves and related parties, see “Related Party Transactions” beginning on page 265.

Disclosure on Market Risk Exposure to credit, commodity price, interest rate and currency risk arises in the normal course of Nyrstar’s business.

Commodity price risk In the normal course of its business, Nyrstar is exposed to risk resulting from fluctuations in the market prices of commodities and raw materials. Nyrstar currently engages only in transactional hedging which means that it will undertake short-term hedging transactions to cover the timing risk between raw material purchases and sales of metal and to cover its exposure on fixed-price forward sales of metal to customers. Transactional hedging arrangements are accounted for in the “Other Financial Assets” and the “Other Financial Liabilities” line items of the balance sheet. Any gains or losses realised from hedging arrangements are recorded within gross profit. Nyrstar currently does not undertake any structural or strategic hedging which means that its results are exposed to fluctuations in zinc, lead and other metal prices. Nyrstar may review its hedging policy from time to time and if its policy changes it will inform the market accordingly.

Foreign Currency Exchange Risk Nyrstar incurs foreign currency risk on sales, purchases and borrowings that are denominated in a currency other than the euro, Nyrstar’s functional and reporting currency. The currencies giving rise to this risk are primarily the U.S. dollar and the Australian dollar. Foreign currency exchange risk arises when the actual or forecasted assets in a foreign currency are either greater or less than the liabilities in that currency. For information about Nyrstar’s hedging policy with respect to foreign currency risk, see “— Significant Factors Affecting Nyrstar’s Results of Operations — Exchange Rates” beginning on page 76. On 30 June 2007 on a pro forma basis, the value of outstanding foreign exchange contracts inherited by Nyrstar was EUR 60 million. All these contracts were with Umicore. There were no outstanding contracts with banks. On 31 August 2007, Nyrstar entered into forward foreign exchange contracts to protect the Company’s exposure on intercompany loans made to enable the acquisition of the Zinifex Carve-out Group’s Australian and U.S. assets. The notional value of the contracts at 31 August 2007 was AUD 982 million and USD 109 million.

Interest Rate Risk Nyrstar incurs interest rate risk primarily on loans and borrowings. The interest rate and terms of repayment of Nyrstar’s loans are disclosed under “— Liquidity and Capital Resources” beginning on page 125. Nyrstar’s current borrowings are all on a floating rate basis, but it may in the future borrow on a fixed rate basis. All variable interest rate loans and borrowings have EURIBOR or LIBOR based interest rates. Changes in interest rates may impact primary loans and borrowings by changing the levels of required interest payments. Management does not have a formal policy of determining how much of Nyrstar’s exposure should be to fixed or variable rates. However, at the time of additional debt financing, management will use its judgment to decide whether a fixed or variable rate would be more favourable over the expected term. Nyrstar does not currently use derivative financial instruments to reduce exposure to fluctuations in interest rates.

Credit Risk Financial instruments that potentially subject Nyrstar to significant credit risk consist primarily of accounts receivable. Credit risk exposure evaluations are performed for all customers requiring credit over a certain amount. Nyrstar has developed policies and procedures for the management of credit exposures, including establishing credit committees that actively monitor credit risk. Nyrstar evaluates the creditworthiness of its customers prior to the granting of any credit, without requiring guarantees or letters of credit, and thereafter monitors the exposure to potential losses from providing credit. Nyrstar generally does not require collateral or other security to support financial instruments with credit risk. The maximum exposure to credit risk is represented by the contractual amounts of the accounts receivable. Depending on country risk analysis, Nyrstar uses documentary credits in line with standard market practices. In Europe, Nyrstar has credit insurance that covers all of its receivables in Belgium, France and Germany. The contract expires on 31 December 2007.

131 Critical Accounting Estimates and Policies Estimates and judgments used by Nyrstar’s management in developing and applying the accounting policies are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. Nyrstar makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and underlying assumptions are reviewed on an ongoing basis. The critical estimates and judgments that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are listed below.

Critical Accounting Estimates and Assumptions Impairment of assets The recoverable amount of each “cash generating unit” is determined as the higher of the asset’s fair value less costs to sell and its value in use. These calculations require the use of estimates and assumptions such as discount rates, exchange rates, commodity prices, future capital requirements and future operating performance.

International Accounting Standard 36 requires that management regularly review assets for indicators of value impairment. Indicators of value impairment may trigger an impairment review. If the impairment review indicates that the carrying value of the asset is not recoverable, an asset is impaired and a charge is made to the income statement of the difference between the carrying value of the asset and the assessed value of the asset.

The fair value of the Umicore Carve-out Group’s assets was determined at a historical high point of the commodity cycle. The asset values reflect the underlying economic environment at the time the fair value was determined. A fall in commodity prices or other changes in economic conditions underlying the Company’s business performance may lead to the incurrence of substantial impairment charges.

Restoration obligations Provision is made for the anticipated costs of future restoration and rehabilitation of smelting and refining sites to the extent that a legal or constructive obligation exists. These provisions include future cost estimates associated with reclamation, plant closures, waste site closures, monitoring, demolition, decontamination, water purification and permanent storage of historical residues. These future cost estimates are discounted to their present value. The calculation of these provision estimates requires assumptions such as application of environmental legislation, plant closure dates, available technologies and engineering cost estimates. A change in any of the assumptions used may have a material impact on the carrying value of restoration provisions.

Retirement benefit obligations An asset or liability in respect of defined benefit pension or medical plans is recognised on the combined balance sheet. The present value of a defined benefit obligation is dependent upon a number of factors that are determined on an actuarial basis. Nyrstar determines the appropriate discount rate to be used at the end of each year. Nyrstar’s retirement benefit obligations are discussed in more detail in Supplementary Note S5 to the Nystar Pro Forma Consolidated Financial Information.

Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences and unused tax losses and tax credits only if it is probable that future taxable profits are available to utilise those temporary differences and losses, and the tax losses continue to be available having regard to the nature and timing of their origination and compliance with the relevant tax legislation associated with their recoupment.

Recent Accounting Pronouncements A number of new standards, amendments to standards and interpretations are not yet effective for periods ended 30 June 2007, and have not been applied in preparing the Nyrstar Pro Forma Consolidated Financial Information:

Amendment to IAS 1, Capital Disclosures, requires an entity to disclose information that enables users of its financial statements to evaluate the entity’s objectives, policies and processes for managing capital. This

132 standard, which is applicable for annual periods beginning on or after 1 January 2007, will not have an impact on Nyrstar’s consolidated results but will require additional disclosures with respect to Nyrstar’s capital.

IFRS 7 Financial Instruments: Disclosures and the Amendment to IAS 1 Presentation of Financial Statements: Capital Disclosures, requires extensive disclosures about the significance of financial instruments for an entity’s financial position and performance, and qualitative and quantitative disclosures on the nature and extent of risks. IFRS 7 and amended IAS 1, which are applicable for annual periods beginning on or after 1 January 2007, will not have an impact on Nyrstar’s consolidated results but will require additional disclosures with respect to Nyrstar’s financial instruments and share capital.

IFRS 8, Operating Segments, sets out requirements for the disclosure of information about an entity’s operating segments and also about the entity’s products and services, the geographical areas in which it operates, and its major customers. It requires that an entity disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates. Once endorsed by the E.U., IFRS 8, which is applicable for annual periods beginning on or after 1 January 2009, will not have an impact on Nyrstar’s consolidated results, but may result in amended disclosure of segment information.

An amendment to IAS 23, Borrowing Costs, requires entities to capitalise borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets (thereby eliminating the option of immediate recognition of such costs as an expense). Once endorsed by the E.U., the amendment to IAS 23 which will be applicable for annual periods beginning on or after 1 January 2009 will not have a significant impact on Nyrstar’s consolidated results.

IFRIC 11 — IFRS 2 — Group And Treasury Share Transactions, provides guidance as to whether specified transactions should be accounted for as equity-settled or cash-settled under the requirements of IFRS 2. IFRIC 11 will be applicable to annual periods beginning on or after 1 March 2007. Nyrstar has not yet determined the potential effect of the Interpretation.

IFRIC 14 — IAS 19 — Limit On A Defined Benefit Asset, Minimum Funding Requirements And Their Interaction, provides guidance on minimum funding requirements in respect of post-employment or other long- term defined benefit plans. Once endorsed by the E.U., IFRIC 14 will be applicable to annual periods beginning on or after 1 January 2008. Nyrstar has not yet determined the potential effect of the Interpretation.

Other interpretations issued and available for early adoption but not applied by Nyrstar have not been included above as they are not expected to have a significant impact on Nyrstar’s consolidated financial statements.

Recent Developments Bridge Credit Facility On 30 August 2007, Nyrstar entered into a EUR 350 million bridge revolving credit facility agreement with Commerzbank Aktiengesellschaft, Fortis Bank SA/NV, ING Bank N.V. and KBC Bank SA/NV as arrangers, Fortis Bank SA/NV as facility agent and certain lenders named therein. This facility was fully drawn on 31 August 2007 (and currently remains outstanding). Concurrently with its entry into the bridge facility, Nyrstar entered into a mandate letter with the same mandated lead arrangers, pursuant to which they agreed (subject to satisfaction of certain conditions precedent) to arrange and underwrite a revolving credit facility of up to EUR 500 million. It is currently Nyrstar’s intention to limit the size of this new facility to EUR 350 million and to use the proceeds to refinance the bridge facility. See “— Liquidity and Capital Resources — Funding Sources” beginning on page 125.

Contribution of Zinifex Carve-out Group and Umicore Carve-out Group

On 31 August 2007, the Zinifex Carve-out Group and the Umicore Carve-out Group were contributed to Nyrstar pursuant to the BCSA. See “Related Party Transactions — Business Combination and Shareholders’ Agreement” beginning on page 265.

133 Transactional Hedging As at 31 August 2007, Nyrstar inherited an unhedged Metal at Risk position of approximately 100,000 tonnes, consisting in part of the unhedged Metal at Risk of the Zinifex Carve-out Group and in part of the unhedged Metal at Risk originating from certain historically built-up inventories of metal which were permanently tied up in the manufacturing and commercial operation of the Umicore Carve-out Group after fair value step-up and accounting policy alignment. Following receipt of approval from Zinifex and Umicore, on 11 September 2007 the Company commenced a programme to transactionally hedge these inherited Metal at Risk positions. Hedges covering the entire inherited Metal at Risk position were put in place by 13 September 2007.

Between 31 August 2007 and 13 September 2007, the underlying zinc price declined from USD 3,070 per tonne to USD 2,766 per tonne and it then increased to USD 3,050 per tonne at 28 September 2007. Between 31 August 2007 and 13 September 2007, the USD declined versus the euro from 1.37 to 1.39 and it declined further to 1.42 by the end of September 2007.

Other than the Metal at Risk position relating to the historically built-up inventories noted above, the Company transactionally hedged all remaining Metal at Risk positions and currency positions of the Umicore Carve-out Group as from 31 August 2007. Between 31 August 2007 and 13 September 2007 (the date of commencement of the Company’s overall hedging programme), the Metal at Risk positions created at the operations acquired from the Zinifex Carve-out Group were not hedged. Full transactional hedging on the Metal at Risk positions and the derived currency positions of the Zinifex Carve-out group was implemented as from 13 September 2007.

The financial impact of the delay in the start-up of Nyrstar’s transactional hedging policy cannot be determined at this time since it will depend, among other things, on zinc price and currency rate trends and on the values attributed to the inherited inventories at 31 August 2007 pursuant to the fair value step-up analysis of the Umicore assets expected to be completed in the coming months.

See “— Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters — Transactional Hedging of Metal Price and Currency Exposure” beginning on page 71.

Foreign Exchange Hedging On 31 August 2007, Nyrstar entered into forward foreign exchange contracts to protect the Company’s exposure on intercompany loans made to enable the acquisition of the Zinifex Carve-out Group’s Australian and U.S. assets. The notional value of the contracts at 31 August 2007 was AUD 982 million and USD 109 million.

Lead Concentrate Contract In September 2007, Nyrstar entered into a long-term contract with an Australian mine to supply lead concentrate to Port Pirie.

Current Trading and Prospects Since 30 June 2007, our overall production level has been slightly ahead of the first half 2007 level. However, there has also been a decline in the price of zinc over this same period. Operational performance has been strong at Balen/Overpelt, Auby, Clarksville, ARA, GM-Metal, Galva 45, Nyrstar Yunnan Zinc Alloys Co., Ltd. and Genesis. Hobart has experienced a decline in demand for EZDA from China, which we believe is only a temporary situation driven largely by a favourable price arbitrage to Chinese consumers between the Chinese domestic zinc price (as quoted on the Shanghai Metal Exchange) and the LME zinc price. Budel has faced some production issues linked to the higher carbon content in the Century concentrates which has led to somewhat lower than expected production levels. See “Business — Business Description — Budel — Production” beginning on page 193. At Port Pirie, we have continued to experience process instability in the sinter plant and this, together with other operational issues such as the derailment of a pallet, have caused metal production levels at Port Pirie to be below anticipated levels.

Zinc prices have declined since 30 June 2007, with the monthly average price of zinc at USD 3,603 per tonne, USD 3,547 per tonne, USD 3,253 per tonne and USD 2,881 per tonne for June, July, August and September, respectively. This drop in price has decreased the value of the free metal gross profit contribution of our zinc smelting assets.

134 The decline in zinc prices since 30 June 2007 has had a negative impact on the price differentials (QP terms) element of gross profit at the assets acquired from Zinifex until the implementation of full transactional hedging at those assets as from 13 September 2007 (following which there is no longer any such element of gross profit), largely as a result of the impact of the non-hedging of concentrates sourced from the Zinifex mines. See “— Significant Factors Affecting Nyrstar’s Results of Operations — Gross Profit Realised by Zinc Smelters — Transactional Hedging of Metal Price and Currency Exposure” beginning on page 71. As our first consolidated financial statements, for the six months ending 31 December 2007, will represent a continuation of the Zinifex Carve-out Group’s combined financial statements, they will reflect this impact from 1 July 2007.

Global zinc concentrate production continues to increase and spot TCs in September were well above year- to-date realised TCs. We believe that this latter trend is positive for smelters as they head into annual negotiations for the settlement of 2008 benchmark levels. Moreover, the lower zinc prices also do not appear to have had a significant adverse effect on premiums. However, further declines in zinc prices as well as movements in exchange rates, particularly the U.S. dollar/euro and the U.S. dollar/Australian dollar exchange rates, could affect premiums and free metal and by-product revenues. We expect in particular the sharp depreciation of the U.S. dollar to date in the second half of 2007 to have an adverse effect on our result before net financing costs and income tax.

Lead prices have increased significantly since 30 June 2007, with the monthly average price of lead at USD 2,426 per tonne, USD 3,084 per tonne, USD 3,119 per tonne and USD 3,227 per tonne for June, July, August and September, respectively.

135 THE ZINC AND LEAD SMELTING AND ALLOYING INDUSTRIES

The following information relating to the zinc and lead markets and industry overview has been provided for background purposes only. Much of the information was obtained from Brook Hunt & Associates Ltd (“Brook Hunt”), including in particular the zinc and lead price forecasts (as of 28 September 2007) and related supply and demand forecasts. Brook Hunt is an international strategic analyst to the metal industries and markets and maintains a mining and metals industry database based on interaction with metal producers and consumers. Brook Hunt prepares publications covering the short- and long-term outlook for metal and concentrate markets and key developments in mine, smelter and refinery output, and makes forecasts of base metal prices.

Introduction Zinc Zinc is a metal that is chemically active and alloys readily with other metals such as copper, aluminium and magnesium. It is durable and its ability to react with iron is of particular significance as this imparts good corrosion resistance to steel substrate when used as a galvanised or applied coating. It is relatively hard, with a low melting point, making it suitable for die-casting, but still soft enough to be formed, rolled or extruded.

The most important first-use product of zinc is galvanised steel. By prolonging the life of steel, zinc extends the life of goods and capital investments, helping to conserve natural resources such as iron ore and energy. According to Brook Hunt, damage caused by corrosion of steel costs approximately 4% of an industrialised country’s GDP annually. Further, only approximately 15% of all steel and 50% of sheet steel is protected by zinc. Thus there is an economic rationale for further growing the intensity of zinc usage. Other important first-uses of zinc include brass, die-casting, zinc chemicals, healthcare and zinc semi-manufacturing of rolled and extruded products. Zinc is an essential trace element for humans, animals and plants. It is vital for many biological functions and plays a crucial role in more than 300 enzymes in the human body.

Zinc is usually found in ore bodies in association with other minerals, commonly lead, copper, silver or gold. Over the last decade, zinc mines averaged 60% of their revenue from zinc, 25% in roughly equal portions from lead and copper, and 15% from silver and gold.

Zinc concentrate and recycled, zinc-bearing secondary material are converted to refined zinc metal (often referred to as slab zinc) through the smelting process. The hydrometallurgical process route used at electrolytic smelters is the most commonly used process and plants using this process produced 93% of world refined output in 2006. Smelters using the pyro-metallurgical Imperial Smelting Process (ISP) produced 6% of world refined output in 2006 whilst plants processing only secondary material to refined zinc accounted for just less than 1% of slab zinc production in 2006.

Zinc metal is produced in a variety of grades and shapes to meet the requirements of London Metal Exchange (“LME”) registration and the particular needs of customers. The standard specification of zinc for registration on the LME is 99.995% zinc of Special High Grade (“SHG”).

As is the case for most materials, zinc faces substitution competition from other materials but as zinc forms a small percentage of its most important first-use product (galvanised steel, which is typically 1 to 8% zinc), substitution has been minimal in recent years. Substitution was an issue in zinc die-casting in the automotive sector in the late 1970s and 1980s but it was driven by the need to reduce vehicle weight by switching to lighter materials such as aluminium and plastics, rather than by high zinc prices. Technological developments saw zinc subsequently regain its market in the automotive sector. Some substitution has occurred in the current high price environment but the impact has been minimal and difficult to distinguish from macro-economic induced demand changes. The zinc price has tripled over the last three years but the proportion of the steel price attributable to zinc was typically just 17% in 2006 (as compared to 6% in 2004) and coated steel producers and consumers so far have absorbed these additional costs.

In 2006, the world’s zinc miners produced 10.38 million tonnes of zinc in concentrates, refined output from primary and secondary smelters totalled 10.56 million tonnes and global consumption of slab zinc was 11.2 million tonnes, with the shortfall between refined production and consumption met by the draw down of accumulated zinc stocks held on the LME and by producers and consumers.

136 Lead Lead has been used for thousands of years because it is widespread, easy to extract and malleable. It is found in ore bodies in association with other minerals, mainly zinc, silver and copper. It is principally extracted as a by-product of zinc mining.

Lead-acid batteries, used principally in starting-lighting-ignition (SLI) applications in motor vehicles, as well as in certain other motive power and industrial uses, have accounted for virtually all of lead consumption growth in the recent past and are likely to do so in the future. Approximately 75% of all lead produced is used in the lead-acid battery industry. The remaining quarter of lead consumed is used in non-battery applications. This comprises several small uses, which have declined over time as the battery sector’s market share has increased, and the remaining applications for lead are under close scrutiny because of environmental concerns.

Lead-acid batteries, however, remain the most cost effective technology for cars and light vehicles, despite the recent increase in the lead price. New battery technologies such as nickel metal hydride and lithium ion still represent only a tiny percentage of global market share and currently are significantly more expensive than traditional lead-acid batteries. So while the future of global lead demand in the long-term is uncertain, in the short to medium term lead-acid batteries appear likely to remain the dominant vehicle technology.

Primary producers smelt and refine lead concentrates. Primary smelters may also treat various secondary materials such as residues from other metallurgical operations, lead-containing industrial wastes and battery paste. Lead has the highest recycling rate of all the metals. Currently some 60% of lead produced is from secondary sources, mainly recycled lead-acid batteries, but also other sources of lead scrap.

In 2006, the world’s lead miners produced 3.29 million tonnes of lead in concentrates, refined output from primary and secondary smelters totalled 7.77 million tonnes and global consumption of refined lead was 7.93 million tonnes, with the shortfall between refined production and consumption met by the draw down of accumulated lead stocks held on the LME and by producers and consumers.

Zinc Overview of the Zinc Smelting Industry Zinc smelters are refineries which process zinc concentrate or zinc secondary material into refined zinc metal. They cast refined slab zinc in a variety of shapes and weights according to customer requirements. There are several grades of refined metal. The most common grade is SHG 99.995% zinc, which is the only grade that can be registered and traded on the LME. Other common grades include “High Grade” (HG 99.95% zinc), “Prime Western” (PW 98.5% zinc) and a variety of alloy grades produced to customer specification.

137 The following diagram outlines the various stages of zinc production and consumption.

THE ZINC INDUSTRY

Mine Production of Secondaries Concentrate

Concentrate stock change Surplus/Deficit

Processing Losses

Primary and Secondary Smelter Output Refined Slab Zinc

Refined metal stock change Direct use Surplus/Deficit of scrap

Zinc Consumption by First-Use: Galvanising, Rolled & Extruded, Brass Semis & Castings, Die-casting Alloys,Oxides, Chemicals

Zinc Consumption by End-Use: Construction, Transport, Industrial Machinery, Consumer Products, Other

Zinc smelters operate at the juncture of two sequential commodity markets — the market for zinc concentrates and the market for refined zinc. Whilst each market has its own supply-demand dynamic the two markets generally move in a congruent, cyclical fashion, either both in surplus or both in deficit. Concentrate pricing has two components, the treatment charge (“TC”), which is paid by the concentrate seller to the smelter and is set through negotiation, and the LME zinc price. The profitability of smelters is largely determined by the interplay between the zinc price, which determines the amount of value to be shared between miner and smelter, and the TC, which determines how that value is shared between miner and smelter.

138 The cyclical patterns of concentrate treatment charges and refined metal prices are caused not just by the underlying global macro-business cycle but also by sizable annual shifts in mine production, smelter production and the demand for refined zinc. Consequently, the concentrate and refined zinc markets can swing rapidly between surplus and deficit with the zinc price and TCs moving in response to these changes in the market dynamic. These swings can create conditions that vary significantly for smelters and miners between years as is illustrated below.

THE ZINC MARKET CYCLE

Treatment charge Mine production outstrips smelter demand; smelter production Surplus concentrate outstrips consumer demand. and refined stocks. Markets move to surplus. Price Low prices force mine trends lower, TCs trend higher. production cuts.

Price

Constrained concentrate Mine production reactivated and supply forces smelter new mines under development. production cuts. Refined Concentrate and refined stocks stocks fall, prices low. Prices approach cyclical increase. highs and TCs improve.

Source: Brook Hunt

Major Zinc Mining and Smelting Companies The top ten zinc miners accounted for 41% of global mine production in 2006 whilst the top ten smelting companies accounted for 46% of global refined output. Brook Hunt forecasts that the formation of Nyrstar NV will create the world’s largest zinc smelting company, producing over 1.0 million tonnes of refined zinc in 2006 on a pro forma basis, representing 10.1% of global refined output. Nyrstar will be the world’s largest pure-play base metals smelting company.

2006 COMPANY PRODUCTION RANKINGS (thousand tonnes Zinc)

Rank Mining Companies kt Zn % Smelting Companies kt Zn % 1 Glencore ...... 749 7.2 Nyrstar Pro forma ...... 1070 10.1 2 Teck Cominco Limited ...... 628 6.0 Korea Zinc Group ...... 899 8.51 3 Zinifex ...... 579 5.6 Glencore ...... 685 6.49 4 Hindustan Zinc ...... 509 4.9 NewBoliden ...... 441 4.17 5 Anglo American plc ...... 397 3.8 Xstrata AG ...... 405 3.83 6 New Boliden ...... 300 2.9 Votorantim ...... 399 3.78 7 Xstrata AG ...... 295 2.8 Hindustan Zinc ...... 345 3.27 8 Falconbridge ...... 293 2.8 Teck Cominco Limited ...... 301 2.85 9 Minera Volcan ...... 258 2.5 Noranda Income Fund ...... 266 2.52 10 Votorantim ...... 205 2 Huludao Zinc Co ...... 265 2.51 All Others ...... 6168 59 All Others ...... 5486 52 Total Global Mine Output ...... 10380 100 Total Global Refined Output .... 10560 100 Source: Brook Hunt Note: Assumes production for each company includes its equity share in each asset. Glencore production increased to include attributable Xstrata production. Xstrata production decreased by Glencore holding.

139 First-Use and End-Use Market Sectors First-Use Galvanising is the predominant first use for zinc, accounting for 48% of global zinc usage in all forms in 2006. The next largest use of zinc is in brass, accounting for 17% of total demand in 2006, followed by die-casting at 11%. These and other principal first uses are described in more detail below.

Galvanising In both absolute and percentage terms, Brook Hunt expects galvanising to be the fastest growing first use for zinc with the principal applications being found in the construction and automotive industries. Growth in the use of zinc in galvanising is primarily driven by consideration of full life-cycle costs in the automotive, construction and consumer durables sectors, allied with rising end-use demand especially from the world’s developing economies.

Brass Semis and Castings Brass, a copper-zinc alloy (typically 65% copper, 35% zinc), is also significant for the zinc market. Brass is a high value product that is simple and inexpensive to produce. It can be cast, forged, formed into sheet, wire and rod, and, because of its high tensile and yield strength, brass is machinable, thereby making it suitable for complex shapes. Brass has a high scrap value, usually at least 80% of its intrinsic metal value, which encourages a high level of recycling.

Die-casting Alloys Die-casting, or the forcing of molten metal under high pressure into moulds or dies, is another high value first-use market, accounting for 11% of zinc usage in 2006. Die-casting uses speciality zinc alloys. In the late 1970s when car makers sought to improve fuel efficiency by reducing vehicle weights, the zinc industry developed thin walled castings, which allowed zinc to continue competing with lighter materials such as aluminium and magnesium, and direct injection die-casting, which has reduced scrap generation and unit manufacturing costs.

Oxides and Chemicals Zinc oxides and chemicals accounted for 10% of zinc consumption in 2006. The principal use for zinc oxide is the vulcanisation of rubber, principally in tyres. Demand is driven by replacement needs and the expansion of the world’s vehicle fleet, particularly in developing economies. Zinc oxide is also used in paints, coatings, ceramics, pharmaceuticals and agriculture.

Zinc Semi-manufacturing Zinc semi-manufacturing of rolled and extruded products accounted for 10% of zinc consumption in 2006. In France and Germany, zinc sheet is a traditional roofing and cladding material. In the United States and other countries zinc sheet is used in coinage. In India and China, zinc sheet is used for the casings of dry cell batteries.

End-Use Products from the first-use sectors are sold into a variety of end-use markets. The pattern of zinc consumption in the end-use markets is such that demand for zinc moves closely with changes in industrial production (“IP”).

Construction The largest end-use sector for zinc is construction, which accounted for 45% of global zinc consumption in 2006, with the non-residential construction sector being particularly zinc intensive. Construction continues to consume the major share of galvanised steel. Galvanised steel is used extensively in various infrastructure projects including bridges, electricity transmission towers, lighting poles. A potential market has begun to open up in parts of North America where galvanised steel studs are replacing traditional timber frames used in residential houses and are proving very popular in the termite and hurricane prone southern states of the United States. Zinc die-cast alloys are also widely used in kitchen and bathroom fittings whilst brass has many applications in the construction industry.

140 Transport The transport sector accounted for 25% of global zinc consumption in 2006, with the automotive industry by far the largest consumer. The intensity of usage of galvanised steel in car bodies varies from country to country depending on corrosion standards. U.S. and European standards are high as a lifetime corrosion resistance guarantee is an attractive selling point widely used by automotive producers. In general, there is less use of galvanised steel in car bodies in emerging economies. For example, only 30-40% of steel car panels are zinc- coated in Brazil and in Russia only approximately 4% of the steel used in a car is galvanised.

Brass is used in the automotive sector in components of fuel, electric and braking systems. Die-cast zinc alloys are used in car door handles, mirror assemblies, motor housings and fuel injection systems in small petrol engines.

Consumer Products 10% of global zinc consumption in 2006 came from the consumer goods sector. Within the white goods industry galvanised sheet has contributed significantly to the durability of items such as washing machines and dishwashers. Zinc coated steel casings resist the corrosion and erosion caused by detergent, bleach and chemical solution usage. Brass is used in many electrical and water handling systems of white goods with die-cast alloys being used in handles, supports, motor assemblies and a variety of other precision components.

Industrial Machinery Industrial machinery also accounted for 10% of global zinc consumption in 2006. Zinc is consumed in a variety of forms in industrial equipment. Galvanised steel is used in corrosion resistant structural parts and enclosures, brass is widely used in many electrical and hydraulic systems and die-cast zinc parts are used in a variety of precision components and assemblies.

Other In the chemical sector, zinc oxide is the prevalent zinc product used and the sector is an important area of growth, particularly in the tyre industry where zinc oxide is used as an accelerator in the hardening process for rubber. Zinc oxide, zinc sulphate, zinc sulphide and zinc phosphate are used in paints, pigments, plastics, pharmaceuticals, ceramics and for agricultural purposes.

Geographic Patterns and Drivers of Zinc Consumption The relationship between industrial production and global zinc consumption is set out below.

INDUSTRIAL PRODUCTION AND GLOBAL ZINC CONSUMPTION

140 14000

120 12000 China emerges as dominant driver of zinc consumption growth 100 10000

80 8000 US-led global

2000) slowdown 60 6000 Asian Financial Crisis Japanese Financial 40 4000 Second Oil Crisis Squeeze First Oil Crisis Annual Zn consumption (kt Zn) 20 Global IP 2000 Western World IP Industrial production (rebased to 100 as at Global Zinc Consumption 0 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Source: Brook Hunt

141 There has historically been a good correlation between per capita demand for zinc metal and both industrial production and gross domestic product (“GDP”) per capita, as shown below. 2005 ZINC CONSUMPTION AND GDP PER CAPITA 12.0

10.0

8.0 Germany Slovak Rep. Italy 6.0 China Japan

France India 4.0 USA

Turkey Poland Zn consumption per capita (kg) 2.0 Russia Brazil 0.0 0 10000 20000 30000 40000 GDP per capita (USD)

Source: Brook Hunt Note: Line represents line of best fit. As can be seen above, the increase in zinc consumption with GDP growth is greater in developing counties than developed countries. Moreover, demand for zinc products is greater in certain emerging economies, such as Brazil, Russia, China and India, on an absolute basis, as a result of their large and growing populations. As per capita incomes rise, and a greater share of income is spent on services of all kinds, the rate of growth of demand for zinc tends to decrease. This would suggest that growth in zinc consumption in China is set to significantly increase if China also follows this pattern. Global GDP and IP has exhibited strong growth since 2000 and this trend is forecast by Brook Hunt and the IMF to continue. The world GDP and IP compound annual growth rate was 4% and 3% from 2000 to 2006, with China and India registering GDP/IP growth of 10%/15% (China) and 7%/7% (India). Brook Hunt and the IMF forecast GDP and IP compound annual growth rates of 5%/4% (World), 10%/16% (China) and 8%/8% (India) from 2006 to 2008. During the last price cycle (1993-2002) global zinc consumption grew at an average annual rate of 3.8%. The primary driver behind this growth was the industrialisation and urbanisation of the developing world where average annual consumption growth was 6.5% per annum compared with just 1.6% per annum in the world’s more mature economies. In 2004, global demand for zinc increased by 7% over 2003, which was driven by a 3.4% increase in demand in mature economies and a 10.2% increase in demand in developing economies. Most of this growth came from China where demand grew by 22% to 2.4 million tonnes. China’s explosive growth continued in 2005 with Chinese consumption rising by 18% to 2.9 million tonnes. Growth in the world’s mature economies recovered in 2006, particularly in Europe, which coupled with continued strong growth in China and elsewhere in the developing world led to a 5.3% increase in global zinc consumption to 11.2 million tonnes. Brook Hunt forecasts that during the current price cycle, zinc consumption growth will be driven predominantly by China. Brook Hunt expects growth in average annual global zinc consumption to be 4.5% for the 2002-2009 period, with the developing world growing at an average annual rate of 7.7% as compared to zinc consumption growth in the mature economies of just 0.9% per annum. In absolute terms, Brook Hunt forecasts that global zinc consumption will increase to 12.8 million tonnes per annum by 2009 from 11.2 million tonnes per annum in 2006. China accounted for 15% of world consumption at the start of this decade and Brook Hunt anticipates it will account for 32% of world demand by the end of the decade.

142 2006 GLOBAL ZINC CONSUMPTION 11.2 million tonnes

Africa 1.7% Australia and Asia China 20.2% 28.3%

Latin America 5.8% CIS 2.7% Japan North 5.7% America 12.6% Europe 23.0%

Source: Brook Hunt

Smelter Gross Profit KEY GROSS PROFIT CONTRIBUTORS

Gross premium Gross Revenue - Realisation expense profit = Recovered zinc Zinc metal sales =x+LME zinc price Net premium tonnes

By- Net by-product sales(a) product sales

Premium negotiated Net with customer premiums Zinc Free zinc where recovery is greater than 85% Free zinc refining margin TC negotiated Cost of goods sold with supplier TC Zinc concentrate Paid Treatment = x LME zinc price - - (b) purchases zinc tonnes charge Impurities

Contained 85% x LME zinc price Escalator zinc tonnes -orx + Base TC

Basis zinc price Deescalator

Notes: (a) By-product revenue net of precious metals payments. (b) Includes payment for contained precious metal and penalties for impurities

Sales turnover for zinc smelters is reported as the sale of recovered zinc tonnes at a zinc price that comprises the LME price and a net premium (i.e., a gross premium less realisation expenses, which are predominantly distribution costs incurred by the smelter). Smelters may also earn income from selling by-products from the production process such as sulphuric acid, cadmium, silver, gold and indium.

The cost of goods sold incurred by the zinc smelters includes the cost of purchasing concentrate from raw materials suppliers. It is a net cost comprising paid tonnes of zinc contained in the concentrate priced at the LME zinc price averaged over an agreed quotation period less the realised TC and, in certain circumstances, a penalty charge. The penalty charge applies only to concentrate containing deleterious elements and may not always be levied.

143 A typical zinc smelter derives its gross profit from four main sources: • The realised treatment charge effectively paid by the concentrate seller to the smelter; • Bonus or “free” zinc metal, which is the difference between the zinc recovered and sold by the smelter (96% metallurgical recovery would be typical for many electrolytic zinc smelters) and the 85% of contained zinc in concentrate that is typically paid for by the smelter in accordance with current industry practices. This level of metal payability incurred by the smelter compares favourably to other base metal smelters (for instance, nickel smelters incur 100% payability, copper smelters 96% payability and lead smelters 95% payability); • Net premiums, being the difference between the LME price at which the smelter pays for the zinc in concentrate and the higher price which smelters achieve on sales of the zinc produced; and • Net receipts from the sale of the by-products such as sulphuric acid, lead, silver, gold, cadmium and other mineral metals.

The theoretical zinc income stream from these four items, known as the zinc refining margin, is an industry performance measure and is calculated on the basis of a smelter treating concentrate with a grade, or zinc metal content by weight, of 53.5% zinc with a smelter recovery of 96%. Between 2000 and 2005, the zinc refining margin averaged USD 255 per tonne of concentrate. Record high prices, TCs and premiums saw the zinc refining margin more than double in 2006 to USD 638 per tonne of concentrate.

Treatment Charges Smelters purchase zinc concentrate under annual or multi-year tonnage contracts (known as frame contracts) or on the spot market. Almost all concentrate is priced according to a standard form of contract: • The smelter will pay the seller the lower of a payment for 85% of the zinc contained in the delivered concentrate or a payment for the implied zinc content in the concentrate had the grade been 8 percentage points lower than its actual grade. The payable zinc metal is valued at the LME official cash price of zinc averaged over an agreed quotation period. • The smelter will receive from the seller a treatment charge expressed in USD per tonne of concentrate. Treatment charge contracts will usually contain a formula that either increases or decreases the agreed “base” TC by a fixed percentage of each USD that the quotation zinc price is above or below the agreed basis zinc price. These adjustments are known as “escalators” and “de-escalators”.

TCs for annual contracted tonnage are agreed by private negotiation between sellers and buyers or by tender. Nonetheless, the majority of terms for annual contracted tonnage agreed in any year tend to settle around a norm that is commonly referred to as the “benchmark” TC. Benchmark treatment charges provide the data for Brook Hunt’s price analysis of the zinc concentrate market. In 2007, there was a variation in the contracts agreed by the major mining and smelting companies and therefore there is no single benchmark contract. This was primarily due to divergent views within the industry regarding the expected zinc price over the short-term. At the zinc price prevailing at the time of the negotiations of these contracts, the realised TCs, as agreed under the two key settlement variation types, were as close as any other year where only one broadly accepted benchmark settlement had been agreed.

Negotiations for the annual contract TCs generally commence in the October prior to the start of the contract year and are normally concluded early in the contract year. A prerequisite for a successful negotiated outcome is general agreement between buyers and sellers regarding the future state of next year’s concentrate market (i.e., whether it will be over- or under-supplied) and the likely zinc price. The former will determine which party has the negotiating advantage. Brook Hunt anticipates that as the concentrate market moves to surplus in 2007, 2008 and 2009 (and, thus the relative negotiating power moves in favour of the smelters), the smelters’ share of contained value will increase from a low of 27% in 2007 to 42% in 2009 (which compares to an average of 41% from 1997 to 2006).

144 2006 AND 2007 “BENCHMARK” TREATMENT CHARGES

500

450

400

350

300

250

200 2007 2006

Realised TC (USD/t Zn conc) 150

100

50 1000 1500 2000 2500 3000 3500 4000 Zinc Price (USD/t Zn)

Source: Brook Hunt

As demonstrated by the graph above, a 2006 contract using the 2006 benchmark base TC of USD 128/tonne of concentrate and a basis zinc price of USD 1400/tonne with an escalator of 14% and a de-escalator of 12% delivered a realised TC of USD 390/tonne of concentrate at the annual average zinc price of USD 3274/tonne.

As noted, in 2007 there is no single benchmark contract. However, a TC of USD 300/tonne and a basis zinc price of USD 3500/tonne with an escalator of 8% and a de-escalator of 6% provides a surrogate benchmark as it generates realised TC outcomes roughly in the middle of the range delivered by the four most significant contracts agreed in 2007. The realised TC at differing zinc prices under this surrogate benchmark is shown below, together with the 2006 benchmark TC contract.

145 Premium Smelter sales of refined zinc direct to customers are made at the prevailing LME price plus a premium. The premium covers the additional costs of producing the product, including alloys, to customer specification and delivery and can vary regionally as shown below. Except when deliveries are made to LME warehouse for sale on the London Metal Exchange, smelters sell refined zinc to “first-use market” customers with contracts for tonnage and premiums, or to the spot market at the LME price plus a spot-market premium.

REGIONAL NET CONTRACT PREMIUMS (USD/t) BASIS SPECIAL HIGH GRADE

200

150

100

50

0 Net premium (USD/t)

-50 Latin America Japan Australia Global Western Europe -100 1989 1991 1993 1995 1997 1999 2001 2003 2005

Source: Brook Hunt

By-products Smelters also earn income from selling products other than zinc, such as sulphuric acid and other by-products such as cadmium, silver, gold and indium. The by-products that are produced by a specific smelter are determined by the concentrates that it purchases and the particularities of its processing plant. Between 2000 and 2006, the sale of by-products generated annual average revenue of USD 12.9/tonne concentrate for the world’s zinc smelters.

Transport Costs It is usual for miners to bear the cost of shipping concentrate to the port of discharge nearest to the smelter. Smelters that are located close to mines (particularly if there are few local competitors) or close to a regional concentrate shipping hub such as Antwerp are usually able to negotiate advantageous commercial terms reflecting a share of the transport savings the miner will realise by not sending concentrate to more distant smelters.

146 Refining Margin Trend Brook Hunt’s zinc price, TC and net premium forecasts suggest that smelter gross profit will continue at a high level throughout 2007 and, while decreasing, will still be substantially above the historical average of USD 306 per tonne (1997 to 2006) in 2008 and 2009, as shown in the zinc refining margin chart below.

SMELTER ZINC REFINING MARGIN (USD/tonne concentrate treated) 700

600

500

400

300

200

100

0 Smelter zinc refining margin (USD/t Zn conc) Zn (USD/t margin refining zinc Smelter 1997 1999 2001 2003 2005 2007 2009

TC Bonus Zinc Net zinc premia By-product credits

Source: Brook Hunt

147 Mine Production World mine production increased at an average growth rate of 3.6% per annum over the last price cycle from 1993 to 2002. During the period a steady increase in China’s output, averaging 10% per annum, saw it become the world’s largest producer of zinc concentrate, accounting for 27% of world output in 2006. Around the turn of the decade there were also major increases to production elsewhere in the world, most notably in Australia, Peru, Ireland, Kazakhstan and Mexico. Growth rates slowed substantially in 2001 and 2002 as the industry responded to low metal prices by cutting output with a number of mines closed, some temporarily and others permanently. With a return to more favourable economic conditions, production recovered to reach 9.9 million tonnes of zinc in 2005 from 9.1 million tonnes per annum in 2002. High zinc prices engendered a particularly strong response from China’s artisanal mining sector in 2006, which contributed to the 13% increase in Chinese mine production and the 4.8% increase in global output to 10.38 million tonnes of zinc.

GLOBAL MINE PRODUCTION BY REGION IN 2006 — 10.4 million tonnes Zinc

Others 9.2% China 28.2% Latin America 19.8%

Asia North 8.7% America 12.8% Europe Australia 8.3% 12.9%

Source: Brook Hunt

Brook Hunt forecasts that output from existing mines and committed projects (base case producers) will increase over the next three years and will peak at 13.9 million tonnes in 2009. There are twenty-seven mines currently in construction that Brook Hunt estimates will add 0.3 million tonnes to global output in 2007, 0.9 million tonnes in 2008 and 1.2 million tonnes in 2009. Mine production from the small-mine, artisanal sector in China is particularly responsive to metal prices, contracting in 2001 and 2002 when metal prices were low, but expanding by around 13% in 2006 in response to the high zinc price. Brook Hunt allows for an increase of 0.6 million tonnes per annum in China’s mine production capability between 2006 and 2009. Part of the increase is from identified new mines and expansions but most is from the more uncertain artisanal sector. China produced over one-quarter of the world’s zinc mine production in 2006 but most of its output comes from small mines that are poorly reported. Forecasts of national output are thus more of an approximation and less certain than for any other region in the world. Elsewhere in the world, Brook Hunt anticipates expanded output from forty-five mines adding 1.1 million tonnes of cumulative output by 2009.

Smelter Production Over the last price cycle from 1993 to 2002, world smelter production increased at an average growth rate of 3.3% per annum. During the period a steady increase in China’s output, averaging 10.8% per annum, saw it become the world’s largest producer of refined zinc, producing 30% of world production in 2006. China, however, was not alone in expanding output as elsewhere there were two new smelters constructed, one in India and the other in Australia, and significant capacity expansions in Asia, Europe and North America. By 2000, global smelter output was 8.9 million tonnes per annum with an average capacity utilisation rate of 95%.

148 In 2001, the market for global refined zinc metal moved to substantial surplus, mine production cuts created a shortage of concentrate and there was a consequential, substantial fall in both the zinc price and the TC. Smelter profit margins came under pressure and this, combined with the shortage of concentrate, resulted in a global reduction in refined metal production of 0.9 million tonnes per annum between 2001 and 2004. Over this four-year period eight smelters were closed permanently (six of these were ISP plants) and there were major reductions in output in China with the average capacity utilisation rate in that country dropping to 78%.

Despite the negative economic aspects of this period, new smelters continued to be constructed. Between 2001 and 2006, twenty-five new smelters were commissioned in China and four new smelters were added elsewhere in the world which together, along with expansions at many other plants, added additional global smelter capacity of 2.2 million tonnes per annum.

GLOBAL SMELTER PRODUCTION BY REGION 2006 — 10.6 million tonnes Zn

Africa Central & Australia 2.4% South Asia 4.4% America 18.3% 7.4%

North America 10.2%

China 29.9% Europe 21.3%

CIS 6.2%

Source: Brook Hunt

Brook Hunt forecasts that production capability from existing smelters and committed projects will increase steadily over 2007, 2008 and 2009 to reach 13.5 million tonnes per annum in 2009. The base case production capability forecast includes incremental output from four new smelters and from both small and large expansions with many of the latter already under construction in China. Brook Hunt expects further tonnage to be added from a general increase in capacity utilisation rates that will most likely occur as more concentrate becomes available. Brook Hunt forecasts an increase in global capacity utilisation from 83% in 2005 to 89% in 2007 and 93% by 2009.

149 Zinc Price Outlook GLOBAL SUPPLY AND DEMAND OF REFINED ZINC (thousand tonnes Zn)

2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007E 2008E 2009E Smelter Production ...... 8,920 9,278 9,662 9,894 10,144 10,086 10,556 11,540 12,826 13,586 add DLA Sales ...... 39 2337343325200 0 Global Supply ...... 8,959 9,301 9,665 9,901 10,178 10,119 10,581 11,560 12,826 13,586 Consumption ...... 8,984 8,961 9,284 9,649 10,313 10,643 11,205 11,718 12,259 12,747 % change ...... 73 (0.3) 3 6 3 9 6.9 3.2 5.3 4.6 4.6 4.0 Refined Implied Surplus (+) Deficit (-) ...... (25) 340 381 252 (135) (525) (624) (159) 567 839 Total Metal Stocks (Implied) .... 1,644 1,984 2,365 2,618 2,482 1,958 1,334 1,175 1,741 2,580 — in days of consumption 67 81 93 99 88 67 43 37 52 74 LME Stocks 194 433 651 740 629 394 90 LME Stock Change ...... (85) 239 218 89 (111) (235) (304) In days of consumption ...... 8 18 26 28 22 13 3 Mine Production(1) ...... 9,009 9,132 9,089 9,576 9,573 9,903 10,376 11,643 13,059 13,854 % change ...... 8.0 1.4 -0.5 5.3 0.0 3.5 4.8 12.2 12.2 6.1 Smelter Production(2) ...... 8,920 9,278 9,662 9,894 10,144 10,086 10,556 11,540 12,826 13,586 % change ...... 6.5 40 4.1 2.4 25 (0.6) 4.7 9.3 11.1 5 9 less Zinc in Residues and Secondaries ...... 689 674 757 815 793 743 761 833 846 923 plus Smelter Processing Losses ...... 520 547 538 575 589 567 594 643 710 751 Concentrate smelted ...... 8,751 9,151 9,444 9,655 9,941 9,910 10,388 11,350 12,691 13,413 Concentrate Surplus (+) Deficit (-) ...... 258 (19) (355) (79) (368) (7) (12) 292 368 441 Zinc Concentrate Stock ...... 1,638 1,619 1,264 1,185 817 810 798 1,091 1,459 1,900 — in days of requirement ...... 68 65 49 45 30 30 28 35 42 52 LME Cash Zinc Price USD per tonne Nominal ...... 1,128 885 778 827 1,047 1,381 3,274 LME Cash Zinc Price USD per tonne Real ...... 1,353 1,033 893 929 1,145 1,461 3,356 Notes: (1) Mine production includes an allowance for estimated production from probable projects of 125kt in 2008 and 400kt in 2009 (2) Smelter production includes an allowance for estimated production from probable projects of 100kt in 2008 and 250kt in 2009 Source: Brook Hunt Note: Nominal prices are adjusted to real prices using U.S. 2007 consumer price index.

In 2006, the LME cash zinc price averaged USD 3274/tonne (148.5 cents/lb). After three years of market deficits, LME stocks ended 2006 at 90,000 tonnes having fallen from a peak of 740,000 tonnes at the end of 2003. Total implied refined metal stock (comprising LME stocks and all unreported inventory throughout the producer-first-use-consumer supply chain) ended the year at 1.3 million tonnes, equivalent to forty-one days of consumer demand. The last major price spike occurred from 1987 to 1989 when overall implied stocks averaged around forty-two days of demand. 1988 was the last year of producer pricing with, thereafter, the main price setting mechanism becoming the LME. For most of the 1990s and the early part of this decade stocks remained at relatively elevated levels with a commensurate real decline in the zinc price.

150 LME ZINC PRICE AND METAL STOCKS

1,400 4,000 1,200 3,500 1,000 3,000 2,500 800 2,000 600 1,500 400 1,000

200 500 LME price (USD/t Zn) LME metal stocks (kt Zn) 0 0 1976 1981 1986 1991 1996 2001 2006 LME Stocks (kt) LME Price (nominal)

LME Price (real)

Source: Brook Hunt Note: The above graph illustrates the LME zinc price and inventory levels from 1976 to the end of September 2007. The zinc price is indicated in both real and nominal terms and the LME inventory levels in thousands of tonnes of zinc. Nominal prices are adjusted to real prices using U.S. 2007 consumer price index. All zinc prices are annual averages with the exception of the 2007 zinc price which includes averages up to 28 September 2007. All LME zinc stocks are as at year end with the exception of the 2007 zinc stock which is the LME zinc stock level as at 28 September 2007.

Brook Hunt forecasts that in 2007, global zinc demand will grow 4.3%, representing a modest reduction on the 5.3% growth rate it estimated for 2006, and that overall consumption will be 11.7 million tonnes. Economic activity in the United States and Europe softened in the early part of the year. Current initiatives by the Chinese government to bring a greater discipline to investment activity in that country should be partially successful, and Brook Hunt expects them to translate to zinc demand growth of 9.5% in China in 2007 as compared to the 11% achieved in 2006.

Brook Hunt forecasts that global smelter output will increase by a substantial 8.9% in 2007 to 11.4 million tonnes, in large part as a result of the commissioning of new and expanded capacity in China. A higher availability of concentrate will allow an increase in the utilisation rates of smelters around the world but particularly in China where the industry has been operating well below capacity in recent years. Brook Hunt forecasts a deficit of 0.22 million tonnes of refined metal in 2007 for the global refined market with LME stock anticipated to fall to a very low level and overall implied stocks to end the year at 1 million tonnes, equivalent to only thirty-two stock days. This represents an extremely tight market that should support high zinc prices. Brook Hunt expects the zinc price to average USD 3,470/tonne (157.3 cents/lb) in 2007.

In 2008 and 2009, Brook Hunt forecasts that global consumption growth will remain at a high level of 4.7% and 4.2% respectively, before trending down in 2010 to below the long-term average of 3% per annum. In 2008 and 2009, Brook Hunt expects mine output to grow at an average of 9% per annum, providing a more than adequate supply of concentrate to smelters. Brook Hunt estimates refined production will continue growing strongly at an average rate of 9.4% per annum in 2008 and 2009.

Whereas the export of refined zinc from China in the 1990s had a negative impact on the zinc price, today it is a structural necessity for China to be a large net exporter. Brook Hunt considers that global demand for zinc can only be met fully if Chinese net exports of refined zinc amount to between 0.5 and 0.7 million tonnes per annum over the period 2007, 2008, and 2009. Failure to reach these levels would generate high zinc prices with a real possibility that demand growth would be curtailed by supply limitations.

Brook Hunt forecasts that the refined market will be in surplus in 2008 and 2009, by 0.56 million tonnes and 0.9 million tonnes respectively. However, based on these estimates, overall implied stock days will still be only 49 equivalent stock days in 2008 and 73 days in 2009. Brook Hunt forecasts prices of USD 2900/tonne (131.5 cents/lb) for 2008 and USD 1700/tonne (77.1 cents/lb) for 2009. Such prices would be substantially higher

151 than the 1993-2002 price cycle nominal average of USD 1022/tonne (46 cents/lb) or real average of USD 1284/tonne (58 cents/lb). Brook Hunt’s forecast allows for a progressive withdrawal of investment fund interest from base metals commencing in 2008 and completed in 2009, by when the zinc price should be set essentially by the fundamentals of supply and demand only. Brook Hunt sets its forecast base case, long-term, real zinc price at USD 1375/tonne (62 cents/lb) within a range USD 1550/tonne (70 cents/lb) to USD1250/tonne (57 cents/lb). The upper limit is defined by the price that would be required to cover the costs of opening a new mine and the lower limit by the price that would be required for existing mines to continue operations. ZINC PRICE FORECASTS (USD/tonne Zn) LME Price 2007E 2008E 2009E Long Term Base Case Nominal USD ...... 3,470 2,900 1,700 Base Case Real USD ...... 3,470 2,843 1,634 1,375 High Case Nominal USD ...... 3,565 3,925 2,975 High Case Real USD ...... 3,565 3,848 2,859 1,550 Low Case Nominal USD ...... 3,255 2,200 1,125 Low Case Real USD ...... 3,255 2,157 1,081 1,250 Source: Brook Hunt Note: Nominal prices are adjusted to real prices using U.S. 2007 consumer price index. The main uncertainties inherent in the base case forecast relate to the timing of new mine and smelter production from projects that are currently at the feasibility and financing stages. There are also uncertainties for consumption associated with volatile global financial liquidity. The alternative positive and negative outcomes from such uncertain events are grouped to produce high and low supply and demand scenarios. These high and low scenario forecasts are therefore extreme outcomes around the base case forecasts.

Treatment Charge Outlook HISTORICAL AND FORECAST TC CONTRACTS (Nominal USD) 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007E 2008E 2009E Overall concentrate stock — days ...... 68 65 49 45 30 30 28 35 42 52 Zn price — USD/tonne Zn .... 1,128 885 778 827 1,047 1,381 3,274 3,470 2,900 1,700 TC Contract Base TC (USD/tonne conc) .... 189 189 168 148 141 126 128 300 310 270 Base Price 1 (USD/tonne Zn) . . 1,000 1,000 1,000 1,000 1,000 1,000 1,400 3,500 3,000 1,500 De-escalator % ...... (14)% (14)% (14)% (15)% (14)% (14)% (12)% (6)% (6)% (8)% Escalator 1 (%) ...... 16% 16% 16% 15% 16% 16% 14% 8% 8% 10% Base Price 2 (USD/tonne Zn) . . 1,100 1,100 Escalator 2 (%) ...... 17% 17% Base Price 3 (USD/tonne Zn) . . 1,200 1,200 Escalator 3 (%) ...... 18% 18% Price Participation (USD/tonne conc) ...... 20.7 (16.3) (31.6) (25.9) 7.6 61.0 262.4 Realised TC — USD/tonne concentrate Nominal ...... 210 173 136 122 149 187 390 Realised TC — USD/tonne concentrate Real ...... 252 201 157 137 162 198 400 Realised TC as % Zn Price .... 41 43 39 33 31 30 26 Source: Brook Hunt A large increase in mine production between 1998 and 2000 was not matched by a similar increase in smelter output and the global concentrate market moved to substantial surplus over these three years. In 2001, China started importing concentrate and this enabled the further expansion of the country’s smelting industry. In 2002, global mine production growth was lagging smelter demand, and global smelter demand for concentrate was met from the draw down of the previously accumulated concentrate stocks. Over the 2001 to 2004 period, the cumulative drawdown of concentrate stocks was 0.85Mt zinc in concentrate taking overall inventory from 1.6Mt at the end of 2000 to only 0.8Mt at the end of 2004. The latter was equivalent to thirty days of smelter demand, which represented a tight concentrate market. Concentrate was still in short supply in 2005 and 2006.

152 Brook Hunt takes the view that with a surplus concentrate market developing from 2007, the negotiating advantage will then move in favour of the smelters. This will, however, be against a background of a falling zinc price, which will in all likelihood result in the resetting of the base TC, basis zinc price and price participation scales at levels quite different from the 2007 benchmark contract.

FORECAST REALISED ZINC TREATMENT CHARGE (USD/tonne concentrate)

Realised TC 2007E 2008E 2009E Long Term Base Case Nominal USD ...... 298 304 290 Base Case Real USD ...... 298 298 269 228 High Case Nominal USD ...... 305 371 318 High Case Real USD ...... 305 364 305 246 Low Case Nominal USD ...... 285 274 204 Low Case Real USD ...... 285 269 196 215 Source: Brook Hunt Note: Nominal prices are adjusted to real prices using U.S. 2007 consumer price index.

The Competitive Cost Position of the Nyrstar Zinc Smelters Brook Hunt constructs its zinc smelter competitive cost analysis by compiling data from a wide variety of sources including information from producers, site visits, personal contacts, reported financial information and trade publications. In order to prepare the final analysis. Brook Hunt must, by necessity, make certain assumptions and judgements that are not validated directly by the operating companies. Furthermore, the time required to prepare a global cost analysis means that certain more recent events may not be precisely reflected in the analysis.

The 2006 global competitive cash operating cost curves were prepared in late 2006 based on estimated data for that year, including estimates of metal prices, exchange rates and inflation necessary to express the costs in 2006 real U.S. dollars.

The cash conversion cost for each smelter is determined by analysis of the principal cost components, namely labour, energy (net of credits for power generated from, or the sale of, steam from waste heat boilers), maintenance materials, consumables and other on-site costs.

153 ZINC SMELTER CONVERSION COSTS 2006

50

45

40

35

30 Auby 25 Tak Budel Balen Clarksville

20 Risdon Kunming

15

Cash Conversion Cost (c/lb slab zinc) 10

5

0 0 1000 2000 3000 4000 5000 6000 7000 8000

Total cumulative zinc production (kt slab Zn) © Brook Hunt 2007

Source: Brook Hunt

Lead Major Lead Mining and Smelting Companies Brook Hunt estimates that the top ten mine producers will account for 39% of global mined lead production in 2007 whilst the top ten smelting companies will account for 25% of global refined lead output. Currently some 60% of lead produced is from secondary sources, mainly recycled lead-acid batteries, but also other sources of lead scrap.

2006 COMPANY PRODUCTION RANKINGS (thousand tonnes Pb)

Rank Mining Companies kt Pb % Smelting Companies kt Pb % 1 The Doe Run Company ...... 248 7.5 Yuguang Gold and Lead Co ...... 288 3.7 2 BHP Billiton ...... 222 6.7 TheDoeRunCompany ...... 260 3.3 3 Glencore ...... 149 4.5 Nyrstar pro forma ...... 241 3.1 4 Teck Cominco Limited ...... 129 3.9 Glencore ...... 240 3.1 5 Xstrata AG ...... 99 3.0 Korea Zinc Group ...... 200 2.6 6 Anglo American plc ...... 94 2.8 Hunan Nonferrous Ind ...... 176 2.3 7 Zinifex ...... 79 2.4 Industrias Penoles ...... 140 1.8 8 Minera Volcan ...... 76 2.3 Quexco ...... 120 1.5 9 Western Mining ...... 70 2.1 Xstrata AG ...... 97 1.2 10 Perilya Limited ...... 68 2.1 Teck Cominco Limited ...... 90 1.2 All Others ...... 2066 62.6 All Others ...... 5915 76.2 Total Global Mine Output ...... 3300 100 Total Global Refined Output ..... 7767 100 Source: Brook Hunt Note: Assumes production for each company includes its equity share in each asset. Glencore production increased to include attributable Xstrata and Metal Europe production. Xstrata production decreased by Glencore holding.

154 Lead Consumption Global lead consumption grew rapidly in the years 1999 and 2000, before falling by 2.4% in 2001 as the global economy started to slow down. A small recovery in 2002 was followed by growth of 4.0% in 2003, which strengthened further to peak at 7% in 2005 before falling back to 3.7% in 2006. Between 1990 and 2006, global annual consumption has increased by 45%, an overall increase of 2.5 million tonnes. China has rapidly overtaken most countries and in 2005 overtook the United States to become the world’s largest consumer of lead. Brook Hunt estimates that Chinese consumption had increased almost five-fold during the 10 year period prior to 2006. This was driven in part by a rapid expansion in the domestic vehicle sector, and in part by a rise in battery exports.

Brook Hunt forecasts that during the current price cycle from 2002 to 2009, global refined lead consumption will increase by 4.7% per annum, an increase in absolute terms of 2.5 million tonnes to 9.0 million tonnes in 2009. Brook Hunt expects ongoing robust lead demand in China to be the main driver of growth, and forecasts lead demand growth over the period of 18.7% per annum, an increase in absolute terms of 2.0 million tonnes, to 2.9 million tonnes in 2009. In the rest of the world, Brook Hunt forecasts average growth over the same period at just 1% per annum, an increase in absolute terms of 0.4 million tonnes, from 5.7 million tonnes in 2002 to 6.1 million tonnes in 2009.

GLOBAL LEAD CONSUMPTION 2006 — 7.9 million tonnes

CIS 1.4% (0.1Mt)

China Europe 27.3% (2.2Mt) 23.1% (1.8Mt)

L. America 6.5% (0.5Mt) N. America 20.8% (1.7Mt) Africa 1.4% (0.1Mt) Australia & Asia Japan 16.1% (1.3Mt) 3.3% (0.3Mt)

Source: Brook Hunt

Mine Production The compound annual average growth rate of world mine production capability over the current price cycle from 2002 to 2009 is forecast by Brook Hunt at 5.3% per annum. This is much higher than the 0.9% per annum seen over the previous price cycle from 1993 to 2002, which saw production peak at 3.04 million tonnes in 2001 but then fall by 8% in the following year as a result of the permanent closure of some of the world’s larger producers of lead and the temporary closures of other mines. Brook Hunt expects mine production capability from existing mines and committed projects to contract in all regions of the world beyond 2011 due to steady depletion of currently identified ore reserves and resources. Brook Hunt expects output from existing mines and committed projects (base case producers) to increase over the next three years to peak at 4.0 million tonnes in 2009. Expansions at existing operations should provide an additional 0.2 million tonnes between 2006 and 2009, and new operations should provide a further 0.3 million tonnes. Brook Hunt estimates that an additional 0.2 million tonnes of output over the period will come from re-activated operations, new ore discoveries at currently-producing mines and the development of greenfield projects, but at this time this can not be allocated to specific mines or projects. Therefore Brook Hunt includes a general allowance in its global lead supply and demand analysis. In the near- to medium-term, this “cumulative market adjustment” is aligned with potential output from a list of probable mine projects.

155 GLOBAL LEAD MINE PRODUCTION 2006 — 3.3 million tonnes

Africa CIS Asia 3.3% (0.1Mt) 2.7% (0.1Mt) 3.7% (0.1Mt)

Australia China 18.9% (0.6Mt) 35.6% (1.2Mt)

N. America 14.8% (0.5Mt)

Europe 7.0% (0.2Mt) L. America 13.8% (0.5Mt)

Source: Brook Hunt

Smelter/Refinery Production Recent tightness in the lead concentrates market, with both term and spot TCs falling to extremely low levels, forced substantial cuts in smelter capacity in 2003. As a result global primary refined lead output fell in 2003, but was more than offset by a corresponding increase in secondary output, which kept overall refined output higher year on year. Primary output picked up again in 2004 but this was purely as a result of growth in China, with producers elsewhere still struggling to secure adequate feed. A more widespread recovery in primary output was seen in 2005 and 2006, although this was still dominated by growth in Chinese refined output. New operations and expansions in China have more than doubled primary refined lead output since the beginning of the decade, from 1 million tonnes in 2000 to 2.1 million tonnes in 2006.

GLOBAL LEAD REFINERY PRODUCTION 2006 — 7.8 million tonnes

CIS 2.7% (0.2Mt) Europe 19.8% (1.5Mt)

China 33.5% (2.6Mt)

N. America 19.8% (1.5Mt)

L. America 6.7% (0.5Mt) Africa Australia & Asia 1.6% (0.1Mt) 15.8% (1.2Mt)

Source: Brook Hunt

The tightness in concentrate feed over the past few years has resulted in an increase in scrap feed to primary smelters. This has risen from 0.8 million tonnes in 2000 to an estimated 1.1 million tonnes in 2006. However ultimately secondary feed to primary smelters is limited in many cases by the use of conventional blast furnace technology. Additional output has therefore come from secondary lead producers. Brook Hunt forecasts that global secondary refined output will increase by 3.8% p.a. between 2002 and 2009. This is an increase in absolute terms of 0.9 million tonnes from 2.9 million tonnes in 2002 to 3.8 million tonnes in 2009. Total refined global lead output is forecast to increase from 6.6 million tonnes in 2002 to 9.2 million tonnes in 2009, an average increase of 4.8% per annum. This growth continues to be driven by China, where new operations and capacity expansions at existing plants (primary and secondary) are expected to sustain growth at around 14% per annum over the period, representing an increase from 1.3 million tonnes in 2002 to 3.4 million tonnes in 2009.

156 Refined Lead Market Outlook and Forecast Lead Prices In 2006, the LME cash lead price averaged USD 1286/tonne (58.3 cents/lb). There was a refined market deficit for the fourth consecutive year, and as a result LME stocks ended the year at 41,000 tonnes, down from a peak of 109,000 tonnes at the end of 2003. Total implied refined metal stocks (comprising LME stocks and all unreported inventory throughout the producer-first-use-consumer supply chain) ended the year at 777,000 tonnes, equivalent to 36 days of consumer demand. Historically, 35 stock days represents a fundamentally tight market that has been supportive of high metal prices.

In 2007, Brook Hunt forecasts that the global lead demand growth rate will increase slightly, to 4.4%, up from 3.7% in 2006. Brook Hunt forecasts that global refined production will increase by 7%, a substantial increase over the 3.3% growth seen in 2006, reflecting 6.9% forecast mine production growth. Brook Hunt expects the global refined market to return to a small surplus of 9,000 tonnes, with total implied metal stocks forecast to increase slightly to 35 equivalent stock days by the year-end.

In 2008 and 2009, Brook Hunt forecasts global consumption growth to remain robust, although it is expected it to peak at 5.3% in 2008 before slowing to 3.7% in 2009. Brook Hunt forecasts the refined market to be in surplus in 2008 and 2009, by 93,000 tonnes and 196,000 tonnes respectively. Overall implied stock days will still be extremely low at 37 equivalent stock days in 2008 and 43 days in 2009. Brook Hunt is allowing for a progressive withdrawal of investment fund interest from base metals commencing in 2008 and completed in 2009 by when the lead price will be set essentially by the fundamentals of supply and demand only. Brook Hunt forecasts prices of USD 1,922/tonne (87.2 cents/lb) for 2008 and USD 1,053/tonne (47.8 cents/lb) for 2009. Brook Hunt sets its forecast base case, long-term, real lead price at USD 990/tonne (44.9 cents/lb) within a range of USD 800/tonne (36.3 cents/lb) to USD 1,100/tonne (49.9 cents/lb).

LEAD PRICE FORECASTS (USD/tonne Pb)

LME Price 2007E 2008E 2009E Long Term Base Case Nominal USD ...... 2,431 1,922 1,053 Base Case Real USD ...... 2,431 1,884 1,012 990 High Case Nominal USD ...... 2,480 2,128 1,379 High Case Real USD ...... 2,480 2,086 1,325 1,100 Low Case Nominal USD ...... 2,050 1,121 822 Low Case Real USD ...... 2,050 1,099 790 800 Source: Brook Hunt Note: Nominal prices are adjusted to real prices using U.S. 2007 consumer price index.

The main uncertainties inherent in the base case forecast relate to the timing of new mine, smelter and refinery production from projects that are currently at the feasibility and financing stages. There are also uncertainties for consumption associated with volatile global financial liquidity. The alternative positive and negative outcomes from such uncertain events are grouped to produce high and low supply and demand scenarios. These high and low scenario forecasts are therefore extreme outcomes around the base case forecasts.

157 LME LEAD PRICE AND STOCKS)

4,000

300 3,500

3,000

2,500 200 2,000

` 1,500 LME price (USD/t)

LME metal stocks (kt Pb) 100 1,000

500

0 0 1976 1981 1986 1991 1996 2001 2006

LME Stocks LME Price (nominal) LME Price (real)

Source: Brook Hunt Note: The above graph illustrates the LME lead price and inventory levels from 1976 to the end of September 2007. The lead price is indicated in both real and nominal terms and the LME inventory levels in thousands of tonnes of lead. Nominal prices are adjusted to real prices using U.S. 2007 consumer price index. All lead prices are annual averages with the exception of the 2007 lead price which includes averages up to 28 September 2007. All LME lead stocks are as at year end with the exception of the 2007 lead stock which is the LME lead stock level as at 28 September 2007.

Lead Concentrate Market Outlook and Forecast Treatment Charges A significant shortage of lead concentrate emerged in 2002, and prevailed through to 2006. Further tightness is already apparent in 2007, with the market unlikely to ease before 2008. As a result many primary smelters are now treating large amounts of secondary material, although scrap resources are also limited. This shortage in raw materials supply has come about largely as a result of the rapid expansion of Chinese smelting capacity over the past few years, with only modest growth in smelter capacity and demand for lead concentrates elsewhere.

As a result, the benchmark TC has declined steadily over the past few years, from USD 188/tonne basis USD 500/tonne in 2000, to USD 149/tonne basis USD 850/tonne in 2006. Contrary to this, realised TCs increased from 2004 to 2006 reflecting increasing investor involvement in the lead market and the resulting impact on the lead price. Differential markets began to develop in 2006 and this has become more evident in 2007, with settlements in Asia moving to flat terms and normal price participation contracts elsewhere. Brook Hunt forecasts that benchmark base TCs are likely to increase in 2008 and 2009 as concentrate availability measured in days of requirement starts to rise but realised TCs are expected to be lower as a consequence of lower forecast lead prices.

158 HISTORICAL AND FORECAST LEAD TC CONTRACTS (Nominal USD)

2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007E 2008E 2009E Rest of World Benchmark Overall concentrate stock — days . . . 44 52 39 33 33 32 30 26 31 35 ROW Benchmark LME Cash Price (USD/tonne) ...... 454 476 452 515 886 976 1,286 2,431 1,922 1,053 Base TC (USD/t conc) ...... 188 150 135 120 125 150 149 158 180 165 Base Price 1 (USD/t Pb) ...... 500 500 500 480 650 850 850 1,500 1,500 1,000 De-escalator (%) ...... 0 0 12.5 10 10 10 10 5 10 10 Escalator 1 (%) ...... 10 12.5 15 15 10 10 10 7 10 10 Base Price 2 (USD/t Pb) ...... 530 Escalator 2 (%) ...... 15 Price Participation (USD/t conc) .... 0.0 0.0 -6.0 5.2 23.6 12.6 43.6 Realised TC (USD/t conc) — Nominal ...... 188 150 129 125 149 163 193 Realised TC (USD/t conc) — Real . . . 226 175 148 141 162 172 197 Realised TC as % Pb Price ...... 73 55 50 43 29 29 26 Asian Benchmark Base TC (USD/t conc) ...... 160 Base Price (USD/t Pb) ...... Flat De-escalator (%) ...... 0 Escalator (%) ...... 0 Source: Brook Hunt Note: Nominal prices are adjusted to real prices using U.S. 2007 consumer price index.

REALISED LEAD TREATMENT CHARGE FORECASTS (USD/tonne concentrate)

2007E 2008E 2009E Long Term Realised TC (ROW Benchmark) Base Case Nominal USD ...... 223 222 170 Base Case Real USD ...... 223 218 164 175 High Case Nominal USD ...... 227 194 144 High Case Real USD ...... 227 190 138 206 Low Case Nominal USD ...... 197 172 147 Low Case Real USD ...... 197 169 141 152 Realised TC (Asian Benchmark) Base Case Nominal USD ...... 145 155 155 Base Case Real USD ...... 145 152 150 High Case Nominal USD ...... 145 135 140 Realised TC (ROW Benchmark) High Case Real USD ...... 145 132 135 Low Case Nominal USD ...... 145 160 185 Low Case Real USD ...... 145 157 178 Source: Brook Hunt Note: Nominal prices are adjusted to real prices using U.S. 2007 consumer price index.

159 BUSINESS

Overview We produce over one million tonnes of zinc and zinc alloys per year, which makes us the world’s largest producer of zinc metal and alloys in terms of tonnes produced in 2006 and in the first half of 2007 according to Brook Hunt. Our market share of the global zinc market in 2006 was 10.1% according to Brook Hunt. We produced 1.140 million tonnes of zinc in 2005, 1.055 million tonnes of zinc in 2006 and 543,000 tonnes of zinc in the first half of 2007. Our production of lead in 2005 was 249,000 tonnes, 224,000 tonnes in 2006 and 116,000 tonnes in the first half of 2007. We operate on four continents and employ over 4,000 people.

Our major products are zinc metal and alloys, but we are also one of the largest primary lead smelting and refining companies in the world in terms of tonnes of lead produced in 2006 and in the first half of 2007. Our zinc is used primarily in steel galvanising and die-casting, and our lead is used primarily in the production of lead acid batteries. Given the polymetallic nature of the zinc and lead concentrates that we process, we are also one of the world’s largest producers of refined silver and we produce other valuable by-products such as indium, copper, gold and cadmium. We produce high-quality branded products, including value-added alloys, which generally enable us to earn a premium over the commodity metal price and to differentiate our product offering on the basis of high quality.

Our operations include zinc and lead smelters previously owned and operated by Zinifex and Umicore including Hobart (Australia), Port Pirie (Australia), Budel (the Netherlands), Clarksville (United States), Balen (Belgium), Overpelt (Belgium) and Auby (France). Our smelters are technologically advanced in this industry with relatively high recovery rates. We also fully own the GM-Metal zinc reprocessing and recycling operation in France and have significant shareholdings in the joint ventures of Galva 45 (zinc galvanising in France), ARA (lead acid battery recycling in Australia), Genesis Alloys (zinc alloying in China), Yunnan Zinc Alloys (zinc smelting and alloying in China) and Föhl China (die-casting in China) and own a 24.90% interest in Padaeng Industry Public Company Limited (zinc smelting and mine in Thailand). See “— Business Description — Segments and Summary Description of the Nyrstar Assets” beginning on page 168.

Our principal customers for zinc metal are Umicore (Belgium and France) and Trafigura (Asia). Lee Kee (China) is our principal customer for zinc alloys, and Trafigura (Asia) for lead. Our product and customer portfolio has a significant focus on high margin, premium quality zinc alloys which frequently represent strong competitive positions in niche technical application markets. Moreover, our global footprint allows us to serve customers worldwide: we have a geographically diversified portfolio of high-quality assets that are well- positioned to supply customers locally.

Business Combination and Creation of Nyrstar Nyrstar was incorporated by Zinifex and Umicore on 13 April 2007 and acquired Zinifex’s zinc and lead smelting and alloying business and Umicore’s zinc smelting and alloying business on 31 August 2007.

It is the common intention of the Selling Shareholders and of Nyrstar that we become an independent company after the closing of the Offering. Nevertheless, we will maintain ongoing relationships with Zinifex and Umicore: Zinifex will be a key supplier of concentrate and Umicore will be an important customer of our Balen and Auby plants. In addition, both Selling Shareholders will act as providers of transitional services. See “Related Party Transactions” beginning on page 265.

160 Group Structure Chart The following diagram shows the legal structure of the Nyrstar group on the date of this prospectus:

Nyrstar

Nyrstar Nyrstar Nyrstar UK Netherlands Finance (Holdings) International

Nyrstar Padaeng Genesis Recycling Nyrstar Föhl China Zinc Alloys Nyrstar US Budel Technology Belgium International

Buzisur Genesis Nyrstar Nyrstar Alloys Germany France Nyrstar Nyrstar Yunnan Zinc Holdings Alloys Buzipon Genesis Nyrstar Alloys Australia (Ningbo) Galva 45 Nyrstar Buzifac Taylor Chemicals

Nyrstar Nyrstar GM-Metal BudelCo Nyrstar Hobart Metals Clarksville

Nyrstar Port Zinifex Pirie Hong Kong

Australian ARA (Sales) Refined Alloys

161 The Company’s main holding subsidiaries and operating subsidiaries are as follows: Country of Proportion of If different, incorporation or ownership proportion of voting Subsidiary name(1) residence interest power held Nyrstar Netherlands (Holdings) B.V. (Zinifex Netherlands (Holdings) B.V.) ...... theNetherlands 100% N/A Nyrstar Finance International SA/NV ...... Belgium 100% N/A Nyrstar UK Pty Ltd ...... theUnited Kingdom 100% N/A Nyrstar Budel B.V. (Zinifex Budel B.V.) ...... theNetherlands 100% N/A Budelco B.V...... theNetherlands 100% N/A Buzifac B.V...... theNetherlands 100% N/A Buzipon B.V...... theNetherlands 100% N/A Buzisur B.V...... theNetherlands 100% N/A Padaeng Industry Public Company Limited ...... Thailand 24.90%(3) N/A Genesis Recycling Technology (BVI) Ltd ...... British Virgin Islands 50%(3) N/A Genesis Alloys Ltd ...... Hong Kong 50%(3) N/A Genesis Alloys (Ningbo) Ltd ...... China 50%(3) N/A Föhl China Co., Ltd(4) ...... China 50% N/A Nyrstar Belgium SA/NV (Umicore Zinc Alloys Belgium SA/NV) ...... Belgium 100% N/A Nyrstar Germany GmbH (Umicore Zinc Alloys Germany GmbH) ...... Germany 100% N/A Nyrstar Australia Pty Ltd (Smeltco Pty Ltd) ...... Australia 100% N/A Nyrstar Hobart Pty Ltd (Smeltco2 Pty Ltd) ...... Australia 100% N/A Nyrstar Metals Pty Ltd (Zinifex Metals Pty Ltd) ...... Australia 100% N/A Zinifex Hong Kong Limited ( 2) ...... Hong Kong 100% N/A Nyrstar Port Pirie Pty Ltd (Zinifex Port Pirie Pty Ltd) ...... Australia 100% N/A Australian Refined Alloys Pty Ltd ...... Australia 50%(3) N/A Australian Refined Alloys (Sales) Pty Ltd ...... Australia 50%(3) N/A Nyrstar France SAS (Umicore Zinc Alloys France SAS) ...... France 100% N/A GM-Metal SAS ...... France 100% N/A Galva 45 S.A...... France 66% N/A Zinc Alloys International SA/NV ...... Belgium 100% N/A Nyrstar Yunnan Zinc Alloys Co., Ltd (Umicore Yunnan Zinc Alloys Co., Ltd) ...... China 60% N/A Nyrstar US Inc...... United States 100% N/A Nyrstar Holdings Inc. (Zinifex Resources (US) Inc.) . . United States 100% N/A Nyrstar-Taylor Chemicals Inc. (Zinifex Taylor Chemicals Inc.) ...... United States 100% N/A Nyrstar Clarksville Inc. (Zinifex Clarksville Inc.) ..... United States 100% N/A

Notes: (1) Names between parentheses denote the former names of the legal entities as part of the Zinifex Carve-out Group and Umicore Carve-out Group. (2) In the process of liquidation. (3) Accounted for under the equity method. (4) Ownership not yet transferred to the Nyrstar group on the date of this prospectus. See “Presentation of Financial and Other Information - Föhl China Co., Ltd” beginning on page 49. Competitive Strengths Our business is well-positioned to benefit from favourable trends in zinc treatment charges and a strong LME zinc metal commodity price, which are forecast to exceed long-term historical averages in the near term. As a company that is primarily focused on zinc and lead smelting, most of our gross profit is generated through the margin we receive from transforming a mining company’s zinc or lead concentrate into refined, commodity grade metal. This gross profit is primarily comprised of revenue received from four streams: treatment charges, “free” zinc or lead we are able to recover and sell over and above the amount for which we pay the mining companies, the amount of refined metal premiums we can generate above the commodity grade metal price, and the sale of by-products we produce.

162 Zinc and lead consumption growth has been significantly higher than global industrial production growth in recent years, facilitating the current environment of high refined metal prices compared to the long-term historical average. This is, in part, due to economic growth in emerging markets such as China. The high metal prices, in turn, appear to have encouraged miners to increase mine production and, therefore, to increase the supply of concentrate. Based on 2007 information from industry consultant Brook Hunt, this increase in mine output is expected, subject to certain variables, to be higher than increases in smelting capacity utilisation through 2008. This would typically suggest that treatment charges will increase during this period. Consequently, this represents a potential positive industry trend for smelting companies such as Nyrstar, as increasing treatment charges effectively mean that smelting companies receive a higher proportion vis-à-vis the mining companies of the value of the zinc metal in the concentrate they treat.

Our earnings and cash flows are expected to remain sensitive to movements in both underlying zinc and lead prices. Industry dynamics are expected to offer support for strong zinc and lead prices in the near term with Brook Hunt forecasted prices exceeding long-term historical averages in both 2008 and 2009, notwithstanding a forecast decline in 2009.

We are the world’s largest zinc producer and a leading lead producer, which we believe leaves us well- positioned to take a leading role in shaping our industry’s future and to realise economies of scale. Our company was created from the zinc and lead smelting assets of the world’s third and fourth largest zinc producers to create the world’s leading zinc producer and a leading lead producer. During 2006, on a pro forma basis, our assets produced more than one million tonnes of zinc and approximately 224,000 tonnes of lead. We own the world’s largest primary producer of lead, the Port Pirie smelter in Australia, which also produces significant amounts of zinc, refined silver and other valuable by-products.

As the largest zinc producer globally, we expect to be able to play a leading role in setting the benchmark, or industry standard, treatment charge. We believe our position in the zinc industry will also allow us to play an active role in shaping the future direction of the zinc and lead industries, while generating economies of scale in our operations.

We have a geographically diversified portfolio of high-quality assets that are well-positioned to supply customers globally. We have operations across four continents, primarily in Europe and Australia. Our Australian smelters supply the growing industrial markets of the Asia-Pacific region, including China, Taiwan and Hong Kong. According to Brook Hunt, this region consumed 53% of world demand for zinc in 2006, with China alone consuming 27%. Brook Hunt forecasts China will account for 7.7% of the forecast growth in zinc demand over the next three years and consume 32% of world zinc demand by the end of this decade. We are well placed to supply this market from both our local Chinese assets (NYZA, Föhl China and Genesis) and our Australian assets. Our minority stake in the Padaeng smelter in Thailand gives us additional access to the growing Southeast Asian market. Our Clarksville smelter is the only primary zinc smelter in the United States, which provides us with a competitive advantage in being able to service our customers there at short notice and at low transport costs. In Europe, there is a shortage of smelting capacity which gives our European smelters an advantage in supplying Europe’s major industrial centres. Approximately 90% of our sales from our European smelters in 2006 were made to customers in Europe and approximately 54% of our global production is sold to Europe. Our Australian lead operations, Port Pirie and ARA, are well placed to supply the growing lead consuming markets in the Asia-Pacific region, including Japan, China, Taiwan, Korea, Malaysia, Indonesia, India, Australia and New Zealand. According to Brook Hunt these markets accounted for 43% of world lead consumption in 2006, with China alone accounting for 27% of world consumption and 63% of Asia-Pacific consumption. In 2006 our lead operations supplied approximately 11% of Asia-Pacific demand. We intend to leverage our global market presence to take advantage of market dynamics.

Our smelters are technologically advanced with high recovery rates relative to much of the rest of the industry. In 2006, our Budel smelter had the second highest zinc recovery rate in the world and our other European smelters achieved better than average recovery rates. Furthermore, our Budel smelter is the only electrolytic zinc smelter in the world to operate without the production of any residue. Our European assets are among the most energy efficient zinc smelters in the world. Port Pirie’s operating flexibility allows it to process a wide range of feedstocks, including recyclable materials and other products that would otherwise be discarded as waste products.

163 We provide a high level of service to our customers and produce high-quality branded products that we believe will enable us to achieve a premium over commodity metal prices. We produce a range of premium products, including value-added alloys, which we believe will enable us to earn a premium over the commodity metal price and to differentiate our product offering on the basis of high level of service and high quality. These products include our ZAMAK, Overcor, Dinslaken, EZDA and GZ brands, which are produced primarily at Balen and Overpelt, Hobart and Genesis and are used for zinc die-casting. In 2006, approximately one-third of Hobart’s production consisted of high-quality alloys that were exported to China, Taiwan and Hong Kong. Our GM-Metal facility in France produces high-quality die-cast alloys from recycled scrap, while our Galva 45 facility, Europe’s largest galvanising plant, performs high-quality galvanising for industrial and automotive customers.

At our Port Pirie and ARA lead operations in Australia we produce a range of high-quality, value-added lead alloys, such as our VRLA refined lead alloy which is used extensively in batteries and our range of copperised lead, calcium lead and antimonial lead alloys destined for a wide range of applications including lead acid batteries, cable sheeting and manufacturing of extruded lead products. Together, these value-added alloys accounted for 28% of Port Pirie and ARA’s combined 2006 lead sales.

At all of our other operating sites we either produce, or are developing production of, premium zinc alloys of various grades that typically attract a premium in excess of the commodity metal price.

We have secure and diverse sources of feedstock supplies. We have long-term concentrate purchase agreements with Zinifex relating to its Century and Rosebery mines, from which we expect to derive approximately 48% of our zinc concentrate feedstock requirements upon our formation. These agreements operate for the life of each mine and include any extension to current mine resources resulting from the discovery of additional ore on the existing mine leases. According to Zinifex, Century is the world’s second largest zinc-producing mine with proved and probable reserves lasting until 2015 and Rosebery’s mine life is expected to last at least until 2018. These agreements are of significant benefit to us as they help to protect our smelters from some of the feedstock shortages that have affected the industry in recent years.

Our Balen, Auby, Budel and Clarksville smelters are also capable of processing significant quantities of secondary materials. Currently up to 20% of our feedstock requirements is sourced from secondary materials. These materials are largely produced by specialist steel recyclers and further help to protect our sites from zinc concentrate shortages, by providing an attractive alternative feedstock source and allowing us to diversify our sources of feedstock supply. These secondary materials also generally tend to be less expensive than zinc concentrates.

Our Port Pirie smelter processes selected lead concentrates and various producer residues (sourced from our Hobart facility and from other companies’ facilities) which these other facilities cannot process further themselves. These residues contain recoverable levels of metal, making Port Pirie a major recycler.

We have an experienced management team sourced from both Zinifex and Umicore which has a track record of optimising its asset base and of capital discipline. Most of our management team comes to us from Umicore and Zinifex and previously held senior management positions at those companies. As such, it has a high degree of familiarity with our assets and of the broader zinc and lead industries. Furthermore, our management team has overseen a period of significant improvement in the performance of our assets and has a proven track record of technical innovation and of realising efficiency and performance improvements. We believe that leveraging the technological expertise and practical experience of our management team across all our assets will give us a competitive advantage.

We have identified a pipeline of organic growth and optimisation projects for our existing assets. We have a number of attractive organic growth options that we expect will further leverage our existing assets and generate attractive investment returns. We anticipate that some of these initiatives will be realised by simply sharing and pooling the technological expertise from both Zinifex and Umicore that our management team brings with it. These options include introducing indium recovery at Port Pirie, employing greater use of secondary materials as feedstock across our asset portfolio, particularly at Hobart, improving the cell house efficiency of Budel and Hobart and increasing the roaster intensity of the Auby and Balen roasters.

164 In addition, we expect to benefit from a number of ongoing improvements that were initiated before our formation, including changing the smelting process at Hobart to improve zinc recovery and installing an oxide washing facility to reduce raw materials costs and increase production at Clarksville.

We have a conservative capital structure and stringent financial management policies that should enable us to maintain our existing asset base through business cycles. As of 1 September 2007, we had total debt of EUR 350 million and cash and cash equivalents of EUR 100 million. This conservative financial position and our financial management policies are designed to provide us with the financial strength and flexibility to pursue growth opportunities and to reduce financial gearing during periods of low treatment charges and metals prices.

We are committed to respecting environmental standards and we have management systems in place to ensure that we maintain both our environmental and safety track records. We strive to maintain a safe environment for our workers, minimise our impact on the environment and contribute to the communities in which we operate. We believe that these goals support our financial objectives and create access to future business opportunities. Our operations have improved in a number of environmental areas in recent years. We are committed to continuing to meet our environmental standards and commitments and have proven safety programmes in place, which have had a significant positive impact on our safety track record.

Strategy Nyrstar is the world’s largest producer of zinc metal and alloys, as well as a leading lead and silver producer with operations spread over four continents. While most of our assets are located in Europe and Australia, the markets we operate in and the customers we serve are global. In servicing our customers and managing our assets, we utilise our core capabilities, including: • Protecting our people, local communities and the environment; • Managing complex multi-metal commodity facilities; • Providing high-quality products and services tailored to the needs of our customers; and • Maximising the consumption of recycled zinc rich feed materials into our processes.

We plan to pursue a number of strategic initiatives, summarised below, aimed at optimising our existing asset base, leveraging our core capabilities and taking advantage of the multi-faceted skill base we possess through our management teams at all of our assets.

Continue to invest in our assets to maintain a competitive cost structure and increase capacity utilisation. We believe that investing in our existing production facilities will enable us to continue to lower our operating costs and increase the competitiveness of our assets, increase our production capacity and increase the utilisation of our zinc production facilities. We are currently investing in or planning for growth projects at many of our facilities which are designed to: • Further improve the zinc recovery rates of our assets; • Remove existing bottlenecks to increase operational efficiency and capacity utilisation of our assets; and • Realise additions and expansions to our production facilities.

Through these measures, we intend to leverage the technological expertise of our management team to realise further improvements in our assets and optimise our combined asset portfolio.

Realise the synergies between the Umicore asset and Zinifex asset portfolios identified during the Nyrstar formation process. Through the formation of Nyrstar, we have identified a number of integration opportunities and synergies associated with combining our assets under one company. Our Belgian and Dutch facilities lie within 50 kilometres of each other, which we believe creates a number of possible synergies and opportunities to reduce our operating costs and conserve capital. We aim to realise these synergies through measures such as

165 coordinating our major maintenance programmes across these sites to increase plant availability, rationalising our inventories, streamlining our logistics, optimising production planning and generating bulk purchasing opportunities.

Increase our use of recycled zinc feedstock materials. We currently source approximately 20% of the feedstock required for our assets from recycled zinc-rich feeds and our management team has developed extensive expertise in the use of these secondary materials in smelting. We are now applying this expertise to our other assets and believe we could readily source additional secondary materials from our existing suppliers as well as through our own sources.

Reducing our reliance on zinc concentrate should enable us to reduce our raw materials costs, improve our operational flexibility and realise low cost incremental capacity increases.

Increase our sales of value-added premium margin products in high growth markets. Nyrstar believes it holds leading market positions for die-cast alloys globally and regionally in Asia and Europe. Die-cast alloys accounted for 30% of Nyrstar’s zinc sales in 2006.

Nyrstar believes it holds leading market positions in the supply of zinc alloys for the galvanising industry both globally and in Europe. Galvanising alloys accounted for 25% of Nyrstar’s zinc sales in 2006. In alloys for galvanising, we believe we are the largest supplier globally as well as in Europe.

We intend to build on these leading positions by identifying new customers and markets for our value-added products and increasing the proportion of these products in our sales portfolio.

Pursue opportunities to increase energy efficiency and manage electricity cost. Electricity is a major operating cost for zinc smelting. We have a clear strategy to improve energy efficiency and minimise our electricity costs and thereby sustain and potentially improve our competitive position and profitability relative to our peers. We have taken and intend to continue to take steps to actively manage our electricity costs over our combined asset portfolio, to achieve electricity price stability over a longer term. We are actively assessing means of leveraging our position as a major electricity purchaser in Europe, which include joining with other European industrial producers to form various energy consortia. These consortia aim to negotiate secure and lower cost electricity supply contracts, including potential involvement in developing dedicated generating capacity.

Invest in technology to increase recycling and reduce our environmental footprint. We believe that our scale and leading electrochemical engineering capabilities will allow us to be at the forefront of technology innovations and improvements that will enhance the industry’s overall sustainability. We intend to work with leading research institutions around the world to improve the recycling of zinc-containing materials and reduce process residues by maximising metal recovery from feedstocks. We also intend to further improve or add processes to recover valuable metals from the reduced volume of residues.

Facilitate and contribute to industry consolidation. The zinc smelting industry is currently fragmented. We therefore believe that the zinc smelting, refining and alloying industry would benefit from the more rational management of capacity across the industry that would be fostered by industry consolidation and an improved industry structure. We believe that further industry consolidation would improve returns through, among other things, improving zinc concentrate purchasing power hence creating conditions for improving treatment charges. We intend to evaluate and pursue opportunities for consolidation in the industry as and when they arise, where it makes strategic sense to do so, adds value for our shareholders and is consistent with our overall policy of maintaining capital discipline and a conservative and prudent level of financial gearing.

166 The table below set out the key strategic initiatives we intend to pursue in the coming years. Where possible, the aggregate anticipated investment amounts per category and the potential impact of each element have been detailed.

Approximate Direction investment Impact Operational synergies: EUR 25 million Š optimise casting Š minimised impact of shutdowns Š co-ordinate maintenance shutdowns Š 3-5% reduction in indirect costs targeted Š reduce indirect costs Š improved profitability from increased secondary feed Š increase feed of secondaries Asset optimisation: EUR 18 million Š reduce maintenance costs and improve process reliability Š overall capacity increases Š tighten supply chain management Š target 56 tonnes of indium recovery at Auby in 2008 Š optimise indium production at Auby Š increase capacity at Clarksville Cross-site skills & knowledge transfer: N/A Š optimise roaster throughput and cell house efficiency Š higher cathode production and reduced power costs Š increase zinc recovery yields Š zinc recovery at all sites targeted to reach 96% or higher Š increase oxide feed as percentage of total feedstock Š target for oxides to reach 30% of total feed Longer-term growth projects: EUR 60 million Š increase Auby capacity by 25 kt per year Š Auby capacity targeted to reach 160 kt per year with limited capital investment by end 2008 Š increase Port Pirie lead capacity by 35 kt per year Š Port Pirie lead capacity targeted to reach 270 kt per year Š improve flowsheet at Hobart Š 4% zinc recovery improvement at Hobart targeted by late 2009 Š new oxide washing facility at Clarksville by early 2009 Š increased feed of secondaries at Clarksville Š develop indium recovery facility at Port Pirie Š recover a broader range of metals from processes

167 Business Description Segments and Summary Description of the Nyrstar Assets We have the following accounting segments: Hobart, Port Pirie, Budel, Clarksville, Balen and Overpelt Operations, Auby, Chinese Operations, Other Operations and Corporate. A summary description of the Nyrstar facilities is provided for each of the relevant segments in the table below.

Capacity (tonnes) per annum unless otherwise Facility (segment) noted Products Technology Hobart ...... 260,000 SHG zinc and alloys Electrolytic smelting Port Pirie ...... lead: 235,000 Lead, lead alloys, Blast furnace zinc: 45,000 zinc, copper, refined silver, gold Budel ...... 260,000 SHG zinc and alloys Electrolytic smelting Clarksville ...... 120,000 SHG zinc and alloys Electrolytic smelting Balen (Balen and Overpelt Operations) . . 270,000 Zinc cathodes, SHG Electrolytic smelting zinc and galvanising alloys Overpelt (Balen and Overpelt Operations) ...... 200,000 92,000 Die-casting and Alloying galvanising alloys Washed oxides Auby ...... 135,000, being Zinc cathodes Electrolytic smelting increased to 160,000 NYZA (Chinese Operations) ...... 60,000 SHG zinc Electrolytic smelting Föhl China (Chinese Operations) ...... 700 Die-casting parts Injection moulding Genesis (Chinese Operations) ...... 23,000, being Die-casting alloys Alloying increased to 78,000 Galva 45 (Other Operations) ...... coated steel parts: Galvanised products Variety of steel 60,000 coating treatments GM-Metal (Other Operations) ...... 26,000 Die-casting alloys Alloying ARA (Other Operations) ...... 40,000 Lead and lead alloys Rotary furnace Padaeng (Other Operations) ...... 110,000 SHG zinc and alloys Open cut mining and electrolytic smelting

Production Process Set out below is a description of the electrolytic smelting process that our zinc smelters use to produce their products.

Electrolytic Smelting Zinc smelting is the process of recovering and refining zinc metal out of zinc-containing feed material such as zinc containing concentrates or zinc oxides. Globally, two main zinc smelting processes are in use: (i) a pyrometallurgical process run at high temperatures to produce liquid zinc and (ii) a hydrometallurgical or electrolytic process using aqueous solution in combination with electrolysis to produce a solid zinc deposit.

The vast majority of zinc smelting plants in the Western world use the electrolytic process, also called the Roast-Leach-Electrowin (“RLE”) process, since it has various advantages over the pyrometallurgical process (overall more energy efficient, higher recovery rates, easier to automate hence higher productivity, etc.).

All of Nyrstar’s smelters use the electrolytic smelting process.

168 General Process Overview The electrolytic zinc smelting process can be divided into a number of generic sequential process steps, as presented in the general diagram set out below.

Source: Brook Hunt

In summary, the process sequence is: • Step 1: Receipt of feed materials (concentrates and secondary feed materials such as zinc oxides) and storage; • Step 2: Roasting: an oxidation stage removing sulphur from the sulphide feed materials, resulting in so-called calcine; • Step 3: Leaching transforms the zinc contained in the calcine into a solution such as zinc sulphate, using diluted sulphuric acid; • Step 4: Purification: removing impurities that could affect the quality of the electrolysis process (such as cadmium, copper, cobalt or nickel) from the leach solution; • Step 5: Electrolysis or electro-winning: zinc metal extraction from the purified solution by means of electrolysis leaving a zinc metal deposit (zinc cathodes); and • Step 6: Melting and casting: melting of the zinc cathodes typically using electrical induction furnaces and casting the molten zinc into ingots.

Additional steps can be added to the process transforming the pure zinc (typically 99.995% pure zinc known as Special High Grade (“SHG”)) into various types of alloys or other marketable products.

169 Process Phases in Detail The various steps in the process are described in more detail below.

Step 1: Feed Materials Receipt and Storage Smelters use a mix of zinc containing concentrates or secondary zinc material such as zinc oxides as feed to their roasting plant. Nyrstar’s Auby and Balen smelters in particular are characterised by a relatively high input of secondary materials. Smelters located inland receive their feed by road, rail or canal depending on site-specific logistical factors and the type of feedstock (e.g., secondary zinc oxides come in smaller volumes and are typically transported by road). Concentrate deliveries typically happen in large batches (e.g., 5,000 to 10,000 tonnes).

Nyrstar’s European smelters are strategically located close to the Antwerp seaport that serves as a global concentrate hub and provides for an extensive multi-modal logistical infrastructure connecting Belgium, the Netherlands and France. Nyrstar’s Australian smelters are located on or near to the coast, allowing for direct maritime access, while Clarksville is connected to the major seaport of New Orleans via the Mississippi and Cumberland Rivers.

Most zinc smelters use several sources of concentrates. These different materials are blended to obtain an optimal mix of feedstock for the roasting process.

Step 2: Roasting Through the roasting process, the zinc sulphides in the concentrates are converted into zinc oxide, known as calcine. A roasting furnace operates at a temperature of approximately 950° C generating enough energy to make the process autogenous. The roasting process is fully automated, controlled and operated from a central control room. Nyrstar operates some of the world’s largest roasters which are modelled after those used throughout the industry (e.g., the Lurgi-VM fluidised-bed roaster which was developed in Balen).

The roasting step results in the production of calcine material (which is transported to the subsequent leaching plant) and sulphur dioxide-rich waste gases. Waste heat boilers remove the calcine contained in these gases as well as recovering the heat in the form of steam that is used in the leaching plant and/or converted into electricity. Finally, the sulphur dioxide is converted into sulphuric acid in a contact process, generating an important smelter by-product.

Step 3: Leaching The main purpose of the leaching process is to dissolve the zinc oxide contained in the roasted calcine material and to transform it into zinc sulphate prior to the electrolysis stage. For this process diluted sulphuric acid is used. Approximately 90% of the zinc in roaster calcine is in the form of zinc oxide, with the balance being present as zinc ferrite, an iron-zinc oxide. Zinc oxide can be leached with weak sulphuric acid solutions, but leaching the zinc from ferrites requires more aggressive acid conditions. The contained zinc dissolves while the other metals come out as a solid generically called “Leach Product”. This leach residue containing precious metals is sold as a by-product to third parties for further refining. The dissolved iron is removed from the zinc sulphate solution as goethite, jarosite or haematite which is usually stored in ponds.

Step 4: Purification The leach solution is subsequently sent to a purification installation that removes other non-iron dissolved impurities such as cadmium, copper, cobalt or nickel which could also affect the electrolysis operation. These impurities are removed through cementation by adding zinc dust to the solution. The resulting by-products are generally sold to third parties for further refining. The purified zinc sulphate solution is sent to the cell house for the electro-winning phase of the smelting process.

Step 5: Electrolysis or Electro-winning Zinc metal is extracted from the purified solution by means of electrolysis. An electric current is passed through the solution and the zinc is deposited on aluminium cathodes. At regular intervals, these cathodes are removed from the cells and the zinc deposit is stripped from the cathodes. Most of the Nyrstar smelters use a mechanised and automated process of stripping machines which was initially developed at the Balen plant.

The zinc produced with the electrolysis process is typically of SHG grade containing 99.995% zinc.

170 The electrolysis phase, uses large amounts of electrical energy and is responsible for the high proportion of the energy cost in the overall smelting process. Hence, cell house productivity (and electrical current and energy efficiency in particular) is a crucial driver in overall plant efficiency. Nyrstar runs some of the industry’s largest and most efficient cell houses.

Step 6: Melting and Casting Depending on the type of end-products produced, the zinc cathodes coming out of the electro-winning plant can undergo an additional transformation step in a foundry. Zinc cathodes are melted in induction furnaces and cast into marketable products such as ingots. Other metals and alloy components may be added to produce zinc containing alloys used in die-casting or general galvanisation applications. Finally, molten zinc may be transported to nearby conversion plants or third parties using specially designed insulated containers. This is the case with Balen and Budel.

Sourcing of Raw Materials and Marketing and Sales Global Marketing Group Function The fundamental goal of our marketing strategy is to compete based on customer preferences and create sustainable competitive advantages while generating value for our shareholders through differentiation from our competitors and their products and services.

The markets we operate in are highly commoditised with marketing and sales activities by producers typically given lower priority to the production process. Our business is to a large extent driven by our customers. In order to extract better margins from our products we do not behave as a commodity producer, instead focusing on three key areas to win customer loyalty and create sustainable advantages: (i) quality, (ii) cost and (iii) service.

Our objective is to be the supplier of choice of the products required by our customers. We seek to achieve this by creating customer loyalty, developing customer partnerships to deliver the best total value and providing the best products, services and solutions through our drive for operational excellence and growing product demand through customer familiarity and innovation. As a result our activities related to raw material procurement, directing production planning, product sales, managing market and metal price risks and providing group-wide supply chain services, including logistics and inventory management are performed by our Global Marketing group function, located in the Regional Support Offices in Balen and Melbourne with additional support located in China, Dubai, France, Germany, the United Kingdom and the United States.

Global Marketing divides its functions into four different areas of capability: (i) Commercial (procurement, sales and development), (ii) Supply Chain (transport planning and scheduling, inventory management and commercial and logistics support), (iii) Risk and (iv) Business Improvement.

Sourcing and Purchasing of Raw Materials A centralised purchasing team is responsible for sourcing and securing our raw material requirements globally. The key goal is to secure supply of raw materials on the most favourable commercial terms possible. Our global coverage and diverse portfolio of raw materials enable us to continuously leverage our position and arbitrage to improve the commercial value of the raw materials we source.

“Life-of-mine” supply agreements with the Zinifex-owned Century and Rosebery mines currently secure over 48% of our zinc concentrate feed requirements. The balance of our supplies are currently secured under a combination of “frame” (fixed period) and “evergreen” (continuous) contracts which typically have one or two year cancellation notice periods. We intend to continue to secure our feed requirements under such contractual arrangements, in order to, among other things, limit our exposure to spot market fluctuations.

We currently have contracts with both mining companies and traders for raw materials with feed supplied by our top five suppliers representing approximately 75% of our zinc concentrate requirements for 2007. More than 80% of our current concentrate portfolio is supplied under annual “benchmark” TC terms. These terms are intended to be consistent with the treatment charge agreed in contract settlements between major mines and smelters for the sale of zinc concentrate to smelters in Japan, Korea and Western Europe, which are regarded within the zinc industry as the “benchmark” for that calendar year. Going forward we expect to be regarded as a major operator of smelters and, as such, we will reasonably be expected by the zinc industry to play a role in establishing the annual benchmark TC terms.

171 The remainder of our supply contacts are either under long-term agreements with multi-year fixed TC terms or with traders. We intend to focus on developing more long-term relationships with producers. The vast majority of our supply contracts are under commercial INCO terms that provide that the supplier is responsible for the arrangement and payment of transport and insurance. Where our smelters are favourably located relative to alternative purchasers we negotiate a location allowance with the supplier. This is a discount we receive that is equivalent to a negotiated percentage of the difference between the total cost of delivery to our smelter and the supplier’s average delivery cost to alternative purchasers.

Where our supply contracts are under commercial INCO terms that provide that we are responsible for the arrangement and payment of transport and insurance, we endeavour to negotiate a freight allowance. This is a discount we receive that is equivalent to the estimated total cost of delivery from the port of loading to the port of unloading in the relevant contract year.

Zinc sourced from suppliers of secondary material currently represents approximately 20% of our total feedstock. Both from a geographic and from a feed quality perspective, we have a diverse portfolio of concentrates and secondary feed. This enables us to optimise the distribution of raw materials amongst our plants.

The table below sets out the geographical distribution of our committed global feed sources in 2007.

Concentrates Secondaries Europe ...... 14% 82% Australia ...... 50% 5% North America ...... 10% 2% Central America ...... 2% 0.0% South America ...... 21% 4% Other ...... 3% 7%

Sales of Metal and By-products Sales of metal and by-products are executed from each of the Regional Support Offices. The key goal is to sell our products on the most favourable commercial terms possible. We intend to increasingly align our products and services to our customers needs and markets, and we continuously work to leverage our positions globally and improve our margins. For the year ended 31 December 2005, sales of zinc, lead and other metals comprised approximately 68%, 11% and 21%, respectively, of Nyrstar’s modified pro forma revenue. For the year ended 31 December 2005, sales to Europe, Asia Pacific, the Americas and the rest of the world comprised approximately 54%, 36%, 7% and 3%, respectively, of Nyrstar’s modified pro forma revenue. For the year ended 31 December 2006, sales of zinc, lead and other metals comprised approximately 73%, 7% and 20%, respectively, of Nyrstar’s modified pro forma revenue. For the year ended 31 December 2006, sales to Europe, Asia Pacific, the Americas and the rest of the world comprised approximately 54%, 35%, 9% and 2%, respectively, of Nyrstar’s modified pro forma revenue. For the six month period ended 30 June 2007, sales of zinc, lead and other metals comprised approximately 74%, 9% and 17%, respectively, of Nyrstar’s modified pro forma revenue. For the six months ended 30 June 2007, sales to Europe, Asia Pacific, the Americas and the rest of the world comprised approximately 52%, 36%, 10% and 2%, respectively, of Nyrstar’s modified pro forma revenue.

A team of Development Consultants supports our sales teams with the key purpose of driving demand through customer familiarity and growth through innovation. Our Development Consultants work very closely with our customers to support their business and develop new uses for their products or improve processes for their production. They also represent Nyrstar in global industry associations, which actively promote better use of our products. This approach has enabled us to position ourselves as not only a supplier of commodity alloys but also as a provider to specialised market niches.

We aim to sell all of our products and by-products under contracts so as to limit our exposure to spot market volatility. In 2006 we sold approximately 46% of our annual sales to our 5 largest zinc customers, i.e., Umicore, Trafigura, Lee Kee and two major steel companies. Approximately 20% of our sales in Europe are under multi- year fixed product-premium agreements with Umicore for supply to its Building Products, Engineered Metal Powders and Chemicals business units. See “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269. We also hold a multi-year exclusive distribution agreement, with annually negotiated product premiums, with Lee Kee Group Ltd, Hong Kong for the

172 sale of die-cast alloys to China, with a minimum off-take obligation for the Lee Kee Group Ltd (the distributor). In addition, we have a multi-year agreement with Trafigura Beheer B.V. for sales of commodity grade zinc and lead respectively from our Hobart and Port Pirie smelters. The contract with Trafigura Beheer B.V. is an off-take agreement with a minimum off-take obligation for Trafigura and that obliges Trafigura to purchase from us on an “ex-works” basis (meaning that Trafigura takes delivery at our facility), with very prompt cash payment. This enables us to carry very low inventories and to limit our exposure to transport costs. Product premiums under the contract with Trafigura Beheer B.V. have been set either multi-year or annually. The majority of our other contracts are annual contracts of an evergreen (continuous) nature, where product premiums are negotiated annually.

We believe we are the largest supplier of zinc die-cast alloys globally as well as the leading supplier of alloys to the steel industry globally. We intend to grow these positions as consumption of these products by our customers increases.

Our zinc sales in 2006 by product are set out below.

% sales Product global SHG (special high grade) ...... 45 Galvanising alloys ...... 25 Die-cast alloys ...... 30

We sell the vast majority of our lead sulphates under contracts that are evergreen, with commercial terms negotiated annually with reference to the primary concentrate market.

Apart from the sulphuric acid we produce at our Hobart and Port Pirie smelters (which is sold under a long- term off-take agreement with an annual pricing adjustment mechanism to Interacid Trading S.A., Switzerland) all sulphuric acid is sold pursuant to annual contracts, most of which have been in place for many years. In 2006, on a pro forma basis, approximately 67% of our annual sulphuric acid sales are made to our ten largest sulphuric acid customers.

The rest of our by-products are predominantly sold under annual contracts.

Metal Price Risk Management Our metal price risk exposure arises from timing differences between the pricing of some of our raw material purchases and the pricing of some of our metal sales. We manage this exposure using a metal price risk management system and by executing trades in compliance with risk, credit and control policies.

We believe that we derive advantages from our approach because: • An effective link between the commercial domain and risk management assists in the execution of the physical business and provides an important tool in winning customer preference; • It enhances the organisational focus on our metal price risk exposure and enables strict compliance with company policies; and • Brokers are a very important source of market information for the physical business and this structure enables us to effectively use that information.

Supply Chain Management Supply chain management provides services encompassing the delivery of feed material to our operating assets and the delivery of finished products and by-products to our customers. The objective is to co-ordinate the delivery of product in-full, on-time and in-specification to our customers at the lowest possible cost. The intent is to manage a pull supply chain operating to a lean and efficient cost model that operates seamlessly across the functional areas of the business.

Activities are separated into specific areas: Inventory Planning, Transport Planning and Scheduling and Commercial and Logistics Support.

Inventory Planning is responsible for continuously balancing supply and demand for in-bound feed material stocks, out-bound finished metals stocks and by-product stocks.

173 Transport Planning and Scheduling is responsible for managing and executing our transport requirements around all logistics movements for concentrates, finished metals and by-products and provides transport scheduling services and transport related problem resolution in relation to bulk vessel chartering, container movements (land and sea), rail, road and air. This department is also responsible for negotiating and managing third party logistics contracts.

The Commercial and Logistics Support area provides customer service and order management functions for sales. The team also fulfils all administrative support and co-ordination responsibilities for other supply chain functions.

Seamless operation of the supply chain is co-ordinated through an in-bound procurement and operations process for feed materials and out-bound sales and operations planning process for finished goods and by-products. These processes warrant cross-functional management of information and physical product movements and allow for the balancing of supply and demand within the supply chain. The processes are supported by comprehensive performance measurement and monitoring and by service level agreements between the supply chain team, other Global Marketing functions and each of our operating assets.

Environment, Health and Safety We are dedicated to achieving leading practices in terms of our environment, health and safety (EHS) performance. Wherever we operate, we hold the health and safety of our employees and protection of the environment to be core values.

Environmental Performance One of Nyrstar’s objectives is to minimise the environmental impact of both our production processes and our products. Both Selling Shareholders have publicly stated positions on sustainability and environmental management, in particular a commitment to continued improvement in performance and managing risks relating to current and historical operations. Nyrstar intends to continue those commitments.

Our primary objective is to conduct our operations in compliance with all relevant environmental regulations, licences and legislation. Nyrstar intends to apply similar standards to all assets wherever they are located, with the aim of minimising any harm to people and the environment. None of our sites have had any environmental prosecutions for violating environmental regulations, licenses or other requirements in 2006 or to date in 2007 and to our knowledge no proceedings are pending as of the date of this prospectus.

We identify, monitor and manage environmental risks arising from our operations and have formal site environmental management systems externally certified to ISO14001 to ensure appropriate focus and integration of environmental issues in our business. The key environmental issues we currently face include the following: • Ensuring compliance with licence conditions, meeting our legal obligations and ensuring we continue to be seen as a valued member of the business and local community by regulators, investors and neighbours alike. We establish provisions for environmental requirements in line with International Financial Reporting Standards (“IFRS”) and our capital and operating plans include the costs associated with any expected changes to licensing requirements.

• Efficiently using resources, particularly those that are non-renewable, are in limited supply or contribute to non-reversible impacts such as climate change. Energy is a major input and a significant operating cost for our business. Energy generation at a number of our facilities is also a significant contributor to greenhouse gas emissions. Therefore energy is a key issue, and its efficient use has economic as well as environmental consequences;

• Minimising emissions to water and air. Our performance needs to continually improve and this includes improving both our production processes and the way we operate them, in line with leading practice. Both regulatory frameworks and community expectations will continue to become more demanding over time and we plan to meet or exceed those expectations;

• Actively participating in the management and remediation of soil and groundwater contamination and other risks that are the result of historical operations. We have legacy issues at a number of our sites, which we can and must address while undertaking our current activities, to comply with environmental requirements and to ensure the sustainability of those assets; and

174 • Effectively managing our waste. The output from our production processes consists of products for customers, intermediate materials for further processing by others, and waste which requires appropriate storage, treatment and disposal. To the extent possible, we engage in recycling so that valuable metals are recovered for economic benefit, rather than being lost in the waste stream.

We intend to continue improving our performance and have budgeted foreseeable investments and expenditures for these purposes, the most significant of which have been detailed, on a site-by-site basis, elsewhere in this prospectus. The key issues for the sites reflect in general the long site histories and ongoing changes in regulatory standards. These issues relate essentially to the remediation of historical soil and groundwater contamination, by-product and waste management, upgrade of pollution control equipment for air and water emissions and upgrade of facilities to reduce fugitive emissions to air and reduce future soil contamination.

Environmental Licences All sites have current environmental operating permits or licences. In some cases these are being reviewed, as provided for under normal environmental licensing and permitting arrangements. Our environmental provisions cover the costs associated with any known licence requirements relating to remediation and our environmental capital plans cover the costs associated with known licence requirements relating to plant improvements. There are no other material issues currently known, or that we currently expect to arise from licence renewal processes.

Projected Environmental Costs During late 2006 and early 2007, URS Australia Pty Ltd, an independent environmental consultant, undertook, at the request of the Selling Shareholders, an independent review of the environmental issues relating to our assets in order to estimate their actual or potential costs over the coming 15-year period. URS provided an overview of the short-term and medium term environmental projects, on a site by site basis, and the estimated costs from January 2007. The following table lists those projects identified by URS in relation to which Nyrstar management anticipates incurring expenditure over the next 15 years that are either planned under current licence conditions or expected to be undertaken voluntarily with a view to achieving consistent standards and performance across our assets.

Estimated spend short-term Estimated spend medium-term (next 3-5 years) (next 5-15 years) Net Present Net Present Site Cost Main issues being addressed Cost Main issues being addressed (EUR million) (EUR million) Auby ...... 41.2 landfill management: optimisation 11.1 plant upgrades of pond life-time Balen ...... 40.6 landfill management: optimisation 17.6 landfill management: of pond life-time, groundwater optimisation of pond life- remediation; remediation of on- time; groundwater site and off-site contaminated remediation soils and plant upgrades Overpelt .... 8.9 groundwater remediation, landfill 1.45 groundwater remediation closure and plant upgrades Kunming .... 7.2 plant upgrades — — ARA ...... 1.9 increased operating costs from —— higher waste disposal costs Budel ...... 17 final closure and handover of the —— gypsum and jarosite ponds area to the Provincial Authorities and plant upgrades Hobart ...... 13.7 plant upgrades and waste 12.8 waste treatment and disposal treatment and disposal Port Pirie .... 27.2 implementation of the tenby10 15.8 increased sulphur capture, fugitive lead emissions reduction wastewater discharge quality programme improvements and groundwater remediation

175 Of the issues identified by URS, Nyrstar management excluded in the table above those issues where it believed spend would not actually be incurred, such as those with a low probability of occurrence. We also excluded sites where the sum of all issues identified by URS was less than EUR 5 million.

URS calculated their estimates using (i) a probabilistic modelling approach with model inputs and assumptions identified in its review report, and (ii) a discount rate of 9% nominal to arrive at net present cost. The numbers above represent the URS modelled output at an 80% confidence level, which is considered a conservative estimate, but one used by many organisations for planning purposes.

As at 30 June 2007 on a pro forma basis our total environmental provisions, established in accordance with IFRS, amounted to EUR 129 million. This amount is lower than the total of the amounts set out above, since IFRS does not permit provisions for expected site closings until the relevant site is actually closed and plant upgrade capital is not required to be provisioned under IFRS.

For the Genesis, Galva 45, GM-Metal, Föhl China and Clarksville sites, there are no significant committed environmental expenditures and no required environmental provisions.

Health and Safety Safety is a core value of Nyrstar. We are committed to achieving an incident free workplace and have a goal of zero injuries. We value the health of our employees and that of the members of the communities around our sites.

We believe that working safely is the responsibility of every individual who works at our sites. Site management has a key role in providing leadership for safety and in ensuring that there is effective involvement and open communication on all safety and health matters at all levels in the organisation.

Both Umicore and Zinifex have established safety and health policies, programmes and processes that have resulted in a significant improvement in injury statistics in recent years and we are committed to continuing these.

Improving our safety and health performance requires a consistent and holistic approach. We aim to have formal safety management systems at all operating sites and aim to seek external certification to OHSAS 18001 or country equivalents where feasible.

We have identified the following areas of focus for our safety improvement programmes in order to achieve our objective of being a leading performer in our sector: • Safety leadership; • Systematic hazard identification and risk assessment; • Safety training and awareness; • Behavioural safety programmes; and • Contractor management.

The key elements of our health programmes include: • Identifying, evaluating and where possible eliminating, or otherwise controlling, workplace exposures; • Implementing regular health surveillance and risk-based monitoring of our workforce; and • Providing education and training to our workforce on occupational disease and workplace exposures and on their responsibilities in reducing exposure risks.

The following is a presentation of the main features of our assets.

Hobart Background The Hobart smelter is located on the western bank of the Derwent River Estuary in Hobart, Tasmania on one hundred and twenty hectares of Company-owned freehold industrial land adjacent to the residential suburb of

176 Lutana. The facility uses the RLE process for zinc production. Hobart sources the majority of its concentrate requirements from the Rosebery and Century mines with the balance sourced predominantly from other Australian mines. Accordingly, it operates with the advantage of being close to its raw material suppliers. Hobart is also integrated with the Port Pirie smelter, with the latter processing Hobart’s paragoethite by-product as well as other leach by-products.

Hobart produced approximately 235,000 tonnes of zinc products in 2006 and over 125,000 tonnes of zinc products in the six months ended 30 June 2007, as well as lesser amounts of other associated metals and by-products including cadmium, copper sulphate and sulphuric acid. Its key products are the EZDA die-casting alloy, the zinc/aluminium alloy known as continuous galvanising grade (“CGG”) and SHG zinc of 99.995% purity used mainly in general galvanising, which are exported predominantly to Asia and in particular to China.

Asset Strategy The Hobart smelter is one of the world’s top ten largest zinc smelters in terms of production volume. It is focused on high value added products for export to growing markets in Asia. While its power costs are low, sourced from hydroelectric generation, its location is remote from its markets. The site’s strategy seeks to build on its present competitive scale and product strengths, while containing the cost of sustaining its process plant and infrastructure. The core elements of the site’s strategy are: • Maintaining a strong focus on operational reliability and consistency and cost effectiveness; • Reducing unit costs of production to improve margin on commodity grade (SHG) production; • Sourcing margin-enhancing arrangements on the export of commodity products; • Increasing the use of Century concentrates to 70% of feedstock from the current 57% at minimum cost, to meet by-product reduction targets and improve through-put and capacity; • Continuing to accelerate the realisation of metal values from historic on-site by-product stockpiles; • Improving zinc recovery by implementing proven process changes; • Further containing energy costs, maximising benefits from the recently negotiated improved electricity contract and seeking sustainable efficiencies in supply chain management; and • Investing prudently in high growth opportunities that increase economic value whilst maintaining capital efficiency in sustaining existing assets.

Operations and Process Description For a general description of the smelter production process, see “— Production Process” beginning on page 168. Set out below are the production characteristics specific to the Hobart site.

Roasting The roasting process has two fluid bed roasters that were commissioned in 1969 and 1975, respectively. Both use VM-Lurgi fluidised bed technology. Periodic shutdowns occur every two years to allow for statutorily required boiler inspection and maintenance. Major maintenance shutdowns occur once every 20 years.

Leaching Leaching leaves a silver and lead-containing by-product which is processed at Port Pirie or sold externally. Iron is removed as a paragoethite by-product, which contains some zinc. Paragoethite has historically been processed at the Port Pirie smelter where the contained metal is recovered, but it is currently sold in the Chinese market to take advantage of high zinc prices while Port Pirie processes an on-site stockpile of this material.

Electrolysis Cell room current efficiency was 90% in 2006. The stripping of zinc from the cathode is performed mechanically by automated stripping machines.

Casting The plant was constructed in 1970. Since then, the casting lines have been upgraded and mechanical product stacker/strappers have been installed. A programme is currently underway to automate the skimming and

177 labelling/weighing activities, with both the auto-skimming and the auto-weighing and labelling projects expected to be operational by the end of 2007. We expect this programme to improve safety performance and increase productivity.

Feedstocks The table below shows the Hobart smelter’s feedstock consumption for the 2004, 2005 and 2006 calendar years and the first half of 2007.

2004 2005 2006 1H 2007 Concentrate feed (tonnes) Rosebery ...... 157,947 153,983 141,191 75,028 Century ...... 148,046 208,639 217,178 142,598 Other Australian concentrates ...... 169,845 151,229 99,394 31,464 Non Australian concentrates ...... 7,673000 Total concentrates ...... 483,511 513,851 457,763 249,090

In 2006, approximately 78% of Hobart’s feedstock was sourced from two Zinifex mines, Century and Rosebery, pursuant to life-of-mine agreements and all of its feedstock was sourced from mines in Australia. From 2008, we have an option to increase the amount of our Century feedstock supply to 360,000 tonnes from 290,000 tonnes in 2007 which would increase the proportion of feedstock from the Century mine to 70% from the current 57% based on current consumption levels. All feedstock for the Hobart site is purchased directly from producers on annual benchmark terms. Until the end of the Century mine’s life, 100% of Hobart’s feedstock requirements can be met by existing contracts.

Certain process modifications have been made to the Hobart smelter to accommodate the high proportion of Century feedstock, although the site maintains sufficient flexibility to treat concentrates from other sources.

Century concentrate contains substantially lower levels of iron than Hobart’s historical feedstock, which will reduce the production of paragoethite by-product, thereby enabling our Port Pirie site to meet paragoethite storage requirements agreed with the South Australian Environmental Protection Agency (“SA EPA”).

A two year contract has been signed with Ausmelt Limited for the reprocessing of a total of approximately 110,000 tonnes of Hobart Leach Product No. 1 (“HLP1”), a historical by-product stockpiled at the Hobart site, which contain approximately 20% zinc, through Ausmelt’s facility at Whyalla in South Australia commencing early in 2008. Ausmelt will produce a zinc oxide secondary material, which will be returned to Hobart for recovery of the contained zinc.

The close proximity of Hobart’s feedstock sources results in lower concentrate transport costs from the mines to the Hobart smelter than could be achieved were the mines to sell their concentrate to a more distant smelter. This saving is shared with the Hobart smelter and thereby reduces its cash cost per tonne of zinc. Miners often bear the costs of transporting concentrate and therefore prefer to ship to nearby customers, which means that such customers may obtain better prices as the customer and miner are essentially sharing the transport savings.

Production The site’s key products are SHG zinc, CGG alloys and die-cast alloys (EZDA). In addition, the site produces by-products of cadmium, copper sulphate, paragoethite, lead sulphate leach concentrate and sulphuric acid. The site has been significantly upgraded over the last 35 years, with improvements such as the installation of fluid bed roasters, modernisation of the leaching and purification processes, the introduction of mechanised zinc stripping in electrolysis and the rebuilding of the casting plant. These major capital works and operational improvements have increased the plant’s annual operating capacity from approximately 170,000 tonnes of zinc in 1977 to approximately 260,000 tonnes of zinc at present. Average zinc recovery for 2006 was 92.3%.

178 By-products The table below sets out the Hobart site’s metal and by-product production for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 Total production (tonnes) Zinc alloys CGG ...... 22,219 26,514 18,081 Zinc alloys EZDA ...... 159,629 150,893 55,752 Total zinc alloys ...... 181,848 177,407 73,833 Zinc SHG ...... 73,052 57,409 51,457 Total Market Metal ...... 254,900 234,815 125,290 Cadmium ...... 420 337 153 LSLC(1) ...... 30,171 29,928 15,300 Dry limed paragoethite ...... 97,464 92,282 46,492 Copper sulphate ...... 1,958 1,404 737 Sulphuric acid ...... 449,916 386,111 217,266 Note: (1) Lead sulphate leach concentrate

For the 2004 calendar year, Hobart’s total metal production (zinc) amounted to 247,669 tonnes.

Marketing The markets for the Hobart site’s products are primarily Australia, New Zealand and Asia. In 2006, the majority of the EZDA was sold in China, where we believe EZDA is considered by the die-casting industry to be the leading brand. Our sales of EZDA in China are through Lee Kee Group, which is also our 50% joint venture partner in Genesis Alloys Ningbo Ltd. See “— Genesis” beginning on page 231. Sales of SHG and EZDA products in Australia and New Zealand are made directly to end-customers. A significant proportion of our CGG and SHG products not sold in Australia, New Zealand or China are sold through an off-take agreement with Trafigura Beheer B.V, a trading company. This arrangement achieves higher net margins through reduced realisation expenses and reduced working capital through favourable credit terms. See “— Sourcing of Raw Materials and Marketing and Sales” beginning on page 171.

The sulphuric acid that the Hobart smelter produces is sold under a long-term off-take arrangement to Interacid Trading S.A., a Switzerland-based provider of marketing, logistics and terminal services for sulphuric acid and sulphur, and Interacid Australia Pty Ltd, its Australian subsidiary, for supply to manufacturers in Victoria of superphosphate fertiliser. See also “— Port Pirie — Marketing” beginning on page 187.

All the other by-products that the Hobart smelter produces are sold directly to end-customers: • Cadmium is sold mainly to Chinese nickel/cadmium battery producers; • Copper sulphate is sold to mines where it is used to recover zinc ore within their flotation process. Approximately 500 tonnes per annum of copper sulphate is sold to Zinifex’s Rosebery mine under life-of-mine off-take agreements with benchmark terms and annually negotiated prices and the balance is sold to traders for supply to one mine in Australia and another overseas; • Zinc dross is sold domestically to an industrial galvaniser. However, Hobart is investing in a dedicated recycling facility which we expect will allow the dross to be fed back to the roasters at the site beginning in early 2008; • The majority of the paragoethite is sold under a long-term arrangement to zinc smelters in China for extraction of zinc; • LSLC is either treated at our Port Pirie site or sold to lead smelters in China under long-term arrangements; and • Approximately 110,000 tonnes of the stockpiled HLP1 by-products are expected to be sold to Ausmelt Limited for reprocessing and approximately 185,000 tonnes per annum are expected to be sold to an international trader for processing.

Nyrstar’s Global Marketing department handles feedstock purchasing and product sales. See “— Sourcing of Raw Materials and Marketing and Sales” beginning on page 171.

179 Operating Costs The scale of our Hobart smelter and the higher revenues generated from its high value added products are partially offset by higher freight costs for sales of finished products. See “The Zinc and Lead Smelting and Alloying Industries — The Competitive Cost Position of the Nyrstar Zinc Smelters” beginning on page 153 for Hobart’s position on Brook Hunt’s cost curve, based on 2006 estimated data.

For a discussion of the main factors affecting the Hobart site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 84 and “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 95.

Energy Electricity and natural gas are the major energy inputs for the site amounting to approximately 98% of the total energy used in 2006. Maintaining a source of low-cost power is important to the site’s competitive cost position. Our Hobart smelter is the second-largest consumer of electricity in Tasmania, drawing a continuous load of approximately 130 megawatts and consuming 967,000 mega-watt hours of electricity in 2006, which was about 9% of the State of Tasmania’s total electricity demand in that period. In relation to electricity, the current energy contract is with Aurora Energy, a state government-owned retailer. The contract runs until 31 December 2007 and includes zinc-price related price escalation and take or pay provisions. New energy and transmission contracts have been finalised while the retail agreement is in the process of being finalised. The energy contract is with Hydro Tasmania and the transmission contract is with Transend, both of which are Tasmanian Government-owned business enterprise. Transmission charges are regulated by the Australian Energy Regulator. The energy contract will run for ten years, commencing 1 January 2008. The retail contract presently being negotiated, provides account management services to the main wholesale energy contract with Hydro Tasmania. This contract structure for electricity avoids the need to meet National Electricity Market Management Company (“NEMMCO”) requirements as a registered market participant and to hold a Financial Services Licence. The retail price is indexed to the Australian consumer price index. The new contracts do not contain any zinc price- related escalation nor any take or pay provisions.

The site used approximately 120,000,000 mega-joules of natural gas in 2006. Natural gas is purchased from Aurora Energy. The retail contract includes gas commodity price, gas transmission charges and a retail margin. Pricing includes monthly indexation to the Australian consumer price index and variable charges depending on demand. Gas distribution to the site is separately contracted with Powerco, a private company and the gas distribution price is also indexed to the Australian consumer price index. Both these agreements have been in place for almost two years and run until 2010.

Transport The site has a dedicated deep-water port facility that handles concentrate delivery and despatch of by-products. The facility is operated by TasPorts Corporation, a 100% government-owned enterprise. All of the site’s concentrate feedstock and by-products are shipped in bulk through this facility. All transport for the Hobart smelter’s zinc metal products is outsourced under a three-year contract that runs until 2010 to a logistics provider, Toll International. The site’s zinc metal products are trucked to a third party facility in Hobart from where they are loaded onto rail and transported to the northern Tasmanian ports of Burnie or Bell Bay for onward transport by sea to customers in Asia. Metal products are not shipped directly from the Hobart deep water port facility because there is no regular shipping service from this port to our international customers. The majority of sulphuric acid produced by Hobart is transported from the Hobart smelter on board the MV Vigsnes, which is under a long-term time charter to Nyrstar. Approximately 67,000 tonnes per year of sulphuric acid is transported through a pipeline to a neighbouring fertiliser company.

Management and Employees As of 30 June 2007, our Hobart smelter had a workforce of approximately 521 employees and approximately 91 full-time equivalent contractors. The number of employees has decreased steadily since 2003, when there were over 680 employees. The 350 unionised employees currently work under a three-year agreement, which expired on 30 November 2006 and is currently being renegotiated.

180 Hobart has a stable workforce with an average annual turnover of approximately 4%. There has been no significant industrial action (including strikes) since late 2003 and we believe that employee relations are good.

Our Hobart site has a safety management system certified to AS4801 and the site’s safety performance has a record of continued improvement. The lost time injury frequency rate per million hours worked (“LTIFR”) declined steadily from over 35 in 2002 to less than 3 in 2006 and has fallen 85% over the past three years to a LTIFR as of 30 June 2007 of 2.5. The LTIFR as of 30 June of each year over the period 2004-2007 is set forth below.

30 June 2004 30 June 2005 30 June 2006 30 June 2007 LTIFR/millions hours worked ...... 17.2 3.1 2.9 2.5

Although contact with lead containing material is a relatively low risk in our Hobart operations due to their nature, each employee is monitored for lead in blood levels, and there are strict controls in place once certain trigger points are activated. Our trigger points for management intervention are at lower levels than those required by applicable legislation.

Capital Expenditure Profile The table below summarises the historical capital expenditures for our Hobart site for the 2005 and 2006 calendar years and the first half of 2007.

EUR million(1) 2005 2006 1H 2007 Total ...... 19.5 23.5 15.3 of which Environment, Health and Safety ...... 4.6 4.1 3.9 of which Periodic Maintenance Shutdown ...... 0 7.9 0.5 of which Current Maintenance ...... 12.0 10.0 8.5 of which Other ...... 2.9 1.5 2.4 (1) Capital expenditures have been converted using period average euro to Australian dollar exchange rates of 0.6128 in 2005, 0.6000 in 2006 and 0.6081 in the first half of 2007.

Over the last two years significant capital expenditures have been undertaken in completing a number of major projects. These include the once-in-thirty-year No.6 Roaster and Acid Plant shutdown which cost EUR 7.8 million. In conjunction with the shutdown, EUR 11.4 million was spent on a range of other projects, including replacement of refractories in the furnace, dome and waste heat boiler along with rebricking and repair of the acid plant absorption and drying towers, replacement of other pieces of equipment such as heat exchangers, cyclones and electrostatic mist precipitators. In addition, EUR 2.5 million was spent on the automation of the No.2 and No.3 casting machines product handling systems, EUR 2.9 million was spent on a suite of projects to enable treatment of Century concentrates at the higher 70% feed rate, and EUR 1.4 million was spent on the upgrade of the acid storage facilities.

A significant portion of the anticipated near to mid-term capital expenditure for Hobart relates to environmental matters, as discussed under “— Environmental Management” below. As a result of the high proportion of Century concentrate treated, there is often a visible plume from the site’s foreshore tail gas stack. An assessment of options to eliminate the visible plume has recently been completed and the preferred solution is the installation of an electrostatic mist precipitator to treat the tail-gas at the foreshore stack at an expected cost of EUR 6.5 million before the end of 2008. Another significant environmental project involves the planned banding of the spent solution tanks. Health and safety projects include the planned automation of the skimming process in casting with robots. This project is expected to be completed by the end of 2007 at a cost of EUR 1.8 million. Other projects include the planned de-manganesing project in the electrolysis plant which should lessen the risks associated with the manual labour intensive nature of cell cleaning. This is expected to be completed by the end of calendar year 2008 at a cost of EUR 1.1 million. A further project which is currently underway is intended to significantly improve the way mechanical and electrical isolations and lockouts are performed across the site. Design work has also commenced for the planned automation of cleaning of the waste heat boiler tube bundles in the roast plant to reduce occupational health and safety risks, as well as improve labour productivity. The total capital cost of this particular initiative is estimated at EUR 4.3 million over a three-year period that runs until 2010.

The No. 5 roaster maintenance shutdown campaign planned for February 2008 is expected to require a total of EUR 11.5 million in capital expenditure and is expected to last for 21 days. While the driver of this shutdown

181 is the statutorily mandated boiler inspection, a significant number of smaller equipment replacement projects are also planned to be undertaken. The site also plans to spend approximately EUR 1.8 million on structural recovery projects in 2008 to eliminate a number of high-risk structural issues across the site.

Another planned project for the site is zinc recovery improvement. The zinc recovery improvement project involves the conversion from the paragoethite to the goethite process in the iron stage of the leach plant. Total capital expenditure on this project is expected to be EUR 21.9 million over a two-year period that runs until the end of 2009. The aim of the project is to increase zinc recovery by a minimum of 4% enabling zinc recovery in line with the industry benchmark of 96%.

Environmental Management General The site operates under an environmental permit issued by the state regulator, the Department of Tourism, Arts and the Environment (“DTAE”).

Although the site has a long operating history and associated environmental legacy issues, it has been recognised with several Tasmanian environmental awards as a proactive and successful environmental manager. The site has an integrated environmental, safety and quality management system which has been certified to ISO14001, ISO9001 and AS4801.

The smelter is also an active participant in the Derwent Estuary Programme (“DEP”), a joint local, state and Commonwealth government initiative to restore and protect the Derwent Estuary. The DEP’s report cards show that there have been significant reductions in pollutant loads into the Derwent since 1996.

Soil Contamination Historical smelting operations have led to a legacy of elevated lead and cadmium levels in the soil around the smelter. A series of studies organised by the government-run Lutana Soil Contamination Working Group in the mid 1990s, however, showed no demonstrable impact on human health. In the most recent survey conducted by the Menzies Centre in 1997, average lead in blood levels for local children under five years of age were similar to national and state averages. There have been no further community health reviews since that time.

Water Discharges and/or Groundwater Contamination The site discharges surface water under an environmental permit. However, stormwater runoff exceeds discharge criteria during storm events and there is evidence of contaminated groundwater flow to the adjacent Derwent River Estuary. The site is implementing surface water and groundwater management strategies, in consultation with the environmental authorities, including interception and treatment in the current site wastewater treatment plant. Construction of a 12 megalitre stormwater retention pond and bio-treatment system, which is expected to resolve non-compliances with stormwater runoff, has been recently completed and is expected to resolve the stormwater runoff issue.

The groundwater management strategy focuses on the prevention of further contamination from sources such as the cell house and extension of the existing recovery programme, including installation of subsurface interception drains (i.e., horizontal bores) in key contamination zones to passively drain groundwater. Preliminary drilling works and test bore installation has been completed and has provided data for modelling and design of the recovery bore configuration. The next stage of works is scheduled for completion by July 2008.

Air Emissions Century concentrate has higher nitrogen content than other concentrates. The use of Century concentrates causes formation of nitrogen oxide (NOx) and in turn causes sulphur trioxide (SO3) to be generated in the acid plant tail gas stream causing a visible stack plume at the Hobart site. The resultant SO3 emission is well within environmental regulatory limits but is visible, particularly under certain meteorological conditions. Engineering investigations are complete and it is planned to install an electrostatic mist precipitator which we believe will resolve this issue.

Energy and Greenhouse Gases The site is a member of the Australian Government’s Greenhouse Challenge Plus Programme aimed at reducing greenhouse gas emissions. Furthermore, the site also has obligations under the Energy Efficiency

182 Opportunities Act 2006 and is currently implementing a range of initiatives to improve energy efficiency. The impact of a carbon emissions trading regime on operations is difficult to assess, as the Australian emissions trading scheme is not expected to come into effect until 2012.

By-product and Waste Stockpiles Over the past ten years, a major focus for our Hobart operations has been the implementation of a strategy to eliminate stockpiles of a range of by-products and wastes. We expect the increased use of low-iron Century concentrates will reduce our current production of paragoethite, thereby freeing up Port Pirie’s capacity to reprocess stockpiles of paragoethite currently stored on its site and increase reprocessing of Hobart historical stockpiles.

Jarosite is stored on-site in an engineered cell with a vegetated soil and clay cover. Leachate collection and groundwater monitoring is undertaken. The cell contains 200,000 to 250,000 tonnes of jarosite and jarosite- contaminated material. There is a condition in the environmental permit issued by DTAE to remove and dispose of this material by the end of 2016. There is the possibility that DTAE may approve an extension to the storage time frame should current monitoring programmes continue to confirm the adequacy of the current storage facility.

Our Hobart smelter stores HLP1, a historical by-product, on-site in a secure area adjacent to the jarosite stockpile. In the past, small amounts of this material have been reprocessed at our Port Pirie site and by third parties. There are approximately 500,000 tonnes of this HLP1 material remaining. The site’s licence requires that the stockpile be removed from site by the end of 2016. We expect that this requirement will be met as contracts have been agreed for the sale and treatment of the HLP1 that should see the material removed over the next two to three years. We anticipate approximately 185,000 tonnes per annum of this zinc bearing material will be sold to an international trader for processing. In addition, we expect that a further 55,000 tonnes per annum will be treated over the next two years by Ausmelt Ltd’s Whyalla operations in South Australia, with the resultant oxide returned to the Hobart smelter for zinc manufacture.

The only significant current process waste stream being stockpiled on the site is a Mercury Filter Cake (“MFC”) material arising from operation of the mercury removal plant, which requires stabilisation and disposal. There are 1800 tonnes of this material stored at a purpose built location on-site in sealed 1000-litre polyethylene cubes. Currently, MFC is generated and stockpiled at a rate of approximately 150 tonnes of MFC per year.

There are also stocks of historically produced mercury waste and mercury contaminated materials from the demolition of redundant acid plant buildings. This additional stockpile is currently stored in 200 litre steel drums within buildings and on sealed ground. It is estimated that there are 2,500 tonnes of this drummed material. Mercury contaminated sludges also arise periodically from sulphuric acid storage tank cleaning and there are currently 600 to 800 tonnes stored on-site which will also require disposal. The site is currently examining treatment and stabilisation options for all mercury waste materials, with the aim of approved disposal in a secure off-site facility. Stabilisation trials commenced in 2007.

There are also 15,000 tonnes of contaminated timber on-site from previous demolition works that will require disposal. We are currently evaluating disposal options such as its use as an alternative fuel in cement kilns.

The accumulation of contaminated soil arising from past and periodic ongoing demolition and excavation works has resulted in a soil stockpile that will require remediation. We estimate that the stockpile located in the old quarry area of the site is approximately 28,000 tonnes. While there is no current DTAE requirement to remove this stockpile from the site, it is anticipated that we would treat and dispose of this soil material some time in the next ten years.

Hazardous Materials In general, the storage and containment of hazardous materials on-site complies with the relevant Australian standards and where exceptions exist, improvement plans or exemptions have been agreed with the regulatory authorities. Improvement works relate to improved containment of spent solution storage tanks; acid tanks and No. 5 and No. 6 acid plants. During the 2007 and 2008 calendar years we have planned spent solution tank banding; a feasibility study into tank bunding and ground sealing; perimeter fencing of No. 5 and No. 6 acid plants; and a feasibility study into additional acid plant bunding.

183 Estimated Spend of Planned Projects with a Net Present Cost Exceeding EUR 5 million In Hobart, we expect to spend EUR 12.2 million for the treatment and off-site disposal of jarosite currently contained in an on-site secure landfill and EUR 6.7 million to install an electrostatic mist precipitator on the foreshore stack. None of the other planned environmental projects outlined above are anticipated to have a net present cost exceeding EUR 5 million.

Port Pirie Background The Port Pirie smelter is located on the eastern side of the Spencer Gulf in South Australia, approximately 200 kilometres north of Adelaide. Port Pirie is an integrated multi-metal smelter and refinery with flexibility to efficiently process a wide range of metals containing lead-dominant feedstock to produce refined lead, refined silver, zinc, copper and gold. The site can produce approximately 235,000 tonnes of refined lead and lead alloy products, up to 16 million troy ounces (500 tonnes) of refined silver and approximately 45,000 tonnes of zinc, as well as copper, gold and sulphuric acid. In the six months ended 30 June 2007, it produced approximately 107,000 tonnes of lead products, over 5 million troy ounces of refined silver and approximately 19,000 tonnes of zinc products. The site processes feedstock from a variety of locations, including all of the Rosebery lead concentrates and the Century lead concentrates. Port Pirie also processes a large amount of by-products, which it sources from Hobart and from its own stockpiles along with other materials that are sourced externally. Port Pirie leases and operates a committed port facility, through which it receives shipments of some concentrates and by-products from Hobart.

Asset Strategy Port Pirie is among the world’s largest primary lead smelting facility based on production volume, which allows it to generate significant economies of scale. Port Pirie’s competitive position is enhanced by its ability to produce a range of metals and treat a variety of by-products and residues, together with its focus on supplying the growing markets of Asia, especially China. Port Pirie is strategically linked to the Hobart smelter through flows of by-products such as paragoethite and leach products.

Port Pirie’s strategy seeks to build on its scale and product flexibility, while continuing to meet the cost of sustaining its process plant and infrastructure. Some of the significant elements of our strategy are to: • Enhance profitable arrangements for the export of our commodity products; • Continue the diversification of our concentrate supply sources beyond the life of the mines of our current suppliers and increase the proportion of non-concentrate feedstocks; • Expand our multi-metal capability to increase production of high value metals, potentially including indium through the leveraging of our indium expertise at Auby; • Seek sustainable reductions in working capital and operating costs, especially energy prices; • Derive additional metal value through the increased treatment of low-cost feedstocks such as by-products, residues and waste materials; • Complete the restoration of our process plant and infrastructure, utilising capital efficient techniques and furthering the implementation of asset management practices; and • Deliver on a range of environmental and related process improvements to achieve agreed environmental performance indicators and implement a range of capital and operational improvements to reduce fugitive and point source emissions and enable agreed community blood lead goals to be achieved.

184 Operations and Process Description The Port Pirie operation incorporates a lead smelter and refinery, a precious metals refinery, a copper plant and a zinc plant. A general diagram of our Port Pirie operations is set forth below.

Concentrates, Fluxes and Paragoethite & Hobart Leach Product

Sinter Plant flue gas Other Zinc Feeds coke coal

Acid Plant Blast Furnace Slag Fuming slag

spent slag lead bullion raw fume

Sulphuric Acid Continuous Dehalogenation Drossing copper matte Kiln Furnace

iron material

Sulphur Leaching Leaching Drossing

Softening Solvent Iron residue slag Extraction Precipitation

Desilverising Electro-winning Purification Rotary Furnace silver crust

Liquation Vacuum Electrolysis speiss to storage Dezincing

Vacuum Debismuthising Cathode zinc Distillation (as needed)

Alloying Cupellation Final Refining Melting

Casting Nyrstar UK Parting Casting

Zinifex Silver and Gold Refined Lead Cathode SHG Zinc Hong Kong

Lead Operations The lead smelting operations consist of an updraft sintering machine, blast furnace and pyro-metallurgical refinery.

The sintering process involves roasting lead sulphide to produce a lead oxide sinter cake, which is then crushed to a suitable size product for the blast furnace. The roasting process gives off sulphur rich gases, which are sent to the acid plant, and low sulphur gases that are discharged to a 205 metre high stack.

The Port Pirie blast furnace is the world’s largest lead blast furnace and operates with a feed of high quality sinter and coke. The process involves reducing the sinter feed with coke to produce a lead bullion and a zinc rich slag. Lead bullion and slag are continuously tapped from the furnace, separated in the fore-hearth and transported in ladles for lead refining and slag fuming. Slag may also be granulated with water and stockpiled for later processing.

185 The lead refinery was rebuilt and modernised in 1998 to replace older, higher cost operations. Refinery capacity is well in excess of the capacity of the blast furnace.

De-copperised bullion is processed through various refining stages using a series of batch treatments in large vessels. The precious metals silver and gold are removed using zinc metal as an alloying reagent to produce a silver crust which is further processed in the precious metals refinery. The other residual impurities, including arsenic, antimony, zinc and bismuth are removed to produce refined lead bullion that is cast into blocks using modern, efficient casting equipment. A wide range of enhanced lead alloys is also produced.

Precious Metals Operations The silver and gold bearing crust recovered in the lead refinery is first liquated to separate out excess lead metal before undergoing vacuum distillation to recover zinc metal, both of which are then recycled back to the lead refinery. Following these two steps, the remaining alloy undergoes oxygen cupellation to remove the residual lead and zinc as an oxide slag, which is recycled back to the blast furnace. The remaining metal is cast as impure silver doré anodes, which are then refined through the parting plant to produce pure silver crystals and a separate gold slime. The silver crystals are melted and then cast as 99.99% pure silver bullion in a variety of product shapes to meet customer requirements. The gold slimes are further treated to produce a 98% pure gold doré, which is sold.

Zinc Operations The zinc operations recover the zinc from lead blast furnace slags using pyro-, hydro- and electro- metallurgical stages. Two slag fuming furnaces are filled with ladles of molten slag from the blast furnace and cold slag from the stockpile. Other oxidised zinc feeds, including zinc silicate ore and zinc-containing materials such as electric arc furnace dust and zinc dross, are also fed as a slag mix having approximately 20% zinc. Fuming furnace gases are cooled through a boiler and other heat exchangers before zinc oxide is finally collected in a bag house.

Collected fume is roasted in rotary kilns to remove halides before grinding and transfer to the electrolytic zinc plant for further purification. Zinc oxide fume is batch leached with spent electrolyte and added iron. The resulting solution is batch purified with zinc dust and the purified solution sent to electrolysis. Cathode zinc is recovered by passing an electric current through the purified solution and then melted in electric induction furnaces and cast into blocks of SHG zinc. Where alloy production is undertaken, a separate furnace is used.

Copper Operations Copper matte recovered from the drossing of lead bullion is leached with oxygen at atmospheric pressure in an acidic sulphate and chloride solution. Copper is extracted from the leach solution and transferred using solvent extraction into a sulphate solution for electro-winning. Cathode copper is produced at near LME A-grade quality and sold locally at LME A-grade premiums.

Feedstocks Port Pirie’s feedstock is supplied mainly through contracts with Australian mines, including Century and Rosebery. The arrangements with Zinifex for the supplies of Century and Rosebery concentrate are life-of-mine arrangements, cover 100% of the production of lead concentrate by these mines and include any extension to the current mine resource resulting from the discovery of additional ore on the existing mine lease, but not on adjacent sites for the Century mine. These arrangements covered approximately 37% of the required concentrates of Port Pirie in 2006. Port Pirie is also a substantial customer for lead concentrate produced from three other major mines in Australia, which collectively account for the remaining concentrate requirements. All of these supply arrangements are of an evergreen nature and on annual benchmark terms. Port Pirie has also occasionally sourced feedstock from a South American mine under a long-term contract on annual benchmark terms.

Approximately 15% of Port Pirie’s feedstock is the Hobart by-product, paragoethite, which contains approximately 17% zinc. Port Pirie is currently consuming a historical on-site stockpile of paragoethite. Another secondary feedstock is electric arc furnace dust from Australian steel companies, which Port Pirie sources under long-term supply agreements.

The close proximity of Port Pirie’s feedstock sources has a favourable effect on concentrate transport costs.

186 The table below sets out Port Pirie’s sources of lead concentrate feed for the 2004, 2005 and 2006 calendar years and the first half of 2007.

Tonnes 2004 2005 2006 1H 2007 Century ...... 71.9 67.5 82.5 27.8 Rosebery ...... 48.0 40.1 37.7 17.7 Other Australian mines ...... 218.4 221.2 200.9 102.5 South American and Indian mines ...... 0.0 16.3 0.0 0.0 Total ...... 338.3 345.1 321.1 148.0

Production The Port Pirie smelter was originally built in 1889 with capacity of 80,000 tonnes of lead per year and was progressively expanded in the 1950s and 1960s. The lead refinery itself was largely rebuilt in 1998 and has demonstrated production capacity of approximately 270,000 tonnes per year of lead metal and alloys, although the lead blast furnace and sinter plant capacity limits annual production to approximately 235,000 tonnes. The precious metals refinery in which gold and refined silver are recovered after extraction in the lead refinery was also largely rebuilt in 1998.

The current zinc production facilities were commissioned in 1967 and have a capacity of 45,000 tonnes per year. Copper production facilities were commissioned in 1984 and have a capacity of approximately 4,500 tonnes per year of copper cathode.

Recovery rates vary from year to year. The average recovery of lead from raw material inputs over the last three financial years ended 30 June 2007 was 98.2%. The average recovery rate of refined silver over the same period was 96.7%. The recovery rate of zinc was approximately 90%.

By-products In 2006, Port Pirie produced approximately 75,000 tonnes of sulphuric acid, approximately 45,000 tonnes of zinc, approximately 3,500 tonnes of copper cathode, approximately 11.5 million troy ounces of refined silver and approximately 16,000 troy ounces of gold.

The table below sets out the Port Pirie site’s metal and by-product production for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 (tonnes in thousands, unless otherwise indicated) Lead metal ...... 218.4 191.5 98.5 Lead alloys ...... 11.6 14.8 8.8 Zinc SHG and alloys ...... 38.3 33.3 19.1 Refined silver (thousands of troy ounces) ...... 13,558.0 11,555.0 5,574.9 Gold (thousands of troy ounces) ...... 19.6 16.6 7.8 Copper cathode ...... 4.1 3.5 1.8 Sulphuric acid ...... 85.0 75.7 31.6

For the 2004 calendar year, Port Pirie’s total lead production (metal and alloys) amounted to 231.5 thousand tonnes, its total zinc production to 36.9 thousand tonnes, and its silver production to 12.944 million troy ounces.

Production of all products in 2006 was affected by a planned 49-day shutdown of the blast furnace to replace the blast furnace hearth and install a new copper drossing furnace, both of which had been in service for over 20 years. By contrast, shutdowns for biannual maintenance typically last for only one to two weeks. Through the latter part of 2006 and the first half of 2007, Port Pirie experienced four unrelated disruptions in its raw materials supply due to mine incidents and weather related transport problems. These had the effect of reducing operational stability through the sinter plant and detrimentally affected production levels achieved. These issues have now been resolved.

Marketing More than 75% of the demand for lead is for the production of lead acid batteries. As there are only a few battery producers in Australia, approximately 90% of Port Pirie’s lead is exported. Exports are mainly to Asia, although a small volume is also exported to Europe. Approximately 40% of the smelter’s zinc production is sold to the domestic galvanising industry with the remainder exported to Asia.

187 All domestic lead and zinc sales are made directly to end-customers. All exported lead and zinc products from Port Pirie are sold to Trafigura Beheer B.V. under an off-take agreement, under which Trafigura purchases and pays for the metal promptly after it is produced, thereby reducing Port Pirie’s working capital requirements. A significant number of tonnes per year are sold as high margin lead alloys, with the balance sold as soft lead. The current agreement runs until the end of 2008.

All of Port Pirie’s sulphuric acid is sold to a global acid marketing company, Interacid Australia Proprietary Limited, under the same long-term contract (expiring on 31 December 2014) that governs the sale of sulphuric acid produced by the Hobart site. This is a fixed price contract with annual escalation/de-escalation based on the price of sulphuric acid and movements in the Australian Bureau of Statistics consumer price index. See also “— Hobart — Marketing” beginning on page 179.

All the other by-products that the Port Pirie smelter produces are sold directly to end-customers.

Copper cathode is sold to a range of customers, primarily Australian manufacturers of copper tubes and billets. The contracts are annual and premiums are renegotiated annually.

Port Pirie’s production of refined silver is predominantly sold to the Asian market and its gold to an Australian customer under annual agreements.

Nyrstar’s Global Marketing department handles feedstock purchasing and product sales. See “— Sourcing of Raw Materials and Marketing and Sales” beginning on page 171.

Operating Costs We believe that Port Pirie is among the lowest cost lead producers in the Western world, primarily due to its scale advantage of being the world’s largest lead smelter. Its feedstock sources are in relatively close proximity to the smelter, which assists in reducing raw materials costs through the sharing with our suppliers of savings on freight costs.

Although Port Pirie produces only small amounts of zinc relative to our other smelters, the fact that its feedstock is essentially by-product from Hobart means that its raw materials costs are very low. This mitigates the higher per unit cost Port Pirie faces by virtue of the relatively small size of its zinc plant.

For a discussion of the main factors affecting the Port Pirie site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 84 and “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 95.

Energy Flinders Power provides electricity to the smelter. The contract for supply of electricity to the lead plant runs until 31 October 2008, and contract for supply of electricity to the zinc plant runs until 30 June 2009. Both contracts provide for fixed unit prices and a combined maximum demand of approximately 46 mega-watts with no commitments with regard to the volume of electricity. No take or pay provisions apply. In 2006, Port Pirie consumed approximately 268,000 mega-watt hours of electricity. Origin Energy Limited currently supplies gas to the zinc and lead plants at Port Pirie and a new three-year term contract will begin on 1 January 2008. Pricing is based on firm delivery of gas to Port Pirie with annual consumer price index escalation and take or pay provisions.

Coke is currently supplied by three Australian suppliers under annual contracts. In 2006, Port Pirie used approximately 75,000 tonnes of coke.

Coal is currently supplied by an Australian supplier under an annual contract. In 2006, Port Pirie used approximately 44,000 tonnes of coal.

Transport Port Pirie has for a number of years leased and operated a port facility adjacent to the site from the Flinders Ports Corporation. The contractual arrangements have expired and are currently the subject of renewal

188 negotiations. It operates a concentrate and residue unloading facility as well as an acid loading facility. We sublease concentrate unloading facilities and a storage shed to Perilya who in turn operates these facilities. Concentrates are received at Port Pirie by rail and by ship through the port.

Transport of all of Port Pirie’s metal products is outsourced under a three-year contract to a logistics provider, Toll International. While final metal product can be shipped from the adjacent port facilities, production is currently containerised and transported by rail to the port of Adelaide, some 200 kilometres south of Port Pirie for shipping to Asia. Domestic markets are serviced by road freight.

Management and Employees We believe that Port Pirie has a stable and committed local workforce and a solid industrial relations climate. At 30 June 2007, Port Pirie had a direct workforce of 670 employees. While the exact number is variable, there are also approximately 110 full time contractors on-site. There is a current collective bargaining agreement in place, which is valid until 31 October 2008 and which provides for a performance based payment regime. Employee turnover in 2005 and 2006 averaged approximately 7%. There has been no significant industrial action (including strikes) in more than five years.

The LTIFR has shown improvement over the past three years, but currently remains at around 5. The LTIFR as of 30 June of each year over the period 2004-2007 is set forth below.

30 June 2004 30 June 2005 30 June 2006 30 June 2007 LTIFR/millions hours worked ...... 8.1 10.6 1.1 5.8

Each employee and contractor is monitored for blood lead levels, with strict controls in place once certain trigger points are activated. The site workplace transfer level of 32 μg/dL blood lead is 36% lower than the Australian regulatory standard of 50 μg/dL blood lead. Between 1 July 2005 and 30 June 2007 the number of Port Pirie employees and contractors above Nyrstar’s target of maximum blood lead of 30 micrograms per decilitre has declined from 171 to 100 (in total).

Capital Expenditure Profile The table below summarises the historical capital expenditures for our Port Pirie site for the 2005 and 2006 calendar years and the first half of 2007.

EUR million(1) 2005 2006 1H 2007 Total ...... 11.9 35.8 13.6 of which Environment, Health and Safety ...... 5.4 9.0 10.2 of which Periodic Maintenance Shutdown ...... 1.1 9.5 0.2 of which Current Maintenance ...... 4.9 15.9 2.6 of which Other ...... 0.5 1.4 0.6 (1) Capital expenditures have been converted using period average euro to Australian dollar exchange rates of 0.6128 in 2005, 0.6000 in 2006 and 0.6081 in the first half of 2007.

Port Pirie’s smelting plant is a mixture of older and newer facilities. Apart from the regular campaign maintenance shutdowns, some of the larger projects completed in the last two years include the installation of a new copper dross furnace, the replacement of one of the zinc plant rectifiers, the installation of a blast furnace enclosure to reduce emissions and the modification of the slag fumer coal injection system to reduce variability in the coal injection rate.

Capital expenditure constraints in previous years mean that older areas of the plant now require a specific focus, which is reflected in the increased expenditure beginning in 2006, to ensure ongoing efficient operation and compliance with regulatory requirements. The major areas of focus are a programme of structural improvements in the blast furnace telpher, zinc electrolysis cell floor, slag fuming installation and copper plant and sinter plant structures. These projects are planned for progressive completion by the end of 2009 and are provided for in our future capital expenditure plans.

In order to maintain the Port Pirie plant, periodic campaign shutdowns are planned. These shutdowns primarily involve the blast furnace, which has a two-year cycle, and slag fuming boilers, which have a three-year survey period. As there are two boilers in operation, there is a survey every 18 months. We plan to shut the fumers in February/March 2008 and the blast furnace in November 2008 for maintenance.

189 Environmental Management General Port Pirie has a licence to operate under the South Australian Environment Protection Act. The licence includes an Environmental Improvement Plan and an Environmental Management and Monitoring Programme. The site has an integrated environmental, safety and quality management system, which has been certified to ISO14001 and ISO9001.

The site is currently negotiating a new 10-year licence under the South Australian Environment Protection Act covering soil, water and air, and we expect such new licence to be granted by July 2008. Local community input into environmental improvement priorities is provided through an established community consultation group. We maintain regular communication with the regulatory authorities via voluntary quarterly presentations to the South Australian Environment Protection Agency and Department of Health.

The basis for South Australian environmental protection licence fees has recently changed to include a pollutant load based fees component. The site’s environmental licence fees are expected to increase significantly in 2008 and this has been included in site operational budgets.

Soil Contamination Soil contamination exists at Port Pirie from over 100 years of industrial operations. However, based on current information and standards, we do not anticipate that further on-site soil remediation will be required until site closure.

Elevated levels of lead and cadmium have been found in wheat and barley grown on farms near Port Pirie. Some grain lead and cadmium levels have exceeded the Codex Alimentarium quality standards. Sources of contamination and rectification measures are currently being assessed and coordinated with the South Australian Department of Primary Industries and Resources (“PIRSA”). There are no current rectification requirements for on-site soil contamination.

Water Discharges and/or Groundwater Contamination Groundwater contamination exists at Port Pirie from over 100 years of industrial operations. The site has completed a number of specific improvements to reduce potential contamination of site groundwater at the source, such as sealing of cell house basements. Remaining areas to be addressed are mainly in the intermediate materials storage area.

The site’s wastewater meets compliance requirements as specified in its SA EPA licence. However, site wastewater discharges still exceed some state Environment Protection Policy water quality policy criteria. The SA EPA has indicated that, as long as its priority remains the reduction of fugitive lead emissions, it will not impose additional significant requirements relating to this issue. However, in the long term, some further improvements may be required.

Air Emissions The South Australian Government currently funds an Environmental Health Centre (“EHC”) in the township of Port Pirie. The Port Pirie site works closely with and supports the local EHC to minimise potential health impacts of lead on the Port Pirie community. The Port Pirie site covers the analysis cost of community blood lead and soils testing. There has been a progressive decrease in community blood lead levels, with average levels among children now less than half what they were in the mid-1980s. However, more recently the rate of improvement has slowed, and in 2005 over 50% of the Port Pirie children in the testing programme still had blood lead levels that exceeded 10 micrograms per decilitre. A project called “tenby10” has commenced to address the situation.

The tenby10 project aims to ensure that the Port Pirie community meets the Australian Government’s national health goal of at least 95% of all children aged 0 to 4 years of age having a blood lead level of less than 10 micrograms per decilitre. The project aims to achieve this goal by the end of 2010. The project was launched in February 2006 and has four key partners — the smelter, the Port Pirie Regional Council, the South Australian Department of Health and the South Australian Environment Protection Authority. The strategic goals of the project are to minimise emissions from the smelter to the community, minimise exposure to children, effectively consult and communicate with the community and ensure best practice monitoring of blood lead and lead in air levels.

190 Port Pirie has committed up to EUR 35.3 million to achieving the tenby10 goal of which EUR 14.7 million had been spent at the end of June 2007.

There are a number of elements included in the tenby10 project including capital upgrades to plant, installation of monitoring equipment, improved housekeeping, and joint initiatives with the community. This funding is directed at minimising fugitive emissions from all operational areas — blast furnace, sinter plant, refinery, slag fumer, kilns and the intermediate materials storage area. There is significant focus on monitoring emission levels and rapidly responding to improve operational performance. A significant improvement in ambient lead in air concentrations has already been seen since commencement of the project in February 2006 and regulatory progressive improvement goals have been met to date as demonstrated in the graph below which shows South Australian Environmental Protection Agency monitoring data.

Sulphur dioxide (SO2) concentrations at ground level in the community of Port Pirie occasionally exceed the National Environmental Protection Measure (“NEPM”) one hour standard. The SA EPA has indicated that it would not be imposing NEPM standards as site SA EPA licence limits and would not be requiring additional emission controls, at least while the priority is on reducing fugitive lead emissions. The site is a significant emitter of SO2 and it is therefore likely that some requirement for SO2 emissions reductions will be required within the next ten years.

Energy and Greenhouse Gases The Port Pirie site is a member of the Australian Government’s Greenhouse Challenge Plus Programme aimed at reducing greenhouse gas emissions. Furthermore, the site also has obligations under the Energy Efficiency Opportunities Act 2006 and is currently implementing a range of initiatives to improve energy efficiency. The impact of a carbon emissions trading regime on operations is difficult to assess, as the Australian emissions trading scheme is not expected to come into effect until 2012.

By-product and Waste Stockpiles An iron arsenic speiss material is produced on the site and approximately 12,000 tonnes are stored on a concrete pad. Approximately 1,200 tonnes per year of this material are produced and the storage area on-site is limited under the current environmental licence. The site is currently investigating off-site reuse or disposal options. We believe that there is capacity for storage of approximately three more years of production in the current SA EPA approved area.

Estimated Spend of Planned Projects with a Net Present Cost Exceeding EUR 5 million In Port Pirie, we anticipate a cost of EUR 20.6 million for various projects related to the tenby10 programme, and of EUR 7.2 million for wastewater discharge quality improvements. None of the other planned environmental projects outlined above are anticipated to have a net present cost exceeding EUR 5 million.

191 Budel Background The Budel zinc smelter is situated on a 200 hectares site at Budel-Dorplein in the southeast of the Netherlands near the Belgian border and close to the majority of its customers in the major industrial centres of the Netherlands, Belgium, Germany, Luxembourg and northern France. Budel also owns approximately 550 hectares of adjacent land. The current electrolytic plant was commissioned in 1973, replacing the thermal zinc recovery operation that had existed on the site since 1892. The smelter uses RLE technology. The expansion of the plant, which was completed in 2006, increased its production capacity to approximately 260,000 tonnes of zinc product per year. In 2006 Budel built new alloying and casting facilities which enable it to produce an expanded range of zinc alloy products including a die-casting alloy similar to the Hobart EZDA product. However, Budel’s major products are SHG zinc and CGG zinc alloys. The site also produces copper cake, cadmium and sulphuric acid by-products. Budel’s feedstock comprises both zinc concentrates primarily from the Century mine and secondary zinc oxides that are recycled from residues produced primarily by the steel industry in Europe.

Asset Strategy Budel is a world class and scale zinc asset located close to its markets. The Budel smelter produces zinc alloys predominately from low iron Century concentrate and essentially no waste products. The site’s strategy seeks to strengthen its earning capacity and reduce the capital employed in the business. Major dimensions of this strategy are to: • Invest in low cost capacity expansions and asset optimisation that build scale and thus increase cost efficiency and maximise metal production and recovery, meeting demand in the European market, which is in deficit following recent industry capacity rationalisation; • Increase site revenue margins by growing Budel’s market share of higher value added products and moving its product mix away from commodity-grade metal to specialised alloy products based on customer specifications; • Seek structural cost efficiencies in power supply rates, through optimisation of purchasing/consumption patterns and through co-operation with other consumers in energy intensive industries; • Reduce operating cost through exploration of synergies with the Nyrstar assets in Belgium and France. A significant potential production synergy is the co-ordination across the Budel, Balen and Auby sites of the mandatory major roaster shutdowns. This co-ordination is expected to deliver annual increases in zinc cathode production through ensuring roaster calcine stock is available across each site for conversion to cathode during periodic roaster shutdowns; and • Reliably create additional low cost capacity through successfully adopting asset management techniques.

Operations and Process Description For a general description of the smelter production process, see “— Production Process” beginning on page 168. Set out below are the production characteristics specific to the Budel site.

In 2000, the Budel process was modified significantly to allow the plant to use zinc concentrates from Zinifex’s Century mine. Since the conversion the feed of concentrates to roasting has resulted in a more stable process, with both the leaching and purification sections able to be operated without unexpected changes in minor element composition, which formerly occurred as a result of a feed-blend change.

The special nature of Century concentrates has provided other more specific benefits. Steam production has increased due to the higher carbon content, while steam consumption is lower because of reduced volumes of flows brought about by lower magnesium levels. With steam production now exceeding plant demand, natural gas consumption is lower.

Reduced magnesium in zinc liquors has cut power consumption in the cell house by around 5%, and our average current efficiency for 2007 has increased to 93.1%. Zinc dust use in purification is 25% lower than historical levels due to the lower cobalt, copper and magnesium levels in Century concentrate.

Roasting The acid plant was modified for Century concentrates with the installation of equipment to remove nitrous oxides and reduce sulphur dioxide in the tail-gas stream.

192 Leaching Major changes have been made to the leaching circuit to manage the special characteristics of Century concentrate, which is low in iron, high in silica and germanium and relatively high in lead and refined silver. The key change to the Budel leaching circuit has been to increase retention time in the leaching process by 35% so that the dissolution and then re-precipitation of the silica content of Century concentrate can be carefully controlled.

Casting Cathodes are melted using electric induction furnaces, producing the site’s base SHG product. After alloying as required, product zinc is cast into slab or block ingots varying from 8 kilograms to 4,000 kilograms.

The two multi-purpose alloying lines produce 140,000 tonnes per annum based on current shift operation. The maximum alloying capacity is 180,000 tonnes in a fully continuous operation. Products are cast on three jumbo casting units, one fully automated slab caster, and a new fully automated 8 kilogramme ingot caster to produce die-casting alloys, which was commissioned in 2006. The facility is able to produce CGG, Eutectic (5% aluminium) and special nickel/zinc alloys.

Feedstocks Budel’s feedstock currently consists of 70-75% Century concentrates, 5-10% other high grade sulphidic concentrates and 15% to 20% zinc oxides and other secondary materials. The process stability of our Budel site has improved significantly following our switch to the processing of predominantly Century concentrates, as compared to our prior operations when over 25 sources of concentrates were processed. Budel holds stocks of approximately 10,000 tonnes of zinc concentrate at the site. The remainder of Budel’s feedstock requirements are held in Antwerp, Belgium, which has concentrate storage capacity of more than 70,000 tonnes. Century concentrates are currently, and will continue under the life-of-mine agreement referenced below to be, delivered ex-ship which means that Zinifex bears all the costs and risks involved in bringing the concentrate to the named port of destination before discharging.

The Century concentrates are supplied by Zinifex under a life-of-mine agreement. All of Budel’s zinc concentrate supplies and most of Budel’s zinc oxide and other secondary supplies are purchased under long-term agreements. The secondaries are mainly sourced in Europe. The vast majority of Budel’s feedstock is purchased directly from producers on annual benchmark terms.

The table below shows the Budel smelter’s historical feedstock consumption for the 2004, 2005 and 2006 calendar years and the first half of 2007. 2004 2005 2006 1H 2007 Raw materials (dry metric tonnes) Century ...... 354,104 351,749 338,321 148,540 Other concentrates ...... 3,619 3,243 4,661 12,664 Total concentrates ...... 357,723 354,992 342,982 161,204 Direct leach oxides ...... 0 8,565 17,161 9,605 Roast oxides ...... 32,765 37,820 50,689 29,837 Total oxides ...... 32,765 46,385 67,850 39,442

Production Until 2005 Budel’s rated production capacity was 232,000 tonnes of zinc metal per year and in 2005 it produced approximately 227,000 tonnes. During 2006 the Budel cell house capacity was expanded to a new rated capacity from 2007 of 260,000 tonnes per year of metal products. Average zinc recovery in 2006 was 98.6% and production of zinc and zinc alloys was approximately 236,000 tonnes. In the six months ended 30 June 2007, Budel produced approximately 109,000 tonnes of zinc and zinc alloys. Additionally, the site produces copper cake, cadmium metal, sulphuric acid and Budel Leach Product (“BLP”).

In recent months Budel has faced production issues linked to the higher carbon content in the Century concentrates, which has led to somewhat lower than expected production levels. As these elevated levels of carbon could persist we have implemented solutions which we believe will adequately address this issue, such as the blending of Century concentrates with other lower carbon content concentrates.

Budel has been a virtually solid waste-free zinc smelter following its conversion in 2000 to predominantly low-iron Century concentrates. The conversion of Budel to process Century concentrates enabled the site to

193 comply with the historic environmental commitments made to the Dutch authorities to cease production of solid waste material previously stored on-site. A second biological wastewater treatment plant commissioned in 1999 has allowed Budel to comply with Dutch effluent quality standards.

Budel’s two key products are SHG and CGG alloys. The Budel smelter also produces high value-added industrial die-cast alloys following the completion of a new alloying facility in mid-2006, which gives the smelter the capacity and flexibility to produce a wide range of alloys.

By-products BLP is classified as a saleable product as it is sold as a raw material to secondary smelters that recover lead and precious metals. Continued classification of BLP as a saleable product is essential to the continued operation of Budel, as Budel’s operating licence dictates that the plant may not produce by-products that do not have a positive net value. “Spicing” of zinc concentrate feed with lead concentrate from Century or other mines is occasionally required to ensure that lead and refined silver levels are adequate and that a saleable BLP is maintained. As Century’s lead head grade declines through its mine life, the lead and refined silver content of Century zinc concentrate will decrease, requiring Budel to make further lead concentrate additions to maintain BLP classification as a saleable product.

In addition to BLP, Budel also produces by-products of cadmium metal, a copper cake product that also contains cobalt and sulphuric acid. In 2006, Budel produced approximately 70,000 dry metric tonnes of BLP and approximately 300,000 tonnes of high-quality sulphuric acid, approximately 680 tonnes of copper-cobalt cakes and approximately 575 tonnes of cadmium metal. All internally generated recyclable streams, including zinc dross, are fed back through the production process which enable Budel to maintain zinc recoveries in excess of 98%.

The table below sets out the Budel site’s metal and by-product production for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 (tonnes) Zinc ...... 224,548(1) 236,419(2) 108,603(3) BLP (dry metric tonnes) ...... 66,589 70,395 36,877 Cadmium ...... 423 575 253 Copper in cake ...... 703 678 303 Sulphuric acid ...... 307,685 300,770 148,353 Notes: (1) Of which 50% were alloys. (2) Of which 51% were alloys. (3) Of which 56% were alloys.

For the 2004 calendar year, Budel’s total metal production (zinc) amounted to 223,948 tonnes.

Marketing Located in the middle of northern Europe, the majority of Budel’s production is sold in Europe. More than 80% of sales are to customers within a radius of less than 400 kilometres from the site. More than 50% of its sales are to the steel industry. Budel’s products are also sold to the galvanising, rolled zinc for building products and die-casting industries. A major customer, adjacent to the Budel site, purchases zinc in liquid form for use in its rolling mill. CGG alloys are sold to major European steel companies based on annual contracts. Most of our other sales from Budel are also based on annual contracts. Almost all of our metal sales from Budel are made directly to end-customers.

We sell more than 75% of Budel’s sulphuric acid to our seven biggest sulphuric acid customers pursuant to evergreen agreements. The rest of the sulphuric acid is sold under annual contracts. We sell the following by-products directly to end-customers: • BLP is sold to secondary lead smelters globally; • Cadmium is sold primarily in the European market; and • Copper cake is sold to the secondary copper industry.

Nyrstar’s Global Marketing department handles feedstock purchasing and product sales. See “— Sourcing of Raw Materials and Marketing and Sales” beginning on page 171.

194 Operating Costs Budel’s scale and location advantages are partially offset by the high unit costs in its operations, primarily due to high electricity costs. See “The Zinc and Lead Smelting and Alloying Industries — The Competitive Cost Position of the Nyrstar Zinc Smelters” beginning on page 153 for Budel’s position on Brook Hunt’s cost curve, based on 2006 estimated data.

Due to high electricity prices in the Netherlands, electricity accounts for 50 to 55% of Budel’s operating costs. For a discussion of the main factors affecting the Budel site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 84 and “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 95.

Energy Budel purchases electricity on both a longer term forward and a day-ahead basis. These transactions are facilitated by Essent Energy Trading B.V. on the basis of an agreement that expires at the end of 2007. Contract renewal negotiations are ongoing. Electricity is relatively expensive in the Netherlands as a result of market inefficiencies, the fuel mix of the generator plants, the lack of sufficient cross border transmission capacity and the cost of carbon dioxide emission rights. Therefore, Budel has joined a consortium of energy-intensive industries in the Netherlands that is seeking to negotiate a more competitive long-term power supply contract based on a cost-plus pricing mechanism for a new coal fired power plant to be built by a major generator. These negotiations are ongoing and their outcome and the timing of implementation of any agreement remains uncertain. The following chart shows recent electricity price trends in the Netherlands.

75

70

65

60

55 /MWh) € 50

45 Endex (

40

35

30 Q2-04 Q4-04 Q3-05 Q1-06 Q3-06 Q4-06 Q2-07 Q1-04 Q3-04 Q1-05 Q2-05 Q4-05 Q2-06 Q1-07 Q3-07

Cal-06 Base Cal-07 Base Cal-08 Base Cal-09 Base Cal-10 Base Cal-11 Base Cal-12 Base

Source: Endex.

In 2006, Budel consumed approximately 953,000 mega-watt hours. Electricity prices over the last three years have varied considerably, in a range between EUR 45 and EUR 65 per mega-watt hour.

The Budel plant is a moderate natural gas consumer with some 4.5 million normal metres cubed used per year. This gas is supplied under a contract that is renewed annually. For most of its process water requirements, Budel extracts some 700,000 cubic metres of groundwater each year.

Transport Budel is located close to the ports of Antwerp and Rotterdam, as well as major industrial centres in the Netherlands, Belgium, the Ruhr area of Germany, Luxembourg and northern France.

195 Zinc concentrates are transported by ship to Antwerp for intermediate storage at the bulk terminal. An efficient rail network provides the major access to the site for raw materials supplies from Antwerp. As most of the secondary feedstock is supplied by European producers, secondary feedstock is mostly supplied to Budel by truck on a just-in-time basis. Some secondary feedstock is supplied through Antwerp. The transport and handling of zinc concentrates for Budel is covered by an evergreen arrangement with Sea Rail, a Belgian company specialising in the transport, handling and storage of bulk materials. Transport of secondary materials is usually arranged for by the supplier in most cases.

Finished product transport is mainly by road. This is supplemented by outbound rail and barge transport facilities that are mainly used for sulphuric acid transport. All transport of finished products is covered by annual agreements with European transport companies. The BLP that is sold to overseas customers is transported to Antwerp by rail as backhaul for the daily zinc concentrate train and then sent by ship to the customer.

Management and Employees As of 30 June 2007, Budel had a skilled workforce of 456 employees, and some 25 full-time contractors. In 2005 and 2006 our employee turnover was low, averaging approximately 5% annually.

In July 2004, a collective labour agreement with a contract period until 31 October 2007 was reached. The collective labour agreement governs salary and working conditions for all non-staff personnel in the Dutch metals industry. The collective labour agreement also governs all working conditions (except salaries) for management personnel. Negotiations for a new agreement began in September 2007. There have been no strikes at the Budel plant in 2005, 2006 and to date in 2007.

As of 30 June 2007, the Budel operation had a 12-month rolling average LTIFR of 0.9. The LTIFR as of 30 June of each year over the period 2004-2007 is set forth below.

30 June 2004 30 June 2005 30 June 2006 30 June 2007 LTIFR/millions hours worked ...... 6.1 2.9 2.9 0.9

The occupational health and safety component of the Budel management system is accredited to OHSAS 18001.

Capital Expenditure Profile The table below summarises the historical capital expenditures for the Budel site for the 2005 and 2006 calendar years and the first half of 2007.

EUR million 2005 2006 1H 2007 Total ...... 11.4 13.2 7.2 of which Environment, Health and Safety ...... 0.7 1.1 2.0 of which Periodic Maintenance Shutdown ...... 0.0 0.0 0.0 of which Current Maintenance ...... 3.0 4.0 4.0 of which Other ...... 7.7 8.1 1.2

In 2005 and 2006, there was capital spend at Budel totalling some EUR 12.4 million relating to the expansion of the plant’s capacity from 230,000 to 260,000 tonnes of market metal. The project, completed in May 2006, comprised an upgrade of the transformer/rectifiers in the cell house and de-bottlenecking the other sections of the plant to match the capacity of the electrolysis department.

Budel is a relatively new, well-designed and well-maintained site but we are improving ventilation in the cell rooms and plan to replace and upgrade PLC (programmable logic controller) control systems, upgrade sumps with liquid proof floors, replace the lead work of wet gas cleaning and install four additional tube press filters. A periodic maintenance shutdown for mid-calendar year 2009 is expected to cost approximately EUR 6 million. Campaign shutdowns are planned at five-year intervals.

Environmental Management General The site holds an environmental operating permit that was revised in 2005 and came into force in February 2006. The revised permit reflects current activities and current regulatory requirements. The site’s air emissions for SO2 and NOX are in compliance with the limits set forth under the operating permit.

196 Our Budel site has ISO 14001 certification for the site’s environmental management system in addition to ISO 9001, OHSAS 18001 and ISO 17025 certifications for its quality and safety management systems.

Soil Contamination The site has legal obligations under the Soil Protection Plan as agreed in the site’s operating permit. A number of investigations and resultant capital works are planned in line with permit commitments within a five- year period ending in February 2011.

Water Discharges and/or Groundwater Contamination Groundwater contaminated as a result of the long history of industrial operations at Budel is being treated by the use of innovative technology for dealing with wastewater contaminated with low concentrations of heavy metal sulphates using sulphate-reducing bacteria (“SRB”). In 1992, we built a full-scale SRB plant to treat historical groundwater contamination from the geohydrological containment system.

The site has a programme of voluntary improvements to the performance of the wastewater treatment plant. Changes to the wastewater treatment plant included in the capital plan are improvements to metals sulphide removal, fluoride removal, and the fixed film reactor. The site’s water licence requires a reduction in well water extracted for process water use by 1 January 2009. Progress is such that we expect target levels will be achieved in advance of the deadline.

Energy and Greenhouse Gases We participated in the Dutch Benchmarking Covenant for the reduction of greenhouse gas emissions, which involved benchmarking our energy efficiency against other zinc smelters around the world. Budel was determined as currently being at best practice, with no further improvements being specifically required. However as energy is a key input to our process, we are continuing to invest in further voluntary energy efficiency measures.

By-product and Waste Stockpiles When originally commissioned in 1973, our Budel smelter used the jarosite process to remove iron as a solid process waste. Jarosite was disposed of in on-site ponds under the terms of the original site environmental agreements. In 1993, Budel committed to ultimately ceasing the production of jarosite and the related by-product gypsum and to closing the existing ponds. The site production of jarosite ceased after the full conversion to Century concentrates in mid-2000. In 1999, the wastewater treatment plant was replaced by a biological process to treat acid plant bleed solutions that had been traditionally neutralised with lime to produce gypsum. The residue from the new water purification process is completely recycled, eliminating gypsum landfilling at the site.

Under agreement with Dutch authorities, our site has invested heavily in projects to ensure jarosite and gypsum material stored on-site is appropriately contained in the ponds area. Relocation of remaining contaminated site materials (zinc ashes and demolished buildings) to the ponds and capping of the last gypsum pond is planned for completion in 2008. The responsibility for the ongoing management of the ponds area after pond closure (the “After Care”) is scheduled to be handed over to the Province of Noord-Brabant at the end of December 2009. Operating and maintenance costs associated with the ponds area will become the responsibility of the Province after handover has occurred.

On 17 December 1999 the Province levied a preliminary tax assessment of EUR 35.85 million against the Budel smelter to cover the cost of the After Care. Budel filed an objection against this tax assessment which is still pending. The preliminary tax assessment will be reviewed on the basis of costs relating to the After Care, as established in an approved After Care Plan. As of the date of this prospectus, an After Care Plan for the ponds area has not yet been approved by the Province. The provincial authorities have set-up an After Care Fund, which receives the tax payments for the After Care. It was agreed that an initial payment of EUR 18 million would be made into the After Care Fund prior to handover of the After Care, of which approximately EUR 16 million had been paid as of the end of June 2007. The remainder of that initial payment is scheduled to be paid in instalments before the end of May 2009.

The final tax assessment will depend on technical and financial modelling outcomes and decision on the applicable interest rate. While the initial modelling in the 1990s indicated that the total amount payable might be

197 approximately EUR 36 million we believe that the final amount will be substantially lower. Based on the site’s version of the technical model existing at the end of 2006, URS estimated the total amount payable was no more than EUR 21.5 million, which we believe represents a conservative view. The provincial authorities have accepted Budel’s land holdings as security for the unpaid portion of the After-Care Fund.

Estimated Spend of Planned Projects with a Net Present Cost Exceeding EUR 5 million In Budel, we expect to spend EUR 5.4 million for the gypsum pond closure. None of the other planned environmental projects outlined above are anticipated to have a net present cost exceeding EUR 5 million.

Clarksville Background The Clarksville zinc refinery is located four kilometres southwest of Clarksville, Tennessee, beside the Cumberland River. The operation is sited on 1,400 acres of freehold land of which 120 acres (49 hectares) is occupied by the plant and the auxiliary operations. The land surrounding the plant supports farming, forestry and wetlands, providing a wildlife refuge.

Clarksville is a relatively modern electrolytic zinc smelter. It uses RLE technology and produced more than 110,000 tonnes of SHG zinc and CGG zinc alloys in 2006, and approximately 65,000 tonnes in the first six months ended 30 June 2007. The plant was commissioned in 1978. In 2006 it produced approximately 41% of America’s total domestic zinc output and is currently the only primary zinc producer in the United States. It has an established reputation as a supplier of quality CGG zinc alloys and SHG zinc. By-products include cadmium metal, sulphuric acid, copper sulphate, an intermediate copper cementate and synthetic gypsum.

Clarksville is located within 900 kilometres of the United States’ industrial heartland, including Chicago and Detroit. A large portion of the U.S. zinc market lies within one-day delivery distance from the zinc plant by road. Lower transport costs provide Clarksville with a geographic competitive advantage that contributes to the realisation of a premium over the LME price for its zinc products.

Historically, the Clarksville smelter was heavily reliant on the nearby Tennessee valley mines for a majority of its feed. As a result of the closure of the Asarco East Tennessee mines in 2001 and Gordonsville in 2003 and Clinch Valley in 2004, Clarksville has since obtained its concentrates from mines in Central and South America, Ireland and Australia. However, with the reopening of the Tennessee Valley mines in 2007 and 2008, we expect Clarksville to source an increasing proportion of its concentrates from local mines.

Asset Strategy By industry standards, Clarksville is a relatively new yet medium scale smelter. Our strategy focuses on building on Clarksville’s current competitive strengths. Key aspects of our strategy include: • Expanding capacity to treat a range of raw materials and securing additional non-concentrate feedstocks, including secondary zinc oxides, to fully utilise the installed cell house capacity, thereby further leveraging Clarksville’s strong infrastructure and reducing our cash cost per unit of zinc production; • Shortening our current concentrate supply chain and reducing our raw materials costs; and • Improving plant reliability, in particular roaster availability, through a focused asset management strategy to maximise productivity at reduced unit cost of zinc production.

Operations and Process Description For a general description of the smelter production process, see “— Production Process” beginning on page 168. Set out below are the production characteristics specific to the Clarksville site.

Roasting and Acid Plant Prior to roasting, the concentrates are combined with purchased secondary zinc oxides and with the site- generated “ground dross”.

Leaching In order to fully utilise the capacity of the downstream stages of production, Clarksville sources direct leach oxides (a type of secondary zinc material) that do not require roasting. These materials bypass the roasting stage and are fed directly to the leach circuit with the calcine from roasting.

198 Electrolysis Current efficiency at Clarksville averaged 92.6% in the 12 months ended 31 December 2006.

Zinc recovery from concentrate to market metal averaged 90.7% over the twelve months ending 31 December 2006 and is largely dependent upon the concentrate quality received. Zinc recovered through the effluent treatment plant amounts to 1,700 tonnes per year, contributing about 1% to the overall zinc recovery.

Feedstocks The Clarksville refinery was specifically designed to recover zinc from the high zinc content, low impurity Tennessee Valley zinc concentrates. However, as a result of the closing of two Tennessee Valley mines, the Clarksville refinery in recent years has produced zinc with feedstock sourced primarily from South America and Ireland. These concentrates are purchased through long-term agreements both with mines and with international trading companies specialising in this field.

With the recent re-opening of one of the East Tennessee mines in 2007 and the planned re-opening in 2008 of the Middle Tennessee mines in the Tennessee valley, Clarksville has recommenced the treatment of high zinc content, low impurity concentrates from local mines. Clarksville has agreements in place over the next four years for the supply of zinc concentrates from the East Tennessee mines and is in negotiations to procure a similar agreement for supply of concentrates from the Middle Tennessee mines. The Clarksville refinery has a long history in treating these types of concentrates and is logistically very well located for supplies by Tennessee Valley mines.

The close proximity of the Tennessee Valley mines to Clarksville is expected to result in a reduction in working capital tied up in holding inventory and lower concentrate transport costs, thus reducing Clarksville’s cash cost per tonne of zinc. In future years, Clarksville expects that the low iron and high zinc Tennessee concentrates supplemented with South American concentrates will be its main source of concentrate requirements.

The tables below show Clarksville’s historical feedstock consumption, including concentrates, roaster oxides and leach oxides for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 (tonnes) Concentrate feed Century (Australia) ...... 23,080 16,664 0 South America ...... 124,373 118,272 62,953 Ireland ...... 34,262 31,573 15,757 Mexico ...... 4,935 5,500 4,896 United States ...... 0 5,000 9,076 Total concentrates ...... 186,651 177,008 92,682 Roaster oxide Europe ...... 19,069 21,038 9,274 United States ...... 2,351 1,007 541 Asia ...... 0 0 343 Total roaster oxide ...... 21,420 22,045 10,158 Leach oxide United States ...... 4,408 4,324 4,400 North America (excluding the United States) ...... 2,508 811 2,258 Europe ...... 1,712 6,376 6,022 Africa ...... 1,584 0 0 Total leach oxide ...... 10,205 11,524 12,679 Total feedstock ...... 218,276 210,577 115,519

Clarksville consumes up to 20% of secondary feedstock, mostly in the form of oxides. These oxides are supplied locally from North America and through imports. They are purchased directly from producers as well as from traders, all under off-take agreements and spot contracts.

199 Since 2003 Clarksville has steadily increased its use of secondary zinc materials, particularly oxides derived from the treatment of steel mill dusts. Blending these oxides with concentrates has allowed increased roaster throughput and partially offset the effects of lower grade concentrates. During the same period the plant has developed the capability to use higher grade oxides when available, as direct leaching feeds. The plant has demonstrated the ability to treat over 24,000 tonnes per year of direct leach oxides (“DLO”). These secondary zinc oxides are sourced from the United States, Peru, Mexico and Europe.

Production Zinc production in 2006 was approximately 112,800 tonnes, of which approximately 60% was SHG with most of the balance being sold as CGG alloys.

Roasting intensity levels have recently increased and this increase has been sustained, as shown in the table below.

Dry metric tonnes per square metre per day 2002 2003 2004 2005 2006 H1 2007 8.2 8.5 9.2 9.4 9.6 9.6

These improved roaster feed rates have been a key contributor to Clarksville’s achieving its July 2005 to June 2006 12-month record production of 121,500 tonnes. We expect that our asset management strategy to improve roaster availability will enable this production level to be surpassed.

By-products In 2006, Clarksville produced approximately 144,000 tonnes of sulphuric acid. Clarksville also produced approximately 300 tonnes of cadmium and in 2007 began production of copper sulphate.

The table below sets out Clarksville’s metal and by-product production for the 2005 and 2006 calendar years and the first half of 2007.

Tonnes 2005 2006 1H 2007 Zinc ...... 115,055 112,792 64,547 Cadmium ...... 245 298 121 Copper as copper sulphate ...... — — 17.1 Sulphuric acid ...... 155,520 144,206 78,413

For the 2004 calendar year, Clarksville’s metal production (zinc) amounted to 113,701 tonnes.

Clarksville is currently assessing the viability of installing an oxide washing facility. It is anticipated that this facility would not yield additional metal production from the site but rather would lower raw materials costs through the ability to wash and treat more proximate supplies of oxide, which we believe could be procured at lower prices.

Marketing Most of Clarksville’s metal products are sold in the United States within a 965-kilometre radius of the site. More than 50% of Clarksville’s zinc customers are in the steel industry. The remaining customers are primarily in the general galvanising industry, with some independent alloyers as well. At least 90% of Clarksville’s zinc sales are under annual contracts with annually negotiated product premiums, fixed tonnage and pre-determined delivery schedules. The remaining metal is sold on a spot basis. Almost all of Clarksville’s zinc sales are made directly to customers in the United States.

Clarksville’s sulphuric acid is marketed by Nyrstar-Taylor Chemicals Inc., a wholly owned subsidiary of Nyrstar. Our sulphuric acid customers are generally located within a 485-kilometre radius of Clarksville and most of the sales are on annual contract basis.

Clarksville also sells the following by-products: • Cadmium is mainly sold to the plating industry for use in aviation and marine coatings; and • Copper sulphate is sold to zinc mines as a flotation additive.

200 In addition, in 2007 Clarksville has sold a large part of the contents of one of its on-site ponds containing Clarksville Leach Product, even though this product is generally not saleable. In this instance the levels of germanium contained therein can be economically extracted.

Nyrstar’s Global Marketing department handles feedstock purchasing and product sales. See “— Sourcing of Raw Materials and Marketing and Sales” beginning on page 171.

Operating Costs The cost advantages to Clarksville in having a modern cost structure and location close to end-use markets have until now been somewhat offset by its modest scale and long concentrate supply chain. See “The Zinc and Lead Smelting and Alloying Industries — The Competitive Cost Position of the Nyrstar Zinc Smelters” beginning on page 153 for Clarksville’s position on Brook Hunt’s cost curve, based on 2006 estimated data.

The site is committed to improving its unit cost position through increasing plant availability. A major programme was started in 2006 to improve the reliability of key equipment and processes and over the next few years the programme is expected to result in better planning and scheduling of plant maintenance, reduce the number of unplanned shut downs and lower overall maintenance costs. Raw materials cost savings are expected through increased sourcing of local concentrates and shared freight savings. For a discussion of the main factors affecting the Clarksville site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 84 and “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 95.

Energy In 2006, Clarksville consumed approximately 465,000 mega-watt hours. Power is obtained from the Tennessee Valley Authority (“TVA”), a government entity. The TVA can unilaterally adjust power prices. Any price adjustments are typically driven by fuel cost volatility. Negotiations for the renewal of the power contract with the TVA were completed in December 2006. The power contract has been renewed for a period of five years starting in December 2006 and the price remains globally competitive. The contract provides for the provision of 72 megawatts of electricity with 21 mega-watts on a firm basis and the remainder being interruptible. The 21 megawatts is the amount of electricity required to maintain roaster operations and electrolysis on holding power.

Transport Clarksville receives raw materials by barge, rail and truck. The smelter is on the banks of the Cumberland River with conveyor and pipeline connecting the plant to the barge unloading facilities. The Cumberland River is connected to the Mississippi River and the port of New Orleans where annual contracts are in place for stevedoring services. Imported concentrates and oxides are usually barged up the Mississippi river from New Orleans under an annual contract with an established barge operator. The raw materials are then unloaded at a barge unloading station, where a conveyor belt takes them to a storage building. Clarksville is also connected by rail to the national rail network through a short line operated by R J Corman Company and by roads that join the interstate road network. Domestic concentrates are brought in by barge, as well as by rail car and by truck, and are unloaded in the same building and then conveyed to the storage building. Trucks also unload raw materials directly into the storage building.

Clarksville’s zinc metal products are transported by road or rail. A wide variety of carriers are used to transport finished goods, typically priced at the market terms at the time.

Sulphuric acid is transported by truck and rail from Clarksville. This transport is typically covered by one-year transport agreements.

Management and Employees As of 30 June 2007, Clarksville employed 265 people, which includes 15 full-time contractors. Employees are not covered by union agreements. Turnover at Clarksville for the year ended 30 June 2007 was approximately 0.8%.

201 Each employee in our Clarksville operations who works in a lead exposure area is monitored for blood lead levels, and there are strict controls in place once certain trigger points are activated. Our trigger points for management intervention are at lower levels than those required by applicable legislation. As of 30 June 2007, the number of Clarksville employees above Nyrstar’s target of maximum blood lead of 30 micrograms per decilitre was one.

Safety performance has improved significantly at Clarksville over the past 3 years, with the 12-month rolling average LTIFR falling from 3.3 as of 30 June 2004 to zero as of 31 December 2006. The LTIFR as of 30 June of each year over the period 2004-2007 is set forth below.

30 June 2004 30 June 2005 30 June 2006 30 June 2007 LTIFR/millions hours worked ...... 3.3 1.6 1.5 0.0

Capital Expenditure Profile The table below summarises the historical capital expenditures for our Clarksville site for the 2005 and 2006 calendar years and the first half of 2007.

EUR million(1) 2005 2006 1H 2007 Total ...... 4.2 6.1 3.8 of which Environment, Health and Safety ...... 0.8 1.2 0.8 of which Periodic Maintenance Shutdown ...... 2.2 3.1 0.0 of which Current Maintenance ...... 1.0 1.3 2.1 of which Other ...... 0.2 0.5 0.9

(1) Capital expenditures have been converted using period average U.S. dollar to euro exchange rates of 1.240 in 2005, 1.266 in 2006 and 1.337 in 1H 2007.

As a result of being one of the newer zinc refineries and its smaller scale, Clarksville has a relatively modest capital requirement. The majority of capital expenditure in 2005 and 2006 was during planned shutdowns. Other major projects in 2005 included the purchase of new laboratory equipment, air compressors and controls equipment. In 2006, equipment to improve feed conditioning was installed. A tank replacement programme also commenced in 2006. A major project to replace the acid plant preheater commenced in 2006 and continued into the first half of 2007. The new preheater will be installed during the October 2007 shutdown described below.

The proposed capital expenditure plan for the second half of 2007 and calendar year 2008 has a balance of compliance, sustaining and growth projects. A roaster campaign shutdown is planned for October 2007 in which replacement of a major section of roaster brickwork will be completed. The major growth project planned for the site is the design and installation of an oxide washing facility to increase the availability of lower cost raw materials for use as feedstock. The design and implementation of the oxide washing project is expected to continue well into calendar year 2008. Other major projects planned for calendar year 2008 include preparation of a new impoundment area, boiler tube bundles purchase (asset maintenance project) and installation of automatic skimming on the ingot casting machine (safety project). A roaster maintenance shutdown is also planned for late 2008 for a period of 14 days.

Environmental Management General The site holds a National Pollutant Discharge Elimination System (“NPDES”) Permit as issued by the Tennessee Division of Water Pollution Control and a Title V Comprehensive Air Permit as issued by the Tennessee Division of Air Pollution Control.

The site achieved ISO14001 certification for its environmental management system in 2006, already having achieved ISO9001 quality accreditation.

Water Discharges and/or Groundwater Monitoring There is limited information available on the impact to groundwater on the site and none of the results to date exceed applicable reporting or remediation guidelines. We have submitted a groundwater monitoring plan to the Tennessee Department of Environment and Conservation. The proposed plan includes monitoring the wells that are both uphill and downhill of the plant and is currently under review by the state.

202 By-product and Waste Stockpiles In July 2003 the Office of Solid Waste of the United States Environmental Protection Agency confirmed the assessment by the Tennessee Department of Environment and Conservation that by-products and wastes from beneficiation operations at the Clarksville site are exempt from certain Resource Conservation and Recovery Act regulations under the Bevill Amendments.

This was a positive outcome for Clarksville, as it means that the materials currently stored on-site in impoundments are regulated as solid waste rather than hazardous waste and it removes any immediate requirement to either cap or excavate and dispose of these materials. Clarksville is expected to continue to source low iron, high quality concentrates which do not require treatment through a hot acid leaching process, and thus minimise the potential for loss of the current Bevill status and the need for additional capital investment.

The Clarksville site has five areas used for the storage of leach by-product, known as Impoundments 1 to 5. Impoundment 1 is currently being used for storage of a variety of Bevill exempt waste materials including plant residues and solids from tank cleaning. The site is continuing to use this area and there is no requirement to close this impoundment prior to site closure. Impoundments 2-5 are also currently used for the storage of beneficiation residues and will require capping at site closure.

Impoundment 3 material has economically recoverable levels of germanium. We are currently arranging the sale and transfer of this material to third parties for metals recovery.

Estimated Spend of Planned Projects with a Net Present Cost Exceeding EUR 5 million None of the planned environmental projects outlined above are anticipated to have a net present cost exceeding EUR 5 million.

Balen and Overpelt Operations The Balen plant is an integrated zinc smelter, whereas the Overpelt site is a casting and oxide washing plant. The Balen and Overpelt sites are only 18 kilometres apart. The sites’ operations are complementary and highly integrated as illustrated in the chart below. Only about one third of the zinc cathodes produced in 2006 by the Balen smelter through its classical RLE flow sheet are processed in the on-site casting installation. The remainder of the Balen cathodes are shipped by truck to the Overpelt site and processed in its casting shop dedicated primarily to the production of die-casting alloys.

In addition, the Overpelt plant serves as a central washing facility for the pre-treatment of purchased secondaries prior to their consumption by some of the Nyrstar smelters, mainly Balen. The washed material is shipped to Balen by truck where it makes up an important part of the smelter’s overall feed.

The following chart illustrates the flow of zinc cathodes and secondaries between our Balen and Overpelt operations.

Washed secondaries Concentrates

END PRODUCTS Balen (galvanising alloys, liquid zinc, SHG)

Cathodes Unwashed secondaries (appr. 2/3 of production)

Oxide Casting END PRODUCTS washing (alloying) (die-casting and galvanising alloys)

Overpelt

203 Balen Background The Balen smelter is located on a 244 hectare site in the northeast of Belgium near the city of Mol, approximately 80 kilometres east of Antwerp.

Since 1910 the plant has gradually moved to integrated zinc-lead smelting. The main production process has changed over time from electrolyte zinc production (1930s), to fluidised bed roasting (1950s and 1960s) and to the treatment of residues by an iron removal process (goethite) around 1973. In 1985, Balen began using what was then the largest roasting facility in the world capable of roasting 920 tonnes of concentrates per day. The annual plant capacity increased to 270,000 tonnes of zinc in 2000. In the six months ended 30 June 2007, Balen produced approximately 128,000 tonnes of zinc.

The Balen smelter uses the RLE process to produce zinc from feedstock of both zinc concentrates and recycled zinc secondary materials, the latter accounting for approximately 20% of its feed requirements. The zinc concentrates are sourced from suppliers world-wide. Approximately one third of the zinc cathodes produced are melted and cast on-site to produce alloys and SHG zinc. Most of the remaining zinc cathode is transported to the nearby Overpelt plant to be transformed into a range of other alloy products. Balen also produces substantial quantities of by-products such as sulphuric acid, Balen Leach Product (a lead and silver product) and copper cement.

Asset Strategy The Balen smelter focuses on the exploitation of technology and maximising production. We strive to increase productivity through implementing an optimised flow sheet so as to achieve maximum flexibility in terms of raw materials supply, a high zinc yield and significant revenues from by-products. Important elements of our strategy include: • Maximising the availability of assets by focusing maintenance on reliability; • Maximising the use of the assets (e.g., the current density in the cell house at 650 Ampères/m2 is amongst the highest worldwide); • Increasing capacity to 275,000 tonnes through process optimisation and maintenance; • Maximising the proportion of recycled secondary zinc materials in the smelter’s feed; • Maximising the feedstock flexibility to optimise zinc recovery and to capture and maximise the value of by-products; • Focusing on sustainable development (e.g., reducing residues, taking responsibility for the site’s environmental legacy); • Operational excellence, including by targeting low energy consumption by global standards, high productivity achieved by consecutive de-bottlenecking and sound asset management; and • Realising synergies with Nyrstar’s assets in the Netherlands through measures such as coordinated roaster shutdowns between Balen and Budel so as to increase overall cathode production and use of a recently-established energy consortium to leverage the increased off-take of the combined and localised Nyrstar European operations to obtain stable long-term electricity supply at reduced cost.

Operations and Process Description For a general description of the smelter production process, see “— Production Process” beginning on page 168. Set out below are the production characteristics specific to the Balen site.

Roasting The Balen roasting operation uses the VM-Lurgi fluidised bed technology. This technology, which was initially developed at the Balen plant, is considered a worldwide standard. The plant uses two roasters, commissioned respectively in 1965 and 1985, the latter being one of the largest in the world with a grid surface of 123 m2. The sulphur dioxide produced is converted into sulphuric acid in two contact acid plants.

Leaching Leaching at our Balen plant results in the Balen Leach Product by-product that contains lead and precious metals and that is currently sold to Umicore’s Precious Metals Refining Hoboken smelter for refining. For a

204 description of the sales agreement with Umicore, see “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269. The goethite residue is dewatered, compacted and stored in a dedicated on-site pond using a proprietary technology that has resulted in a substantial extension of the expected pond life to 2030, based on the plant’s current production outlook.

Purification Balen’s purification installation recovers copper, cobalt and nickel from the zinc solution which are sold as by-products to third parties. The Balen site currently purchases zinc dust from Umicore’s Zinc Chemicals business unit for use in its purification process. For a description of the purchase agreement with Umicore, see “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269.

Electrolysis Compared to other zinc smelters of a similar size, the Balen smelter operates at a very high current density (650 Ampères/m2) and has a current efficiency above 90%, contributing to its high productivity. Zinc deposit stripping is fully automated. The cell house technology, which is currently used at a significant number of other smelters around the world, was developed at the Balen site, which is illustrative of the site’s culture of technological innovation.

Casting Typically about two thirds of the zinc cathodes produced at Balen are sent to our Overpelt casting workshop while the remainder are melted into SHG, special galvanising alloys and liquid zinc in the on-site induction furnaces.

Feedstocks The choice of feedstock for the Balen smelter is guided by a dual objective: optimisation of the zinc output and maximisation of by-product revenues. In order to achieve these goals we manage a large portfolio of concentrates and of secondary zinc oxides. The Balen smelter can process a high percentage of secondary feed material input without adversely affecting overall plant productivity, efficiency or residue output. This helps reduce the sensitivity to changing zinc concentrate availability and terms.

We secure our supply of concentrates through contracts with miners and, to a lesser extent, traders under contracts that are typically referenced to the annually agreed benchmark TC. These contracts typically have 12-month termination clauses. Historically the Balen smelter has developed a strategy of maintaining long-term relationships with both miners and traders. For secondary zinc oxides, contracts are either based on the treatment charge benchmark or have a fixed price and these contract terms are renegotiated annually.

Concentrates are transported by train from the port of Antwerp, a main thoroughfare harbour for zinc concentrates. Secondary zinc materials are delivered to the plant by truck.

In order to cope with the wide variety of the feedstock, proprietary planning software was specifically developed for us that allows for the technical and economic optimisation of the site’s zinc production. Recognising the process constraints in terms of grades and impurities, this software also fosters optimisation of by-product outputs such as the Balen Leach Product and copper cake.

The table below shows the Balen smelter’s historical feedstock consumption for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 source of feeds (tonnes) Concentrates Europe ...... 161,269 181,332 88,181 North America ...... 72,790 60,088 37,599 South America ...... 106,736 119,705 52,326 Australia ...... 5,447 12,118 0 Africa ...... 6,275 17,078 890 Total concentrates ...... 352,518 390,320 178,996 Total secondary zinc oxides ...... 74,364 97,075 41,057 Total feed ...... 426,882 487,395 220,053

205 We believe the high percentage of input of secondary zinc oxides, representing on average 20% of Balen’s feedstock, is a distinct competitive advantage. As secondary zinc oxides generally contain no sulphur, using them allows us to increase roaster throughput without upgrading the acid plant. Since secondary zinc oxides contain less iron than concentrates, the use thereof also reduces the cost of iron removal. Finally, the use of these zinc oxides contributes to feed diversity, thus reducing the sensitivity to fluctuations in the concentrate market.

Production The Balen plant implemented several production de-bottlenecking programmes since 1999 that increased capacity to up to approximately 270,000 tonnes of zinc per year, making it one of the largest zinc operations in the world. The plant also produces substantial amounts of marketable by-products.

However, delivery delays in a context of a general market shortage of concentrates in 2005 and an isolated yet severe disruption in the electrolysis installation in 2006 resulted in a lower output in those years. Human error caused the electrolyte solution to become heavily polluted resulting in a stoppage and multi-week restart of the electrolysis installation.

In 2006, we achieved a zinc recovery of 95.6%. As a result of the investment made in 2006 for a goethite acid washing, we expect to improve the zinc recovery by at least 0.5% as from 2007.

The table below sets out Balen’s metal production for the 2005 and 2006 calendar years and the first half of 2007.

Metal production 2005 2006 1H 2007 (tonnes) Total zinc cathode production ...... 235,663 255,188 127,605 of which shipped to Overpelt site and other Umicore sites ...... 132,607 180,078 86,456 of which transformed into zinc alloys galvanising specialities ...... 51,651 27,853 22,583 of which transformed into SHG ...... 6,967 19,146 4,875 of which transformed into liquid zinc ...... 38,962 30,710 15,719 of which sold to third parties ...... 1,053 944 278 of which stock variation ...... 4,424 -3,544 -2,306

For the 2004 calendar year, Balen’s total metal production (zinc cathodes) amounted to 271,732 tonnes.

By-products In addition to zinc production, the Balen operation generates a range of marketable by-products such as Balen Leach Product, sulphuric acid, copper and cobalt nickel cake and zinc sulphate solution.

The table below sets out the Balen site’s by-product production for the 2005 and 2006 calendar years and the first half of 2007.

By-products production 2005 2006 1H 2007 (tonnes) Total production data Zinc sulphate solution (contained zinc) ...... 3,509 4,440 2,475 Balen Leach Product ...... 43,180 44,666 22,758 Copper cake ...... 1,311 2,218 1,318 Cobalt nickel cake ...... 593 665 336 Sulphuric acid ...... 320,106 338,146 153,955

Marketing Nyrstar’s Global Marketing department handles feedstock purchasing and product sales. See “— Sourcing of Raw Materials and Marketing and Sales” beginning on page 171.

Out of the site’s total zinc cathode production, approximately two-thirds are sent to the nearby Overpelt casting facility. The remaining one-third is processed in the site’s own casting facility, producing SHG zinc used

206 in galvanising applications, liquid zinc which is sold to Umicore’s Zinc Chemicals business unit for transformation into zinc dust and higher-margin galvanising specialty alloys, similar to Overpelt’s product line. For a description of the sale agreement with Umicore, see “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269.

In 2006, approximately 45,000 tonnes of dry Balen Leach Product were sold to Umicore’s Precious Metals Refining business unit for further recovery of lead and other metals in Umicore’s Hoboken smelter. In that same year about 340,000 tonnes of sulphuric acid were sold, mainly to the regional chemical and fertiliser industry. Also in 2006, 2,218 tonnes of copper cake and 665 tonnes of cobalt nickel cake were sold to metal refiners in Europe. Approximately, 4,500 tonnes of contained zinc in zinc sulphate solution were sold to the chemical industry. With the aim of optimising by-product revenues, management is considering a process change that could result in halting this sulphate solution production and recovering the zinc as cathodes instead. In total, the various by-products of our Balen plant are sold to about a dozen customers, mostly Belgian and Dutch, under short-term contracts. For a description of the sale agreement with Umicore in respect of Balen Leach Product, see “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269.

Operating Costs See “The Zinc and Lead Smelting and Alloying Industries — The Competitive Cost Position of the Nyrstar Zinc Smelters” beginning on page 153 for Balen’s position on Brook Hunt’s cost curve, based on 2006 estimated data.

For a discussion of the main factors affecting the Balen site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 108 and “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 117.

Energy The Balen site consumes about 130 megawatthours per hour, or approximately 990,000 mega-watt hours in 2006, making it one of the major Belgian electricity consumers. About 5 megawatthours per hour are generated on-site using a turbine fed by the steam produced by the roasting process. An additional 2.5 megawatthours per hour are expected to be produced by the end of 2008 by recovering heat from the acid plant.

The Balen site (and the Overpelt site) currently purchase electricity under a three-year contract that expires in December 2007. Compared to current market prices, pricing terms in effect in 2007 are favourable as they were fixed prior to the increase in market electricity prices beginning in 2006. The Balen and Overpelt sites have entered into a new electricity supply contract covering 2008 and 2009 with pricing terms also based on the forward prices of the Belgian electricity market.

In addition, in line with our broader strategic priority, we aim to continuously assess opportunities that could ensure that the future power requirements of our Belgian sites are met using favourable purchasing terms. We are a member of Blue Sky Development CVBA/SCRL, a company formed by substantial energy consumers that is carrying out a feasibility study regarding its members’ future power supply. Its aim is to secure a low-cost and reliable energy supply with price benchmarked to the prices of nuclear power, based on a long-term off-take commitment by Blue Sky Development’s members. As at the date of this prospectus the feasibility study is ongoing and the timing of the ensuing process is uncertain.

Gas is sourced from an external supplier at market terms.

Transport Concentrates arrive by boat in the port of Antwerp and are discharged at a dedicated quay where there is 20,000 tonnes of storage capacity. Concentrate movements to Balen as well as to Auby are optimised using a computer model. Concentrates are delivered by rail from Antwerp to Balen in dedicated trains.

By-products are filtered and discharged directly onto trucks for transport to customers.

207 Casting products are transported by truck to customers. Liquid zinc is transported by road in dedicated refractory lined containers on trucks to the Umicore zinc dust plant in the Belgian town of Angleur. Cathodes are sent by road to the nearby Overpelt plant for further processing into zinc alloys. Sulphuric acid is either loaded onto barges at the periphery of the Balen site and shipped via an extensive canal network or transported by truck into the Netherlands and Belgium.

Management and Employees As of 30 June 2007, the Balen site had a workforce of 584 employees and approximately 35 full-time contractors. Workforce numbers have been relatively steady since the late 1990’s, after reducing from about 1,000 in the early 1980’s. Contractors are employed only for specific assignments such as maintenance. The employees are governed by a number of collective bargaining agreements.

Employee turnover at Balen is low, having averaged less than 1% over the last three years.

In 2004, a “Re-engineering project” was launched aiming at cost reductions and specifically at reducing maintenance costs. In February 2005, while the Re-engineering project was still ongoing, a “refocus on zinc specialty products” project was announced which resulted in a capacity reduction at the Auby plant. At the Balen plant the initiative resulted in the elimination of 23 jobs in the melting department. These events triggered a five-day strike in 2005, which was the last major disruption to production at the Balen site.

The LTIFR in Balen of 17.6 as at 31 December 2006 is relatively high compared to our other sites. In 2002, Balen and Overpelt management contracted Du Pont in order to focus on employee behaviour and to recommend new initiatives to further improve safety. At the end of 2006, a number of the Du Pont recommendations were again emphasised, the first results of which are reflected in a reduction in the LTIFR as of 30 June 2007.

The LTIFR as of the relevant dates in the period 2004-2007 is set out below.

31 December 31 December 31 December 30 June 2004 2005 2006 2007 LTIFR/millions hours worked ...... 10.35 9.29 17.66 10.98

Routine blood and urine tests on workers have been monitored for many years and are expected to continue in the future. The following chart shows low levels of toxic metals for the last three calendar years. There is no local Belgian standard applicable for cadmium, but the international agency American Conference of Governmental Industrial Hygienists (“ACGIH”) recommends a value of 5μg/g creatinine. The measured levels are consistently below the international standard.

2004 2005 2006 μg/g creatinine Average P90(1) Average P90(1) Average P90(1) Cd Urine Balen ...... 0.92 1.76 0.80 1.23 0.80 1.52 (1) 90% of the tested workers show values below the reported number.

Capital Expenditure Profile The table below summarises the capital expenditures for our Balen site for the 2005 and 2006 calendar years and the first half of 2007.

EUR thousands 2005 2006 1H 2007 Total ...... 8,923 12,368 7,988 of which Environment, Health and Safety ...... 3,079 3,021 2,919 of which Periodic Maintenance Shutdown ...... 1,787 1,305 940 of which Current Maintenance ...... 4,024 7,685 4,066 of which Other ...... 33 357 63

Periodic maintenance at Balen includes shutdowns of the roaster installation every two years and of the cell house every four years.

The major historical capital expenditure are related to de-bottlenecking projects and environmental matters.

208 In 2006, we installed a filter press for copper chloride in order to accommodate an increase of secondary zinc input as well as a goethite acid wash facility to improve zinc recovery. The total cost for these two projects amounted to EUR 1.8 million. For the Balen Leach Product we added a filter at a cost of EUR 1.6 million. A new furnace was installed in the casting department at a cost of EUR 1.6 million.

In 2007, we started the construction of a residue compacting installation at an expected total project cost of EUR 6.3 million. The revamping of electrical cabinets in the plant is expected to continue through 2007 and 2008.

For 2008, the implementation of the groundwater remediation project is budgeted at EUR 4.5 million and the installation of a new wastewater treatment plant is expected to cost EUR 7.2 million. A project related to heat recovery in the acid plant leading to the production of additional electricity is planned at a cost of EUR 5.1 million.

Environmental Management General Our Balen operation has ISO 14001:2004 certification for the site environmental management system in addition to ISO 9001 certification for the quality management system.

The basic operating permit for Balen is valid until 2015. However, the site is in the process of applying for a new permit that is expected to enable it to: • Increase production capacity from 260,000 to 285,000 tonnes of cathodes; and • Discharge the wastewater treatment effluents into nearby surface water in order to be able to implement the future groundwater remediation project (described below).

As part of the application process, the site is currently finalising a legally required Environmental Impact Assessment.

Soil Contamination More than 100 years of industrial activities have resulted in soil contamination, both on-site and in the nearby surrounding areas. As part of its commitment to actively participate in the management and remediation of risks that are the result of these historical operations, Umicore signed in 2004 an agreement (the “Covenant”) with the local waste authorities (Openbare Vlaamse Afvalstoffenmaatschappij or “OVAM”) and the Flemish Minister of Environment in order to remediate the historical pollution at its Flemish sites and some surrounding areas. Since the Balen and Overpelt sites are part of the Covenant, Nyrstar assumed the obligations related to those sites by becoming a co-signatory of the Covenant.

Soil Impact at the Production Plant As part of the Covenant obligations, we have a programme to excavate freely accessible contaminated soil and fill material from across the entire plant area and dispose of the excavated material into a secure landfill. To date, this work is about 80 percent complete. More material will be excavated once additional landfill capacity is made available. It is anticipated that a new landfill will be constructed on top of the old and covered goethite landfill to store this contaminated soil. See “— By-product and Waste Stockpiles — Old Goethite Landfill” beginning on page 211. It is expected that the costs for the construction of the new landfill will be financed not only by Nyrstar, but also by other users of the landfill such as OVAM, the local community and other third parties. The estimated timing of these works is between 2008 and 2010 (see “— By-product and Waste Stockpiles” beginning on page 210).

Soil Impact in the Near Surrounding Areas As part of the Covenant obligations, the remediation of the residential areas Balen-Wezel and Mol-Wezel, located west of the Nyrstar site, involved the removal of affected soil and zinc ashes which had previously been used in construction of residential driveways. The remedial actions in the near surrounding areas were started at the end of 2006 and completed in May 2007. Following discussion with the Flemish Minister of Environment, the remedial works were undertaken before the introduction of a formal remedial plan. The risk that further remediation may be required when the formal remedial plan is introduced with OVAM is believed to be small.

209 Water Discharges and/or Groundwater Contamination Due to historical industrial activities dating back more than 100 years, the groundwater near and underneath the Balen site is contaminated. A draft remedial action plan was submitted to OVAM in October 2006. A formal remediation plan taking into account OVAM’s comments is planned to be submitted in October 2007 and approval is expected by the beginning of the 2008 calendar year.

The proposed remediation plan is a hydrogeological containment/pump and treat approach. Part of the contaminated groundwater is expected to be used as process water after treatment, replacing currently extracted clean groundwater. This requires, however, a significant upgrade of the existing wastewater treatment facility and construction of a wastewater discharge point approximately 2 kilometres from the site.

The required wastewater treatment plant upgrade and discharge point construction works are included in the operational plan and budget. These works are planned for 2007 and 2008.

Air Emissions Over the years, important investments for the reduction of emissions of metals, including zinc, lead, cadmium and arsenic, and SO2 into the air from our site have been undertaken. Since cadmium production was halted in 2002, no measurable cadmium emissions have been observed, while metal concentrations in ambient air in the nearby residential areas are well below anticipated future European standards.

SO2 emissions have reduced despite the increase of production. However, in exceptional circumstances, that overall account for less than 1% of operating time (such as start-up or halting of operations) or during the implementation of a change in feed composition, the limit values are occasionally exceeded. In order to ensure compliance during irregular operations, we are planning to install additional abatement equipment.

Energy and Greenhouse Gases As energy is a significant operating cost, energy efficiency initiatives have been undertaken at our Balen plant for some time. We signed up to the Flemish Benchmarking Covenant for the reduction of greenhouse gases, which resulted in the energy efficiency of our plant being compared to that of similar plants around the world in 2004. The outcome of the energy audit in 2004 was that we operate at a world-class level in terms of zinc industry energy efficiency and no additional improvement measures were required. Under the Benchmark Covenant, a new energy efficiency plan will be drafted for the period from 2008 until 2012. The Balen plant aims to continue to operate at high levels of energy efficiency, particularly as two voluntary energy-saving projects are already planned to be implemented over that period.

By-product and Waste Stockpiles There are currently three landfills present on-site, of which two are still in operation.

As a result of the zinc smelting process at the Balen site, a goethite iron residue is produced and stored in secure on-site landfills. In the future, new landfills are unlikely to be permitted.

The Balen plant is implementing a project to ensure the maximum life of the current landfills by dewatering sludges prior to disposal. This “compacting project” includes both installation of a dewatering plant and redevelopment of one of the existing landfills in which to store the dewatered goethite cakes.

Neutralisation Sludge Landfill The neutralisation sludge landfill will be redeveloped into a landfill for dewatered neutralisation sludge and dewatered goethite waste, planned to commence in 2007. Redevelopment includes the dredging, dewatering and redumping of existing sludges as well as further filling with newly produced waste. We expect this redeveloped landfill will allow further operations for a period of over 23 years.

We are establishing provisions over time to cover the final capping of the landfill.

New Goethite Landfill A new goethite landfill is currently used as a temporary buffer for goethite sludge and is planned to be used for the dewatering project initiated for the re-development of the neutralisation landfill, since disposal of goethite sludge (liquid) is no longer permitted. The new goethite landfill needs to be closed by 2009 according to the permit.

210 Old Goethite Landfill The old goethite landfill is no longer in operation and was capped in 2005, in accordance with the stringent European and Flemish environmental requirements. A thorough monitoring programme exists to ensure that this landfill does not present any future risk for the environment.

At the same time, we are investigating together with the authorities the possibility of constructing an additional landfill on top of the capped old goethite landfill in order to dump the remaining contaminated soil still present on-site, as well as contaminated material coming from outside the plant.

The costs for constructing the new landfill will be shared by Nyrstar and the other future users. The Nyrstar part of the costs are included in the provisions for excavating the remaining on-site contaminated soil.

Product Related Issues: Mercury Removal Currently, mercury is recovered from the emissions at Kontakt 12 (but not Kontakt 11), both of which are part of the roasting department. The mercury is converted on-site at an average rate of one tonne per year and sold. The mercury/selenium sludge, another by-product at the sulphuric acid plant, is disposed of in German salt mines. We have planned the installation of a mercury removal system at Kontakt 11 for 2008.

Estimated Spend of Planned Projects with a Net Present Cost Exceeding EUR 5 million At Balen, we expect to spend EUR 30.3 million for the redevelopment of the neutralisation pond to ensure the maximum life of our goethite storage facility and EUR 18 million in groundwater interception, recovery and treatment as required under the Covenant.

None of the other planned environmental projects outlined above are anticipated to have a net present cost exceeding EUR 5 million.

Overpelt Background The Overpelt plant, formerly a zinc smelting plant and now a zinc alloying plant, is strategically located close to its main consumer markets and only 18 kilometres from Balen, from which it sources most of its feed. The plant was founded in 1888 and the first zinc production took place in 1893. In 1973 a lead rolling mill was installed. In 1974 the original horizontal retort zinc production process was replaced by an electrolytic zinc plant using the goethite process.

In 1992, roasting, sulphuric acid production and zinc electrolysis were discontinued in favour of the production of zinc alloys and the washing of secondary raw materials to remove impurities, which continue to be Overpelt’s activities. Both activities are highly integrated with the nearby Balen smelter.

The Overpelt casting plant processed approximately 180,000 tonnes of zinc cathodes in 2006, and approximately 95,000 tonnes in the six months ended 30 June 2007, transforming them into high margin specialty zinc alloys. The casting plant receives the majority of its zinc cathodes from the nearby Balen plant, complemented to a much lesser extent with zinc cathodes from our Auby smelter, specifically used for the production of high purity zinc destined for the alkaline battery industry. The cathodes are melted and other metals are added to form an alloy, which is subsequently casted.

The Overpelt washing plant processed approximately 95,000 tonnes of secondary zinc oxides in 2006. These secondary zinc oxides mainly come from Waelz kilns located in France and Germany. The washed oxide materials are sent primarily to the Balen plant and to the Auby plant.

The entire Overpelt site, with the exception of a small part which is owned and operated by a third party company, HVE, is owned by Nyrstar. Through its Building Products and Zinc Battery Materials business units, Umicore operates a lead rolling mill and a zinc powder facility on the site for which a 50 year right to build (i.e., the right to temporarily own, use and exploit buildings and/or constructions on land owned by Nyrstar) was granted to Umicore by Nyrstar. In addition to the washing and casting facilities, the site’s service departments were also transferred to Nyrstar. See “Related Party Transactions — Ancillary Agreements — Transitional Services Agreements with Zinifex and Umicore” beginning on page 268 for the agreements that relate to the provision of services on sites shared by Nyrstar and Umicore.

211 Asset Strategy The Overpelt facility operates one of the largest oxide washing facilities in Europe and a major casting plant. The strategy of this site is centred on delivering: • Increased volumes of washed oxides for consumption in the Balen, Budel and Auby smelters. This type of material enables increased capacity since it allows for an increase of the roaster throughput without a corresponding increase in the throughput of the sulphuric acid plant; • An enhanced washing facility to enable the treatment of a wider range of secondary materials including lower-grade materials that can be sourced on attractive terms while at the same time increasing the proportion and quality of direct leach oxides; • Increase production of cast high margin, premium zinc alloys to match customer requirements; • Increased focus on maintenance programmes linked to reliability to improve productivity and reduce operating costs; • Increased synergies through the coordination of the roaster shutdown of our various European sites by producing quality washed zinc secondaries in order to boost calcine production and also enable direct leaching, thereby supplementing the zinc feed during programmed roaster shutdowns.

Operations and Process Description A general diagram of our Overpelt operations is set forth below.

(Alloying metals Zinc cathodes Zinc Al/Ce/Cu/La/Mg) Reagent (Balen/Auby) oxides

Oxide washing Foundry

Washed oxides Galvanising alloys Die- casting Balen alloys Budel (Auby)

Casting Our melting and casting operations produce die-casting and galvanising zinc alloys. Two 1.6 megawatt induction furnaces are used to melt the cathodes. Molten zinc is alloyed with aluminium/magnesium and with copper in a mixing process to produce the required alloy specification.

Additionally, special quality SHG is cast for the production of battery grade zinc.

Oxide Washing The washing operation entails the removal of some impurities from secondary zinc oxides. Halides are the main impurities removed during this washing operation which uses hot water.

The Overpelt site has two washing circuits, one producing washed oxides for the Nyrstar roasters in Balen, Budel and Auby and another producing material fed directly into the Balen leaching plant.

Feedstocks Casting The feed for the casting operations is provided mainly by our Balen smelter in the form of zinc cathodes. Cathodes from our Auby plant are used for the production of battery grade products. We also make use of small quantities of externally sourced zinc.

212 The table below shows the Overpelt plant’s historical cathode feedstock consumption for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 (tonnes) Cathode feeds Balen ...... 114,465 162,108 80,358 Auby ...... 54,506 14,643 6,071 Other zinc ...... 22,776 2,103 8,766 Total feed ...... 191,747 178,854 95,195

Oxide Washing The feed mainly consists of Waelz kiln oxides from various European sources that have supplied us for many years on the basis of contracts that are negotiated annually. These contracts typically have a fixed price or are referenced to the treatment charge benchmark. In addition to these Waelz oxides, the washing plant is also fed with low grade secondary materials originating from the brass and copper industries among others.

The table below shows the Overpelt plant’s historical oxide feedstock consumption for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 (tonnes) Oxide feeds Waelz oxides ...... 67,000 75,835 39,174 Brass/copper recycling ...... 8,369 9,953 8,808 Miscellaneous ...... 8,320 9,005 953 Total secondaries ...... 83,689 94,794 48,935

Production The tables below set out the Overpelt site’s alloy and oxide production for the 2005 and 2006 calendar years and the first half of 2007.

Casting

2005 2006 1H 2007 (tonnes) Alloy production Die-casting alloys ...... 169,607 161,800 83,754 Galvanising specialities ...... 10,150 11,889 7,624 Zinc for batteries ...... 13,091 8,081 4,082 Total ...... 192,848 181,770 95,460

The alloys produced in the casting plant in Overpelt can be split into three application areas: alloys for die-casting, alloys for galvanising and alloys for battery applications.

We are generally able to adapt the production capacity of the casting department to market demand by changing the number of shifts.

All drosses produced as part of the casting process are recycled either in Balen/Overpelt or sold to third parties.

Oxide Washing

2005 2006 1H 2007 (tonnes) Washed oxides ...... 76,286 87,222 44,538

213 Proactive maintenance programmes launched in 2005, as well as a change in shifts worked per week, helped to increase production by almost 14% between 2005 and 2006.

Marketing The Overpelt site’s alloys are sold under the Overcor, Dinslaken, Galfan and other proprietary brands to a large number of customers in the die-casting, galvanising and steel industries, mainly through direct sales in continental Europe assisted by local agents. Nyrstar’s Global Marketing department handles feedstock purchasing and product sales. See “— Sourcing of Raw Materials and Marketing and Sales” beginning on page 171.

Operating Costs For a discussion of the main factors affecting the Overpelt site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 108 and “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 117.

Energy Power consumption of the Overpelt plant amounts to approximately 10 megawatthour per hour, or approximately 40,000 mega-watt hours in 2006. For a description of the terms of our electricity supply contracts in Overpelt and the initiatives taken to manage the cost of electricity, see “— Balen — Energy” beginning on page 207.

Gas is sourced from an external supplier at market terms.

Transport Overpelt is strategically located close to major industrial centres in Belgium, the Netherlands and the Ruhr area in Germany, Luxembourg and northern France.

The Overpelt plant’s supply of cathodes is delivered by road, mainly from the nearby Balen plant. Waelz oxides are also delivered by truck by a network of roads well connected to several main European highways. The Overpelt site also benefits from good access to a network of canals connecting Belgium, France, the Netherlands and Germany in case bulk transport is the preferred mode of transport.

Management and Employees As of 30 June 2007, the Overpelt site had a workforce of 195 employees and approximately 5 full-time contractors. Numbers have fallen steadily from about 420 employees in 1995.

Employee turnover at Overpelt is low, having averaged less than 1% over the last three years.

In 2006, the LTIFR at the Overpelt site was 6.5 per million hours worked. In 2002, Balen and Overpelt management contracted Du Pont in order to focus on employee behaviour and to recommend new initiatives to further improve safety. At the end of 2006, a number of the Du Pont recommendations were again emphasised, the first results of which are reflected in a reduction in the LTIFR as of 30 June 2007.

The LTIFR as of the relevant dates in the period 2004-2007 is set out below.

31 December 31 December 31 December 30 June 2004 2005 2006 2007 LTIFR/millions hours worked ...... 12.41 3.14 6.50 0.00

214 Routine blood and urine tests on workers have been monitored for many years and are expected to continue in the future. The following chart shows low levels of toxic metals for the last three calendar years, consistently below the international standard of 5μg/g creatinine.

2004 2005 2006 μg/g creatinine Average P90(1) Average P90(1) Average P90(1) Cd Urine Overpelt ...... 0.78 1.93 0.60 1.17 0.78 1.73 (1) 90% of the tested workers show values below the reported number.

Capital Expenditure Profile The table below summarises the capital expenditures for our Overpelt site for the 2005 and 2006 calendar years and the first half of 2007.

EUR thousands 2005 2006 1H 2007 Total ...... 953 1,867 813 of which Environment, Health and Safety ...... 192 278 354 of which Periodic Maintenance Shutdown ...... 0.0 0.0 0.0 of which Current Maintenance ...... 761 850 344 of which Other ...... 0.0 739 115

In 2006, we introduced a second washing line for direct leach oxides at a cost of EUR 0.7 million in order to increase the throughput of secondaries.

For 2007, we are planning to install equipment to treat casting dross for a total cost of EUR 230,000.

For 2008, we plan to construct a new wastewater treatment plant as well as implement a groundwater remediation project for a total estimated cost of EUR 5.2 million.

Environmental Management General Our Overpelt operation has ISO 14001:2004 certification for the site environmental management system in addition to ISO 9001 certification for the management system.

Soil Contamination See “— Balen — Environmental Management — General — Soil Contamination” beginning on page 209 for a description of the Covenant with OVAM and the Flemish Minister of Environment, which is also applicable to the Overpelt site.

The site’s current basic operating permit remains valid until July 2010. By way of preparation for the renewal of the permit, in 2007 the Overpelt site began to prepare a legally required Environmental Impact Assessment and Safety Investigation.

Soil Impact at the Production Plant As part of the Covenant obligations, contaminated soil and fill material were excavated and disposed in a secure landfill. There is no longer freely accessible contaminated soil or fill material present on-site.

Soil Impact in the Near Surrounding Areas As part of the Covenant obligations, the remediation of the residential area Overpelt-Cité, located south of the Nyrstar site, involved the removal of affected soil and zinc ashes which had been used in the past in the construction of residential driveways. The remedial actions in the near surrounding areas were started in September 2006 and completed in December 2006. In discussion with the Flemish Minister of Environment, the remedial works were undertaken before the introduction of the formal remedial plan. The risk that further remediation may be required when the formal remedial plan is introduced with the authorities (OVAM) is believed to be small.

215 Water Discharges and/or Groundwater Contamination Due to historical industrial activities, the groundwater near and underneath the Overpelt site is contaminated with heavy metals, to a depth of at least 60 metres below ground level. A draft remedial action plan was developed in 2006 and subsequently submitted to OVAM. Final approval is expected by the end of 2007. The remediation proposed is a pump and treat approach with a goal of removing the bulk of the pollutants, hydraulically containing the current groundwater contamination plume and preventing further horizontal and/or vertical migration of the contamination. We are currently extracting deep groundwater for process water purposes. It is currently expected that this process water extraction will be ceased when groundwater remediation starts. The groundwater extracted as part of the on-site groundwater remediation is expected to be treated and used as process water.

In terms of the wastewater discharge criteria, new limit values were released in April 2007, requiring an upgrade of the existing wastewater treatment facility. While the Dutch authorities challenged the decision of the Flemish authorities, we are confident that the discharge limits ultimately imposed will be realistically achievable within the scope of the planned wastewater treatment plant upgrade.

Air Emissions Over the years, important investments for the reduction of emissions of metals including zinc, lead, cadmium and arsenic into the air from our site have been undertaken. The oldest, most contaminating units were decommissioned and all remaining furnaces were equipped with appropriate filters. Only very limited amounts of metals are currently emitted. SO2 emission into the air is not an issue for the Overpelt site. Periodic monitoring by an accredited external expert shows that all measurements remain under the applicable limits. Metal concentrations in ambient air in the nearby residential areas are well below the anticipated future European standards.

Energy and Greenhouse Gases The Overpelt site signed the Flemish Energy Benchmarking Covenant in 2003 for a period ending on 31 December 2012. The outcome of the energy audit of 2004 indicated that additional measures should be undertaken in order to achieve best international practices. Most of the recommended measures are already in place. Under the Benchmark Covenant, a new energy efficiency plan will be drafted for the period from 2008 until 2012. However, as in Balen, Overpelt is committed to further reductions of its greenhouse gas emissions.

By-product and Waste Stockpiles Two Old Landfills Two old landfills, closed in agreement with the competent authorities, are currently still subject to regular monitoring, both for integrity and surrounding groundwater impact.

New Goethite Pond The “New Goethite” pond was built to store goethite (until 1992) and neutralisation sludge (from 1992). According to the permit and in line with recent EU legislation, the new goethite pond was closed by filling up the remaining capacity with material from the soil remediation programmes and by installing a cap. Closure works are ongoing and are expected to be completed in the first half of 2008.

There is no longer an operational landfill at the Overpelt site. Neutralisation sludge is stored in the Balen site’s landfill.

Estimated Spend of Planned Projects with a Net Present Cost Exceeding EUR 5 million In Overpelt, we expect to spend EUR 7.9 million in groundwater interception, recovery and treatment, as required under the Covenant.

None of the other planned environmental projects outlined above are anticipated to have a net present cost exceeding EUR 5 million.

Auby Background The Auby smelter is located in the town of Auby in the north of France, approximately 35 kilometres south of the city of Lille. The plant is situated on a site of 138 hectares. It is adjacent to the canal de la Deûle, which connects to the seaport of Calais, and is well connected to several motorways. Zinc smelting at the site dates back to 1869.

216 The plant typically produces approximately 130,000 tonnes of zinc cathode per annum. In the six months ended 30 June 2007, total zinc production was approximately 67,000 tonnes. Feedstock of both zinc concentrates and zinc secondaries is consumed at the plant using the RLE process to produce zinc cathode. Unlike zinc ingot, which is typically produced at other zinc smelters, zinc cathode is favoured by Auby’s largest customer, Umicore’s Building Products business unit. Plans exist to increase zinc production to approximately 160,000 tonnes per annum which we expect to be implemented by the end of 2008.

The Auby plant sells its production as zinc cathode. In addition to producing standard zinc cathodes, the plant produces some special quality cathodes, sold as battery grade zinc. The site also produces by-products of sulphuric acid, Auby Leach Product (a product containing both lead and silver), copper and indium cement.

Umicore’s Building Products business unit operates a rolling mill adjacent to the Nyrstar plant on the southern part of the site and currently consumes the vast majority of our Auby zinc cathode production. See “— Production” beginning on page 219 and “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269. See also “Related Party Transactions — Ancillary Agreements — Transitional Services Agreements with Zinifex and Umicore” beginning on page 268 for the agreements that relate to the provision of services on adjacent Nyrstar-Umicore sites.

Asset Strategy The Auby smelter is a medium-scale smelter and producer of high quality zinc and indium cement. The strategy for this smelter is to consolidate its position and deliver on the following opportunities: • Increasing capacity to 160,000 tonnes per annum at low incremental cost and without affecting current performance thereby reducing cash cost per unit of zinc production; • Continuing the successful ramp-up of the new indium recovery installation, production levels of which can be adapted to the levels of incoming feedstock, with a view to producing more than 56 tonnes of indium by 2008; • Assessing and developing opportunities to increase the visibility and stability of Auby’s future power purchasing terms, locking in current favourable general market conditions in France thanks to a high proportion of nuclear generation in the country’s overall electricity production, including through the Exeltium power consortium initiative (see “— Energy” beginning on page 220); • Optimising cost efficiency by realising synergies from the geographical proximity of other Nyrstar operations. In conjunction with Balen’s, Overpelt’s and Budel’s cast houses delivering more cathodes from the Auby expansion for casting into high margin/premium products at a lower operating cost; and • Optimising the relationship with the site’s prime customer (Umicore Building Products), benefiting from the proximity advantages.

Operations and Process Description The Auby operations incorporate a zinc plant and a newly commissioned indium recovery plant. For a general description of the smelter production process, see “— Production Process” beginning on page 168. Set out below are the production characteristics specific to the Auby site.

Roasting The Auby roaster and acid plant were commissioned in 1975. In accordance with French legislation, a shutdown for inspection and maintenance takes place every 18 months.

Leaching Leaching in the Auby plant results in the Auby Leach Product (“ALP”) by-product that contains lead and precious metals and is currently sold to Umicore’s Precious Metals Refining Hoboken smelter for refining. For a description of the sale agreement with Umicore, see “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269. In the future it is expected that the goethite residue will be dewatered and compacted prior to storage in a dedicated on-site pond using a new proprietary technology that should result in a substantial extension of the expected pond life, based on the plant’s current production outlook. The necessary requests for permits were filed in 2005 and favourable opinions were published by the relevant authorities. We are currently still awaiting the issuance and publication of the decisive Prefectoral Order before implementing the technology.

217 Purification The three-phased Auby purification installation recovers copper (first phase), cobalt and nickel (second phase) and finally cadmium (third phase) from the zinc solution. The cadmium cake is disposed of in an external off-site landfill while the recovered metallic impurities are sold as by-products to third parties. Auby currently purchases zinc dust from Umicore’s Zinc Chemicals business unit for use in its purification process. For a description of the purchase agreement with Umicore, see “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269.

Electrolysis The electrolysis step at Auby uses a modern cell house commissioned in 1987 that has automated cranes and stripping and brushing machines for handling and stripping the large 3.2 m² cathodes (so called super jumbo cathodes). The plant’s cell house current efficiency recently improved and has consistently reached more than 90% since the beginning of 2007. Increasing cell house efficiency is a continuing priority and was incorporated as part of the planned increase of the cell house capacity to 160,000 tonnes per year, scheduled for commissioning at the end of 2008.

Indium Recovery Indium made soluble in the leaching circuit is removed from the leaching solution by means of a hydrolysis process. The cake produced during this operation is sent to the new indium recovery unit, commissioned at the end of 2006, for additional treatment. Here impurities are precipitated in a purification step leaving an indium metal solution. Using metallic dust, the indium can then be precipitated to an approximately 20% indium-rich concentrate that is sold to third parties for further processing. The indium recovery process is tailored to the goethite flow sheet. The Auby plant also sells indium to Umicore’s Precious Metal Refining Hoboken smelter. See “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269.

Feedstocks The choice of feedstock for the Auby smelter is guided by two objectives: optimisation of the zinc input and maximisation of by-product revenues. To achieve these goals we manage the mix of a large portfolio of concentrates and of secondary zinc oxides. The feedstock of the Auby smelter is composed of a combination of concentrates (approximately 80% of Auby’s total feed) and secondary materials (approximately 20%).

We secure our supply of concentrates through contracts with miners and, to a lesser extent, traders under contracts that are typically referenced to the annually agreed benchmark TC. These contracts typically have 12-month termination clauses. On a yearly basis, approximately 20 different concentrates are purchased and treated in the plant. All sulphide concentrates treated by Auby are delivered through the Belgian seaport of Antwerp and are subsequently transported to Auby, mostly by barge.

For the past several years Auby has treated secondary zinc material such as zinc oxides, thus diversifying its feed, reducing its sourcing risk and increasing zinc recycling in general. The weight of secondary materials in Auby’s total feed has consistently risen to approximately 20% at present and is intended to continue to grow as part of Nyrstar’s overall sourcing strategy. Secondary zinc oxide contracts are either based on the treatment charge benchmark or have a fixed price. Most of these contracts are renegotiated annually.

Following the commissioning of the new indium recovery unit, indium-rich concentrates are routed to Auby.

As part of its sourcing and production planning and management, Auby uses the same proprietary software used at the Balen plant, allowing for the optimisation of by-products such as the Auby Leach Product, copper cement and indium concentrate. See “— Balen — Feedstocks” beginning on page 205.

218 The table below shows the Auby smelter’s historical feedstock consumption for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 (thousands of tonnes) Source of feeds North America ...... 42 38 15 South America ...... 129 80 53 Europe ...... 185 77 43 Central America ...... 19 11 2 Australia ...... 3 1 0 Total concentrates ...... 378 207 114 Total secondary zinc material ...... 53 40 26 Total feed ...... 432 247 140

Production Prior to the 2005 restructuring, production at the Auby smelter amounted to approximately 260,000 tonnes per year. This production level was achieved using two cell houses and two roasters, of which one was located in the nearby French seaport of Calais. Average zinc recovery for 2006 was approximately 96%.

A decision was taken in 2005 to reduce production in order to focus on high value added zinc products. This involved the closure of the older cell house at Auby and the decommissioning of the roaster and sulphuric acid production at the Calais site.

Today’s production of approximately 130,000 tonnes per year is sold as zinc cathodes. Because the plant sold cathodes instead of the more standard ingot product, Auby’s existing melting and casting facilities became redundant and were subsequently closed in 2006. One of the reasons for this closure is that Auby’s largest customer, Umicore’s Building Products business unit, included a re-melting step in its production process, such that Auby was not required to maintain its own casting facilities to meet this customer’s needs.

After implementation of the capacity reduction, the cell house became the site’s production bottleneck, with the roasting, leaching and purification stages still offering spare capacity. We recently decided to implement an increase of the cell house capacity planned by the end of 2008, returning the site’s capacity to approximately 160,000 tonnes of zinc per year at a low incremental cost and investment.

The tables below set out the Auby site’s metal and by-product production for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 (in tonnes) Zinc production Standard cathodes ...... 155,748 106,429 56,942 Cathodes battery grade ...... 6,912 21,348 10,218 Zinc alloys ...... 40,767 0 0 Zinc SHG ...... 18,633 0 0 Total zinc production ...... 222,060 127,777 67,120 By-product production Copper cement ...... 1,745 1,020 524 Zinc sulphate solution ...... 2,518 2,500 1,535 Sulphuric acid ...... 342,059 181,663 98,300 Indium concentrate (metal content) ...... 0 0 2.76 Auby Leach Product ...... 37,382 20,633 13,438

Marketing Nyrstar’s Global Marketing department handles feedstock purchasing and product sales. See “— Sourcing of Raw Materials and Marketing and Sales” beginning on page 171.

219 The vast majority of Auby’s cathode production is sold to Umicore’s Building Products business unit plant, located adjacent to Nyrstar’s smelting plant in Auby. See “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269. Approximately 15% of the current production at Auby consists of special quality SHG zinc, currently sold to Umicore’s Engineered Metal Powders business unit for the production of battery grade zinc powder. Any remaining cathode tonnages are transported to the Overpelt site, where they are transformed into alloys for the die-casting and galvanising industries.

At present, the Auby smelter produces approximately 185,000 tonnes of sulphuric acid per year. This sulphuric acid is sold to a large number of customers mainly located in France and active in a variety of industries.

Around 25,000 tonnes per year of Auby Leach Product (ALP) are sold to a limited number of lead refiners on the basis of one-year contracts. ALP is a lead and silver concentrate resulting from the recovery of these metals introduced in the plant through the zinc feedstock.

Following the commissioning of the new indium recovery unit Auby now produces indium concentrate as a by-product. Nyrstar entered into a sale contract with Umicore’s Precious Metals Refining business unit operating the Hoboken smelter in Belgium that will further process and refine the indium concentrate. Production is still ramping-up, both in quantity and quality terms. For a description of the sale agreement with Umicore, see “Related Party Transactions — Ancillary Agreements — Metal Purchase and Sale Agreements with Umicore” beginning on page 269.

Approximately 2,500 tonnes per year of zinc are sold to the chemical industry as a zinc sulphate solution. With the aim of optimising by-product revenues, management is considering a process change that could result in halting this sulphate solution production and recovering the zinc as cathodes instead. See also “— Balen — Production” beginning on page 206.

Copper contained in the feedstock is partly recovered as copper cement. Approximately 1,200 tonnes per year of copper cement are sold to European metal refineries.

Operating Costs See “The Zinc and Lead Smelting and Alloying Industries — The Competitive Cost Position of the Nyrstar Zinc Smelters” beginning on page 153 for Auby’s position on Brook Hunt’s cost curve, based on 2006 estimated data.

The planned production increase beginning in 2009 is expected to entail low incremental costs and to contribute to the overall reduction of the unit operating costs. For a discussion of the main factors affecting the Auby site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 108 and “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 117.

Energy The Auby site purchases electricity from Electricité de France (“EdF”). Our contract with EdF provides that the price consists of a fixed price component and a zinc price-based escalator. This escalator explains the sharp increase in Auby’s electricity cost from 2005 to 2006. In 2006, the site consumed approximately 504,000 mega- watt hours of electricity.

In December 2006 the French government created a new regulated tariff regime called TRTAM (Tarif Réglementé Transitoire d’Ajustement du Marché) in order to facilitate the transition from regulated prices to higher liberalised market prices. This transitional regime is in place for two years from 1 July 2007 to 30 June 2009. Auby subscribed to this TRTAM tariff because it will be lower than Auby’s current electricity price. Once the TRTAM tariff is no longer applicable, Auby’s electricity price will continue to be governed by the current terms of our contract with EdF, including the zinc price escalator formula. The TRTAM regime is, however, currently the subject of a formal inquiry by the European Commission. A state aid investigation on the

220 regulated electricity tariffs in France was initiated by the European Commission on the basis of Article 88 (2) of the EC Treaty. The notification was published in the Official Journal of the European Union on 18 July 2007, inviting the interested parties to submit their comments to the Commission within one month of the date of publication. It is expected that the Commission will issue a decision within 18 months. Should the Commission conclude that the TRTAM regime constitutes “unlawful state aid”, the amount of such “aid” could be recovered from the Company. Currently, no estimate can be given of such amount, if any.

In addition to the TRTAM regime, in line with our overall strategic priority, the Auby site is pursuing an agreement with the Exeltium consortium in order to increase the long-term visibility and stability of its electricity sourcing terms. The members of the Exeltium consortium consist of several energy-intensive companies with production facilities in France. The supply of electricity to these members is based on a partnership contract between Exeltium and EdF entered into on 5 April 2007. The tariff is based on the production costs associated with a nuclear power plant, which are currently lower than prevailing combustibles-based prices and are typically less volatile. The supply contract that would initially cover approximately half of Auby’s current electricity demand will come into effect in the second half of 2007, subject to the European Commission’s positive guidance. Should the contract come into effect, any TRTAM-based volumes would be reduced pro-rata. The Exeltium contract has a 15-year term.

Until November 2006, the Auby smelting activity shared a site with Umicore’s Building Products business unit. As a result of the carve-out of the zinc smelting and alloying activities, the Auby site was physically split. The part of the original site owned by Nyrstar has a surface of 138 hectares.

Several arm’s length service level agreements were put in place between Nyrstar and Umicore that ensure the continuing operation of both sub-sites, covering mainly the supply of energy. In the case of energy deliveries, Nyrstar supplies medium voltage electricity to the adjacent Umicore Building Products operations and at the same time purchases from Umicore natural gas for its auxiliary boilers. These service level agreements are long- term contracts based upon market conditions. See “Related Party Transactions — Ancillary Agreements — Transitional Services Agreements with Zinifex and Umicore” beginning on page 268 for more details.

Transport The Auby smelter is well connected to national and international roadways, railways and waterways. It is linked by a canal to the French seaport of Calais. Concentrates delivered through the seaport of Antwerp in Belgium are transported by barge to Auby on the basis of a contract with CBO, a cooperative of barge carriers.

The plant is also located close to an internationally connected motorway network allowing easy transport of our products and by-products by road. Transport of products from the Auby site to our customers typically is governed by multiple contracts with established trucking companies.

Management and Employees As of 30 June 2007, the Auby smelter had a workforce of 300 direct employees. In addition, the site employs approximately 75 full-time contractors on an annual basis. The restructuring that took place in 2005 did not cause any material disruptions to operations, which is indicative of the sound labour relations at the Auby site.

Excluding the restructuring effect, employee turnover in Auby has been low, averaging approximately 2% over the last three years.

The employment of Auby employees is governed by agreements which are an extension of French labour law for the metal industry. Non-manager employees are governed by the agreements of the metal industry of French Flanders, while management is governed by the agreements of the national metal industry. The agreements are signed for an indefinite duration and there is a 15-month period after signing within which negotiations need to take place, or the employees keep their entitlements individually. There is an exception to the indefinite period for two particular agreements: the agreement for progress profit sharing is negotiable every three years, and the wages agreement is negotiated every year at a fixed date.

The LTIFR as of the relevant dates in the period 2004-2007 is set out below.

31 December 31 December 31 December 30 June 2004 2005 2006 2007 LTIFR/millions hours worked ...... 3.19 1.64 4.60 5.11

221 Routine blood and urine tests on workers have been monitored for many years and are expected to continue in the future. The following tables show low levels of toxic metals for the last three calendar years, well below maximum allowable levels. The standard in France for lead-in-blood is 900 μg/l for men and 700 μg/l for women and for cadmium-in-urine is 5 μg/g creatinine.

The evolution of the lead-in-blood and of the cadmium-in-urine concentrations of the workers is as follows: Lead-in-blood, expressed in μg/l

2004 2005 2006 Leaching ...... 162 154 179 Roasting ...... 201 223 188 Maintenance ...... 130 179 120 Anode production ...... 115 128 129

Cadmium-in-urine, expressed in μg/g creatinine

2004 2005 2006 Leaching ...... 1.64 1.54 1.30

Capital Expenditure Profile The table below summarises the capital expenditures for our Auby site for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 EUR thousands Total ...... 5,566 12,217 4,136 of which Environment, Health and Safety ...... 637 218 33 of which Periodic Maintenance Shutdown ...... 3,145 1,286 1,233 of which Current Maintenance ...... 1,533 2,243 1,710 of which Other ...... 251 8,470 1,160

As a result of the decision to reduce the production capacity by the end of 2005, the capital expenditures during 2005 in the Auby plant were low. Most of the spending went to the periodic roaster shutdown and to maintenance.

In 2006, we undertook a major investment in the facilities for the production of indium (EUR 7.5 million). The physical split of the Auby site as a result of the carve-out of the zinc smelting activities from Umicore France’s other business cost approximately EUR 0.5 million.

A number of projects are currently underway that are expected to continue into 2008. The major projects are the increase of the production capacity of the cell house, budgeted at EUR 11.5 million, and the compacting of the goethite residue, estimated at EUR 8.5 million. Other projects planned through 2008 are the installation of a magnesium bleed and storage facilities for zinc secondaries, budgeted at approximately EUR 3 million.

In 2007, the periodic shutdown is expected to require approximately EUR 6 million due to the coinciding of the periodic roaster shutdown (required every 18 months) with the one-in-four-years shutdown of the cell house.

Environmental Management General Our Auby operation has ISO 14001:2004 certification for the site environmental management system in addition to ISO 9001 certification for the management system.

Soil Contamination More than 100 years of industrial activities have resulted in soil contamination, both on-site and in the nearby surrounding areas. As part of its commitment to actively participate in the management and remediation of risks that are the result of these historical operations, the Auby site initiated various investigations and remedial projects, on-site as well as in the nearby residential areas and the far surrounding areas.

222 Soil Impact at the Production Plant Soil contamination was identified through a range of environmental investigations over the entire site. An administrative order from 2005, based on a detailed risk assessment, required the site to undertake a number of specified remedial actions including sediment dredging at the dock and soil removal in the vicinity of the roaster. After the 2005 administrative order was issued, the requirement to remove the soil in the vicinity of the roaster was amended to require only a survey of the underlying groundwater. The administrative order imposes various deadlines for completion of the various measures, all of which have been met so far or are expected to be met in the future. We expect to receive a permit for the sediment dredging at the dock by the end of 2007.

An earlier administrative order, issued in 2003, required the site to repair the capping of the former ponds used for sludge storage. Instead of repairing, we decided to renew the capping. We are currently finalising the preparatory studies in this respect and plan to commence the project in 2008.

Soil Impact in the Near Surrounding Areas In agreement with the authorities, the Auby plant assessed the risks related to soil contamination in the nearby residential area as a result of atmospheric depositions, in particular for cadmium and lead. While a school and a public square have already been remediated, further actions will most likely include the testing of potentially affected soils at selected locations and removal where impact is observed above certain action levels. It is anticipated that further community consultation in the near future and subsequent cleanup will be required.

Soil Impact in the Far Surrounding Areas Following assessment and remediation of soil contamination at the nearby MetaleuropNord site, we expect that the plant will have to define soil contamination in the far surrounding areas as a result of atmospheric depositions, in particular for cadmium and lead. It is currently anticipated that similar actions will be applied around the Auby site and that the plant will be invited to participate in the implementation of those actions.

Water Discharges and/or Groundwater Contamination The site is registered in the French database of contaminated or potentially contaminated sites. An administrative order from 2005 requires groundwater monitoring to check that contamination does not migrate towards the drinking water wells. A more recent administrative order (in 2007) describes the groundwater monitoring requirements more in detail.

Due to the favourable geological conditions beneath the site, groundwater contamination due to historical industrial activities exists in very localised and limited spots. However, further groundwater investigation will be required in 2007 and it is possible that a further series of investigations will be required in the upcoming years. Increased annual groundwater monitoring costs, in addition to existing operating expenses, may be required. Some sort of interception and treatment of contaminated groundwater on a site level will be required in the period 2010-2015. Further sealing and control of source areas may be required in the period 2008-2012.

By-product and Waste Stockpiles There are currently nine landfills present on-site, of which two are still in operation (the neutralisation sludge landfill and the goethite waste landfill).

Waste Management Due to the nature of the raw material processed at the Auby site, a sludge-type waste (goethite) was produced and stored in secure on-site landfills. However, production and storage in landfills of sludge-like waste streams is no longer permitted.

The Auby plant is therefore in the process of implementing a project of dewatering the waste sludges before these are disposed of in the landfills. The so-called “compacting project” includes both the installation of a dewatering plant as well as the redevelopment of one of the existing landfills in order to store the dewatered goethite cakes.

Neutralisation Sludge Landfill The neutralisation sludge landfill will be redeveloped into a landfill for dewatered neutralisation sludge and dewatered goethite waste, planned to commence in 2008. Redevelopment includes the dredging, dewatering and

223 redumping of existing sludges as well as further filling with newly produced waste. This new landfill is expected to allow further operations for a period of over 30 years.

Rehabilitation of Old Landfills Ponds located on the southwestern part of the site were closed and rehabilitated in 1995. Unfortunately, the capping was not properly installed and attempts at restoring the cap have not been successful. As a result, the entire capping of these ponds needs to be renewed to ensure that the current closure standards are complied with by the end of 2009.

Additionally, two landfills which have reached the end of their lives also need to be capped.

Hazardous Materials The current on-site concentrate storage shed is in relatively poor condition. Dust and spillage control are difficult with the current storage shed and the existing unloading facility at the dock. We are planning the installation of a new concentrate storage shed for the period 2011-2015.

Estimated Spend of Planned Projects with a Net Present Cost Exceeding EUR 5 million In Auby we expect to spend EUR 23.9 million for the optimisation and rehabilitation of currently operating landfills, EUR 13.8 million for old landfill closure and EUR 11.1 million for the construction of a new concentrate storage and handling facility.

None of the other planned environmental projects outlined above are anticipated to have a net present cost exceeding EUR 5 million.

Chinese Operations The segment “Chinese Operations” consists of the following assets: Nyrstar Yunnan Zinc Alloys Co., Ltd, Föhl China Co., Ltd and Genesis Alloys (Ningbo) Ltd and its affiliated companies Genesis Recycling Technology (BVI) Ltd and Genesis Alloys Ltd.

Nyrstar Yunnan Zinc Alloys Co., Ltd Background The Nyrstar Yunnan Zinc Alloys Co., Ltd (“NYZA”) plant is located within the Yunnan Copper (“YC”) plant site in the suburbs of Kunming, the capital of the Yunnan province in the southwest of the People’s Republic of China. Kunming is located about 1,100 kilometres west of Guangdong and 2,000 kilometres west- southwest of Shanghai. We own 60% of the NYZA shares and a Chinese state-owned enterprise, Yun Tong Zinc Co. Ltd (“YZ”), owns the other 40%.

Our joint venture agreement with YZ came into effect in May 2006. YZ operated the plant prior thereto. Under the joint venture agreement, we have the right to appoint the majority of the directors on the board of NYZA. However, for various matters (such as the amendment of the articles of association, a decision to merge or to split, an increase, reduction or transfer of registered capital, a disposal of NYZA’s assets or an investment exceeding RMB 5,000,000) the unanimous consent of all directors is required. The joint venture agreement has a 30-year term. Either party can request the termination of the joint venture agreement for certain causes, including a deadlock at the level of the Board of Directors of NYZA.

The plant was commissioned in 2002 and is currently undergoing an upgrade to enable production of zinc alloys for use in the Chinese die-casting and galvanising markets. The design capacity is 50,000 tonnes of zinc per year, but an ongoing de-bottlenecking exercise seeks to increase production to approximately 60,000 tonnes per year. In the six months ended 30 June 2007, NYZA produced approximately 29,000 tonnes of zinc products. The current plant replaced a smaller 10,000 tonnes per year zinc plant built in 1991. Except for the roaster, all of the facilities of the smaller plant have been closed.

NYZA operates a process involving roasting, leaching and electro-winning. Leach residues are processed in a Waelz kiln. Slags produced are sold to a local cement works. Roaster gas is treated by YZ. The hydrometallurgical process associated with a thermal treatment of the leach residue makes NYZA a zero waste plant.

224 Asset Strategy The NYZA smelter is located in the midst of several zinc mines in an area rich in zinc concentrates. Due to the proximity of several hydro-electric power plants in Yunnan, the smelter has relatively low production costs compared to other smelters.

The Kunming zinc smelter’s association with YC provides various synergies in this major industrial complex. The significant elements of NYZA’s strategy are: • Continued investing in low cost capacity expansions that build scale and improve cost efficiency; • Commissioning a die-casting alloy line and commencing the production of premium margin alloy products to capitalise on the rapidly growing demand in China; • Containing costs of power supply and seeking sustainable efficiencies in supply chain working capital; and • Implementing an approach to asset management consistent with other Nyrstar assets.

Operation and Process Description For a general description of the smelter production process, see “— Production Process” beginning on page 168. Set out below are the production characteristics specific to the NYZA site.

Roasting The first stage of the process involves roasting of zinc sulphide concentrates, producing zinc oxides, also called calcines. During this process sulphur is removed and is subsequently converted to sulphuric acid in an acid plant belonging to YZ.

The VM-Lurgi type roaster was commissioned in 2002. An adjacent, older and smaller roaster is currently not in use.

Leaching In the leaching process the zinc contained in the calcines is extracted in a two-stage process using a neutral leaching step and weak acid leaching step. This yields a zinc containing solution and a leach residue.

Waelz Kiln Operation Weak acid leach residues are washed, filtered and partially dried. This material is mixed with coke and some other zinc bearing process residues and treated in a Waelz kiln. Zinc, lead, indium and some other elements are fumed. The metallic vapours are oxidised and collected as Waelz oxides in bag filters.

The slags, essentially containing the ore gangue, are granulated and sold to the cement industry.

Waelz Oxides Leaching Under the direction of Umicore, NYZA recently commissioned a dedicated circuit to process Waelz oxides using a weak acid and hot acid leach at the pre-hydrolysis and goethite precipitation stage. A lead residue and an indium concentrate are produced for sale and a goethite residue is produced for recycling to the Waelz kiln.

The zinc contained in the oxides is dissolved and the solution is sent to the main circuit.

Purification In purification, addition of zinc dust in two stages removes metallic impurities from the zinc sulphate solution. In the first stage of the purification process, zinc dust is fed into the neutral solution to precipitate copper and cadmium as well as the majority of the nickel and thallium.

The cements are processed to obtain a final cake rich in copper which is sent to YC’s smelter for copper recovery. The cadmium is valorised as crude cadmium metal through a thermal process.

225 In the second purification, zinc dust and antimony are added to the solution. As a result, cobalt and nickel are cemented out of the solution. The cobalt-rich residue is leached again to remove further zinc and is then sent to the Waelz-kiln.

Electrolysis In electrolysis the zinc present in the solution is deposited as metal on the cathode. Cell house efficiency has recently improved and is presently about 91.5%, competitive with other leading electrolytic operations. A number of actions are planned to further stabilise the current efficiency at 91.5%. The zinc metal is stripped manually from the base cathode plates.

Casting The stripped zinc cathodes are melted in 2 induction furnaces and cast as 25 kilogramme ingots on two casting wheels using manual stacking. Most of the production is of SHG quality.

Feedstocks Most of the concentrates come from the Yunnan province and the balance from the Sichuan province. YZ is required under the joint venture agreement to procure concentrates to meet NYZA’s demand, and NYZA is bound to purchase concentrates, to the extent produced in China, solely from YZ for the duration of the agreement (i.e., 30 years), subject to a 12 months’ cancellation notice period. NYZA currently purchases concentrates from YZ under monthly contracts at prevailing market conditions.

Calcine, i.e., concentrate that has already been roasted, is available as a secondary material from fertiliser plants. The NYZA smelter uses this feed to bridge consumption of concentrate during roaster maintenance campaigns. The NYZA smelter works with a number of suppliers of calcine.

A raw materials steering committee consisting of members from both joint venture parties is in charge of managing the purchase of raw materials and determining quantities and qualities to be contracted in the following month, as well as terms (including price) for the purchase of such raw materials.

Production The NYZA plant is a small zinc plant. 2006 production amounted to 50,684 tonnes, of which 32,459 tonnes was produced following formation of the joint venture. Most of the production is SHG zinc and is sold in the domestic market via local trading companies. The biggest customer of NYZA is a subsidiary of YC, which represents around 25% of sales. Average zinc recovery for 2006 was 93.1%.

Most of the sales are done “ex-works”, meaning that the seller makes the goods available for delivery at its premises.

Cadmium is sold on the Chinese market as crude cadmium. A leach product and indium concentrate are produced for sale. Copper from the filter cake from the purification is recovered by YC. Slags are sent to the cement industry.

A new facility enabling production of die-casting alloys and CGG is under construction and is expected to be commissioned in December 2007.

The medium-term goal is to transition from cathode production into higher value added products, resulting in the production of die-cast alloys and continuous galvanising alloys.

Operational improvements and process de-bottlenecking have increased the annual production levels from 38,000 tonnes in 2005 to 54,000 tonnes currently. We have planned de-bottlenecking procedures in the roaster section to reach production levels of 58,000 tonnes per year in 2008. 60,000 tonnes per year is presently the maximum capacity for the cell house. We believe that the cell house capacity can be increased, at low incremental cost, to reach a maximum capacity of 65,000 tonnes per year by 2010.

We own 60% of NYZA. The table below, however, sets out NYZA’s total production for the 2005 and 2006 calendar years and the first half of 2007.

226 2005 2006 1H 2007 (tonnes) Zinc ...... 41,072 50,684 28,822 Cadmium ...... 58.2 168.3 87.5 Copper in cement ...... 246.5 311.4 106.98 Indium in concentrates ...... 3.2 11.4 5.98 Slags ...... 39,197 44,380 23,900

Marketing NYZA’s zinc is marketed by the NYZA marketing team and has to date been sold with a relatively low premium as SHG and high grade (“HG”) on the Chinese market.

It is anticipated that by the end of 2007 the new die-casting line will allow the production of special alloys with high premiums. Building on the Chinese marketing network already in place for the sale of our European products, we expect to be able to quickly and efficiently introduce these products into the Chinese domestic market, targeting high quality end-applications for use in sectors such as the automotive industry.

Operating Costs See “The Zinc and Lead Smelting and Alloying Industries — The Competitive Cost Position of the Nyrstar Zinc Smelters” beginning on page 153 for the Kunming (which is how the site is generally referred to by industry analysts) smelter’s position on Brook Hunt’s cost curve, based on 2006 estimated data.

For a discussion of the main factors affecting the NYZA site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 118 and “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 117.

Energy Electricity generation is well developed in Yunnan province, due in particular to the presence of several hydro-electric power plants, resulting in adequate and stable sources of relatively inexpensive energy with few power supply shortages. The NYZA smelter has a contract with the Yunnan Kunming Power Supply Bureau for the provision of 30 megawatts of electricity. The current contract runs until 2009. After that period the contract must be renegotiated. In 2006, the Kunming plant consumed approximately 203,000 mega-watt hours of electricity. The NYZA smelter also uses coal and coke in the Waelz kiln to treat the weak acid leach residue. One to three month contracts for supply of coal and coke are negotiated directly by NYZA with local miners.

The Chinese government has announced plans to make energy supply more attractive for efficient users, but details of this new policy have not yet been publicised.

Transport The site has a dedicated railway system which can be expanded easily to meet the needs of the NYZA plant. All concentrate feedstock and by-products are brought to the site by truck, while zinc metal product is currently transported via railway to different customers. By-products are transported to NYZA’s customers by truck.

Management and Employees As of 30 June 2007, the NYZA smelter had an experienced workforce of 494 full-time employees and approximately 393 full-time contractors. The smelter also employs temporary workers on an as-needed basis through an agency.

The staff and workers have formed a union, which has initiated discussions with the smelter on a collective bargaining agreement. Furthermore, NYZA established within its organisation a communist party committee with a party secretary, having an office of 5 to 6 persons.

227 The site’s occupational health and safety standards are progressively improving. Some efforts still need to be made in order to bring the safety reporting up to European standards.

In August 2006, as part of the joint venture agreement, a health review was performed on 439 NYZA employees. In addition to a routine examination (including pulmonary function, cardiovascular system and target organs), the analysis focused on blood and urine levels for cadmium and lead and urine and hair levels for arsenic. In total, 5% of the tested population exceeded one of the criteria, with greater incidence of exceedance for arsenic and cadmium.

Although contact with harmful material is a low risk in the NYZA smelter’s operations, each employee is monitored for lead and other materials in blood.

In addition, NYZA developed an EHS policy and is aiming for continuous improvements in its EHS performance. To that effect, NYZA intends to: • Establish a systematic EHS management system and obtain external certification; • Improve safety awareness and initiatives of employees by rolling out a training programme focusing on, among other things, safety culture, job safety analysis, accident/incident investigation, personal protective equipment, permit to work, material handling and emergency response; • Conduct an initial risk assessment for all work activities and processes and update it at least once every two years; • Continuously improve the working environment; • Conduct annual physical examinations to ensure the health of our employees; • Conduct an annual review of new applicable laws, regulations and standards and incorporate them into NYZA’s operations; and • Annually review NYZA’s EHS policy and management system and its performance to ensure the EHS development of the operation.

Capital Expenditure Profile The table below summarises the capital expenditures for NYZA for the 2006 calendar year and the first half of 2007.

2006 1H 2007 EUR thousands(1) Total ...... 594 345 of which Environment, Health and Safety ...... 20 24 of which Periodic Maintenance Shutdown ...... 0.0 0.0 of which Current Maintenance ...... 574 159 of which Other ...... 0 162 (1) For 2006: EUR 1 = RMB 10.0096; For 1H 2007: EUR 1 = RMB 10.2567; RMB is Chinese renminbi, the lawful currency of China.

As the joint venture agreement with YZ only came into effect in May 2006, no capital expenditure details are available for 2005.

Taking into account that the plant was recently built and has been ramping-up to full production, capital expenditure in 2006 was low.

For 2007, the installation of a casting line for die-casting alloys and a spectro-photometer accounts for approximately EUR 0.5 million in capital expenditure. Major spending will nevertheless be for the asset management and is budgeted at EUR 1.4 million. A similar expenditure is expected in 2008, with an additional EUR 0.5 million budgeted for the periodic shutdown of the roaster.

228 Environmental Management General The current plant was commissioned in 2002. The first on-site activities were initiated in 1985, by the construction of a 10,000 tonnes per year zinc plant (jarosite process). Our plant is surrounded by the operations of YC.

General EHS improvements are required for the NYZA site. Housekeeping for the storage of raw materials, wastes, by-products and chemicals storage requires considerable improvement. Open areas have the potential to create dust. Bunding around storage tanks areas is generally in a poor condition and is likely to require upgrading in the future. Maintenance of stormwater drains also requires improvement. We also anticipate upgrades to improve the integrity of the wastewater collection system and to separate it from the stormwater system.

Water Discharges and/or Groundwater Contamination Wastewater Treatment Charges Wastewater from NYZA is discharged to the copper plant for treatment at its general wastewater treatment plant. This discharge is covered by an agreement with the copper plant. The agreement between the copper plant and NYZA stipulates concentration limits for a range of metals, pH and fluorine, which were regularly exceeded in 2006. We are currently reviewing these exceedances with the copper plant to address the issue in the medium term. We have planned upgrades of process waster and stormwater systems as part of the general EHS upgrade provisions mentioned below, such that the high acid levels in the wastewater discharges should decrease in the future.

New Wastewater Treatment Plant The National Integrated Wastewater Discharge Standard establishes maximum levels of Type 1 pollutants (including cadmium, mercury, arsenic and lead) at the outlet of the workshop or the workshop treatment facility. We may be required to construct our own wastewater treatment plant prior to discharge to the copper plant. It is expected that this new wastewater treatment plant would only need to treat process water and not sewage effluent, which could continue to be discharged to the copper plant’s general wastewater treatment plant.

By-product and Waste Stockpiles We have proposed the construction of a mercury removal plant in the new acid plant being constructed by YZ. This mercury removal plant will be designed to achieve the quality of sulphuric acid product required for use in fertiliser manufacture.

Estimated Spend of Planned Projects with a Net Present Cost Exceeding EUR 5 million None of the planned environmental projects outlined above are anticipated to have a net present cost exceeding EUR 5 million.

Föhl China Co., Ltd For a discussion of the legal ownership of Föhl China, see “Presentation of Financial and Other Information — Föhl China Co., Ltd” beginning on page 49.

Background Föhl China Co., Ltd (“Föhl China”) was established in November 2005 by Umicore (50%) and Adolf Föhl Verwaltungs- und Beteiligungs GmbH (50%) for the production of die-casting parts. The plant is located in the Kaiming Industrial park in the town of Taicang, 50 kilometres from Shanghai. Production started in June 2006.

After eight months of operation, a further investment was made in a mould fabrication shop to support Föhl China’s die-casting production activity. Föhl China operates in a rented facility.

Umicore entered into a shareholders’ agreement with Adolf Föhl Verwaltungs- und Beteiligungs GmbH on 23 May 2005 with a 50-year term. Each party has the right to appoint one-half of the directors on the Board of Directors of Föhl China. Certain decisions require the unanimous approval of all directors, including any amendment of the articles of association, any increase or decrease of the registered capital of Föhl China or any disposal of Föhl China’s shares, a merger of Föhl China with another organisation or a division of Föhl China or a listing of Föhl China’s shares on any stock exchange, a mortgage of Föhl China’s assets, the establishment of a

229 branch office, a subsidiary, or a representative office inside or outside China, any expansion or reduction of Föhl China’s scale of production departing from the business plan as well as any decisions on investments exceeding RMB 100,000, and any amendment of the business purpose of Föhl China. Either party can request the termination of the joint venture agreement for certain causes.

Asset Strategy Drawing upon the expertise of its parents in alloy formulation and mould design and engineering, Föhl China positions itself as a top quality die-casting parts provider in the Chinese market. The important elements of Föhl China’s strategy are: • Capitalising on our technical expertise by collaborating closely with the customer in end product design and by subsequently designing an optimal die-casting mould in house; • Providing a reliable and economical manufacturing facility by adopting state-of-the-art manufacturing systems, intricate die design capability, die-casting machines and associated peripheral equipment; and • Further lowering production costs through efforts to increase and expand capacity in this newly established company.

Operations and Process Description The first step consists of designing with the customer the part to be die-cast. After finalising the drawings a die-casting mould is designed and fabricated in-house. Using this mould, mass production starts after approval by the customer of parts produced in a trial run. The die-casting operation itself consists of injecting under high pressure the molten zinc alloy into the mould. After solidification and cooling the part is removed from the mould and then undergoes a final finishing step.

Feedstocks Föhl China is supplied with die-casting alloys by various local producers including Nyrstar’s Genesis plant. See “— Genesis” beginning on page 231. Contracts with third party suppliers typically are on spot terms.

Production The Föhl China plant has a capacity of approximately 700 tonnes of die-casting alloys per annum. The plant was commissioned in 2006 and production in 2006 was approximately 200 tonnes. Föhl China achieved 75% of its full projected capacity of the installed injection machines in May 2007.

Approximately 5% of the molten zinc alloys that Föhl China handles result in skimming dross, which are sold to a local recycler.

Marketing The Föhl China marketing team targets a high tech niche market in China with end applications in the automotive, electronics, home appliance and building industries.

Operating Costs The unit operating costs in Föhl China have decreased since March 2007. The major reason for this cost reduction is an increase in productivity. For a discussion of the main factors affecting the Föhl China site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 108 and “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 117.

Transport Föhl China is located close to Shanghai, where most of the major automotive companies are located. The plant has easy access to highways and the ports of Taicang and Shanghai. Feedstock and products are delivered by truck.

230 Management and Employees As of 30 June 2007, Föhl China had a workforce of 50 full-time employees, 13 part-time employees and 2 full-time contractors.

Three expatriates work in Föhl China to ensure the general management and technology transfer from Föhl Germany to Föhl China during the start-up phase.

The safety record for Föhl China shows one injury for the year 2006. Given that operations only commenced in June 2006, no full year LTIFR statistics are available yet.

Given the nature of the site’s activities (i.e., die-casting), the risk of exposure of the employees to lead and cadmium is limited, and hence testing of employees is not warranted.

Capital Expenditure Profile The table below summarises the capital expenditures for Föhl China for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 EUR thousands(1) Total ...... 348 549 12 of which Environment, Health and Safety ...... 0.0 0.0 0.0 of which Periodic Maintenance Shutdown ...... 0.0 0.0 0.0 of which Current Maintenance ...... 0 0 0 of which Other ...... 348 549 12 (1) For 2005: EUR 1 = RMB 10.1953; For 2006: EUR 1 = RMB 10.0096; For 1H 2007: EUR 1 = RMB 10.2567; RMB is Chinese renminbi, the lawful currency of China.

Föhl China is a newly created company, with a facility established on a green field site. Capital expenditures in 2005 and 2006 relate entirely to the purchase and installation costs of the plant’s machinery.

For 2007, capital expenditures are expected to be modest, the aim being to fully utilise the production capability of the installed machinery. For 2008 we anticipate an investment of EUR 0.2 million in new machinery to accommodate the planned production increase.

Environmental Management Föhl China is classified as a non-polluting enterprise according to an audit conducted by the local environmental authority.

Genesis Background Genesis Alloys Ningbo Ltd (“Genesis”) is a zinc die-cast alloy producer, located 20 kilometres northwest of the city of Ningbo in the Zhejiang province of China. We own 50% of the shares and the other 50% are owned by Lee Kee Group, a metals distribution company listed on the Hong Kong Stock Exchange. Genesis commenced operations in 2001 and we believe it is now regarded as the domestic supplier of choice for domestically produced premium quality die-cast alloy in China.

We manage Genesis with the Lee Kee Group providing marketing and sales support. The general manager of Genesis reports to a board, which is composed of an equal number of our representatives and Lee Kee Group’s representatives. The Chairman is elected from among the board members and does not have a casting vote. Board decisions are made by simple majority.

The Genesis joint venture Shareholders’ Agreement dated 30 July 2001 (as amended from time to time), to which Nyrstar Netherlands (Holdings) B.V. acceded on 29 August 2007, provides for a right of first refusal in favour of Lee Kee Group and the right to approve any new joint venture partner. More specifically, if Nyrstar Netherlands (Holdings) B.V. proposes to transfer its shares in the Genesis joint venture to any entity other than Nyrstar or a subsidiary of Nyrstar, those shares must first be offered for sale to Lee Kee Group Limited. If Lee

231 Kee Group Limited chooses not to purchase the shares, Nyrstar Netherlands (Holdings) B.V. may transfer the shares to a third party who must be first approved by Lee Kee Group Limited.

Asset Strategy This modern manufacturing facility has established metal treatment and casting equipment and practices that form the platform for a growth strategy that seeks to: • Deliver the highest quality, domestically produced die-cast alloy in China; • Continue the implementation of best practice management systems, processes, practices and quality control systems; and • Expand plant capacity from 23,000 tonnes per annum to 78,000 tonnes per annum to meet customer demand. This expansion is due for completion in early 2008.

Operations and Process Description SHG zinc metal feedstock is melted with aluminium, magnesium and copper and then batch alloyed under controlled conditions in a combination of reverbatory and rotary diesel-fired furnaces. Alloys are then cast into 10 kilogramme, Genesis-branded ingots and stacked in 1.1 tonne bundles for delivery to customers.

Product quality is monitored by optical emission spectroscopy to ensure finished metal is produced according to customer specifications. 90% of current product demand is for #3 alloy but Genesis also regularly produces #2, #4, #5 and #8 alloys. These alloys are all similar, but have different levels of alloying elements.

A dross recycling system is used to maintain metal recoveries above 99%. All process gas streams are collected and filtered through a bag house prior to discharge to atmosphere.

The site also operates a fully functioning metallurgical laboratory that is equipped to supply technical support to customers.

A general diagram of Genesis’s operations is set forth below.

Special High Grade Zinc Additives

Diesel fired Dross reverbatory furnaces treatment

8 tonnes per hour straight linecasting machines

Alloy Baghouse Dust

Feedstocks Genesis uses only primary metals as raw materials. SHG zinc is sourced under an annual agreement with Trafigura Trading (Shanghai) Co., a subsidiary of Trafigura Beheer B.V. Under the terms of the joint venture, Genesis is required to purchase feedstock from local suppliers, which is the basis for the agreement with Trafigura Trading (Shanghai) Co. Volumes of supplies of feedstock are agreed on a monthly basis and the delivery schedule is agreed in such way that there is sufficient feedstock on-site to meet production demand and maintain a one week inventory of both raw material and finished product.

232 The supply agreement of raw material is structured to allow Genesis to manage pricing risk exposure.

Production We own 50% of Genesis. The table below, however, sets out Genesis’s total production for the 2005 and 2006 calendar years and the first half of 2007. Note that 2005 and 2006 production was lower than capacity due to structural repairs of the plant.

2005 2006 1H 2007 Zinc alloys (tonnes) ...... 0 9,316 11,655

Marketing Genesis is a significant producer of die-cast alloys in China. Genesis die-cast alloys are sold to customers that require high quality product and are willing to pay for consistent quality and reliable deliveries. Approximately 50% of Genesis sales are in the Southern Chinese Guandong province. With the growth in die-cast alloys consumption in Northeast China, Genesis’s focus on marketing efforts in those regions has led to increased sales in those regions in 2006 and the first half of 2007.

Genesis’s customers are in the automotive and electronics industries. Comprising more than 50% of Genesis’s sales in 2007, the bathroom and furniture hardware industries remain important customer segments. In addition, Genesis also supplies our Föhl China site with die-casting alloys. See “— Föhl China Co., Ltd — Feedstocks” beginning on page 230.

Operating Costs The purchase of diesel for fuelling the furnace is the single largest operating cost. Combined with electricity, used primarily for powering mechanical equipment, energy costs accounted for approximately 41% of Genesis’s operating costs in the first half of 2007. Personnel costs accounted for approximately 22% over the same period with the balance being comprised of depreciation, materials and external services. For a discussion of the main factors affecting the Genesis site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 84 and “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 95.

Energy Diesel is supplied under a 12-month rolling contract by a company based in Ningbo. Electricity is supplied by the local government-controlled electricity generator.

Transport Raw materials are delivered by the supplier on truck from warehouses in Shanghai and Ningbo. Finished goods are delivered to customers by truck or rail throughout China. Approximately 50% of all finished goods are despatched to the province of Guangdong.

Management and Employees As of 30 June 2007, Genesis employed 48 people. The plant manager is an Australian expatriate employed by Nyrstar.

As the Chinese government requires all enterprises to have a union, all Chinese site personnel are union members. The union is funded by Genesis who contributes 5.5% (as set by the government) of the total monthly site salary into a union account for the development of the employees. The total 5.5% must be used for training (2.5%), labour competition (1%) and union activities (2%). Since the plant commenced operation, labour relations with employees have been excellent and we believe that Genesis is regarded as the employer of choice in the local area.

Significant progress has been made in the last six months in establishing best practice standards in the operations of the plant in relation to safety and health. As at 30 June 2007, the 12-month rolling LTIFR was 7.4.

233 Capital Expenditure Profile The table below summarises the historical capital expenditures for Genesis for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 EUR thousands(1) Total ...... 132 293 46 of which Environment, Health and Safety ...... 0.0 1 0.0 of which Periodic Maintenance Shutdown ...... 0.0 0.0 0.0 of which Current Maintenance ...... 0.0 36 24 of which Other ...... 132 256 22 (1) Capital expenditures have been converted using period average renminbi to euro exchange rates of 10.1953 in 2005, 10.0096 in 2006 and 10.2567 in the first half of 2007.

Significant capital expenditures were incurred in 2005 and 2006 to rebuild the plant on a new location after a structural failure in January 2005 that halted production. Specifically, the company that had constructed the original plant had failed to properly take into account the proximity and effect of nearby rice paddies on the plant’s foundation, which caused the structure to subside. With this exception, capital expenditure has generally been targeted to the current expansion of the plant from its current nameplate capacity of 22,000 tonnes to 78,000 tonnes, which is expected by mid-2008.

Post expansion the capital spend is expected to reflect the asset management strategy which will be to sustain production and incrementally improve equipment reliability.

Environmental Management Genesis conforms to the Nyrstar’s group-wide environmental policies and standards.

As a precautionary measure, local authorities routinely monitor bag house emissions. The most significant environmental risk is the potential for off-site contamination from any losses from the diesel storage and supply system. This facility has been redesigned and is planned to be relocated and rebuilt to best practice standards as part of the current expansion programme. Upgrade works are also expected to include a stormwater interception system.

Other Operations The segment “Other Operations” consists of shareholdings in the following companies: Galva 45 S.A., GM-Metal SAS, Australian Refined Alloys Pty Ltd and Australian Refined Alloys (Sales) Pty Ltd and Padaeng Industry Public Company Limited.

Galva 45 S.A. Background Galva 45 S.A. (“Galva 45”) is a French company specialising in galvanising manufactured steel parts, with an annual production capacity of about 60,000 tonnes. The company operates a plant located in the Department of Loiret, some 80 kilometres south of Paris between Orléans and Pithiviers. Galva 45 was founded in 1982 and operates one of the largest European galvanising plants.

Nyrstar holds 66% of the Galva 45 shares. The remaining 34% are held by Etablissements Jourdain S.A., which under French law gives them a “blocking minority” position in certain circumstances. There is no shareholders’ agreement in place between us and Etablissements Jourdain S.A.

Galva 45 specialises in a variety of steel coating treatments, and in particular in specialty galvanising of automotive parts (engine cradles, suspension arms, beams, bearings, etc.) and tubular products for use in the agriculture sector and livestock farming. It also acts as an important player in the local jobbing galvanising market. Most of its end markets are characterised by rigorous quality specifications such as uniformity of coated material and limited impurities while the coated parts are often complex in form and design and of various sizes. The coating services offered by Galva 45 result in improved corrosion protection (hence increased life expectancy) as well as improved appearance. In 2006, the company produced approximately 58,000 tonnes of

234 galvanised steel parts versus approximately 29,000 tonnes in 1997, corresponding to a CAGR of 8.0%. In 2005, the company produced approximately 55,000 tonnes of galvanised steel parts.

Nyrstar’s investment in Galva 45 has the added benefit of providing it with first hand experience and intelligence on the most recent developments in the galvanising industry, with an emphasis on the specialty galvanising segment such as the automotive sector.

Asset Strategy In the segment of tubular products for the use in the agriculture sector, Galva 45 operates in partnership with Etablissements Jourdain S.A., its 34% shareholder and a leading French tubular part manufacturer for the agriculture sector located near the plant. In 2006, Etablissements Jourdain S.A. purchased 24,800 tonnes out of the total of 55,000 tonnes of steel parts coated by Galva 45.

In the automotive segment, Galva 45 acts as a leading galvaniser in France. Over recent years, Galva 45 has been successfully optimising its customer relationships by extending its coating service offering with finishing operations such as nut tightening and bloc assembly. Like the agriculture segment, the automotive segment has been a major contributor to Galva 45’s recent growth. In 2006, the automotive segment represented 25,300 tonnes of steel parts out of the total of 55,000 tonnes of steel parts coated by Galva 45.

In the automotive segment, Galva 45 has an important contract in place with a major French car manufacturer, accounting for approximately 50% of its sales.

In 2006, Galva 45 sold 4,900 tonnes of steel parts to the regional job galvanising market, offering general galvanising services, leveraging its expertise and quality levels built up in its two main end markets.

The key strategic building blocks of Galva 45 can be summarised as follows: • Consolidating and building on its current position as privileged partner to the French automotive manufacturing industry and original equipment manufacturers, via dedicated research and tailor-made, automated and high quality service offerings; • Assessing opportunities to penetrate the fast-growing automotive galvanising markets (of Germany and South Korea), most likely with established local partners and through knowledge-sharing; • Continuing the close partnership with Etablissements Jourdain S.A. to facilitate future expansion by providing operating flexibility and co-development of new products; and • Continuing to increase market share in the regional jobbing sector allowing capacity optimisation without constraining expansion in the two main markets.

Operations and Process Description Galva 45 operates four automated hot-dip galvanising lines and a park of some twenty automated machines for finishing and assembling galvanised steel parts. Hot-dip galvanising is a form of galvanisation by which steel is coated with a thin zinc layer by passing the steel through a molten bath of zinc or zinc-containing alloys at a temperature of around 460 °C. The process of hot-dip galvanising results in a metallurgical bond between the zinc and the steel. Galvanisation enhances corrosion resistance of the coated steel parts.

Hot-dip galvanising for certain applications such as automotive parts uses specific and often proprietary zinc alloys that enhance the quality of the zinc deposit and allow thinner coatings.

Galva 45 has largely automated the process handling activities. The size of our baths allows Galva 45 to treat a wide range of part sizes.

Our stake in Galva 45 provides us with insight into the needs and trends of the high-end European galvanisation markets, allowing us to promptly react to market trends.

Galva 45 operates four modern automated galvanising lines: • Line 1: installed in 2003 and 2004, this line is equipped with two 3.5 metre-long zinc baths and is dedicated to the automotive industry, and uses a special galvanising alloy. All handling operations are fully automated and the line typically operates in three shifts running 185 dips per day. In addition to the

235 standard baths, this line is also fitted with a small pilot bath, allowing testing of new alloys or products on an industrial scale; • Line 2: installed in 2005, this second line has one 5.5 metre-long bath and fully automated handling operations. It has an annual capacity of approximately 20,000 tonnes which is scalable, allowing for extension with a second bath. The line is highly flexible, allowing it to run multiple galvanising processes and use different alloys. It is currently used for both automotive and general galvanising jobs; • Line 3: installed in 2000, this 8.5 metre-long bath line is also fully automated and is currently dedicated to general galvanising jobs using a zinc-nickel-bismuth special alloy. It currently operates in three shifts corresponding to 90 dips daily (approximating 130 tonnes of daily production); and • Line 4: installed in 2001, this line has one 2 metre-long bath with semi-automated handling operations. It is currently dedicated to general galvanising, typically running three shifts with a daily capacity of 150 dips.

As part of its strategy to offer full services to the automotive industry, Galva 45 is also equipped with some 30 automated machines allowing a diversity of mechanical finishing operations following the galvanising steps. These operations include the removal of zinc drops, fitting of non-metal parts and the tightening of nuts. These machines have been tailor-made in collaboration with a machine supplier.

Management and Employees As of 30 June 2007, Galva 45 had a workforce of 184 employees. Temporary workers are not included in this figure but are used frequently in response to fluctuations in workload. Also in 2006, Galva 45 committed to its workers 1,855 hours of training at a cost of EUR 120,000 or 2.8% of the overall annual payroll cost.

The company has established a comprehensive organisational structure, enabling it to respond to the demanding qualifications of some of its end-markets.

Galva 45 has two separate dedicated production departments: automotive and general galvanising. These are supported by the Engineering, Maintenance, Quality-Safety-Environment, Financial, Marketing and Sales departments.

In addition to the standard corporate decision-making bodies, a steering committee presided over by a Nyrstar representative meets several times per year to review periodic performance and discuss strategic options.

Galva 45’s safety performance is closely monitored. At 31 December 2006, the LTIFR stood at 133, compared to an average of 112 for the overall French galvanising sector. Safety is an overarching principle and attempts are continuously made to reduce the number of lost time accidents with an overall objective of zero accidents.

The LTIFR as of the relevant dates in the period 2004-2007 is set out below.

31 December 31 December 31 December 30 June 2004 2005 2006 2007 LTIFR/millions hours worked ...... 168 173 133 124

Given the nature of the site’s activities (i.e., galvanising), the risk of exposure of the employees to lead and cadmium is limited, and hence testing of employees is not warranted.

Capital Expenditure Profile The table below summarises the capital expenditures for Galva 45 for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 EUR thousands Total ...... 6,440 1,248 515 of which Environment, Health and Safety ...... 1,252 80 23 of which Periodic Maintenance Shutdown ...... 162 105 0.0 of which Current Maintenance ...... 383 326 331 of which Other ...... 4,643 737 161

236 In 2005, Galva 45 incurred exceptional costs of EUR 4.2 million to rebuild a galvanising line that had been destroyed by a fire. These costs have been refunded by the insurance company. In addition, approximately EUR 1.2 million was spent for the construction of a wastewater treatment plant.

In 2006, the majority of the costs were incurred for current maintenance and the periodic shutdown.

For the years 2007 and 2008 capital expenditures of EUR 0.6 to 0.9 million per year are budgeted to cover the costs of installing new assembling machines. These machines are expected to be dedicated to galvanising a new range of parts for the automotive activity.

Environmental Management Galva 45 has ISO 9001 certification for the site quality management system and is scheduled to obtain ISO 14001:2004 certification for its environmental management system by the end of 2007.

Galva 45 was recently awarded the automotive certification ISO TS 16949.

GM-Metal SAS Background GM-Metal SAS (“GM-Metal”) is a die-casting alloys producer with annual production capacity of about 20,000 tonnes. GM-Metal is also a specialised recycler of die-casting alloys and as such fits in the Nyrstar strategy of closing the zinc loop (i.e., by using secondary zinc materials) and hence increasing the share of secondary raw materials in our feedstock.

GM-Metal is situated on 58 hectares of industrial land close to Le Vigeant (75 kilometres south of Poitiers, France). Formerly a family owned company, GM-Metal was acquired by Umicore in 2002.

The plant was constructed on an old military camp in 1988 with one melting furnace and one casting line. It has since been upgraded with a rotary furnace in 2000, a second casting line in 2004, a fume filtration unit in 2004 and an automated product-stacking unit in 2005.

Asset Strategy Our GM-Metal plant focuses on the recycling of zinc products and the production of premium products for the adjacent surrounding markets (France, Italy, Spain, Germany and Portugal).

GM-Metal is focused on: • Recycling scraps from the die-casting industry in more efficient ways; • Producing die-casting and galvanising alloys from SHG zinc (99.995%); and • Producing specialty orders for tailor-made alloys on demand.

Operation and Process Description Zinc die-casting scraps such as sprues, plated parts, drosses or zinc slabs are molten in a gas-fired furnace. The composition of the molten bath is adjusted by adding an alloying element in order to bring the resulting alloy in line with the European specification (EN 1774 — zinc and zinc alloys, ingots and liquid). The alloys are then filtered and cast into 7 kilogramme ingots with 2 different shapes for the GM-Metal and Overcor brands respectively.

As the operating mode is discontinuous, it allows each batch of material to be treated in a specific way.

Feedstocks The GM-Metal plant is fed with a wide range of primary and/or recycled products: • Scraps and plated parts coming from the die-casting industry in Germany, Spain, France and Italy that are transformed predominantly based on tolling treatments; • SHG zinc cathodes from Nyrstar’s European smelters specifically for the production of the Overcor brand; and • SHG zinc slabs purchased on the market.

237 Production Our GM-Metal plant is one of the largest zinc alloys recycling operations in Europe, producing more than 24,000 tonnes of zinc die-casting alloys in 2006, and approximately 14,000 tonnes in the six months ended 30 June 2007. GM-Metal has an annual production capacity of 26,000 tonnes of zinc alloys.

We significantly upgraded many parts of the plant over the last five years. In particular, we installed a second casting line, a mechanical stacking machine and a fume filtration unit that allow us to comply with the strict environmental legislation in France.

The table below sets out GM-Metal’s production for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 (tonnes) Primary alloys ...... 4,794 9,371 6,679 Recycled alloys ...... 13,897 15,461 7,104

Marketing The GM-Metal brand and services are long-established in GM-Metal’s key French market. GM-Metal’s principal products include die-casting alloys and master alloys for the galvanising industry, both products generating high premiums in a moderately growing market.

For the recycling of scrap and sprues, GM-Metal offers customers dedicated treatment of their products. See “— Feedstocks” beginning on page 237.

Operating Costs As GM-Metal operates in batches, operating costs are slightly higher than in a continuous activity. Due to a geographical positioning away from an industrial area (but central to the end-users markets), energy costs are higher and salaries lower than the average of the Western European zone. For a discussion of the main factors affecting the GM-Metal site’s operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 108 and “Operating and Financial Review and Prospects — Results of Operations for the Umicore Carve-out Group — Discussion and Analysis of Results of Operations for the Umicore Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Umicore Carve-out Group” beginning on page 117.

Energy GM-Metal mainly uses gas brought in tanks by road. We entered into a five-year contract in January 2007 for the supply of 900 tonnes of gas over this period.

Transport Feedstocks arrive and finished products leave GM-Metal by road. GM-Metal primarily uses local transport companies. Transport of primary feedstocks is covered either by annual contracts or by one-off contracts depending on the transport company. Recycled products are covered by fixed-price annual contracts with two local transport companies.

Management and Employees As of 30 June 2007, the GM-Metal facility had an experienced workforce of approximately 31 employees. Employees are not covered by union agreements and turnover is very limited.

The LTIFR as of the relevant dates in the period 2004-2007 is set out below.

31 December 31 December 31 December 30 June 2004 2005 2006 2007 LTIFR/millions hours worked ...... 0.0 0.0 45.5 125.3

238 GM-Metal’s LTIFR numbers for 2006 and 2007 are relatively high because of its small workforce. Indeed, one incident has a bigger impact on the LTIFR number for sites with smaller workforces than for sites with larger workforces.

Given the nature of the site’s activities (i.e., die-casting), the risk of exposure of the employees to lead and cadmium is limited, and hence testing of employees is not warranted.

Capital Expenditure Profile The table below summarises the capital expenditures for GM-Metal for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 EUR thousands Total ...... 620 137 68 of which Environment, Health and Safety ...... 442 15 68 of which Periodic Maintenance Shutdown ...... 0.0 0.0 0.0 of which Current Maintenance ...... 178 122 0 of which Other ...... 0 0 0

In 2005, the manual stacking of ingots ceased and was replaced by a mechanised and automated stacking machine. This investment constituted a major improvement for the safety and health of the workers. Current maintenance expenses included the replacement of a fork-lift truck accounted for approximately EUR 180,000 in capital expenditure.

In 2006, the majority of the expenditures went to current maintenance.

In 2007 and 2008, approximately EUR 160,000 is budgeted for the modification and enlargement of the trucks’ loading and unloading area. These works aim at the improvement of the workers’ safety in this zone.

ARA Background Australian Refined Alloys Pty Ltd (“ARA”) is a lead acid battery recycling joint venture owned 50% by Nyrstar and 50% by the Sims Group, a recycling company listed on the Australian Stock Exchange. ARA operates two lead acid battery recycling facilities in Australia, which are located at Alexandria in Sydney and Laverton North in Melbourne. Nyrstar is the operating partner. In 2006, ARA recycled approximately 4 million batteries, producing approximately 35,000 tonnes of lead and lead alloys. In the six months ended 30 June 2007, lead and lead alloys productions was approximately 17,000 tonnes.

The joint venture commenced in 1984, with day-to-day management undertaken by us. Product marketing is undertaken separately by ourselves and the Sims Group, both domestically and outside of Australia. The general manager of ARA reports to a board comprised of an equal number of representatives from each of Nyrstar and the Sims Group. Decisions are by simple majority vote. The Chairman is elected annually from the board members and does not have a casting vote. The joint venture operates under an authorisation originally issued in 1984 by the Trade Practices Commission, which is now the Australian Competition and Consumers Commission. The authorisation places conditions on ARA in terms of sourcing of used lead acid batteries and sale of alloy product by the joint venture partners.

The ARA joint venture is governed by the Australian Refined Alloys Joint Venture Agreement (the “ARA Joint Venture Agreement”) entered into on 3 October 1984 between Nyrstar Port Pirie Pty Ltd and Sims Product Holdings Pty Ltd (the “Joint Venturers”), each of whom owns a 50% share in the ARA joint venture.

The purpose of the ARA joint venture is to produce and sell lead, lead alloys and related products. Under the ARA Joint Venture Agreement, ARA is appointed by the Joint Venturers to conduct the ARA joint venture operations.

All products produced by the ARA joint venture are sold by the Joint Venturers to Australian Refined Alloys (Sales) Pty Ltd (“ARA (Sales)”) under sales agreements between those parties. The sales agreements provide that ARA (Sales) is not permitted to engage in any activity other than the purchase and sale of lead, lead

239 alloys and related products, without the prior written consent of the Joint Venturers. While the joint venturer sales agreements contemplate the sale of products to third parties, in practice, ARA joint venture products are repurchased by the Joint Venturers in proportion to the quantities required to meet orders received from customers.

The Laverton North site has been operating since 1975 and the Alexandria site since 1979. In addition to producing lead metal, ARA plays an important role in Australia meeting its Basel Convention commitments relating to maximising domestic treatment and minimising trans-boundary movements of hazardous wastes.

Asset Strategy ARA is a relatively low cost operation and therefore benefits from increases in commodity lead prices. Its strategic role within Nyrstar is its contribution to the closing out of lead’s product life cycle, thereby supporting a sustainable future for that metal. Additionally, the linkage of our Port Pirie operations and ARA’s operations strengthens Nyrstar’s Australian market position.

The ongoing strategic initiatives for ARA are to employ and apply the best available practice battery recycling technologies to deliver the lowest environmental footprint achievable when recycling lead acid batteries.

Operations and Process Description Batteries are first crushed to separate the three main components, lead and lead compounds (approximately 75% of the weight of the battery), acid (approximately 15%) and polypropylene (approximately 5%).

The lead and lead compounds are recovered from the battery breaking operation and combined with fluxes and reductants in short barrelled rotary furnaces wherein the smelting process yields lead bullion and slag. Other lead containing scrap materials are also added at this stage for recycling. The slag produced in the smelting operation is disposed of into an approved landfill under licence by the respective Environmental Protection Agencies in each state. The crude lead bullion is then further refined to produce lead and lead alloys to customer requirements.

The sulphuric acid from the battery crushing operation is either neutralised with lime slurry or supplied to companies for use in the liquid waste treatment industry.

A general diagram of ARA’s operations is set forth below.

Used lead acid batteries

Battery breaking and Plastic separation Other lead containing materials

Acid treatment Rotary furnace

Wastewater Lead bullion

Alloying

240 Feedstocks An estimated 90% of Australian used lead acid batteries are currently collected and recycled, which is among the highest collection and recycling rates in the world. ARA has capacity to recycle in excess of 4.5 million batteries annually together with other lead-containing materials such as drosses, returns from battery manufacture, sheeting and piping. The table below shows ARA’s historical feedstock consumption for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 (tonnes) Used lead acid batteries ...... 60,445 55,046 27,955 Other lead scrap ...... 1,926 1,544 1,920 Sludge and dross ...... 1,088 1,119 771

Used lead acid batteries are purchased in competition with other recyclers. Supply for feedstock became tighter in 2006 as a result of increased competition for used lead acid batteries. This was due to an increase in domestic recycling capacity, an increase in the volume of used lead acid batteries permitted to be exported from Australia and a dramatic increase in illegal exports of used lead acid batteries to Asia that was fuelled by historically high lead prices. Major Australian-based scrap collectors, including the Sims Group, supply 60% of ARA’s feedstock requirements. Batteries are sourced from all parts of Australia with some imports from Pacific island countries. ARA subsidises freight from remote areas to encourage nationwide recycling of used lead acid batteries. These freight subsidies currently equate to 16% of total feedstock costs.

Production Combined, the two sites produce over 36,000 tonnes of lead per year. The natural product from the ARA smelters is antimonial or “hard” lead alloys. There is also a capacity to refine approximately 60% of the output, which enables the production of 99.97% pure, or “soft”, lead and a range of other lead alloys.

ARA’s production since 2006 has been affected by an increase in competition for used lead acid batteries in Australia.

We own 50% of ARA. The table below, however, sets out ARA’s total production for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 Lead alloys (tonnes) ...... 38,420 35,079 17,143

Marketing ARA supplies both antimonial and soft-based lead alloys to customers in both Australia and Southeast Asia. Over 90% of ARA’s customers are involved in the manufacture of lead acid batteries. The majority of the lead and lead alloy products are used in the battery manufacturing industry and approximately 70% of the markets are based in Southeast Asian countries.

Polypropylene is sold for recycling into black plastic products such as new battery cases, septic tanks, rubbish bins and plant nursery pots.

Sales of product produced by ARA are conducted by each of the Joint Venturers, who are each entitled to 50% of ARA’s output. All sales by Nyrstar are made directly to end-customers.

Operating Costs For the period ended 30 June 2007, personnel costs comprised 29% of operating costs. Consumables including fluxes added to the smelting process accounted for 24% of operating costs. External services including landfill and effluent disposal costs accounted for 19% and energy used throughout the operation comprised 7% of operating costs over this period. For a discussion of the main factors affecting the ARA sites’ operating costs, see “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Six Months Ended 30 June 2006 and 2007 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 84 and “Operating and Financial Review and Prospects — Results of Operations for the Zinifex Carve-out Group — Discussion and Analysis of Results of Operations for the Zinifex Carve-out Group for the Years Ended 31 December 2005 and 2006 — Segment Results of Operations for the Zinifex Carve-out Group” beginning on page 95.

241 Energy The plants are significant users of natural gas, electricity and oxygen and have long-term supply contracts with Origin Energy, a company listed on the Australian Stock Exchange, for the supply of gas and electricity. ARA is in the second year of a five-year agreement with BOC Gases, a subsidiary of Linde AG, for the supply of liquid oxygen. Gas, electricity and oxygen together represent less than 10% of ARA’s operating costs.

Water supply and trade wastewater licences are held with City West Water in Melbourne and Sydney Water in Sydney.

Transport ARA’s sites are centrally located in Australia’s two major population centres. Both locations are regional transport hubs for road, rail and sea transport. Used batteries are delivered to site from all Australian states by either road or a combination of road and rail transport. The sites’ lead metal products are transported by road directly to Australian customers and by ship through ports in Melbourne and Sydney to overseas customers in Southeast Asia.

Management and Employees We believe that ARA has a committed and stable workforce. As of 30 June 2007, ARA had a workforce of 69 full-time employees and 15 full-time contractors. The employees comprised 14 staff and 55 operations and maintenance personnel who are employed under Australian Workplace Agreements (“AWAs”) which are due to expire in October 2007. All employees participate in performance-based remuneration systems. Renegotiation of the AWAs will commence in the fourth quarter of 2007. We believe that ARA enjoys a good working relationship with its employees. There have been no employee strikes at ARA for over ten years.

Employee turnover was 6% and 8% in 2005 and 2006, respectively. Employee turnover was 21% for the year to June 2007, due to planned retirements and a buoyant job market.

Safety improvement at ARA has focused on managing the risks of manual handling related injuries which are associated with the current battery breaking operation. The LTIFR of 5.4 as of 30 June 2007 reflects the average of one LTI injury per year. The LTIFR as of 30 June of each year over the period 2004-2007 is set forth below.

30 June 2004 30 June 2005 30 June 2006 30 June 2007 LTIFR/millions hours worked ...... 10.7 0.0 5.4 5.4

All employees and contractors are routinely monitored for blood levels with strict controls in place once certain trigger points are activated. The key trigger point is 30% lower than that required by applicable legislation. The number of ARA employees with lead in blood over 30 micrograms per decilitre was 13 as of 30 June 2007.

Capital Expenditure Profile The table below summarises the historical capital expenditures for ARA for the 2005 and 2006 calendar years and the first half of 2007.

2005 2006 1H 2007 EUR million(1) Total ...... 0.4 0.4 0.2 of which Environment, Health and Safety ...... 0.1 0.1 0.1 of which Periodic Maintenance Shutdown ...... 0.0 0.0 0.0 of which Current Maintenance ...... 0.3 0.3 0.1 of which Other ...... 0.0 0.0 0.0 (1) Capital expenditures have been converted using period average euro to Australian dollar exchange rates of 0.6128 in 2005, 0.6000 in 2006 and 0.6081 in 1H 2007.

Both ARA sites are mature operations. Capital expenditures for the last three years have been predominantly targeted at lowering occupational health and safety risks and improving plant environmental performance.

242 The current asset management strategy is focused on improving on-line time and reliability of the equipment with a focus on the battery breaking and furnace operations. Conceptual engineering has commenced on a major project to replace both operating facilities with best practice environmental technology, which is also expected to yield other significant operating benefits, such as lower unit operating costs. The project is expected to be implemented, subject to board approval, in 2008.

Environmental Management Both ARA sites operate under environmental licences issued by the relevant state environmental authorities.

All process gases are filtered through bag houses before discharge to the atmosphere. Stack emission quality is monitored continuously. Routine stack testing and reporting, which are requirements of both site operating licences, are conducted periodically by third party organisations. Community based air sampling stations are utilised to monitor any lead in air from fugitive emissions of the operations.

Solid waste has been categorised following processes specified by the respective state Environment Protection Agencies and is disposed of into licensed landfills operating in each state. Both sites are also licensed to discharge liquid effluents under trade waste agreements from the relevant state authorities.

Padaeng Industry Public Company Limited All information contained in this section has been sourced exclusively from publicly available information.

Background We own a 24.90% interest in the share capital of Padaeng Industry Public Company Limited (“Padaeng”), a Thai company established on 10 April 1981 and listed on the stock exchange of Thailand. Padaeng is the only producer of SHG zinc in Southeast Asia with an annual production capacity of 110,000 tonnes of zinc metal and alloys. Its head office is located in Bangkok.

Padaeng operates a zinc mine (Mae Sot mine) and a smelter located in Tak province, as well as a roaster plant located in Rayong province. At the roaster plant, imported zinc sulphide concentrate is converted into calcine prior to being sent to the smelter in Tak province for further processing to produce zinc metal. The Mae Sot mine is the only mine in our asset portfolio.

Asset Strategy Padaeng focuses on the production of zinc metal and alloys primarily for the Thai market. The excess capacity is exported to Asian markets. Padaeng’s objective is to be recognised as a producer of high quality products by delivering added-value alloys, with a strong focus on fast delivery and customer service. For all sales, Padaeng aims to maintain the quality of the products at a world-standard level. Padaeng’s strategy also includes: • The installation of additional equipment to increase production; and • The implementation of production improvements, modifications and incorporation of additional process stages to improve product quality and further improve environmental controls.

Feedstocks As its primary source of raw material, the smelter plant in Tak receives zinc silicate ore and concentrate from the Mae Sot mine. Additional concentrates are purchased from external sources. Local purchases consist of oxides sourced from small operations. Zinc sulphide concentrates are mainly purchased from South America and Australia, and delivered to the roaster plant in Rayong. All sulphides delivered in 2006 were imported.

Padaeng was awarded a 25-year zinc ore mining concession by the Thai government in 1982. The main mining lease of the Mae Sot mine is hence due for renewal in 2007 and Padaeng is in the process of negotiating a new mining lease. The renewal procedure is a complex administrative process and it is possible that the new mining lease will not be granted before the expiry date of the current lease in October 2007. Padaeng has publicly stated that it has no reason to expect a long delay but that it has nevertheless taken precautionary measures to secure the necessary stocks and supplies to meet the smelter’s production plan well into 2008.

Padaeng has also engaged in zinc ore exploration programmes in Thailand and in neighbouring countries.

243 Production Padaeng mainly produces and sells SHG zinc ingots and zinc alloys.

Padaeng produced approximately 101,200 tonnes in 2005, and 96,500 tonnes in 2006. The actual sales volume for the six months ended 30 June 2007 was approximately 52,000 tonnes.

Padaeng produces the following three by-products: sulphuric acid, limestone and copper cathodes. In 2006, the sales of sulphuric acid reached a level of approximately 96,317 tonnes.

Marketing A Padaeng SHG zinc ingot with the brand name “Padaeng Thailand” has been registered on the London Metals Exchange since 1989. In the local market, Padaeng emphasises consistent customer service, rapid delivery of goods from its warehouse in Bang Pa-in and providing technical advice to customers. Padaeng also organises seminars for zinc-related industries, governmental sectors, architects, engineers and universities to promote wider usage of zinc. To fulfil customer requirements further, other tailor made zinc alloys can also be supplied upon request. For the export market, as the sole smelter in Southeast Asia providing acceptable quality products and technical services, Padaeng believes it can render faster delivery of goods and technical assistance to customers than other zinc suppliers in the region.

Management and Employees In 2006, Padaeng had a total of 850 full-time employees and 170 full-time contractors. Employee turnover was 3% in 2006.

The LTIFR in Padaeng was 5.12 in 2006. In 2007, the smelter plant at Rayong received an award for outstanding occupational health and safety for the third consecutive year.

Environmental Management Mae Sot Mine The Mae Sot facility strictly implements and follows through with environmental policies based on an environmental impact assessment (EIA) and the standards of the Department of Primary Industries and Mines. The operations meet these standards in every aspect including the quality of air, groundwater and surface water. The sedimentation and drainage system has been upgraded and is monitored 24 hours a day to ensure that the amount of suspended solids in rainwater that pass through the site is within the prescribed limit. Wastewater from the flotation process is channelled to tailings ponds and then recycled. Water at various locations is sampled and tested according to the prescriptions of the authorities.

Since 2003, Padaeng has been rehabilitating areas where mining was completed by planting vetiver as a pioneer species. In collaboration with Tak province’s Office of Land Development, Padaeng planted two million vetiver plants on the slopes of the dumping area. The groundcover and trees help to prevent soil erosion and beautify the scenery.

The mine received the good performing aggregate plant award from the Department of Primary Industries and Mines, Ministry of Industry.

Calcine Plant As a result of a continuous safety awareness campaign, the calcine plant has now operated without accident for eight consecutive years, achieving the target of 1,900,000 work hours without accident. The plant also won the Thailand Energy award from the Department of Alternative Energy Development and Efficiency, Ministry of Energy and an award for excellence in the areas of safety, health and working environment from the Ministry of Labour for the second year in a row.

Zinc Smelting Plant In 2006, the zinc smelting plant attained the certification for ISO 14001:2004 environmental management standards and also achieved the re-certification for TIS 18001 and OHSAS 18001 occupation health and safety management standards.

244 As part of the environmental management process, investments were made to manage and further improve the environmental impact of the activities. The decommissioning of the residue pond is expected to be completed in 2007. The wastewater treatment system has been upgraded to recycle zinc out of the waste. Although already below applicable standards, emissions in the atmosphere from the desulphurisation tower in the sulphuric acid plant are planned to be further decreased through a newly installed demister.

Corporate The segment “Corporate” consists of our London corporate office and our Regional Support Offices in Balen, Belgium, and Melbourne, Australia.

Background Nyrstar SA/NV is incorporated in Belgium and has its corporate offices in London, the United Kingdom and in Balen, Belgium. The decisions for the country of incorporation and the location of the offices were made in consideration of the primary markets in which Nyrstar is engaged, the anticipated location of investors in Nyrstar and the corporate responsibilities the entity will have in the region as a result of the intended initial public offering referred to in this prospectus. Nyrstar’s operating sites are also supported by a western Regional Support Office in Balen, Belgium, and an eastern Regional Support Office in Melbourne, Australia.

While our corporate offices are in London and Balen, the Board of Directors of the Company effectively and ultimately manages the Company in accordance with Belgian law and applicable corporate governance provisions.

Corporate Offices Nyrstar’s corporate office in London houses the senior executives for most corporate functions, including finance, operational management, marketing and sales, corporate development, human resources, sustainable development, investor relations and legal counsel. Certain senior executives (including the Treasurer, Company Secretary and IT Director) are based in Balen, Belgium.

Regional Support Offices Due to the size and geographic diversity of our operating assets, our operations are grouped into two regions, East and West, each represented by a Chief Operating Officer at the head office and supported by a Regional Support Office. The Western Regional Support Office, located in Balen, assists the European and American sites, whilst the Eastern Regional Support Office, located in Melbourne, assists the Australian and Asian sites.

The types of shared services provided to sites by these support offices include accounting, purchasing, raw materials sourcing and product sales, human resource management, environment, health and safety management, business systems, technical services and business improvement.

Operating Costs The majority of Corporate and Regional Support Office costs consist of providing shared services to the operating sites, and as such are charged to the relevant sites.

The incremental costs associated with the new corporate structure of the Nyrstar group have been estimated at between EUR 15 million and EUR 20 million. These costs are not included in the Pro Forma Consolidated Income Statement Information set out on pages PF-8 and PF-9, since they are not considered sufficiently factually supportable at this stage.

Management and Employees The Company is currently recruiting qualified personnel to fill various positions at its corporate offices and various regional offices. Once the recruitment process is completed, the Company will operate with approximately the number of people set out in the table below.

Number of Facility employees Corporate office, London ...... 34 Corporate office, Balen ...... 30 Western Regional Support Office, Balen ...... 62 Eastern Regional Support Office, Melbourne ...... 45

245 Investment Initiatives There are a number of corporate business system initiatives planned for 2008, including: • Moving to a single SAP system; • Various finance and operations IT improvement projects; and • Establishing a new IT data centre.

Employees The workforce at all of our operations consisted of 3,865 employees and 766 contractors as at 30 June 2007, with approximately 72% of our total personnel employed in production, and the remainder employed in management (approximately 6%), specialist roles (approximately 11%), and in administrative roles (approximately 11%).

For a breakdown of our employees by location, see for each individual asset, “Management and Employees”.

We believe we have good relations with our employees. Their terms and conditions, including working hours, health and safety, disputes, termination of employment, vacations and benefits, are governed, in accordance with a variety of collective bargaining agreements, individual agreements and common law contracts. Employees at our Clarksville plant and at our Chinese operations are not covered by any collective bargaining agreement.

The majority of employees have a remuneration structure that consists of a base component, determined from a job size ratio and calculated according to the qualifications and experience of the employee, and a bonus. Depending on the country, the bonus can be individual performance related or group results related. The performance-related bonus has been developed for the majority of employees and is intended to recognise the achievement of stretch targets, i.e., achievements that are over and above the normal requirement of an employee’s position. These stretch targets are linked to individual performance, site/team performance and overall group results. The performance-related bonus is determined annually in conjunction with the market increase salary review. The group-related bonus is applied in Belgium for blue- and white-collar employees and is linked to our return on capital employed (“ROCE”) results.

A flexible remuneration component is also available to the majority of professional employees through the option of leasing a motor vehicle. In Balen and Overpelt this benefit component is available only to managers.

At our United States operation, we provide medical and dental benefits to our active employees, and in 2006, we spent approximately USD 2,995,000 on the provision of these services. In the first six months of 2007, USD 1,618,000 was spent on the same provision. In the Balen and Overpelt operations, we provide medical benefit insurance to our management team.

We regard the professional development of our staff as a key area of our human resources strategy. We have a “Training and Further Education” policy that highlights the regard we have for supporting personnel through training based on job specific technical knowledge, company systems and generic skills including leadership and people management. Apprenticeship course-work is also considered as training. Our human resources department organise a number of training courses that are run across all sites on topics such as Front Line Leaders, Safety Leadership and Performance Management.

We recognise that the key to a safe and healthy workplace is the development of a culture where our people show a genuine desire for their own safety and well-being and that of their fellow workers. To assist our employees in recognising this, a number of our sites have engaged in wellness programmes that address the health and well-being of employees.

We have a variety of non-state pension fund programmes in place for all our employees. They are both defined benefit and defined contribution.

Insurance Applicable laws in certain of the jurisdictions in which we operate require us to insure against certain limited risks. Through a number of international insurers, we maintain insurance policies that cover our liability

246 for death or injury to workers, and liability insurance for operators of our vehicles. We also maintain policies covering certain contamination risks and medical care for certain employees. We maintain property insurance which protects against losses relating to our assets and certain aspects of business interruption for certain of our sites and freight insurance which protects against losses relating to the transport of our equipment, product inventory and concentrates. Our insurance is in full force and effect with all due premiums paid. We believe our insurance coverage is broadly in line with that of similar companies in the same industry. However, our insurance does not cover every potential risk associated with our operations. In particular, meaningful coverage at reasonable rates is not obtainable by us or other companies within the industry for certain types of environmental hazards, such as pollution or other hazards as a result of the disposal of waste products. The occurrence of a significant adverse event, the risk of which is not fully covered by insurance, could have a material adverse effect on our financial position or results of operations. Moreover, no assurance can be given that we will be able to maintain adequate insurance in the future at rates we consider reasonable. See also “Risk Factors” beginning on page 26.

Intellectual Property and Research and Development Nyrstar manages a portfolio of intellectual property rights consisting of trademarks, domain names, trade names and patents, all necessary to conduct its business, all of which are owned by Nyrstar.

Nyrstar Nyrstar Metals Pty Ltd filed various trademark applications for the word mark “Nyrstar” and for the figurative mark “nyrstar & device” (including in Australia, the European Union and the United States). Zinifex Limited currently holds various domain name registrations for the “Nyrstar” name in generic top level domains including “.com”, “.net”, “.biz” and “.info”, as well as in country code top level domains including “.co.uk” and “.be”. The transfer of these registrations to Nyrstar is in process and is expected to be progressively completed. In some jurisdictions where Nyrstar companies have been established and/or the “Nyrstar” name is being used in the course of trade, the name and/or logo may enjoy protection under corporate, unfair competition, passing off or similar local laws.

Intellectual Property Acquired or Licensed from Umicore As part of the carve-out of Umicore’s zinc alloys business in November 2006, the intellectual property rights required to conduct our business were transferred to entities that are now Nyrstar entities. This was followed on 10 April 2007 by the execution of an intellectual property rights agreement by which Umicore either transferred the ownership of or provided a licence to Nyrstar in respect of the patents, trademarks, domain names, technical and business know how, expertise, confidential and proprietary information and data constituting Umicore’s accumulated knowledge pertaining to the zinc alloys business transferred to Nyrstar. These intellectual property rights include some 15 patents, 10 trademarks and 8 domain names.

The supporting documents and materials relating to all these intellectual property rights transferred by Umicore to Nyrstar were delivered to Nyrstar. When information and data to which we should have access are accumulated in the filing system of Umicore, the necessary access was secured until we have our own system running.

Intellectual Property Acquired or Licensed from Zinifex Zinifex has transferred or agreed to transfer to Nyrstar all of the intellectual property related to the Zinifex smelting business. The intellectual property acquired from Zinifex by Nyrstar includes a number of trademarks registered in Australia and various overseas jurisdictions, as well as several patents. Nyrstar is entitled to use the intellectual property in the applicable jurisdictions.

Research and Development Research and development (“R&D”) agreements as well as non-disclosure and other similar agreements pertaining to the business transferred to us were also assigned to us or, whenever such transfer was not possible, access to the results was secured for us.

A service level agreement between Umicore and Nyrstar ensures the short and medium term continuity of quality R&D service for Nyrstar, provides Nyrstar with completion of on-going engagements and constitutes a

247 roadmap for non-disruptive performance of R&D services during a transitional period, before strategic decisions are taken by both Nyrstar and Umicore in terms of R&D. The financial terms as well as the scope of services rendered by Umicore are subject to annual revision. This agreement was concluded for an initial duration of one year expiring at the end of 2007 and will be automatically renewed for successive one year periods unless terminated by any party with three months prior notice. See also “Related Party Transactions — Ancillary Agreements — Transitional Services Agreements with Zinifex and Umicore” beginning on page 26.

In parallel, service level agreements were also executed between Umicore and Nyrstar for the R&D projects for which Nyrstar relies on Umicore’s R&D services, for the access by Nyrstar to Umicore’s physical metallurgy laboratory premises in Olen, for assistance provided by Umicore’s patent department in terms of patent administration as well as for raising funds for projects and activities of Nyrstar entities. Generally, all such agreements run for an initial duration of one year, with possible further one year renewals, unless otherwise expressly agreed in such agreements (e.g., a duration linked to the specific length of a development project or earlier termination when Nyrstar’s laboratory facility will be commissioned). See also “Related Party Transactions — Ancillary Agreements — Transitional Services Agreements with Zinifex and Umicore” beginning on page 268.

Nyrstar, as the leading zinc smelting company and a leading lead smelting company, has a critical mass of technical and engineering capability, which means we believe that we are well-positioned to implement both incremental and step-change improvements. This technical focus ensures Nyrstar maintains and strengthens its operational performance and is well-placed to undertake longer-term step-change improvements to enhance sustainability and to grow the business.

The Global Manager Technology heads the technical group and has members centrally located in Balen and Melbourne to support global operations. All group members have expert process and technical knowledge in a specific field complemented by extensive project management experience. The initial focus is the application of group and industry best practice to ensure reliable and improved process performance. The processes and technologies that are covered are: • Electro-chemistry, to ensure world class performance in current efficiency and power consumption in all smelters of the group; • Pyro- and hydro-metallurgy, to maximise throughput, create the process flexibility required to handle the various feedstocks, improve metal recoveries and minimise the amount of residues going to landfills; and • Application knowledge to assist customers in the use of Nyrstar’s metals and alloys.

The central Technology Group works in close co-operation with the plant technical groups and the Global Manager Business Improvement to ensure ongoing process improvement. The Technology Group oversees the management of the R&D that is required for the major improvement initiatives. This R&D programme is being implemented using both in-house expertise and recognised external providers, a number of which were formerly used by Umicore and Zinifex. Nyrstar has a service level agreement in place with the Umicore Research, Development and Innovation group for specific projects (see “Related Party Transactions — Ancillary Agreements — Transitional Services Agreements with Zinifex and Umicore” beginning on page 268) and there are programmes in place with the Parker Centre in Perth and several Commonwealth Scientific and Industrial Research Organisation labs in Australia.

The following table sets out the expenses for the Technology Groups (including certain expenses for R&D).

2005 2006 1H 2007 EUR million Umicore(1) ...... 4.23 4.06 1.79 Zinifex(2) ...... 1.88 2.09 0.75 Total ...... 6.39 6.16 2.81 Notes: (1) Approximately two thirds of the amounts set out in this table are attributable to R&D expenditures made by Umicore specifically for the zinc activity. (2) These expenses are those incurred by the Zinifex central technology group, of which approximately 75% relate to the businesses contributed to Nyrstar by Zinifex, with the balance relating to the mining businesses retained by Zinifex. Additionally each of these businesses are supported by their own site based technical

248 groups whose expenses are included in the businesses’ operating costs. Of the total Zinifex central technology group expenses, only a small portion of the amounts set out in this table are attributable to R&D. These amounts furthermore comprise only a relatively small portion of the overall expense for R&D incurred by Zinifex in 2005, 2006 and the first six months of 2007, with the remainder being incurred in the various businesses where the R&D was undertaken and reported in the operating costs for those businesses.

Information Technology In terms of business systems, our focus is to rapidly build our IT capability in order to support Nyrstar’s independent operation, while positioning Nyrstar to grow and integrate future acquisitions into the Nyrstar IT system.

Plans for achieving this objective include: • Creating an independent Nyrstar stand-alone IT business systems group through: • Recruiting a skilled IT workforce; • Developing alliances with IT partners; and • Establishing an independent data centre and telecommunications network; • Exiting the service level agreements with the Selling Shareholders; • Completing the carve-out of the SAP and non SAP systems of the Selling Shareholders; and • Establishing a single SAP system.

SAP Nyrstar’s core critical business system is the SAP financial and administrative software used for our commercial activities, including human resources, payroll, sales and marketing, finance, purchasing and plant maintenance.

The SAP system also provides full financial consolidation capability. This enables us to establish and present independent financial reporting for all Nyrstar entities as required under Belgian law, and also delivers the monthly management accounts.

Nyrstar currently has two SAP systems: one for the Zinifex Carve-out Group (carved-out from the Zinifex group) and one for the Umicore Carve-out Group (carved-out from the Umicore group).

Umicore runs the Nyrstar SAP system for the Umicore Carve-out Group on behalf of Nyrstar under a service level agreement. Similarly, Zinifex runs the SAP system for the Zinifex Carve-out Group on behalf of Nyrstar under a service level agreement.

Service Level Agreements We currently rely on service level agreements with each of the Selling Shareholders to run our IT systems. See “Related Party Transactions — Ancillary Agreements — Transitional Services Agreements with Zinifex and Umicore” beginning on page 268.

Nyrstar expects to exit the IT service level agreement with Zinifex by the end of June 2008. By that time, Nyrstar expects to have established its own independent data centre, systems infrastructure and telecommunications network that will allow it -in conjunction with IT partners- to run the IT and SAP systems for the Zinifex Carve-out Group independently, without further support from Zinifex.

By November 2009, Nyrstar expects to have completed the integration of the Umicore Carve-out Group SAP and the Zinifex Carve-out Group SAP systems and to exit the IT service level agreements with Umicore. As from that time, Nyrstar’s IT will be completely independent from both Selling Shareholders’ IT systems and IT support.

It is expected that as from December 2009, Nyrstar will be running a single SAP system, having completed the alignment of the European business processes. The single SAP project is expected to require an investment of

249 approximately EUR 10 million over three years. The investment level will be validated by a feasibility study in 2008. The intention is for Nyrstar IT to be capable of integrating newly acquired businesses into the SAP system where appropriate.

Disaster Recovery Nyrstar has an SAP disaster recovery service in place for the Zinifex Carve-out Group. There is no SAP disaster recovery service in place for the Umicore Carve-out Group. Nyrstar is currently establishing this service and expects to have it in place by early 2008.

Security We have taken appropriate measures to secure the Nyrstar systems and data by using market standard IT security capability similar to that utilised by the Selling Shareholders.

Intranet and Internet Nyrstar has established a single Nyrstar intranet and internet from September 2007 and since that time Nyrstar employees have had a Nyrstar e-mail address.

Stand-alone IT Systems Padaeng as well as our joint ventures in China each run their own stand-alone IT systems. Similarly, each of ARA in Australia and Galva 45 and GM-Metal in France run their own stand-alone IT systems. However, all fully and jointly owned Nyrstar entities are connected for email and file sharing by a common telecommunications network.

Legal Proceedings We are involved in a number of legal proceedings arising in the ordinary course of our business. We discuss below pending legal proceedings that may have a significant impact on our results or our profitability. Except for those matters set out below, we do not expect that the legal proceedings in which we are involved will have a material adverse effect on our activities or on our results of operations. It should be noted, however, that we are unable to predict the ultimate outcome of the proceedings in which we are involved and that no guarantee can be given in this respect.

The main legal proceedings that we are involved in are described hereafter.

Galveco is a patent-protected zinc alloy used for galvanising steel, which is based on tin and does not contain lead. Following the initial commercial production of Galveco in June 2000, we produced and supplied Galveco to galvanisers in Germany, France, Belgium, the United States, Morocco, China, Greece and the Netherlands. We sold approximately 45,000 tonnes of Galveco, corresponding to approximately 3,500,000 tonnes of steel that has been galvanised with Galveco.

We, along with the other players in the galvanising chain, were recently confronted with the serious issue of the cracking of steel that had been hot dip galvanised. Although it was widely known that the process of galvanising steel may cause steel cracking, recent technical surveys conducted by independent scientists have shown that several factors can contribute to this phenomenon. Specifically, the combination of lead and tin may, in certain conditions and in combination with other contributing factors, cause steel to crack in a process known as Liquid Metal Assisted Cracking or “LMAC”. In March 2007, we decided as a precautionary matter to withdraw Galveco from the market and, consequently, to stop any further sale of Galveco. At the date of this prospectus, three legal proceedings, one in the United States and two in Germany, have been initiated regarding the Galveco matter. The United States proceedings involve only Umicore entities, whereas the German proceedings involve two entities (Nyrstar Belgium SA/NV and Nyrstar Germany GmbH) of the Nyrstar group.

The case in the United States was initiated on 6 July 2006 when V&S Columbus Galvanising LLC (“V&S”) filed a civil complaint in the Ohio State Court against Umicore Marketing Services USA Inc. and Umicore USA Inc. Since the defendants are entities that are part of the Umicore group, Nyrstar is not directly concerned by these proceedings. The plaintiff claims damages of USD 1,000,000 for breach of contract, breach of express and

250 Fortis Bank SA/NVimplied warranties, negligence and product liability. The two Umicore entities have denied these claims and Umicore Marketing Services USA Inc. filed a counterclaim to recover USD 87,362.10 from V&S for its failure to pay for the Galveco purchased from Umicore. The matter is currently in the discovery phase and a final pre-trial court hearing is scheduled for February 2008. The trial on the merits of the claim will be before a jury.

The two German matters both concern evidence hearing proceedings that were initiated before the Regional Court (Landgericht) in Kaiserslautern to appoint an expert to determine the causes of cracks discovered in the steel construction of a football stadium roof and a freight cargo hall. Nyrstar Belgium SA/NV and Nyrstar Germany GmbH are involved in this matter as producers of the Galveco used to galvanise the steel components. The first German matter, relating to the football stadium, involves a claim for damages in the amount of EUR 4,561,195, while the claim in the second German matter, relating to the cargo hall, has not yet been quantified. The two court-appointed assessments are still ongoing and the experts’ findings and conclusions are not yet known.

Umicore’s insurer has confirmed that Umicore’s insurance policy would provide cover for the Galveco claims made in the United States and Germany. Umicore’s insurer has also agreed to include Nyrstar as an additional insured entity under the Umicore insurance programme in relation to losses registered with the insurer as a “Galveco claim”.

In four other instances Nyrstar Belgium SA/NV and Nyrstar Germany GmbH received claims letters for cracks that were discovered in other steel constructions in Germany. In two of these cases, amounts of EUR 725,053 and EUR 532,563 respectively have been claimed as damages. Galveco has not yet been found to be a cause for the cracking in any of these instances.

Under the terms of the 23 April 2007 Business Combination and Shareholders’ Agreement, Umicore agreed to remit to us any insurance proceeds or other indemnities collected in respect of any losses we may suffer as a result of a final judicial decision rendered against us or a settlement in relation to the above-mentioned Galveco litigation. In addition, Umicore agreed to indemnify us for losses we incur as a result of a final judicial decision rendered against us or a settlement that is not covered by such remittances or by other insurance proceeds that we would receive directly. Under this indemnification obligation, Umicore will only indemnify us for 50% of the first EUR 10 million of any such losses we might incur. Umicore will indemnify us for all of the losses we incur in excess of such EUR 10 million threshold. Therefore our maximum financial exposure with respect to the Galveco litigation is EUR 5 million. This arrangement is an exception to the principle under the Business Combination and Shareholders’ Agreement that we have no recourse against the Selling Shareholders for matters that affect the value of the zinc and lead businesses we acquired. See “Related Party Transactions — Business Combination and Shareholders’ Agreement — No representations and warranties from the Selling Shareholders” beginning on page 266.

Material Contracts In the two-year period immediately preceding the date of this prospectus, we entered into a number of material contracts, other than in the ordinary course of business, as described elsewhere in this prospectus.

For a summary of the contractual terms governing our relationships with the Selling Shareholders, see “Related Party Transactions — Business Combination and Shareholders’ Agreement” beginning on page 265, “Related Party Transactions — Ancillary Agreements — Sale and Purchase Agreements with Zinifex and Umicore” beginning on page 268, “Related Party Transactions — Ancillary Agreements — Transitional Services Agreements with Zinifex and Umicore” beginning on page 268, “Related Party Transactions — Ancillary Agreements — Concentrate Purchase Agreements with Zinifex” beginning on page 269, and “Related Party Transactions — Ancillary Agreements — Metal Purchase Agreements with Umicore” beginning on page 269.

For a description of the joint venture agreement in respect of Nyrstar Yunnan Zinc Alloys Co., Ltd, see “— Nyrstar Yunnan Zinc Alloys Co., Ltd — Background” beginning on page 224.

On 30 August 2007, we entered into a EUR 350,000,000 bridge revolving credit facility agreement with Commerzbank Aktiengesellschaft, Fortis Bank SA/NV, ING Bank N.V. and KBC Bank SA/NV as arrangers, Fortis Bank SA/NV as facility agent and certain lenders named therein, described under “Operating and Financial Review and Prospects — Liquidity and Capital Resources — Funding Sources” beginning on page 125.

251 SELLING SHAREHOLDERS

Umicore Umicore SA/NV is a materials technology group. Its activities are centred on four business areas: Advanced Materials, Precious Metals Products and Catalysts, Precious Metals Services and Zinc Specialties. Each business area is divided into market-focused business units.

Umicore focuses on application areas where it knows its expertise in materials science, chemistry and metallurgy can make a real difference, be it in products that are essential to everyday life or those at the cutting edge of new technological developments. Umicore’s overriding goal of sustainable value creation is based on this ambition to develop, produce and recycle materials in a way that fulfils its mission: materials for a better life.

The Umicore group has industrial operations on all continents and serves a global customer base; it generated a turnover of EUR 8.815 billion (EUR 1.919 billion excluding metal) in the 12 months ended 31 December 2006 and employed some 14,000 people as of 1 September 2007.

Zinifex Zinifex’s is one of the world’s largest zinc and lead companies. It has its headquarters in Melbourne, Australia and owns and operates two mines in Australia, the Century open-pit zinc mine in northwest Queensland and the Rosebery underground zinc-lead-silver mine in Tasmania.

Zinifex’s strategy is to focus on growing its mining business. Zinifex owns key development and exploration assets, namely Dugald River (located in northwest Queensland), Izok Lake and High Lake (both in the Nunavut Territory of Canada) and holds interests in a number of Australian, regional and international exploration projects and mining tenements.

The Zinifex group has industrial operations in Australia and serves a global customer base.

The continuing operations of the Zinifex group generated revenue of EUR 1.161 billion (AUD 1.929 billion) in the 12 months ended 30 June 2007 and employed some 600 people as of 1 September 2007.

252 MANAGEMENT AND CORPORATE GOVERNANCE

Board of Directors At the closing of the Offering, the Company’s Board of Directors will be composed as follows:

Principal function Name within the Company Nature of directorship Initially appointed Term expires Julien De Wilde(1) ...... Chairman Non-Executive, Independent 2007 2010 Paul Fowler ...... CEO, Director Executive 2007 2010 Peter Mansell ...... Director Non-Executive 2007 2010 Karel Vinck ...... Director Non-Executive 2007 2010 Roland Junck ...... Director Non-Executive, Independent 2007 2011 Ray Stewart ...... Director Non-Executive, Independent 2007 2011 Note: (1) Acting through De Wilde J. Management BVBA.

It is our intention to propose an additional independent director for appointment after the closing of the Offering.

The business address for all directors is at the registered office of the Company.

Julien De Wilde is the Chairman of the Board. He built his career in the petrochemicals, telecommunication equipment and steel products sectors. He worked at senior management level with Texaco and was a member of Texaco’s European Management Board. He subsequently occupied senior positions with Alcatel and was appointed to Alcatel’s Executive Committee. Mr. De Wilde was appointed as CEO of Bekaert in 2002 and occupied the position until 2006. Bekaert is a European based advanced metal transformation, materials and coatings company. He has extensive experience working in various regions including Europe, North and South America and China.

Paul Fowler is a director and Chief Executive Officer of the Company. Paul Fowler has had an extensive career in the minerals and petrochemical sectors. He worked in various senior management positions for British Petroleum (BP) for 15 years. During this time he oversaw BP’s gold mining operations in North America, managed the worldwide Mergers and Acquisitions team for the BP Group, headed the Refining and Supply operations of BP for Australasia, and occupied the role of Chief of Staff for the CEO of the BP Group in London, a position which included corporate strategic planning and economic analysis. His final position with BP was as Senior Vice President, Refining and Marketing for BP; North American operations. Paul Fowler subsequently became CEO of Fletcher Challenge Forests in Auckland where he managed an international portfolio of forest assets. In 2002 Paul Fowler moved to Melbourne as one of the team of executives recruited to bring the assets of Pasminco out of administration. In 2004 Zinifex purchased these assets and Paul Fowler was until recently the Chief Operating Officer of the company. He is a fellow of the Australian Institute of Company Directors. Paul Fowler has been a non-executive director of many companies. He holds a Bachelor of Science in Marine Engineering from the United States Naval Academy, a Master of Engineering (Nuclear) from the University of Virginia, United States, and a Master of Business Administration from the University of Virginia, United States.

Peter John Mansell is a non-executive director and has also been the Chairman of the Board of Zinifex from March 2004. He has a broad range of experience in the management, direction, development and governance of listed entities. He was a corporate and resources partner in the law firm Freehills from 1988 until February 2004. At various times he has been the Freehills National Chairman, Managing Partner of the Perth office and a member of the National Board. He is a fellow of the Australian Institute of Company Directors. He was the immediate past President of its Western Australian division in 2002 to 2003 and sat on the National Board of that body during his Presidency. His other current listed entity directorships include the following: Great Southern Plantations Limited (since November 2005); Chairman of West Australian Newspapers Limited (since September 2001); Bunnings Property Management Limited which is the responsible entity of Bunnings Warehouse Property Trust (since June 1998); and Chairman of ThinkSmart Limited (since April 2007). He holds a Bachelor of Commerce degree, a Bachelor of Law degree and Higher Diploma Tax from the University of Witwatersrand.

Karel Vinck is a non-executive director and is also the Chairman of the Board of Umicore. Before joining Umicore, Karel Vinck was Chief Executive Officer of Eternit and Bekaert. He is also a member of the Board of

253 Suez-Tractebel, Tessenderlo Group, Eurostar and of Théâtre Royal de la Monnaie. He is co-ordinator of the European Rail Traffic Management System with the European Commission. He is Chairman of Cumerio, honorary chairman of VEV, the Flemish employers association, and Chairman of the Flemish Science Policy Council. He was Chief Executive Officer of the Belgian Railways from 2002 until 2005. He holds a Master’s Degree in Electrical and Mechanical Engineering from the Katholieke Universiteit Leuven, Belgium and a Master of Business Administration from Cornell University, United States.

Roland Junck is a non-executive director of the Company. He has had an extensive career in the steel industry. He is a former CEO of Arcelor Mittal and remains a member of the Board of Directors of Arcelor China Holding S.à r.l. in Luxembourg. He was previously a member of the Group Management Board of Arcelor with responsibility for the global Long Carbon Steel and Wire Drawing business and for China. He started his career with Arbed in 1980 in the rolling mills at Dudelange, before moving to Esch-Schifflange in 1985. In 1993, he was named General Manager of TrefilArbed Bissen, being appointed Managing Director in 1996. He was named Senior Vice President of Aceralia in 1998 and was a member of the Arbed Group Management Board from 1999 until 2002, when he was appointed Senior Executive Vice President of the newly created Arcelor, in charge of the Long Carbon Steel Sector. He graduated from the Federal Polytechnic in Zurich and has a Masters of Business Administration from Sacred Heart University of Luxembourg.

Ray Stewart is a non-executive director of the Company. He is the Chief Financial and Administration Officer of Belgacom Group, a position he has held since 1997. Prior to joining Belgacom Group, from 1994 until 1997 he was Chief Financial Officer for Matav which is the incumbent telephone company for Hungary. From 1979 to 1994 he held various positions with Ameritech headquartered in Chicago, including, from 1991 to 1994, Chief Financial Officer for Ameritech International which was the international business development unit for Ameritech. He has a Business Undergraduate degree in Accounting from Indiana University, and a Masters of Business Administration in Finance also from Indiana University.

Senior Management Team The following table sets forth the names of the members of the Company’s Senior Management Team as of the date of this prospectus and their positions with the Company.

Name Function Paul Fowler ...... Chief Executive Officer Heinz Eigner ...... Chief Financial Officer Leo Jacobs ...... Chief Operating Officer Western Hemisphere Greg McMillan ...... Chief Operating Officer Eastern Hemisphere Paul Bibby ...... Chief Development Officer Erling Sorensen ...... Chief Marketing Officer Anne Dekker ...... Director, Environment and Community Russell Murphy ...... Director, Human Resources and Safety Jan Altink ...... Director, Investor Relations and Communications Phil Palmer ...... Director, Global Business Systems Michael Morley ...... General Counsel

Paul Fowler is the Chief Executive Officer of the Company. See his biography above under “— Board of Directors” beginning on page 253.

Heinz Eigner is the Chief Financial Officer of the Company. He worked for Honeywell from 1987 until 2002, where he occupied several positions in Germany, Switzerland and the United States. From 2000 to 2002, Heinz Eigner was Controller Enterprise Service Solutions — Central Europe. He joined Umicore in 2002 as Vice-President, Business Group Controller Automotive Catalysts and became Vice-President Business Group Controller Zinc Specialties in 2006. He holds a degree in Betriebswirtschaftslehre — University degree as Diplom-Kaufmann, Justus von Liebig Universität, Giessen, Germany.

Leo Jacobs is the Chief Operating Officer responsible for Nyrstar’s operations in the Western hemisphere. He joined Umicore in 1974, where he has occupied several positions across different countries. He has worked in Belgium, South Korea, Thailand and France as Manager, Head of Department, Plant Manager, Vice-President of Umicore Zinc Smelting (2001), Senior Vice-President of Umicore Zinc Alloys (2005). In 2006-2007, Leo Jacobs was the Managing Director of Nyrstar Belgium and Nyrstar France. He is also a member of the Board of

254 Directors of IZA-Europe, Föhl China, NYZA and Galva 45. Leo Jacobs holds a degree in Civil Engineer Chemistry from the Katholieke Universiteit Leuven and a Master in Business Administration from the UIA, Belgium.

Greg McMillan is the Chief Operating Officer responsible for Nyrstar’s operations in the Eastern hemisphere. Prior to joining Zinifex, he was a Project Manager for Delta Group Pty Ltd from 1988 until 1991; from 1991 to 2000, he held several positions with Boral Ltd., including National Sales and Marketing Manager of Boral Casting Pty Ltd, Manager Corporate Development, General Manager Investor Relations and Industry Analysis, and General Manager and Director of Melocco Pty Ltd. From 2000 until 2002, he was General Manager Brambles Marine Group, a subsidiary of Brambles Limited. Greg McMillan joined Zinifex in 2003 as General Manager Hobart Smelter and was appointed to General Manager Century Mine in 2005, a position he held until joining Nyrstar. He has held directorships in Queensland Resources Council Ltd, Riversleigh Lawn Hill Pastoral Holding Company Pty Ltd, Tasmanian Minerals Council Ltd, Tasmanian Chamber of Commerce & Industry Ltd and is currently a director of Australian Refined Alloys Pty Ltd. Greg McMillan holds a Certificate of Production Engineering from the Sydney Institute of Technology, a Bachelor of Commerce from Griffith University and a Master of Business Administration from the Australian Graduate School of Management, University of NSW, Australia.

Paul Bibby is the Chief Development Officer of the Company. Prior to joining Zinifex in 2005, he occupied several positions. He was Manager Business Development and Major Projects for CRA Corporate Strategy and Development from 1989 until 1996. He was with Rio Tinto from 1996 until 2000 as Manager Coal Technology, Manager Business Planning and Manager Mineral Processing. He joined General Motors in 2000 as Foundry Manager. From 2001 until 2004, he occupied the position of General Manager Manufacturing — Industrial Products for Capral Aluminium. In 2004, he joined ION Automotive as General Manager Engine Components before joining Zinifex in 2005 as General Manager Zinifex Technical Support. He has been a member of the Board of Cooperation on Science and Technology between Australia and Indonesia from 1996 until 1999. He holds a Bachelor in Applied Science (Metallurgy) from the Royal Melbourne Institute of Technology.

Erling Sorensen is the Chief Marketing Officer of the Company. Prior to joining Zinifex in 2005, he held several management positions: Manager of Elkem AS, Oslo, Norway (1993-1994), Managing Director of Setaf Asia Pte Ltd, Singapore (1994-1995), Director of Commercial and Marketing of Clipper Maritime (Asia) Pte Ltd, Oslo, Norway (1995-1997), Managing Director of Norclip Shipping AS, Oslo, Norway and Managing Director of Clipper Bulk A/S, Melbourne, Australia. He joined Zinifex in 2005 as General Manager of Global Marketing and Sales in Australia. He is a fellow of the Australian Institute of Company Directors. He has been a member of the Advisory Board of GMB Schiffahrts GmbH (2003-2005). He has been a non-Executive Director of Second Curve Group of Companies (2002-2005), ASDC (2002-2005) and Envirohealth Pty Ltd (2001-2005). Since 2006, he is Director of Genesis Recycling Technology (BVI) and associated companies. Erling Sorensen holds a Master Mariner Merchant Marine from the International School of Navigation, Denmark, a Graduate Diploma in Applied Finance and Investments from the Securities Institute, Australia and an Executive Master of Business Administration from the Melbourne Business School, Australia.

Anne Dekker is the Director, Environment and Community of the Company. She started her career with NZFP Pulp & Paper Kinleith Mills (1986-1992) where she was first a Biochemical Engineer before becoming the Group Leader Environmental Research and Auditing. From 1992 until 1995, Anne Dekker was a lecturer in Environment Engineering at the Department of Technology of Massey University, in New Zealand. In 1995, she joined Australian Paper (Tasmanian Mills, Australia) as an Environment Engineer then as Environment Manager. From 2000 until 2002, she was Manager Environment with Pasminco Hobart Smelter in Australia. Anne Dekker became the Manager for Sustainable Development of Zinifex in 2002 and kept this position until she was appointed Director, Environment and Community at Nyrstar. She has held several directorships and positions on advisory committees and in environmental management, environmental law and water industry associations. From 2001 until 2006, she was a non-executive director for the Port of Devonport Corporation in Australia. She is also a fellow of the Australian Institute of Company Directors. She holds a Bachelor in Technology from Massey University (New Zealand), a Post Graduate Diploma in Pulp and Paper Technology from the University of Auckland (New Zealand) and a PhD in Environmental Engineering from Massey University (New Zealand).

Russell Murphy is the Director, Human Resources and Safety of the Company. He joined Zinifex in 1979 and has since then occupied several positions: Production roles Rosebery Mine (1979 — 1988), Mine Site Training Officer Rosebery Mine (1988 — 1989), Training Superintendent Rosebery Mine (1989 — 1992), HR Manager Rosebery Mine (1992 — 1995), HR Manager Hobart Smelter (1995 — 1997), Workplace Transition Manager (1997 — 1999), Divisional HR Manager — Mining (1999 — 2002), Group HR Manager Australian

255 Operations (2002 — 2006), Acting General Manager Human Resources (2006 — 2007). Russell Murphy is a member of the board reference group of the Australian Mines and Metals Association. He holds a Graduate Diploma in Business Management from Charles Sturt University, Australia.

Jan Altink is the Director, Investor Relations and Communications of the Company. He has broad experience in financial communications. He started his career in Hong Kong as an Associate Editor for Seatrade magazine and Far East Correspondent for Seatrade Week (1983-1986). He then worked as a reporter for the South China Morning Post in Hong Kong (1986-1987) before becoming a Senior Consultant for Hill & Knowlton Asia Ltd (1987-1988). In 1988, he joined Shandwick as Group Manager, Corporate & Financial Relations (1988- 1991) and was promoted to director shortly before leaving. In 1991, he became the Head of Group Communications for a global division of Standard Chartered Bank in Hong Kong. From 1998 until 2005, he worked in London, first for Deutsche Bank as Director, Head of Marketing & Communications for the Global Institutional Services division and then for Mellon Financial Corporation as international Director of Corporate Affairs. In 2006, he joined the Shaheen Business & Investment Group as Managing Director, Corporate Communications.

Phil Palmer is the Director, Global Business Systems of the Company. He started his career with ICI (Australia) in 1990 where he occupied several positions from Technology Group Information Technology Manager (1994-1995) to leader SAP Project Argyle Phase 2 (1996-1998). In 1998, he joined Zinifex where he became successively Business Systems Services Development Manager (1998-1999), Business Systems Manager and Business Systems Transition Manager (2002-2007). He holds a bachelor of business in accountancy from the RMIT, Australia, a graduate diploma in Information Technology from Swinburne University in Australia and a Masters in Information Systems from Swinburne University, Australia.

Michael Morley is the General Counsel of the Company. Prior to joining the Company, he was General Counsel of Smorgon Steel Group Ltd, a position he held from 2003 until 2007. From 1997 until 2003, he was a Senior Associate in the Corporate/Mergers & Acquisitions team of Clayton Utz, one of Australia’s pre-eminent law firms. Prior to joining Clayton Utz he held a number of positions including positions with Coopers & Lybrand and Fosters Brewing Group Limited. He holds a Bachelor of Economics and a Bachelor of Laws from Monash University (Melbourne, Australia) and a Master of Taxation Law from Melbourne University (Melbourne, Australia).

Corporate Governance Introduction On 5 October 2007 the Company’s Board of Directors adopted a corporate governance charter in accordance with the recommendations set out in the Belgian Code on Corporate Governance (the “Corporate Governance Code”). The corporate governance charter describes the main aspects of the corporate governance of the Company. Subject to closing of the Offering, and except as disclosed below, the Company will apply the nine corporate governance principles contained in the Corporate Governance Code.

The corporate governance charter will be made available on the Company’s website (www.nyrstar.com) upon closing of the Offering, and will be updated in the event of changes to the Company’s corporate governance.

Board of Directors The Company has a “one-tier” governance structure, whereby the Board of Directors is the ultimate decision-making body. The Board of Directors has all powers except for those reserved to the Shareholders’ Meeting by law or the articles of association of the Company.

Pursuant to the Company’s articles of association, the Board of Directors must be composed of at least three members. Pursuant to the Corporate Governance Code, at least half of the directors must be non-executive and at least three directors must be independent in accordance with the criteria set out in the Belgian Companies Code and the Corporate Governance Code.

The directors are appointed by the Shareholders’ Meeting for a term of no more than four years. They can also temporarily — until the next Shareholders’ Meeting — be appointed by the remaining directors, in the event an office of director becomes vacant. The Shareholders’ Meeting can dismiss the directors at any time.

256 The Board of Directors elects a chairman from among its non-executive members. The chairman of the Board of Directors cannot be the CEO.

In principle, the Board of Directors will meet at least six times per year. The chairman of the Board of Directors has a casting vote on matters submitted to the Board of Directors.

Board Committees Subject to and effective as of the closing of the Offering, in accordance with the Corporate Governance Code, the Board of Directors will have an Audit Committee and a Nomination and Remuneration Committee.

In addition, the Board of Directors will set up a Safety, Health and Environment Committee.

The Board of Directors will determine the terms of reference of these committees.

Audit Committee The Audit Committee will consist of at least three non-executive directors, a majority of which must be independent. The chairman of the Audit Committee cannot be the chairman of the Company.

The role of the Audit Committee is to supervise and review the financial reporting, the internal control and risk management systems and the internal audit process of the Company. In addition, the Audit Committee makes recommendations to the Board of Directors on the selection, appointment and remuneration of the external auditor and monitors the independence of the external auditor.

The Audit Committee must report regularly to the Board of Directors on the exercise of its functions. It must identify all areas in which action or improvement is deemed necessary in the opinion of the Audit Committee and produce recommendations concerning the necessary steps to be taken. The audit review and the reporting on that review should cover the Company and its subsidiaries as a whole.

In principle, the committee will meet at least four times per year. The members of the Audit Committee must at all times have full access to the Chief Financial Officer and to any other employee to whom they may require access in order to carry out their responsibilities.

Subject to and effective as of the closing of the Offering, the following directors shall be member of the Audit Committee: Ray Stewart (chairman), Roland Junck and Karel Vinck.

Nomination and Remuneration Committee The Nomination and Remuneration Committee will consist of at least three directors. All members of the Nomination and Remuneration Committee will be non-executive directors.

In deviation of provisions 5.3/1 and 5.4/1 of the Corporate Governance Code, the Nomination and Remuneration Committee will not be comprised of a majority of independent directors. It will be comprised of four non-executive directors, only two of which will be independent. The two directors who will not be independent, Peter Mansell and Karel Vinck, represent the founding shareholders of the Company in the Board of Directors. Given that the Board of Directors will initially only be comprised of six directors, and notwithstanding the current intention of the Board to nominate a seventh director for appointment as soon as practicable after the closing of the Offering, a Nomination and Remuneration Committee of more than four members is not deemed appropriate. At the same time, the participation of the founding shareholders, through Peter Mansell and Karel Vinck, in the Nomination and Remuneration Committee is viewed by the Board of Directors as an important and valuable tool in assisting the transition and integration of the two businesses that were contributed to the Company by the two founding shareholders. For these reasons, the Board of Directors is of the opinion that a deviation of provisions 5.3/1 and 5.4/1 of the Corporate Governance Code is justified.

The Nomination and Remuneration Committee is chaired by the chairman of the Board of Directors or another non-executive director.

The role of the Nomination and Remuneration Committee is to make recommendations to the Board of Directors with regard to the appointment of directors and to make proposals to the Board of Directors on the remuneration policy for directors and executive management.

257 In principle, the committee will meet at least twice a year.

Subject to and effective as of the closing of the Offering, the following directors shall be member of the Nomination and Remuneration Committee: Julien De Wilde (chairman), Ray Stewart, Peter Mansell and Karel Vinck.

Safety, Health and Environment Committee The Safety, Health and Environment Committee will consist of at least three non-executive directors, a majority of which must be independent. The Safety, Health and Environment Committee is chaired by the chairman of the Board of Directors or another non-executive director.

The role of the Safety, Health and Environment Committee is to ensure that the Company adopts and maintains appropriate Safety, Health and Environment policies and procedures, as well as effective Safety, Health and Environment internal control and risk management systems, and to make appropriate recommendations to the Board of Directors.

In principle, the committee will meet at least twice a year.

Subject to and effective as of the closing of the Offering, the following directors shall be member of the Safety, Health and Environment Committee: Roland Junck (chairman), Julian De Wilde and Peter Mansell.

Executive Management The Company’s executive management is composed of the CEO and the members of the Senior Management Team.

Chief Executive Officer The CEO is appointed, and can be removed, by the Board of Directors.

The CEO leads and chairs the Senior Management Team and is accountable to the Board of Directors for the Senior Management Team’s performance.

Senior Management Team The Board of Directors has delegated the day-to-day management of the Company as well as certain management and operational powers to the CEO. The CEO is assisted by the Senior Management Team.

The Senior Management Team is composed of at least four members. Its members are appointed by the Board of Directors and include all executive directors.

The CEO, with the assistance of the Senior Management Team, is responsible and accountable to the Board for: • Operating the Company; • Implementing the decisions taken by the Board of Directors; • Putting in place internal controls (without prejudice to the Board of Directors’, the Audit Committee’s and the Safety, Health and Environment Committee’s monitoring roles); • The complete, timely, reliable and accurate preparation of the Company’s financial statements, in accordance with applicable accounting standards and policies; • Presenting the Board of Directors with a balanced and understandable assessment of the Company’s financial situation; and • Providing the Board of Directors in due time with all information necessary for the Board of Directors to carry out its duties.

In principle, the Senior Management Team meets every week.

258 Remuneration of Directors and Executive Management Directors Upon recommendation of the Nomination and Remuneration Committee, the Board of Directors determines the remuneration of the directors to be proposed to the Shareholders’ Meeting. The Shareholders’ Meeting decides on the remuneration of the directors.

The directors receive a fixed remuneration in consideration of their membership of the Board of Directors. In addition, the directors, excluding the Chairman of the Board, will receive fixed fees for their membership and/ or chairmanship of any Board Committees. No attendance fees will be paid.

In addition, executive directors are also remunerated as members of the Senior Management Team. See “— Executive Management” immediately below. Non-executive directors do not receive any performance- related remuneration, stock options or other share based remuneration, or pension benefits.

The total remuneration payable to the directors for their services as directors is expected not to exceed EUR 300,000 for the remainder of the financial year 2007, and EUR 750,000 for the financial year 2008.

Executive Management The remuneration of the CEO and the members of the Senior Management Team is determined by the Board of Directors based on recommendations made by the Nomination and Remuneration Committee.

An appropriate portion of the remuneration will be linked to corporate and individual performance.

The total remuneration and benefits payable to the CEO (other than for his board mandate) and the members of the Senior Management Team for the remainder of the financial year 2007 are expected to amount to between EUR 1.0 million and EUR 1.3 million (gross amount, including fringe benefits but excluding stock based compensation).

The total remuneration and benefits payable to the CEO (other than for his board mandate) and the members of the Senior Management Team for the financial year 2008 are expected to amount to between EUR 6.4 million and EUR 8.0 million (gross amount, including fringe benefits but excluding stock based compensation).

In addition, the CEO and the members of the Senior Management Team will also be granted share awards under Nyrstar’s share plans as described under “Management and Corporate Governance — Description of Our Share Plans” beginning on page 262.

Indemnification and insurance of Directors and Executive Management The Company may enter into indemnification arrangements with the directors and implement directors and officers insurance coverage.

General Information on Directors and Members of Executive Management Except as may be described below, no director or member of executive management has: (a) any convictions in relation to fraudulent offences or any offences involving dishonesty; (b) except in the case of compulsory liquidations, at any time in the previous five years, been associated with any bankruptcy, receivership or liquidation of any entity in which such person acted in the capacity of a member of an administrative, management or supervisory body or senior manager nor: • been declared bankrupt or has entered into an individual voluntary arrangement to surrender his or her estate; • been a Director with an executive function of any company at the time of, or within 12 months preceding, any receivership, compulsory liquidation, creditors’ voluntary liquidation, administration, company voluntary arrangement or any composition or arrangement with that company’s creditors generally or with any class of its creditors; • been a partner in a partnership at a time of, or within 12 months preceding, any compulsory liquidation, administration or voluntary arrangement of such partnership;

259 • been a partner in a partnership at the time of, or within 12 months preceding, a receivership of any assets of such partnership; or • had any of his or her assets subject to receivership; or (c) received any official public incrimination and/or sanctions by any statutory or regulatory authorities (including designated professional bodies) or ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer.

We note however that Mr. Vinck, in his capacity as former chief executive officer of Eternit, Italy (unrelated to Nyrstar or the Selling Shareholders), was convicted in 2005 by a Sicilian court in connection with asbestos exposure of certain of Eternit’s employees between 1973 and 1975. Mr. Vinck asserts that this conviction is without merit and is currently appealing the matter. Such appeal is pending.

There are no outstanding loans granted by the Company to directors or members of executive management, nor are there any guarantees provided by the Company for the benefit of any director or member of executive management.

No director or member of executive management has any conflicts of interests between any duties the director or member of executive management owes to the Company and any private interests and/or other duties (other than in his capacity as an officer or director of the Selling Shareholders). Directors and members of executive management are expected to arrange their personal and business affairs so as to avoid conflicts of interests with the Company. In case any such conflicts arise, the director or member of executive management concerned may not take part in the deliberations or voting on the matter.

No director or member of executive management has had any interest, direct or indirect, in any transaction which is or was unusual in its nature or conditions or significant to the business of the Company and which was affected by the Company since its incorporation (other than in his capacity as an officer or director of the Selling Shareholders).

No director or member of executive management has a family relationship with any other director or member of executive management.

Other than set out in the table below, no director or member of executive management has, at any time in the previous five years, been a member of the administrative, management or supervisory bodies or partner of any companies or partnerships. Over the five years preceding the date of this document, the directors and members of executive management hold or have held the following main directorships (apart from their directorships of the Company and its subsidiaries) or memberships of administrative, management or supervisory bodies and/or partnerships:

Name Current Past Julien De Wilde ...... Agfa Gevaert N/A Bekaert KBC Bank Metris Telenet Van Breda International CTO Paul Fowler ...... N/A PCML SPC Pty Ltd (Qdl) Zinifex Century Limited (Vic) Zinifex Australia Limited (Vic) Zinifex Group Treasury Pty Ltd (Vic) Zinifex International (Holdings) Pty Ltd Zinifex Metals Pty Ltd (Vic) Zinifex Port Pirie Pty Ltd (SA) ZRUS Holdings Pty Ltd (Vic) Evergreen Forests Ltd (NZ) Air Logistics (NZ)

260 Name Current Past

Peter John Mansell ...... Bunnings Property Management Foodland Associated Limited Limited Hardman Resources Limited Electricity Networks Corporation JDV Limited Great Southern Plantations Progressive Enterprises Holdings Limited Limited ThinkSmart Limited Tethyan Copper Company Limited West Australian Newspapers The Hoyts Corporation Pty Limited Limited Western Power Corporation Zinifex Ltd Freehills Ferngrove Vineyards Limitd AngloGold (Australian subsidiairies) Therapy Focus Inc Karel Vinck ...... Alumni Lovanienses ABX Logistics Worldwide Cumerio Community of European Railway and Eurostar Infrastructure Companies Suez-Tractebel Katholieke Universiteit Leuven Tessenderlo Group Union Internationale des Chemins de Fer Théâtre Royal de la Monnaie Umicore Vlaamse Raad voor Wetenschapsbeleid VOKA/VEV Roland Junck ...... Arcelor China Holding S.àr.l. Arcelor S.A. Ray Stewart ...... TheUnited Fund for Belgium Arcelor Mittal Indiana University Kelly School of Business and Alumni Association Heinz Eigner ...... N/A N/A Leo Jacobs ...... IZAEurope N/A Greg McMillan ...... N/A Lawn Hill Riversleigh Pastoral Holding Company Pty Ltd Queensland Resources Council Ltd Tasmanian Minerals Council Ltd Tasmanian Chamber of Commerce & Industry Ltd Paul Bibby ...... N/A N/A Erling Sorensen ...... N/A Australian Steel Distribution Centre Envirohealth Pty Ltd Second Curve Group of Companies Anne Dekker ...... N/A N/A Russell Murphy ...... N/A N/A Jan Altink ...... N/A N/A Phil Palmer ...... N/A N/A Michael Morley ...... N/A N/A

261 Directors’ and Other Interests As of the date of this prospectus, none of the directors, nor any member of executive management has indicated to the Company an intention to participate in the Offering.

As of the date of this prospectus, none of the directors, nor any member of executive management owns any shares in the Company or any options over such shares.

None of the directors, except for the CEO, has entered into a service contract with the Company or any of its subsidiaries that provides for benefits upon termination of employment.

All members of the Senior Management Team are entitled to a 12-month salary payment in case their employment is terminated without cause. In addition, the CEO is entitled to a 12-month salary payment in case his employment is terminated upon a change of control over the Company.

Description of Our Share Plans The Company has established an Employee Share Acquisition Plan (“ESAP”) and an Executive Long Term Incentive Plan (“LTIP”) (together referred to as the “Plans”) with a view to attracting, retaining and motivating the employees and senior management of the Company and its wholly owned subsidiaries (for the purposes of this section together referred to as the “Group”). The key terms of each Plan are set out below.

Employee Share Acquisition Plan General The ESAP is a general employee share plan pursuant to which grants may be made by the Board of Directors to employees of the Group (the “Employees”) in the form of conditional awards to receive a number of ordinary shares in the Company at a future date determined as follows:

EUR 1,000 Company share price at date of grant

(“Employee Share Awards”) or their equivalent in cash (“Employee Phantom Awards”) (Employee Share Awards and Employee Phantom Awards together referred to as “Employee Awards”).

The terms of the ESAP may vary from country to country to take into account local tax and other regulations and requirements in the jurisdictions where eligible Employees are employed or resident.

Employee Awards will be granted at times determined by the Board. In the framework of the Offering, the Board has recently determined that a grant of Employee Awards under the ESAP will be made to all full-time and permanent part-time Employees of the Group at the time of the closing of the Offering (see “Business — Business Description — Employees” beginning on page 246). There is no current intention to make any further grants under the ESAP.

The Nomination and Remuneration Committee will make recommendations to the Board in relation to the operation and administration of the ESAP.

Eligibility The Board will determine which Employees will be eligible to participate in the ESAP (the “Participating Employees”).

In general, it is intended that all full-time and permanent part-time Employees (as the case may be having completed a minimum length of service, if specified by the Board) will be eligible to be granted Employee Awards under the ESAP on the terms and conditions determined by the Board.

No more than 10% of the Company’s issued share capital will be allotted to satisfy Employee Awards granted under the ESAP or any other awards under any other share plans operated by the Company (including the LTIP) in any 10-year period.

262 Vesting In principle, Employee Awards will not vest until three years after the grant date. If a Participating Employee leaves the Group prior to the vesting date, he or she will either forfeit his or her rights under the Employee Award or, if the Participating Employee is a “good leaver”, his or her Employee Awards will vest pro rata to the period elapsed since the grant date.

Employees will not be entitled to dividends, voting or other ownership rights in respect of the Employee Awards until they vest.

No amount will be payable by Participating Employees to the Company on the granting or vesting of any Employee Awards.

Acquisition and delivery of the underlying shares The Nyrstar ordinary shares which are conditionally awarded to Participating Employees under the ESAP will be acquired through the buy-back of Nyrstar shares in accordance with the procedures set out in Articles 620 and following of the Belgian Companies Code. See “Description of Nyrstar’s Shares and Articles of Association — Share Capital and Shares — Purchase and Sale of Own Shares” beginning on page 277.

In the event the Shareholders’ Meeting does not authorise the required buy-back, the Employee Share Awards shall be automatically converted into Employee Phantom Awards and Participating Employees will be entitled to a cash payment equivalent to the market value of the shares to which the relevant vested Employee Share Awards relate.

Initial Awards Following the closing of the Offering, approximately 3,200 Employees will be eligible to participate in the initial grant under the ESAP. If all eligible Employees choose to participate, this will result in the conditional award, subject to the terms described above, of EUR 1,000 worth of ordinary shares in the Company per Employee or approximately EUR 3.6 million (including social security) in total.

The cost of delivering the shares at the time of vesting of the Employee Awards may increase or decrease proportionately with an increase or decrease in the Company’s share price over the relevant period following the Offering.

Executive Long Term Incentive Plan General Under the LTIP, key/senior executives employed by the Group (the “Executives”) selected by the Board of Directors may be granted conditional awards to receive ordinary shares in the Company at a future date (“Executive Share Awards”) or their equivalent in cash (“Executive Phantom Awards”) (Executive Share Awards and Executive Phantom Awards together referred to as “Executive Awards”).

The terms of the LTIP may vary from country to country to take into account local tax and other regulations and requirements in the jurisdictions where eligible Executives are employed or resident.

The Nomination and Remuneration Committee will make recommendations to the Board in relation to the operation and administration of the LTIP.

Eligibility The Board will determine which Executives will be eligible to participate in the LTIP (the “Participating Executives”).

Following the closing of the Offering, it is expected that the Chief Executive Officer and the members of the Senior Management Team will be eligible for the first Executive Awards granted under the LTIP.

Maximum Entitlement The value of the conditional Executive Awards under the LTIP will vary, depending on the role, responsibility and seniority of the relevant Participating Executive. The maximum value of the conditional

263 Executive Awards granted to any Participating Executive in any financial year of the Company will not exceed 150% of his or her base salary at the time of the grant, except that in the financial year in which the Offering takes place this limit is increased to 400%.

Vesting In principle, Executive Awards will vest over a three-year rolling performance period. In normal circumstances, they will vest as follows: • one third of the Executive Awards will vest automatically after three years; • one third of the Executive Awards will vest after three years, subject to satisfaction of the performance conditions over a period of two years; and • one third of the Executive Awards will vest after three years, subject to satisfaction of the performance conditions over a period of three years.

In the event of cessation of employment before the normal vesting due to certain “good leaver reasons”, the Board may determine that a number of Executive Awards will vest, taking into account such factors as the Board determines, including the proportion of the performance period which has elapsed and the extent that performance conditions have been satisfied up to the date of leaving.

Performance Conditions The LTIP performance conditions will be based on the Total Shareholder Return (“TSR”) of the Company compared to its peers. TSR is defined as the combined equity return of shareholders realised through a combination of dividends, capital returns and share price movement. Additionally, the LTIP includes further performance conditions based on financial and operational objectives of the Company.

The LTIP rules provide for various circumstances in which unvested Executive Awards lapse, including failure to satisfy performance conditions.

Acquisition and delivery of the underlying shares The Nyrstar ordinary shares which are conditionally awarded to Participating Executives under the LTIP will be acquired through the buy-back of own shares in accordance with the procedures set out in Articles 620 and following of the Belgian Companies Code. See “Description of Nyrstar’s Shares and Articles of Association — Share Capital and Shares — Purchase and Sale of Own Shares” beginning on page 277.

In the event the Shareholders’ Meeting would not authorise the required buy-back, the Executive Share Awards shall be automatically converted into Executive Phantom Awards and the Participating Executives will be entitled to a cash payment equivalent to the market value of the shares to which the relevant vested Executive Share Awards relate.

Cost It is expected that the LTIP will initially involve 42 executives (including the CEO and the members of the Senior Management Team). Based on current salary levels, it is expected that the initial grant under the LTIP following the closing of the Offering will have a cost of between EUR 11 million (in case of achievement of the planned performance conditions) and EUR 22 million (in case of achievement of extended performance conditions) (including social security). Subsequent annual grants under the LTIP are expected to have a cost of between EUR 3.8 million (in case of achievement of the planned performance conditions) and EUR 7.6 million (in case of achievement of extended performance conditions) (including social security).

The cost of delivering the shares at the time of vesting of the Executive Awards may increase or decrease proportionately with an increase or decrease in the Company’s share price over the relevant period following the Offering.

264 RELATED PARTY TRANSACTIONS

Zinifex and Umicore each hold 50% of the Company’s ordinary shares and will continue to do so until shortly prior to the closing of this Offering. In the past we entered into arrangements with related parties belonging to the Zinifex and Umicore groups, and may continue to do so after the closing of the Offering. The following is a summary of all material transactions between ourselves and related parties (excluding intragroup debt that arose prior to 31 August 2007).

Business Combination and Shareholders’ Agreement On 23 April 2007 Umicore, Zinifex and the Company signed a Business Combination and Shareholders’ Agreement (“BCSA”) in which Zinifex and Umicore agreed to combine Zinifex’s zinc and lead smelting and alloying business and Umicore’s zinc smelting and alloying business (each, a “Zinc Business” and collectively, the “Zinc Businesses”) and to create Nyrstar. Following the satisfaction of certain conditions precedent, closing under the BCSA took place on 31 August 2007. On that date, we acquired, directly and indirectly, the Zinc Businesses from the Selling Shareholders pursuant to various sale and purchase agreements entered into with Zinifex and its relevant subsidiaries and with Umicore.

The BCSA and the sale and purchase agreements (See “ — Ancillary Agreements — Sale and Purchase Agreements with Zinifex and Umicore” beginning on page 268) will continue to govern our relationship with the Selling Shareholders after the closing of the Offering.

The principal terms of the BCSA include the following:

Equalisation Mechanism Prior to the signing of the BCSA, Zinifex and Umicore (assisted by external experts) performed extensive due diligence on the Zinc Businesses and conducted detailed arm’s length discussions and negotiations to assess and agree their relative economic interests in Nyrstar.

Shortly before the closing of the sale of the Zinc Businesses to Nyrstar on 31 August 2007, the respective values of each Selling Shareholder’s Zinc Business to be transferred, directly and indirectly, to the Company were re-assessed in order to reflect variations in certain key valuation parameters such as metal price and electricity tariff assumptions. This resulted in a relative economic interest of 59.74% for Zinifex and 40.26% for Umicore.

As at 31 August 2007 Zinifex and Umicore each held and as at the date of this prospectus each hold an equal number of the Company’s ordinary shares, i.e., 40,264,232 each. Zinifex’s greater relative economic interest in Nyrstar was taken into account by way of an equalisation subscription right (the “Equalisation Subscription Right”) granted to Zinifex on 31 August 2007 and entitling Zinifex to subscribe for 19,471,536 additional ordinary shares (the “Equalisation Shares”) in the Company with a view to this Offering. Zinifex conditionally exercised its Equalisation Subscription Right on 5 October 2007, subject to the condition precedent that the results of the book-building compel the Selling Shareholders to sign an underwriting agreement in accordance with the terms of the BCSA. The 19,471,536 Equalisation Shares have been taken into account to determine the number of ordinary shares offered in the Offering.

Under the indicative timetable, the fulfilment of the condition precedent will be acknowledged on or about 30 October 2007. Upon such fulfilment the exercise by Zinifex of the Equalisation Subscription Right will become effective, and as a result Zinifex will effectively subscribe for and pay up the 19,471,536 newly issued Equalisation Shares for an amount of EUR 427,375,848 on or about 30 October 2007. At such time, Zinifex’s shareholding will effectively reflect its relative economic interest of 59.74%. The consideration for the Equalisation Shares will be returned to Zinifex as repayment of a loan provided by Zinifex to the Company on normal market terms in connection with the acquisition of Zinifex’s Zinc Business. Should, for any reason, the closing of the Offering not take place notwithstanding the effective exercise of the Equalisation Subscription Right on or about 30 October 2007, then Zinifex and Umicore have agreed to negotiate a mutually acceptable mechanism allowing for the reinstatement of equal shareholdings of 50% each between them.

Any residual shareholdings held by Zinifex and Umicore after the closing of the Offering shall be proportionate to their relative economic interests, i.e., equal to 59.74% and 40.26%, calculated as a percentage of the total number of ordinary shares held by Zinifex and Umicore together.

265 If, however, the condition precedent referred to above is not fulfilled by 5 January 2008, then the conditional exercise by Zinifex of the Equalisation Subscription Right on 5 October 2007 will be deemed not to have taken place and Zinifex’s shareholding will remain at 50%. The Selling Shareholders have agreed to then manage the Company as a 50-50 private joint venture, each holding 50% of the Company’s ordinary shares and each having equal ownership and voting rights. The relative values of each Selling Shareholder’s Zinc Business will then be re-assessed at the time of an initial public offering of the Company later than the initial public offering contemplated in this prospectus or, if there is no initial public offering before 31 August 2009, on 31 August 2009. At such time, the Equalisation Subscription Right becomes exercisable again, but the number of Equalisation Shares that are the subject of the Equalisation Subscription Right will vary to any shift in the relative values of their respective Zinc Businesses between 31 August 2007 on the one hand and the time of a deferred initial public offering or 31 August 2009 on the other hand. Should no initial public offering take place before 31 August 2009, the 50-50 joint venture will be restructured as a joint venture where the actual shareholdings reflect the relative values, at such time, of the Zinc Businesses transferred by Zinifex and Umicore, with amended joint venture provisions taking effect that protect both the interests of the majority shareholder and the minority shareholder.

Additional Capital Increase — Purchase Price Adjustment Based on IPO Proceeds The values of the Selling Shareholders’ respective Zinc Businesses, on the basis of which we purchased the Zinc Businesses on 31 August 2007, will be adjusted to reflect the value of the Company as inferred from the Offering. In the event that the value of the Company as inferred from the Offering exceeds the aggregate values for which we acquired the Zinc Businesses on 31 August 2007 by more than 5%, we will pay purchase price adjustments to Zinifex and its subsidiaries and to Umicore. This will be achieved by way of an additional capital increase to be subscribed in cash by the Selling Shareholders to be effected following the end of the book- building period and subsequent pricing, i.e., on or about 30 October 2007 under the indicative timetable. The Company and its subsidiaries will use the proceeds of the additional capital increase to pay to Zinifex and its relevant selling subsidiaries and to Umicore purchase price adjustments under the various sale and purchase agreements entered into on 31 August 2007. See “— Sale and Purchase Agreements with Zinifex and Umicore” beginning on page 268.

Under the indicative timetable, on or about 30 October 2007, the Extraordinary Shareholders’ Meeting of Nyrstar called to approve such capital increase will first acknowledge that the above mentioned condition precedent has been satisfied and that Zinifex has effectively exercised its Equalisation Subscription Right and has subscribed to and paid up 19,471,536 Equalisation Shares.

Zinifex and Umicore will then subscribe to the capital increase in accordance with their relative economic interests, i.e., 59.74% of the capital increase will be subscribed to by Zinifex and 40.26% by Umicore. All additional ordinary shares subscribed to by the Selling Shareholders will immediately be regrouped with the 80,528,464 ordinary shares existing on the date of this prospectus and with the 19,471,536 Equalisation Shares. As a result, the number of ordinary shares offered in this Offering will be unaffected by such capital increase, if any.

No Representations and Warranties from the Selling Shareholders We acquired the Zinc Businesses on 31 August 2007 without any representations or warranties from Zinifex or Umicore. Subject to certain limited exceptions, we will not have any recourse against the Selling Shareholders for any matters that affect the value of the Zinc Businesses we acquired.

Obligations of Nyrstar — Release of Guarantees Subject to certain limited exceptions, we are liable for all our liabilities and obligations (whether environmental, financial or otherwise) vis-à-vis third parties in respect of the Zinc Businesses acquired from the Selling Shareholders, regardless of the period to which such liabilities and obligations relate (i.e., before or after 31 August 2007). We will not have any right of recourse in this respect to the Selling Shareholders.

Under the terms of the BCSA, we have an obligation to indemnify Zinifex and Umicore for all losses incurred by them in respect of the Zinc Business transferred to us and to use reasonable endeavours to procure that by 29 February 2008 the Selling Shareholders are released from all guarantees or other security previously provided by them to third parties in respect of their respective Zinc Businesses.

266 Liability relating to the Prospectus and Related Offering Documents Under the BCSA, Zinifex has agreed to indemnify us and our directors for losses we incur as a result of the inclusion in this prospectus or related offering documents of misleading or deceptive information in relation to Zinifex’s Zinc Business or the omission from this prospectus or related offering documents of information concerning Zinifex’s Zinc Business otherwise required to be included herein. Similarly, Umicore has agreed to indemnify us and our directors for losses we incur as a result of the inclusion in this prospectus or related offering documents of misleading or deceptive information in relation to Umicore’s Zinc Business or the omission from this prospectus or related offering documents of information concerning Umicore’s Zinc Business otherwise required to be included herein.

If we suffer losses arising in connection with the prospectus as a result of any other circumstance that is not related to a specific Selling Shareholder’s Zinc Business or in connection with the IPO generally (other than as described in the paragraph above), the Selling Shareholders shall indemnify us and shall bear their losses in proportion to their respective relative economic interests of 59.74% for Zinifex and 40.26% for Umicore.

The above indemnifications do not apply in respect of forward-looking statements we make in this prospectus or related offering documents, or in respect of losses arising as a result of conduct by Nyrstar taken without the express or implied approval of Zinifex and Umicore.

The foregoing arrangements are without prejudice to Article 61, §1 and 2 of the Prospectus Law.

Non-compete Undertaking We undertook not to compete with Umicore during a period ending three years after the admission to trading of the Company’s ordinary shares on the Eurolist of Euronext Brussels. Our non-compete undertaking prevents us from establishing, carrying on, acquiring and retaining (through a purchase of shares or assets or otherwise) and participating in a competing business, being, for these purposes, a business that is of the same or a similar type to the businesses of Umicore and its subsidiaries known as Building Products, Zinc Chemicals and Engineered Metal Powders and the annual turnover or sales revenues of which are at least equal to EUR 30 million.

Our non-compete undertaking does not prevent us from acquiring a controlling interest in a company that owns a competing business (among other assets or businesses), provided that we procure that such company sells that competing business within twelve months. Umicore has certain preferential rights (including a right of first refusal) in relation to the sale of the competing business.

Other than the above, there are no non-compete undertakings between the Company and the Selling Shareholders.

Post-IPO Provisions Subject to the closing of the Offering, certain provisions will regulate Zinifex’s and Umicore’s conduct in relation to the Company provided the Selling Shareholders retain a residual shareholding in the Company of at least 10% each. These provisions, amongst other things, require the Selling Shareholders to exercise their voting power in the Company to support the nomination by the other shareholder of a nominated director as a director to the Nomination and Remuneration Committee of our Board of Directors and, at our Shareholders’ Meetings, to vote in favour of any resolution for the appointment of a nominated director as a director (unless this would result in the other shareholder having more than one nominated director on our Board of Directors).

In addition, Zinifex and Umicore must observe certain restrictions when disposing of their remaining ordinary shares in the Company. For a period of one year following the admission to trading of the Company’s ordinary shares on the Eurolist of Euronext Brussels, the Selling Shareholders may not dispose of any ordinary shares in the Company without the written consent of the other Shareholder. Thereafter, each of Zinifex and Umicore may only dispose of ordinary shares in the Company provided the other shareholder is provided the opportunity to also sell a corresponding number of its ordinary shares in substantially the same manner (tag- along right).

Ancillary Agreements Pursuant to the BCSA, Zinifex and Umicore each entered into a number of ancillary agreements with Nyrstar. These agreements were entered into at a time when our assets were owned by the Selling Shareholders

267 and, therefore, they were not tested in the market. Consequently, no assurance can be given that the terms of these agreements, including and in particular the terms related to the sale of zinc products in these agreements, are equivalent to what could have been negotiated in the market.

Sale and Purchase Agreements with Zinifex and Umicore To effect the transfer of the Zinc Businesses to Nyrstar, we entered into various sale and purchase agreements with Zinifex and its relevant subsidiaries and various sale and purchase agreements with Umicore on 31 August 2007. We purchased the Zinc Businesses on 31 August 2007 with cash we obtained from capital increases subscribed in cash by Zinifex and Umicore on such date, as well as through external bank debt.

Prior to the signing of the BCSA, Zinifex and Umicore conducted financial modelling and agreed upon a valuation model to assess the stand-alone values of their respective Zinc Businesses and hence to determine their relative economic interests in Nyrstar.

The valuation model used for these purposes by Zinifex and Umicore did not purport to provide a valuation of Nyrstar, but rather a relative valuation of the assets transferred by them to Nyrstar on a stand-alone basis, based on a consensus outlook for metal prices and exchange rates at the time of valuation. It therefore did not take into account potential synergies or savings, growth opportunities or additional overheads or other costs arising from the business combination or the debt arrangements that we have entered into. The valuation model therefore did not purport to be indicative of what the future operating results and financial position of Nyrstar as a stand-alone entity would be.

The values of the Zinifex and Umicore Zinc Businesses used for these purposes amounted, on a debt-free basis, to EUR 1,449,712,357 and EUR 977,162,547 respectively, leading to a relative economic interest in Nyrstar of 59.74% for Zinifex and 40.26% for Umicore.

The respective purchase prices for the Zinc Businesses of Zinifex and Umicore were derived from the above mentioned valuation model. After having made a preliminary estimate of the net debt in the entities constituting the Zinifex Zinc Business and the Umicore Zinc Business on 31 August 2007, the aggregate purchase price paid by Nyrstar to Zinifex and its subsidiaries and to Umicore amounted to EUR 1,490,571,026 and EUR 946,829,894 respectively.

We are currently in the process of calculating adjustments to the purchase prices under the various sale and purchase agreements (with the exception of the agreement in respect of Padaeng Industry Public Company Limited) in respect of modelled working capital, net current tax liabilities and net debt. In addition, each of these sale and purchase agreements provides that if the value of the Company as inferred from the Offering exceeds the aggregate values on the basis of which we acquired the Zinc Businesses on 31 August 2007 by more than 5%, we will be required to pay a purchase price adjustment to Zinifex and its relevant subsidiaries and to Umicore pursuant to a capital increase to be effected on or about 30 October 2007. See “— Business Combination and Shareholders’ Agreement — Additional Capital Increase — Purchase Price Adjustment Based on IPO Proceeds” beginning on page 266.

Since, among other things, the valuation model used for the purposes described above was not constructed to determine the value of Nyrstar as a stand-alone entity and the purchase prices it generated are subject to various adjustments as noted above, potential investors are cautioned not to rely on the outcome of such valuation model in making their investment decision.

Transitional Services Agreements with Zinifex and Umicore Zinifex and its subsidiaries provide IT services to Nyrstar on a transitional basis. Zinifex may also provide other additional services (as reasonably requested by Nyrstar) and agreed services (as determined by agreement between Zinifex and Nyrstar), and this will generally continue until 30 June 2008. The charges for the services reflect the actual cost to Zinifex of providing the services to Nyrstar.

Umicore and its subsidiaries also provide a number of services to Nyrstar and its subsidiaries, including in respect of information systems and finance. The mechanism for determining payment and the duration of the provision of the services vary according to the service provided. Typically the services are rendered at Nyrstar’s request and invoiced at cost with a margin in line with market practice. Conversely, Nyrstar’s subsidiaries provide certain services to the sites in Overpelt (Belgium) and Auby (France) that are shared with Umicore operations remaining on such sites. These services relate, amongst others, to warehousing and purchasing and access control and surveillance.

268 Concentrate Purchase Agreements with Zinifex Zinifex supplies zinc and lead concentrates from its Century and Rosebery mines to various Nyrstar operations under long-term contracts, with treatment charges to be negotiated annually in line with generally accepted industry practices taking into consideration relevant market conditions at the time. The contracts regarding the supply from the Century mine and the contracts regarding the supply from the Rosebery mine operate until the end of the life of the mine (currently estimated to occur in 2015 and 2018 respectively, according to public announcements made by Zinifex) or until the end of life of the relevant Nyrstar smelter, whichever is earlier. The agreements include any extension to the current mine resource resulting from the discovery of additional ore on the existing mine lease (but not from discoveries on the adjoining lease areas held by Zinifex as far as the Century mine is concerned).

Each of the agreements defines the process and the key components for determination of the price to be paid by Nyrstar for the concentrates supplied by Zinifex. Payments for contained metal in concentrate are specified in the agreements and are to be determined by reference to the appropriate quotations on the LME. Treatment charges and certain other variable charges are to be renegotiated annually on a market related and arm’s length basis having regard, amongst other factors, to other relevant benchmark agreements negotiated within the zinc and lead industries. In addition, there are some defined charges and allowances.

As a result of these arrangements, Zinifex is our major supplier of raw materials, currently supplying approximately 48% of our current zinc concentrate requirements and 40% of our current overall feedstock requirements. Pursuant to these agreements, Century supplies zinc concentrates to Budel (350,000 to 400,000 dry metric tonnes per annum as elected by the Company), Clarksville (50,000 dry metric tonnes per annum) and Hobart (300,000 (in 2008) and 360,000 (beyond 2008) dry metric tonnes per annum). Rosebery supplies all of its zinc concentrates produced to our Hobart smelter. In addition, all of the Century and Rosebery lead concentrates produced are sold to our Port Pirie smelter. This annual supply of between 930,000 to 1,060,000 tonnes of zinc and lead concentrates amounts to between 82% and 89% of Zinifex’s total annual output.

Zinifex is also a customer of Nyrstar as our Hobart site sells copper sulphate to Zinifex’s Rosebery mine.

Metal Purchase and Sale Agreements with Umicore We have entered into various sale agreements with the Umicore group. Our Balen and Auby smelters sell zinc products such as zinc cathodes, liquid zinc and zinc ingots to several business units of the Umicore group under three separate contracts. A first contract provides for the sale of zinc cathodes from the Auby plant to Umicore’s Building Products business unit, which has a facility located adjacent to the Auby plant. This covers the sale of 80,000 tonnes of zinc cathodes (with an option for Umicore to take up to an additional 30,000 tonnes) per annum. The second contract provides for the sale of zinc cathodes from the Auby plant to Umicore’s Engineered Metal Powders business unit, for delivery at the Overpelt plant of Umicore. This contract covers the sale of 10,200 tonnes of zinc cathodes (with an option for Umicore to take up to an additional 3,800 tonnes) per annum. Finally, the third contract provides for the sale of zinc cathodes, liquid zinc and zinc ingots (the latter to be replaced by zinc cathodes at the latest as of 1 July 2009) from the Balen plant to Umicore’s Zinc Chemicals business unit, located in Angleur, Belgium and Eijsden, the Netherlands. This contract covers the sale of 62,000 tonnes of zinc products per annum.

All three contracts include a premium formula that is linked to the movement of the relevant regional zinc premium. However, these contracts were entered into at a time when our assets were owned by the Selling Shareholders and, therefore, they were not tested in the market. Consequently, no assurance can be given that the terms of these contracts generate a return equivalent to what could have been negotiated in the market.

Under the two sale agreements for the sale of zinc cathodes from the Auby plant, and the sale agreement for the sale of zinc cathodes, liquid zinc and zinc ingot from the Balen plant, both parties have the right to renegotiate the price for zinc cathodes as from the start of the second full calendar year after the signing of the BCSA, i.e., for sales of zinc cathodes as of 2009. If no agreement on the new price for the next calendar year can be reached within a certain timeframe, each party may terminate the sale agreement (in the case of the sale agreement for the Balen plant, only as regards the sale of zinc cathodes) by giving 12 months prior notice; accordingly, the earliest possible effective termination date of these three agreements (in the case of the sale agreement for the Balen plant, only as regards the sale of zinc cathodes) by reason of a failure to agree on the price of zinc cathodes is 30 June 2009.

269 In respect of liquid zinc, the sale agreement for the Balen plant was entered into for a term of five years, after which the agreement can be terminated by giving 6 months’ prior notice. The earliest possible effective termination date of this agreement in respect of liquid zinc is therefore 31 December 2011.

Our Balen and Auby smelters also sell leach products and our Auby smelter sells indium cements to Umicore’s smelter located in Hoboken, Belgium. The sale agreement for leach products is for an indefinite duration but can be terminated by either party upon 24 months prior notice (to be reduced to 12 months in the case of capacity or production reduction, cease of production or closure) and provides for prices based on payments for metal (lead, silver and gold) less deductions such as treatment charges, refining charges and penalties. The sale agreement for indium cements has a fixed term of five years and provides for prices based on payments for indium content less deductions such as treatment charges and penalties.

We have entered into purchase agreements with Umicore for the purchase of fine zinc powders for the Balen and Auby smelters. The price for these fine zinc powders is set according to the LME price plus a premium. Either party can terminate the purchase agreements by giving 24 months’ prior notice, provided that such notice can only be given as from 1 January 2008.

270 MAJOR SHAREHOLDERS

List of Major Shareholders and Voting Rights On the date of this prospectus, our sole shareholders are Zinifex and Umicore, the Selling Shareholders, each holding an equal number of ordinary shares, i.e., 40,264,232 each. Zinifex and Umicore have equal voting rights.

Zinifex and Umicore have been our sole shareholders since the incorporation of Nyrstar on 13 April 2007.

Control of Nyrstar Immediately prior to the closing of the Offering the Selling Shareholders will hold shares in Nyrstar as follows:

Zinifex (shares held as at 31 August 2007): ...... 40,264,232 Zinifex (Equalisation Shares to be issued on or about 30 October 2007 resulting from the exercise of the Equalisation Subscription Right): ...... 19,471,536 Umicore (shares held as at 31 August 2007): ...... 40,264,232 Total ordinary shares: ...... 100,000,000

For a description of the Equalisation Shares and the Equalisation Subscription Right, see “Related Party Transactions — Business Combination and Shareholders’ Agreement — Equalisation Mechanism” beginning on page 265.

In the event that the results of the Offering are such that not all the ordinary shares offered pursuant to this Offering are sold, then Zinifex and Umicore shall sell their shares proportionally in accordance with their relative economic interests of 59.74% and 40.26%. Following the closing of the Offering, the residual shareholdings held by Zinifex and Umicore shall then be equal to 59.74% and 40.26% of the total number of shares held by Zinifex and Umicore together.

271 DESCRIPTION OF NYRSTAR’S SHARES AND ARTICLES OF ASSOCIATION

General This section summarises the Company’s corporate purpose, share capital and the material rights of its shareholders under Belgian law and the Company’s articles of association. It is based on the Company’s articles of association that were amended by the Extraordinary Shareholders’ Meeting of 5 October 2007 and that will become effective upon closing of the Offering and listing of the Company’s shares.

The Company was incorporated on 13 April 2007, under the name “Neptune Zinc”, for an unlimited duration. The name of the Company was changed to “Nyrstar” pursuant to a decision of the Extraordinary Shareholders’ Meeting of 20 April 2007. The Company has the legal form of a limited liability company (société anonyme / naamloze vennnootschap), organised under the laws of Belgium. Pursuant to the Belgian Companies Code, the liability of the shareholders is limited to the amount of their respective committed contribution to the capital of the Company.

The Company’s registered office is located at Zinkstraat 1, 2490 Balen, Belgium, telephone number +32 (0)14 81 92 11. The Company is registered with the register of legal entities (registre des personnes morales — RPM / rechtspersonenregister — RPR) (Turnhout) under enterprise number 0888.728.945.

The description provided hereafter is only a summary and does not purport to give a complete overview of the articles of association, nor of all relevant provisions of Belgian law; neither should it be considered as legal advice regarding these matters. The description below assumes that the changes to the Company’s articles of association, which were approved on 5 October 2007 subject to the condition precedent of the closing of the Offering and the listing of the shares on the Eurolist of Euronext Brussels, have become effective.

Corporate Purpose The corporate purpose of the Company is set forth in Article 3 of its articles of association and reads (in translation from the Dutch and French originals) as follows: “The purpose of the company is the carrying out of the following activities, both in Belgium and abroad, directly or indirectly, for its own account or for the account of third parties, alone or in association with third parties: • the acquisition, ownership, management and transfer, by means of purchase, contribution, sale, exchange, assignment, merger, split, subscription, financial intervention, exercise of rights or otherwise, of any participating interest in any business or branch of activity, and in any company, partnership, enterprise, establishment, association or foundation which does or may in the future exist; • the purchase, subscription, exchange, assignment, sale and transfer of, and all other similar operations relating to, every kind of transferable security, share, bond, subscription right, option and government stock; • the manufacturing, smelting, refining, transforming, recycling, marketing and trading of zinc and lead, zinc and lead alloys and products derived from zinc and lead, and the carrying out of all financial, manufacturing, commercial and civil operations relating to zinc and lead activities.

The company may take out, make use of, purchase, acquire or transfer all forms of intellectual property rights relating directly or indirectly to its activities and may undertake research activities.

The company may acquire, rent, lease, fabricate, manage, transfer or exchange any personal or real property, with or without substance. It may carry out all real estate activities in any legal form, including the purchase, sale, leasing and renting of real estate, the issuing of real estate income certificates or land certificates and the management of real estate properties.

The company may grant loans of any kind, duration or amount. It may secure its own obligations or obligations of third parties notably by providing guarantees and by mortgaging or pledging its assets, including its own commercial undertaking (fonds de commerce / handelszaak).

The company may exercise the functions of director, manager or liquidator in companies or associations. It may also supervise and control such companies or associations.

272 In general, the company may undertake all commercial, industrial and financial operations directly or indirectly related to its purpose and all actions which could facilitate the realisation of its purpose”.

Share Capital and Shares On the date of this prospectus, the Company’s share capital amounts to EUR 1,610,569,280 represented by 80,528,464 ordinary shares without nominal value. The capital is fully paid-up. The issue premium amounts to EUR 156,929,776.

Upon the fulfilment, under the indicative timetable on or about 30 October 2007, of the condition precedent for the exercise by Zinifex of the Equalisation Subscription Right, Zinifex will effectively subscribe for and pay up the 19,471,536 Equalisation Shares for an amount of EUR 427,375,848 (see “Related Party Transactions — Business Combination and Shareholders’ Agreement — Equalisation Mechanism” beginning on page 265). This amount will be recorded as capital in the amount of EUR 389,430,720 and as issue premium in the amount of EUR 37,945,128. Consequently, the Company’s share capital will amount to EUR 2,000,000,000 represented by 100,000,000 ordinary shares without nominal value. The issue premium will amount to EUR 194,874,904.

In the event that the value of the Company as inferred from the Offering exceeds the aggregate values for which we acquired the Zinc Businesses on 31 August 2007 by more than 5%, there will be an additional capital increase, under the indicative timetable on or about 30 October 2007, to be subscribed in cash by the Selling Shareholders in accordance with their relative economic interests, i.e., 59.74% of the capital increase will be subscribed to by Zinifex and 40.26% by Umicore. The amount of such additional capital increase, if any, and issue premium, if any, will not be known until around 29 October 2007. However, any additional ordinary shares subscribed to by the Selling Shareholders on or about 30 October 2007 in the framework of this additional capital increase will immediately be regrouped with the 80,528,464 ordinary shares existing on the date of this prospectus and with the 19,471,536 Equalisation Shares, as a result of which the total number of ordinary shares will be unaffected by such additional capital increase (see also “Related Party Transactions — Business Combination and Shareholders’ Agreement — Additional Capital Increase – Purchase Price Adjustment Based on IPO Proceeds” beginning on page 266).

Form and Transferability of the Shares The shares of the Company can take the form of registered shares, bearer shares in book-entry form or dematerialised shares. The shares being offered will take the form of bearer shares in book-entry form.

As of 1 January 2008, all bearer shares in book-entry form will be automatically converted into dematerialised shares.

All of the Company’s shares are fully paid-up and freely transferable.

Currency All shares of the Company are denominated in euro.

Description of Rights and Benefits Attached to the Shares Voting Rights Each shareholder of the Company is entitled to one vote per share. Shareholders may vote by proxy.

Voting rights can be suspended in relation to shares: • Which are not fully paid up, notwithstanding the request thereto of the Board of Directors of the Company; • To which more than one person is entitled, except in the event a single representative is appointed for the exercise of the voting right; • Which entitle their holder to voting rights above the threshold of 3%, 5%, 7.5%, 10%, 15%, 20% and any further multiple of 5% of the total number of voting rights attached to the outstanding financial instruments of the Company on the date of the relevant Shareholders’ Meeting, except in the event where the relevant shareholder has notified the Company and the CBFA at least 20 days prior to the date of the Shareholders’ Meeting on which he or she wishes to vote its shareholding reaching or exceeding the thresholds above; and • Of which the voting right was suspended by a competent court or the CBFA.

273 Generally, the Shareholders’ Meeting has sole authority with respect to: • The approval of the annual accounts of the Company; • The appointment and dismissal of directors and the statutory auditor of the Company; • The granting of release from liability to the directors and the statutory auditor; • The determination of the remuneration of the directors and of the statutory auditor for the exercise of their mandate; • The distribution of profits; • The filing of a claim for liability against directors; • The decisions relating to the dissolution, merger and certain other re-organisations of the Company; and • The approval of amendments to the articles of association.

Right to Attend and Vote at Shareholders’ Meetings Annual Shareholders’ Meeting The Annual Shareholders’ Meeting is held at the registered office of the Company or at the place determined in the notice convening the Shareholders’ Meeting. The meeting is held every year on the last Wednesday of April at 10:30 hours (Central European Time, GMT+1). If this date is a legal holiday, in either or both of the two cultural communities of Belgium, the meeting is held the next business day at the same time. At the Annual Shareholders’ Meeting, the Board of Directors submits the audited stand-alone and consolidated financial statements and the reports of the Board of Directors and of the statutory auditor with respect thereto to the shareholders. The Shareholders’ Meeting then decides on the approval of the stand-alone financial statements, the proposed allocation of the Company’s profit or loss, the release from liability of the directors and the statutory auditor, and, when applicable, the (re-)appointment or dismissal of the statutory auditor and/or of all or certain directors.

Special and Extraordinary Shareholders’ Meetings The Board of Directors or the statutory auditor (or the liquidators, if appropriate) may, whenever the interest of the Company so requires, convene a Special or Extraordinary Shareholders’ Meeting. Such Shareholders’ Meeting must also be convened every time one or more shareholders holding at least 20% of the Company’s share capital so demand. Shareholders that do not hold at least 20% of the Company’s share capital do not have the right to have the Shareholders’ Meeting convened.

Notices Convening the Shareholders’ Meeting The notice convening the Shareholders’ Meeting must state the place, date and hour of the meeting and shall include an agenda indicating the items to be discussed as well as any motions for resolutions.

The notice must be published in the Belgian Official Gazette (Moniteur belge / Belgisch Staatsblad) at least 24 days prior to the Shareholders’ Meeting or the registration date (if such date is specified in the convening notices). The notice must also be published in a national newspaper 24 days prior to the date of the Shareholders’ Meeting or the registration date (if such date is specified in the convening notices). The annual accounts, the annual report of the Board of Directors and the annual report of the statutory auditor must be made available to the public at least 15 days prior to the date of the Annual Shareholders’ Meeting. Convening notices must be sent 15 days prior to the Shareholders’ Meeting to the holders of registered shares, holders of registered bonds, holders of registered subscription rights, holders of registered certificates issued with the co-operation of the Company and to the directors and statutory auditor of the Company. This communication is made by ordinary letter unless the addressees have individually and expressly accepted in writing to receive the notice by another form of communication, without having to give evidence of the fulfilment of such formality.

Formalities to Attend the Shareholders’ Meeting All holders of shares, subscription rights, bonds (if any) issued by the Company and all holders of certificates issued with the co-operation of the Company (if any) can attend Shareholders’ Meetings. Only shareholders, however, may vote at Shareholders’ Meetings.

274 In order to be admitted to attend the Shareholders’ Meeting, holders of bearer instruments in book-entry form must deposit a certificate of unavailability issued by a recognised account holder with the clearing agency for the financial instruments concerned or the clearing agency itself, confirming the number of financial instruments that have been registered in the name of the holder concerned and stating that these financial instruments are blocked until after the date of the Shareholders’ Meeting. The certificate must be deposited at the Company’s registered office or any other place indicated in the notice convening the Shareholders’ Meeting at the latest three business days prior to the meeting.

Registration Date In accordance with Article 536 of the Belgian Companies Code, the articles of association also allow the Board of Directors to specify a registration date in the notice convening the Shareholders’ Meeting. If the Board of Directors decides to set a registration date in the notice, only shareholders who hold shares at 24:00 hours (Central European Time, GMT+1) on the registration date may participate and vote with such shares at the Shareholders’ Meeting, regardless of the number of shares that they hold on the actual date of the Shareholders’ Meeting. The specified registration date can be no earlier than 15 calendar days, and no later than five business days, before the date of the Shareholders’ Meeting.

Proxy Each shareholder has the right to attend a Shareholders’ Meeting and to vote at the Shareholders’ Meeting in person or through a proxy holder. The proxy holder must be either another shareholder or a director of the Company. The Board of Directors can request the participants to the meeting to use a model of proxy (with voting instructions), which must be deposited at the Company’s registered office or at a place specified in the notice convening the Shareholders’ Meeting at least three business days prior to the meeting.

Quorum and Majorities In general, there is no attendance quorum requirement for a Shareholders’ Meeting and decisions are generally passed with a simple majority of the votes of the shares present or represented. However, capital increases (other than those decided by the Board of Directors pursuant to the authorised capital), decisions with respect to the Company’s dissolution, mergers, de-mergers and certain other reorganisations of the Company, amendments to the articles of association (other than an amendment of the corporate purpose), and certain other matters referred to in the Belgian Companies Code do not only require the presence or representation of at least 50% of the share capital of the Company but also a majority of at least 75% of the votes cast. An amendment of the Company’s corporate purpose requires the approval of at least 80% of the votes cast at a Shareholders’ Meeting, which can only validly pass such resolution if at least 50% of the share capital of the Company and at least 50% of the profit certificates, if any, are present or represented. In the event where the required quorum is not present or represented at the first meeting, a second meeting needs to be convened through a new notice. The second Shareholders’ Meeting may validly deliberate and decide regardless of the number of shares present or represented.

Dividends All shares participate in the same manner in the Company’s profits (if any). The ordinary shares offered in the Offering carry the right to receive dividends (if any) payable with respect to the entire financial year ending 31 December 2007 and each subsequent financial year. Pursuant to the Belgian Companies Code, the shareholders can in principle decide on the distribution of profits with a simple majority vote at the occasion of the Annual Shareholders’ Meeting, based on the most recent non-consolidated audited annual accounts, prepared in accordance with the generally accepted accounting principles in Belgium and based on a (non-binding) proposal of the Company’s Board of Directors. The Company’s articles of association also authorise the Board of Directors to declare interim dividends subject to the terms and conditions of the Belgian Companies Code.

Dividends can only be distributed if following the declaration and issuance of the dividends the amount of the Company’s net assets on the date of the closing of the last financial year as follows from the statutory annual accounts (i.e., the amount of the assets as shown in the balance sheet, decreased with provisions and liabilities, all as prepared in accordance with Belgian accounting rules), decreased with the non-amortised costs of incorporation and extension and the non-amortised costs for research and development, does not fall below the amount of the paid-up capital (or, if higher, the issued capital), increased with the amount of non-distributable reserves. In addition, prior to distributing dividends, 5% of the net profits must be allotted to a legal reserve, until the legal reserve amounts to 10% of the Company’s share capital.

275 In relation to bearer shares, in principle the entitlement to dividends does not lapse. In accordance with the Law of 24 July 1921, if the Company wishes to invoke a statute of limitations in relation to dividends on its bearer shares, it must deposit the amount of the unclaimed dividends with the Caisse de Dépots et Consignations / Deposito- en Consignatiekas. After 30 years, dividends that have remained unclaimed accrue to the Belgian State. With regard to registered shares, the right to payment of dividends lapses five years after the dividends have become payable.

See “Dividend Policy” beginning on page 55 for the Company’s dividend policy.

Rights Regarding Liquidation The Company can only be dissolved by a shareholders’ resolution passed with a majority of at least 75% of the votes cast at an Extraordinary Shareholders’ Meeting where at least 50% of the share capital is present or represented.

If, as a result of losses incurred, the ratio of the Company’s net assets (determined in accordance with Belgian legal and accounting rules) to share capital is less than 50%, the Board of Directors must convene an Extraordinary Shareholders’ Meeting within two months as of the date upon which the Board of Directors discovered or should have discovered this undercapitalisation. At this Shareholders’ Meeting the Board of Directors needs to propose either the dissolution of the Company or the continuation of the Company, in which case the Board of Directors must propose measures to redress the Company’s financial situation. Shareholders representing at least 75% of the votes validly cast at this meeting have the right to dissolve the Company, provided that at least 50% of the Company’s share capital is present or represented at the meeting.

If, as a result of losses incurred, the ratio of the Company’s net assets to share capital is less than 25%, the same procedure must be followed, it being understood, however, that in that event shareholders representing 25% of the votes validly cast at the meeting can decide to dissolve the Company. If the amount of the Company’s net assets has dropped below EUR 61,500 (the minimum amount of share capital of a limited liability company or SA (société anonyme)/NV(naamloze vennootschap)), any interested party is entitled to request the competent court to dissolve the Company. The court can order the dissolution of the Company or grant a grace period within which the Company is to remedy the situation.

Changes to the Share Capital In principle, changes to the share capital are decided by the shareholders. The Shareholders’ Meeting may at any time decide to increase or decrease the share capital of the Company. Such resolution must satisfy the quorum and majority requirements that apply to an amendment of the articles of association, as described above under “— Right to attend and vote at Shareholders’ Meetings — Quorum and majorities”.

Capital Increases by the Board of Directors Subject to the same quorum and majority requirements, the Shareholders’ Meeting may authorise the Board of Directors, within certain limits, to increase the Company’s share capital without any further approval of the shareholders. This is the so-called authorised capital. This authorisation needs to be limited in time (i.e., it can only be granted for a renewable period of maximum five years) and in scope (i.e., the authorised capital may not exceed the amount of the registered capital at the time of the authorisation). On 5 October 2007, the Company’s Shareholders’ Meeting authorised the Board of Directors to increase the share capital of the Company within the framework of the authorised capital with maximum EUR 400,000,000 for the purposes of implementing stock option or share plans and acquisitions. See also “— Preferential Subscription Right” beginning on page 276.

Preferential Subscription Right In the event of a capital increase for cash with the issue of new shares, or in the event of an issue of convertible bonds or subscription rights, the existing shareholders have a preferential right to subscribe, pro rata, to the new shares, convertible bonds or subscription rights. These preferential subscription rights are transferable during the subscription period. The Shareholders’ Meeting may decide to limit or cancel this preferential subscription right, subject to special reporting requirements. Such decision by the Shareholders’ Meeting needs to satisfy the same quorum and majority requirements as the decision to increase the Company’s share capital.

276 The shareholders may also decide to authorise the Board of Directors to limit or cancel the preferential subscription right within the framework of the authorised capital, subject to the terms and conditions set forth in the Belgian Companies Code. The Company’s 5 October 2007 Shareholders’ Meeting granted the Board of Directors this authorisation within the limits of the authorised capital. See also “— Capital increases by the Board of Directors” beginning on page 276.

Generally, unless expressly authorised in advance by the Shareholders’ Meeting, the authorisation of the Board of Directors to increase the share capital of the Company through contributions in cash with cancellation or limitation of the preferential subscription right of the existing shareholders is suspended as of the notification to the Company by the CBFA of a public takeover bid on the financial instruments of the Company. The Company’s Shareholders’ Meeting did not grant such express authorisation to the Board of Directors.

Purchase and Sale of Own Shares In accordance with the Company’s articles of association and the Belgian Companies Code, the Company can only purchase and sell its own shares by virtue of a special shareholders’ resolution approved by at least 80% of the votes validly cast at a Shareholders’ Meeting where at least 50% of the share capital and at least 50% of the profit certificates, if any, are present or represented. The prior approval by the shareholders is not required if the Company purchases the shares to offer them to the Company’s personnel.

In accordance with the Belgian Companies Code, an offer to purchase shares must be made either by way of an offer to all shareholders under the same conditions or on a regulated market. Shares can only be acquired with funds that would otherwise be available for distribution as a dividend to the shareholders. The total amount of shares held by the Company can at no time be more than 10% of its share capital. On 5 October 2007, the Shareholders’ Meeting authorised the Board of Directors to redeem a number of shares that cannot be higher than 10% of the Company’s share capital, for a price not lower than 10% below the average closing price during the last 20 trading days and not higher than 10% above the average closing price during the last 20 trading days. This authorisation is valid for a period of 18 months.

The Board of Directors was not granted the authorisation to purchase own shares “to avoid imminent and serious danger to the Company”, i.e., to defend against public takeover bids.

Legislation and Jurisdiction Notification of Significant Shareholdings Belgian law imposes disclosure requirements on any individual or entity acquiring or transferring voting securities or securities which give a right to voting securities, as soon as, following such acquisition or transfer, the total number of voting rights directly or indirectly held by such individual or entity, alone or in concert with others, increases above or falls below a threshold of 5%, or any multiple of 5%, of the total number of voting rights attached to the Company’s securities. Article 5 of the Law of 2 March 1989 on the disclosure of significant shareholdings in listed companies and on the regulations in relation to public takeover offers (the “Law of 2 March 1989”) (Loi relative à la publicité des participations importantes dans les sociétés cotées en bourse et réglementant les offres publiques d’acquisition / Wet op de openbaarmaking van belangrijke deelnemingen in ter beurze genoteerde vennootschappen en tot reglementering van de openbare overnameaanbiedingen), allows companies to reduce the first disclosure threshold to 3%. The Company has exercised this right in Article 8 of its articles of association. A shareholder whose shareholding increases above or falls below any such thresholds must, each time, disclose this fact to the CBFA and to the Company. The documents pursuant to which the transaction was effected must be submitted to the CBFA. When the participation of a shareholder reaches 20%, the notification must indicate the strategy in which the relevant acquisition or transfer fits, as well as the number of securities acquired during a period of twelve months before the notification and the manner in which such securities were acquired. Such notification is also required if an individual or an entity acquires or transfers control (either direct or indirect, either de iure or de facto) of a company that possesses 3% of the voting rights of the Company.

The forms on which such notifications must be made, as well as further explanations, can be found on the website of the CBFA (www.cbfa.be). The Company is required to publicly disclose any notifications received regarding increases or decreases in a shareholder’s ownership of the Company’s securities on the next business day, and must mention these notifications in the notes to its annual accounts. Euronext Brussels will publish details of the notifications. Violation of the disclosure requirements may result in the suspension of voting rights, a court order to sell the securities to a third party and/or criminal liability. The CBFA may also impose administrative sanctions.

277 The Law of 2 May 2007 on the disclosure of significant shareholdings in issuers whose securities are admitted to trading on a regulated market and containing various provisions (the “New Transparency Law”), implementing under Belgian law the Directive 2004/109/EC of the European Parliament and the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC, will modify the regime on the notification of significant shareholdings as soon as it enters into force. The date of entry into force of the new regime will be determined by a Royal Decree, which will contain additional implementing measures. This Royal Decree has not yet been adopted on the date of this prospectus. The provisions of the Law of 2 March 1989 described above will be repealed as of the date of entry into force of the New Transparency Law.

The main changes contained in this new legislation are the following: • The New Transparency Law reduces the thresholds for the first notification that issuers may introduce in their articles of association. According to Article 18 of the New Transparency Law, thresholds of 1%, 2%, 3%, 4% and 7.5% may be introduced in the articles of association. An issuer may choose to apply any or all of these lower and intermediary thresholds. Since the introduction of these thresholds may not impair mandatory compliance with the legal thresholds (5% and multiples of 5%), a notification will be required when either of the legal thresholds or the thresholds determined by the articles of association are reached; • The events triggering a mandatory notification are extended. While the principle under the Law of 2 March 1989 is that the possession, acquisition and transfer of securities are essentially the only events that trigger the obligation to notify, the New Transparency Law extends the notification obligation to events where there is no acquisition or transfer of securities: • Under the New Transparency Law, a notification is required where, as a result of events changing the breakdown of voting rights, the percentage of voting rights attached to securities with voting rights reaches, exceeds or falls below the thresholds provided for in the above paragraph, even where no acquisition or disposal of securities occurred (e.g., share capital increase or cancellation of treasury shares); and • A notification is also required when physical persons or legal entities enter into, change or terminate an agreement of action in concert, where as a result of such event, the percentage of voting rights subject to the action in concert or the percentage of voting rights of one of the parties acting in concert, reaches, exceeds or falls below the thresholds mentioned in the first paragraph; and • The New Transparency Law provides that the notification does not have to mention the identity of physical persons holding directly or indirectly, excluding securities held by other parties acting in concert, voting rights representing less than 5% of the total voting rights of the issuer (or of the lower threshold set by the articles of association of the issuer) and holding an interest in the issuer representing less than 3% of the voting securities.

Public Takeover Bids Public takeover bids on the Company’s shares and other securities giving access to voting rights (such as subscription rights or convertible bonds, if any) are subject to the supervision by the CBFA. Any public takeover bid must be extended to all of the Company’s voting securities, as well as all other securities giving access to voting rights. Prior to making a bid, a bidder must publish a prospectus, approved by the CBFA prior to publication.

Belgium implemented the Thirteenth Company Law Directive (European Directive 2004/25/EC of 21 April 2004) by the Belgian Law on public takeover bids (Loi sur les offres publiques d’acquisition / Wet op de openbare overnamebiedingen) of 1 April 2007 and a Royal Decree of 27 April 2007 on public takeover bids (Arrêté Royal sur les offres publiques d’acquisition / Koninklijk Besluit op de openbare overnamebiedingen). The Belgian Law on public takeover bids provides that a mandatory bid will need to be launched if a person, as a result of his own acquisition or the acquisition by persons acting in concert with him or by persons acting for their account, directly or indirectly holds more than 30% of the voting securities in a company having its registered office in Belgium and of which at least part of the voting securities are traded on a regulated market or on a multilateral trading facility designated by Royal Decree.

There are several provisions of Belgian company law and certain other provisions of Belgian law, such as the obligation to disclose significant shareholdings (see “— Notification of Significant Shareholdings” beginning on page 277) and merger control, that may apply to the Company and which may make an unsolicited tender

278 offer, merger, change in management or other change in control, more difficult. These provisions could discourage potential takeover attempts that other shareholders may consider to be in their best interest and could adversely affect the market price of the Company’s shares. These provisions may also have the effect of depriving the shareholders of the opportunity to sell their shares at a premium.

In addition, the board of directors of Belgian companies may in certain circumstances, and subject to prior authorisation by the shareholders, deter or frustrate public takeover bids through dilutive issuances of equity securities (pursuant to the “authorised capital”) or through share buy-backs (i.e., purchase of own shares).

In principle, the authorisation of the Board of Directors to increase the share capital of the Company through contributions in cash with cancellation or limitation of the preferential subscription right of the existing shareholders is suspended as of the notification to the Company by the CBFA of a public takeover bid on the securities of the Company. The Shareholders’ Meeting can, however, expressly authorise the Board of Directors to increase the capital of the Company by issuing shares in an amount of not more than 10% of the existing shares of the Company at the time of such a public takeover bid. Such authorisation has not been granted to the Board of Directors of the Company. See also “Description of Nyrstar’s Shares and Articles of Association — Share Capital and Shares — Changes to the Share Capital — Preferential Subscription Right” beginning on page 276.

The Board of Directors was not granted the authorisation to purchase own shares “to avoid imminent and serious danger to the Company”, i.e., to defend against public takeover bids. See also “Description of Nyrstar’s Shares and Articles of Association — Share Capital and Shares — Purchase and Sale of Own Shares” beginning on page 277.

Squeeze-outs Pursuant to Article 513 of the Belgian Companies Code, as amended by Article 60 of the Belgian Law on public takeover bids, or the regulations promulgated thereunder, a person or entity, or different persons or entities acting alone or in concert, who, together with the company, own 95% of the securities conferring voting rights in a public company, can acquire the totality of the securities conferring (potential) voting rights in that company following a squeeze-out offer. The shares that are not voluntarily tendered in response to such offer are deemed to be automatically transferred to the bidder at the end of the procedure. At the end of the offer, the company is no longer deemed a public company, unless bonds issued by the company are still spread among the public. The consideration for the securities must be in cash and must represent the fair value as to safeguard the interests of the transferring shareholders.

Sell-out Right Holders of securities conferring (potential) voting rights may require an offeror who, acting alone or in concert, following a takeover bid, owns 95% of the voting capital or 95% of the securities conferring voting rights in a public company to buy their securities at the price of the bid, upon the condition that the offeror has acquired, through the bid, securities representing at least 90% of the voting capital subject to the takeover bid.

279 TAXATION

Belgian Tax Regime The paragraphs below present a summary of certain material Belgian federal income tax consequences of the ownership and disposition of shares by an investor that purchases such shares in connection with this Offering. The summary is based on laws, treaties and regulatory interpretations in effect in Belgium on the date of this prospectus, all of which are subject to change, including changes that could have retroactive effect.

This summary does not purport to address all tax consequences of the ownership and disposition of shares, and does not take into account the specific circumstances of particular investors, some of which may be subject to special rules, or the tax laws of any country other than Belgium. This summary does not describe the tax treatment of investors that are subject to special rules, such as banks, insurance companies, collective investment undertakings, dealers in securities or currencies, persons that hold, or will hold, shares as a position in a straddle, share-repurchase transaction, conversion transactions, synthetic security or other integrated financial transactions.

For purposes of this summary, a Belgian resident is an individual subject to Belgian personal income tax (i.e., an individual who is domiciled in Belgium or has his seat of wealth in Belgium or a person assimilated to a resident), a company subject to the Belgian corporate income tax (i.e., a corporate entity that has its statutory seat, its main establishment, its administrative seat or seat of management in Belgium) or a legal entity subject to the Belgian income tax on legal entities (i.e., a legal entity other than a company subject to Belgian corporate income tax, that has its statutory seat, its main establishment, its administrative seat or seat of management in Belgium). A Belgian non-resident is any person that is not a Belgian resident.

Investors should consult their own advisers regarding the tax consequences of an investment in shares in the light of their particular circumstances, including the effect of any state, local or other national laws.

Belgian Residents Dividends Withholding Tax As a general rule, a withholding tax of 25% is levied on the gross amount of dividends paid on or attributed to the shares, subject to such relief as may be available under applicable domestic provisions. Dividends subject to the dividend withholding tax include all benefits paid on or attributed to the shares, irrespective of their form, as well as reimbursements of statutory capital, except reimbursements of fiscal capital made in accordance with the Belgian Companies Code. In principle, fiscal capital includes the paid-up statutory capital, paid-up share premiums and the amounts subscribed to at the time of the issue of profit sharing certificates, if treated in the same way as capital according to the articles of association of Nyrstar.

In certain circumstances, Belgian law provides, subject to certain conditions, for a reduction to 15% of the dividend withholding tax with respect to dividends paid on or attributed to shares issued on or after 1 January 1994. The shares offered, however, do not meet the conditions for entitlement to this reduced withholding tax rate of 15% and will therefore, as a general rule, be subject to the 25% dividend withholding tax in Belgium.

If Nyrstar redeems its own shares, the redemption distribution (after deduction of the portion of fiscal capital represented by the redeemed shares) will be treated as a dividend which in certain circumstances may be subject to a withholding tax of 10%, subject to such relief as may be available under applicable domestic provisions. No withholding tax will be triggered if such redemption is carried out on a stock exchange and meets certain conditions. In case of liquidation of Nyrstar, any amounts distributed in excess of the fiscal capital will in principle be subject to the 10% withholding tax, subject to such relief as may be available under applicable domestic provisions.

Individuals For Belgian resident individuals who acquire and hold shares as a private investment, the Belgian dividend withholding tax fully discharges their personal income tax liability. They may nevertheless elect to report the dividends in their personal income tax return. Where the beneficiary opts to report them, dividends will normally be taxable at the lower of the generally applicable 25% withholding tax rate on dividends and the tax rate corresponding to the taxpayer’s tax tranche, taking into account his other reported income. If the beneficiary

280 reports the dividends, the income tax due will be increased by local surcharges. In addition, if the dividends are reported, the dividend withholding tax withheld at source may be credited against the income tax due and is reimbursable to the extent that it exceeds the income tax due, provided that the dividend distribution does not result in a reduction in value of or a capital loss on the shares. This condition is not applicable if the individual can demonstrate that he has held the shares in full legal ownership for an uninterrupted period of 12 months prior to the payment or attribution of the dividends.

For Belgian resident individual investors who acquire and hold the shares for professional purposes, the Belgian withholding tax does not fully discharge their income tax liability. Dividends received must be reported by the investor and will be taxable at the investor’s personal income tax rate. Withholding tax withheld at source may be credited against the income tax due and is reimbursable to the extent that it exceeds the income tax due, subject to two conditions: (1) the taxpayer must own the shares in full legal ownership at the time the dividends are paid or attributed; and (2) the dividend distribution may not result in a reduction in value of or a capital loss on the shares. The latter condition is not applicable if the investor can demonstrate that he has held the full legal ownership of the shares for an uninterrupted period of 12 months prior to the payment or attribution of the dividends.

Companies For Belgian resident companies, the dividend withholding tax does not fully discharge the corporate income tax liability. Gross dividends received must be reported and will be subject to corporate income tax at a rate of 33,99%, unless the reduced corporate income tax rates apply. If withholding tax is levied at source, it may be credited against the corporate income tax due and is reimbursable to the extent that it exceeds the income tax due, subject to two conditions: (1) the taxpayer must own the shares in full legal ownership at the time the dividends are paid or attributed; and (2) the dividend distribution may not result in a reduction in value of or a capital loss on the shares. The latter condition is not applicable (a) if the company can demonstrate that it has held the shares in full legal ownership for an uninterrupted period of 12 months prior to the payment of or attribution on the dividends; or (b) if, during the said period, the shares never belonged to a taxpayer other than a resident company or a non-resident company which has, in an uninterrupted manner, invested the shares in a Belgian permanent establishment.

Belgium resident companies may deduct up to 95% of gross dividends included in their taxable profits if, at the date the dividends are paid or attributed, (1) they hold at least 10% of the capital of Nyrstar or a participation with an acquisition value of at least EUR 1,200,000, (2) they held full legal ownership of the shares, (3) the shares qualify as fixed financial assets under Belgian GAAP, (4) they held or will hold the shares for an uninterrupted period of at least one year, and (5) the conditions relating to the taxation of the underlying distributed income, as described in Article 203 of the Income Tax Code (the “Article 203 ITC Taxation Condition”) are met (together, the “Conditions for the application of the definitively taxed income regime”).

With respect to the verification of the Conditions for the application of the definitively taxed income regime, it should be noted that the minimum shareholding requirement does not apply to dividends received by Belgian credit institutions, insurance companies and stock exchange companies. Moreover, the Conditions for the application of the definitively tax income regime depend on a factual analysis upon each distribution, and for this reason the availability of this regime should be verified upon each distribution.

Organisations for Financing Pensions The dividends received by organisations for financing pensions (organismes de financement de pensions / organismen voor de financiering van pensioenen) within the meaning of Article 8 of the Law of 27 October 2006) are exempt from corporate income tax. Organisations for financing pensions can obtain a full (and reimbursable) tax credit for the Belgian withholding tax levied on dividends.

Other Taxable Legal Entities For taxpayers subject to the Belgium income tax on legal entities, the Belgian dividend withholding tax in principle fully discharges its income tax liability.

Capital Gains and Losses Individuals Individual Belgian residents acquiring the shares as a private investment should not be subject to Belgian capital gains tax on the disposal of the shares and capital losses are not tax deductible.

281 Individual Belgian residents may, however, be subject to a 33% tax (plus local surcharges) if the capital gain is deemed to be realised outside the scope of the normal management of the individual’s private estate. Losses arising from such transactions are deductible from the taxable income received from similar transactions provided the losses were incurred during the preceding five income years.

Capital gains realised by Belgian resident individuals upon the redemption of the shares or upon the liquidation of Nyrstar will generally be taxable as a dividend. See “— Dividends” beginning on page 280.

Individual Belgian residents who hold the shares for professional purposes are taxable at the ordinary progressive income tax rates on any capital gains realised upon the disposal of the shares, except for shares held for more than five years, which are taxable at a separate rate of 16.5% (plus local surcharges). Capital losses on the shares incurred by individual Belgian residents who hold the shares for professional purposes are in principle tax deductible.

Capital gains realised by individual Belgian residents on the disposal of the shares for consideration, outside the exercise of a professional activity, to a non-resident company (or a body constituted in a similar legal form), to a foreign State (or one of its political subdivisions or local authorities) or to a non-resident legal entity, are in principle taxable at a rate of 16.5% (plus local surcharges) if, at any time during the five years preceding the sale, the individual Belgian resident has owned directly or indirectly, alone or with his/her spouse or with certain relatives, a substantial shareholding in Nyrstar (i.e., a shareholding of more than 25% in Nyrstar). This rule has been deemed not to be in line with the freedom of establishment and the free movement of capital set forth in the EC Treaty by the European Court of Justice in its decision of 8 June 2004. The Belgian tax authorities accept that this rule does not apply if the shares are transferred to the above mentioned persons provided that they are established in the European Economic Area.

Companies Belgian resident companies are normally not subject to Belgian capital gains taxation on gains realised upon the disposal of shares provided that the Article 203 Tax Condition, described above under “Other Belgian Residents — Dividends — Withholding Tax” is met. Capital losses on shares incurred by resident companies are in principle not tax deductible.

Capital gains realised by Belgian resident companies upon the redemption of shares or upon the liquidation of Nyrstar will in principle be taxable as dividends. See “— Dividends” beginning on page 280.

Other Taxable Legal Entities Belgian resident legal entities subject to the legal entities income tax are, in principle, not subject to Belgian capital gains taxation on the disposal of shares, except in case of transfer of a substantial shareholding to an entity established outside the European Economic Area. Capital gains realised by legal entities resident in Belgium on the redemption of shares or upon the liquidation of Nyrstar will in principle be taxed as dividends (see “— Dividends” beginning on page 280).

Capital losses on shares incurred by legal persons resident in Belgium are not tax deductible.

Tax on Stock Exchange Transactions A stock market tax is generally levied on the purchase and the sale, and on any other acquisition and transfer for consideration in Belgium of existing shares through a professional intermediary in Belgium on a secondary market (so-called “secondary market transactions”). Investors purchasing shares are subject to a 0.17% stock market tax imposed on the purchase price, but with a cap of EUR 500 per transaction and per party.

No stock market tax is due by: (1) professional intermediaries described in Article 2, 9° and 10° of the Law of 2 August 2002 acting for their own account; (2) insurance companies described in Article 2, §1 of the Law of 9 July 1975 acting for their own account; (3) professional retirement institutions referred to in Article 2, 1° of the Law of 27 October 2006 concerning the supervision on institutions for occupational pension; and (4) collective investment institutions acting for their own account.

282 Belgian Non-residents Dividends Withholding Tax As a general rule, a withholding tax of 25% is levied on the gross amount of dividends paid on or attributed to the shares, subject to such relief as may be available under applicable domestic or tax treaty provisions. Dividends subject to the dividend withholding tax include all benefits paid on or attributed to the shares, irrespective of their form, as well as reimbursements of statutory capital, except reimbursements of fiscal capital made in accordance with the Belgian Companies Code. In principle, fiscal capital includes paid-up statutory capital, paid-up share premiums and the amounts subscribed to at the time of the issue of profit sharing certificates, if treated in the same way as capital according to the articles of association of Nyrstar.

In certain circumstances, Belgian law provides, subject to certain conditions, for a reduction of the dividend withholding tax to 15% on shares issued on or after 1 January 1994. The shares offered, however, do not meet the conditions for entitlement to this reduced withholding tax rate of 15% and will therefore, as a general rule, be subject to the 25% dividend withholding tax in Belgium.

If Nyrstar redeems its own shares, the redemption distribution (after deduction of the portion of fiscal capital represented by the redeemed shares) will be treated as a dividend which in certain circumstances may be subject to a withholding tax of 10%, subject to such relief as may be available under applicable domestic or tax treaty provisions. No withholding tax will be triggered if such redemption is carried out on a stock exchange and meets certain conditions. In case of the liquidation of Nyrstar, any amounts distributed in excess of the fiscal capital will be subject to the 10% withholding tax, subject to such relief as may be available under applicable domestic or tax treaty provisions.

For non-resident individuals and companies, the dividend withholding tax will be the only tax on dividends in Belgium, unless the non-resident holds the shares in connection with a business conducted in Belgium through a fixed base in Belgium or a Belgian permanent establishment. If the shares are acquired by a non-resident in connection with a business in Belgium, the investor must report any dividends received, which will be taxable at the applicable non-resident individual or corporate income tax rate, as appropriate. Withholding tax levied at source may be credited against non-resident individual or corporate income tax and is reimbursable to the extent that it exceeds the income tax due, subject to two conditions: (1) the taxpayer must own the shares in fully legal ownership at the time the dividends are paid or attributed; and (2) the dividend distribution may not result in a reduction in value of or a capital loss on the shares. The latter condition is not applicable if (1) the non-resident individual or the non-resident company can demonstrate that the shares were held in full legal ownership for an uninterrupted period of 12 months prior to the payment or attribution of the dividends; or (2) with regard to non-resident companies only, if, during the said period, the shares have not belonged to a taxpayer other than a resident company or a non-resident company which has, in an uninterrupted manner, invested the shares in a Belgian permanent establishment.

Non-resident companies whose shares are invested in a Belgian permanent establishment may deduct up to 95% of the gross dividends included in their taxable profits if, at the date dividends are paid or attributed, the Conditions for the application of the definitively tax income regime are met. Application of the definitively taxed income regime depends, however, on a factual analysis to be made upon each distribution and its availability should be verified upon each distribution.

Relief of Belgian Withholding Tax Under Belgian tax law, withholding tax is not due on dividends paid to a non-resident organisation that is not engaged in any business or other profit making activity and is exempt from income taxes in its country of residence, provided that it is not contractually obligated to redistribute the dividends to any beneficial owner of such dividends for whom it would manage the shares. The exemption will only apply if the organisation signs a certificate confirming its qualifying status and that it is the full legal owner or usufruct holder of the shares. The organisation must then forward that certificate to Nyrstar or its paying agent.

Dividends distributed to non-resident companies established in a Member State of the EU or in a country with which Belgium has concluded a double tax treaty that includes an exchange of information clause and qualifying as a parent company, will be exempt from Belgian withholding tax provided that the shares held by the non-resident company, upon attribution of the dividends amount to at least 15% of Nyrstar’s capital and are held or will be held during an uninterrupted period of at least one year. A company qualifies as a parent company provided that (i) for companies established in a Member State of the EU, it has a legal form as listed in the annex to the EU Parent-Subsidiary Directive of 23 July 1990 (90/435/EC), as amended by Directive 2003/123/EC of

283 22 December 2003, or, for companies established in a country with which Belgium has concluded a double tax treaty that includes an exchange of information clause, a legal form similar to the ones listed in such annex; (ii) it is considered to be a tax resident according to the tax laws of the country where it is established and the double tax treaties concluded between such country and third countries; and (iii) it is subject to corporate income tax or a similar tax without benefiting from a beneficial tax regime.

In order to benefit from this exemption, the investor must provide Nyrstar or its paying agent with a certificate confirming its qualifying status and the fact that it meets the two required conditions. If the investor holds the shares for less than one year, at the time the dividends are paid on or attributed to the shares, Nyrstar will deduct the withholding tax but will not transfer it to the Belgian Treasury provided that the investor certifies its qualifying status, the date from which the investor has held the shares, and the investor’s commitment to hold the shares for an uninterrupted period of at least one year. The investor must also inform Nyrstar or its paying agent if the one-year period has expired or if its shareholding will drop below 15% of Nyrstar’s capital before the end of the one year holding period. Upon satisfying the one-year shareholding requirement, the deducted dividend withholding tax will be refunded to the investor. The 15% minimum participation requirement will be reduced to 10% for dividends paid on or attributed to shares from 1 January 2009.

Belgium has concluded tax treaties with more than 80 countries, reducing the dividend withholding tax rate to 15%, 10%, 5% or 0% for residents of those countries, depending on conditions, among others, related to the size of the shareholding and certain identification formalities.

Prospective holders should consult their own tax advisors as to whether they qualify for reduction in withholding tax upon payment of dividends, and as to the procedural requirements for obtaining a reduced withholding tax upon the payment of dividends or for making claims for reimbursement.

Capital Gains and Losses Individuals Capital gains realised on the shares by a non-resident individual that has not acquired the shares in connection with a business conducted in Belgium through a fixed base in Belgium or a Belgian permanent establishment generally are not subject to taxation and capital losses are not tax deductible.

However, if the gain is deemed to be realised outside the scope of the normal management of the individual’s private estate, the gain will be subject to a final professional withholding tax of 30.28%. Losses arising from such transactions are deductible from the taxable income received from similar transactions provided the losses were incurred during the preceding five income years. Belgium has concluded tax treaties with more than 80 countries which generally provide for a full exemption from Belgian capital gain taxation on such gains realised by residents of those countries.

Capital gains realised by Belgian non-resident individuals upon the redemption of shares or upon the liquidation of Nyrstar will generally be taxable as a dividend. See “— Dividends” beginning on page 280.

Capital gains will be taxable at the ordinary progressive income tax rates and capital losses will be tax deductible, if those gains or losses are realised on shares by a non-resident individual that holds shares in connection with a business conducted in Belgium through a fixed base in Belgium.

Capital gains realised by non-resident individuals on the disposal of the shares for consideration, outside the exercise of a professional activity, to a non-resident company (or a body constituted in a similar legal form), to a foreign State (or one of its political subdivisions or local authorities) or to a non-resident legal person, are in principle taxable at a rate of 16.5% if, at any time during the five years preceding the sale, the seller has owned directly or indirectly, alone or with his/her spouse or with certain relatives, a substantial shareholding in Nyrstar (i.e., a shareholding of more than 25% in Nyrstar). This rule has been deemed not to be in line with the freedom of establishment and the free movement of capital set forth in the EC Treaty by the European Court of Justice in its decision of 8 June 2004. The Belgian tax authorities accept that this rule does not apply if the shares are transferred to the above-mentioned persons provided that they are established in the European Economic Area. Belgium has concluded tax treaties with more than 80 countries which generally provide for a full exemption from Belgian capital gain taxation on such gains realised by residents of those countries.

Companies Capital gains realised on the shares by a non-resident company or other non-resident entity that have not acquired shares in connection with a business conducted in Belgium through a Belgian permanent establishment

284 are generally not subject to taxation and losses are not tax deductible. Capital gains realised by a non-resident company or other non-resident entity that holds shares in connection with a business conducted in Belgium through a Belgian permanent establishment are normally not subject to Belgian capital gains taxation on the disposal of shares, provided that, at the date of disposal, the Article 203 ITC Taxation Condition, described above under “— Belgian residents — Dividends — Withholding tax” is satisfied with respect to the dividend payment. Losses on shares incurred by a non-resident company or other non-resident entity are in general not tax deductible.

Capital gains realised by non-resident companies or other legal entities upon the redemption of shares or upon the liquidation of Nyrstar will generally be taxable as a dividend. See “— Dividends” beginning on page 280.

Tax on Stock Exchange Transactions A stock market tax is normally levied on the purchase and the sale and on any other acquisition and transfer for consideration in Belgium, of existing shares through a professional intermediary established in Belgium on the secondary market (so-called “secondary market transactions”). The applicable rate amounts to 0.17% of the consideration paid but with a cap of EUR 500 per transaction and per party.

Belgian non-residents who purchase or otherwise acquire or transfer, for consideration, existing shares for their own account through an intermediary established in Belgium may be exempt from the stock market tax in Belgium if they deliver a sworn affidavit to the intermediary confirming their non-resident status.

There is also an exemption for: (1) professional intermediaries described in Article 2, 9° and 10° of the Law of 2 August 2002 acting for their own account; (2) insurance companies described in Article 2, §1 of the Law of 9 July 1975 acting for their own account; (3) professional retirement institutions referred to in Article 2, 1° of the Law of 27 October 2006 concerning the supervision on institution for occupational pensions acting for their own account; and (4) collective investment institutions acting for their own account.

United States Tax Regime TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, HOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES IN THIS PROSPECTUS IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY HOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON HOLDERS UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS INCLUDED HEREIN BY THE COMPANY IN CONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) BY THE COMPANY OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) HOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

The following is a summary of certain material U.S. federal income tax consequences of the acquisition, ownership and disposition of ordinary shares by a U.S. Holder (as defined below). This summary deals only with initial purchasers of ordinary shares that are U.S. Holders and that will hold the ordinary shares as capital assets. The discussion does not cover all aspects of U.S. federal income taxation that may be relevant to, or the actual tax effect that any of the matters described herein will have on, the acquisition, ownership or disposition of ordinary shares by particular investors, and does not address state, local, foreign or other tax laws. In particular, this summary does not address tax considerations applicable to investors that own (directly or indirectly) 10% or more of the voting stock of the Company, nor does this summary discuss all of the tax considerations that may be relevant to certain types of investors subject to special treatment under the U.S. federal income tax laws (such as financial institutions, insurance companies, investors liable for the alternative minimum tax, individual retirement accounts and other tax-deferred accounts, tax-exempt organisations, dealers in securities or currencies, investors that will hold the ordinary shares as part of straddles, hedging transactions or conversion transactions for U.S. federal income tax purposes or investors whose functional currency is not the U.S. dollar).

As used herein, the term “U.S. Holder” means a beneficial owner of ordinary shares that is, for U.S. federal income tax purposes, (i) an individual citizen or resident of the United States, (ii) a corporation created or organised under the laws of the United States or any State thereof, (iii) an estate the income of which is subject to U.S. federal income tax without regard to its source or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or the trust has elected to be treated as a domestic trust for U.S. federal income tax purposes.

285 The U.S. federal income tax treatment of a partner in a partnership that holds ordinary shares will depend on the status of the partner and the activities of the partnership. Prospective purchasers that are partnerships should consult their tax advisers concerning the U.S. federal income tax consequences to their partners of the acquisition, ownership and disposition of ordinary shares by the partnership.

The summary assumes that the Company is not a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes, which the Company believes to be the case. The Company’s possible status as a PFIC must be determined annually and therefore may be subject to change. If the Company were to be a PFIC in any year, materially adverse consequences could result for U.S. Holders.

The summary is based on the tax laws of the United States, including the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations thereunder, published rulings and court decisions, as well as on the income tax treaty between the United States and Belgium (the “Treaty”), all as currently in effect and all subject to change at any time, possibly with retroactive effect.

THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR GENERAL INFORMATION ONLY. ALL PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISERS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING THE ORDINARY SHARES, INCLUDING THEIR ELIGIBILITY FOR THE BENEFITS OF THE TREATY, THE APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.

Dividends General Distributions paid by the Company out of current or accumulated earnings and profits (as determined for U.S. federal income tax purposes), before reduction for any Belgian withholding tax paid by the Company with respect thereto, will generally be taxable to a U.S. Holder as foreign source dividend income, and will not be eligible for the dividends received deduction allowed to corporations. Distributions in excess of current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. Holder’s basis in the ordinary shares and thereafter as capital gain. However, the Company does not maintain calculations of its earnings and profits in accordance with U.S. federal income tax accounting principles. U.S. Holders should therefore assume that any distribution by the Company with respect to ordinary shares will constitute ordinary dividend income. U.S. Holders should consult their own tax advisors with respect to the appropriate U.S. federal income tax treatment of any distribution received from the Company.

For taxable years that begin before 1 January 2011, dividends paid by the Company will be taxable to a U.S. Holder that is an individual, estate or trust at the special reduced rate normally applicable to capital gains, provided the Company qualifies for the benefits of the Treaty. A U.S. Holder will be eligible for this reduced rate only if it has held the ordinary shares for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date. A U.S. Holder will not be able to claim the reduced rate for any year in which the Company is treated as a PFIC. See “— Passive Foreign Investment Company Considerations” beginning on page 288.

Foreign Currency Dividends Dividends paid in euro will be included in income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day the dividends are received by the U.S. Holder, regardless of whether the euro are converted into U.S. dollars at that time. If dividends received in euro are converted into U.S. dollars on the day they are received, the U.S. Holder generally will not be required to recognise foreign currency gain or loss in respect of the dividend income.

Effect of Belgian Withholding Taxes As discussed in “— Belgian Tax Regime — Tax Applicable to the Shares — Belgian non-residents”, under current law payments of dividends by the Company to foreign investors are subject to a 25% Belgian withholding tax. The rate of withholding tax applicable to U.S. Holders that are eligible for benefits under the Treaty is reduced to a maximum of 15%. For U.S. federal income tax purposes, U.S. Holders will be treated as having received the amount of Belgian taxes withheld by the Company, and as then having paid over the withheld taxes to the Belgian taxing authorities. As a result of this rule, the amount of dividend income included in gross income for U.S. federal income tax purposes by a U.S. Holder with respect to a payment of dividends may be greater than the amount of cash actually received (or receivable) by the U.S. Holder from the Company with respect to the payment.

286 A U.S. Holder will generally be entitled, subject to certain limitations, to a credit against its U.S. federal income tax liability, or a deduction in computing its U.S. federal taxable income, for Belgian income taxes withheld by the Company. U.S. Holders that are eligible for benefits under the Treaty will not be entitled to a foreign tax credit for the amount of any Belgian taxes withheld in excess of the 15% maximum rate, and with respect to which the holder can obtain a refund from the Belgian taxing authorities.

For purposes of the foreign tax credit limitation, foreign source income is classified in one of several “baskets”, and the credit for foreign taxes on income in any basket is limited to U.S. federal income tax allocable to that income. Dividends paid by the Company generally will constitute foreign source income in the “passive income” basket. If a U.S. Holder receives a dividend from the Company that qualifies for the reduced rate described above under “Dividends — General”, the amount of the dividend taken into account in calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. In certain circumstances, a U.S. Holder may be unable to claim foreign tax credits (and may instead be allowed deductions) for foreign taxes imposed on a dividend if the U.S. Holder has not held the ordinary shares for at least 16 days in the 31-day period beginning 15 days before the ex dividend date or if such holder holds its shares as part of an arrangement in which its expected economic profit is insubstantial.

U.S. Holders that are accrual basis taxpayers, and who do not otherwise elect, must translate Belgian taxes into U.S. Dollars at a rate equal to the average exchange rate for the taxable year in which the taxes accrue, while all U.S. Holders must translate taxable dividend income into U.S. Dollars at the spot rate on the date received. This difference in exchange rates may reduce the U.S. dollar value of the credits for Belgian taxes relative to the U.S. Holder’s U.S. federal income tax liability attributable to a dividend. However, cash basis and electing accrual basis U.S. Holders may translate Belgian taxes into U.S. Dollars using the exchange rate in effect on the day the taxes were paid. Any such election by an accrual basis U.S. Holder will apply for the taxable year in which it is made and all subsequent taxable years, unless revoked with the consent of the IRS.

Prospective purchasers should consult their tax advisers concerning the foreign tax credit implications of the payment of Belgian taxes.

Sale or other Disposition A U.S. Holder’s tax basis in an ordinary share will generally be its U.S. dollar cost. The U.S. dollar cost of an ordinary share purchased with foreign currency will generally be the U.S. dollar value of the purchase price on the date of purchase, or the settlement date for the purchase, in the case of ordinary shares traded on an established securities market, as defined in the applicable Treasury Regulations, that are purchased by a cash basis U.S. Holder (or an accrual basis U.S. Holder that so elects). Such an election by an accrual basis U.S. Holder must be applied consistently from year to year and cannot be revoked without the consent of the IRS.

Upon a sale or other disposition of ordinary shares, a U.S. Holder generally will recognise capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount realised on the sale or other disposition and the U.S. Holder’s adjusted tax basis in the ordinary shares. This capital gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period in the ordinary shares exceeds one year. However, regardless of a U.S. Holder’s actual holding period, any loss may be long-term capital loss to the extent the U.S. Holder receives a dividend that qualifies for the reduced rate described above under “Dividends — General”, and exceeds 10% of the U.S. Holder’s basis in its ordinary shares.

Any gain or loss will generally be U.S. source. Therefore, in case Belgian taxes are imposed on such gain (see “— Belgian Tax Regime — Tax Applicable to the Shares — Belgian non-residents” beginning on page 283), a U.S. Holder may have insufficient foreign source income to utilise foreign tax credits attributable to such tax (if any) imposed on a sale or disposition. In addition, the Belgian transfer tax imposed with respect to transfer on a stock exchange (see “— Belgian Tax Regime — Belgian non-residents — Tax on stock exchange transactions” beginning on page 285) will not give rise to a foreign tax credit. Prospective purchasers should consult their tax advisers as to the availability of and limitations on any foreign tax credit attributable to taxes imposed with respect to a sale or other disposition of ordinary shares.

The amount realised on a sale or other disposition of ordinary shares for an amount in foreign currency will be the U.S. dollar value of this amount on the date of sale or disposition. On the settlement date, the U.S. Holder will recognise U.S. source foreign currency gain or loss (taxable as ordinary income or loss) equal to the difference (if any) between the U.S. dollar value of the amount received based on the exchange rates in effect on

287 the date of sale or other disposition and the settlement date. However, in the case of ordinary shares traded on an established securities market that are sold by a cash basis U.S. Holder (or an accrual basis U.S. Holder that so elects), the amount realised will be based on the exchange rate in effect on the settlement date for the sale, and no exchange gain or loss will be recognised at that time.

Disposition of Foreign Currency Foreign currency received on the sale or other disposition of a ordinary share will have a tax basis equal to its U.S. dollar value on the settlement date. Foreign currency that is purchased will generally have a tax basis equal to the U.S. dollar value of the foreign currency on the date of purchase. Any gain or loss recognised on a sale or other disposition of a foreign currency (including its use to purchase ordinary shares or upon exchange for U.S. dollars) will be U.S. source ordinary income or loss.

Passive Foreign Investment Company Considerations A foreign corporation will be a PFIC in any taxable year in which, after taking into account the income and assets of the corporation and certain subsidiaries pursuant to applicable “look-through rules” either (i) at least 75% of its gross income is “passive income” or (ii) at least 50% of the average value of its assets is attributable to assets which produce passive income or are held for the production of passive income. Although gains from the sale of commodities are generally treated as passive income, the Company believes that it will be entitled to treat its income from the sale of primary metals as active income, under a special exception that is available to qualifying active producers of commodities. The Company therefore believes that it is not a PFIC, and it does not expect to become a PFIC. The Company’s possible status as a PFIC must be determined annually and therefore may be subject to change. This determination will depend in part on the Company’s continuing status as an active producer of commodities. If the Company were to be treated as a PFIC, U.S. Holders of ordinary shares would be required (i) to pay a special U.S. addition to tax on certain distributions and gains on sale and (ii) to pay tax on any gain from the sale of ordinary shares at ordinary income (rather than capital gains) rates in addition to paying the special addition to tax on this gain. Additionally, dividends paid by the Company would not be eligible for the special reduced rate of tax described above under “— Dividends — General”. Prospective purchasers should consult their tax advisers regarding the potential application of the PFIC regime.

Backup Withholding and Information Reporting Payments of dividends and other proceeds with respect to ordinary shares, by a U.S. paying agent or certain other intermediaries will be reported to the IRS and to the holder as may be required under applicable regulations. Backup withholding may apply to these payments if the holder fails to provide an accurate taxpayer identification number or certification of exempt status or fails to report all interest and dividends required to be shown on its U.S. federal income tax returns. Certain holders (including, among others, corporations) are not subject to backup withholding. Backup withholding tax is not an additional tax. Amounts withheld as backup withholding may be credited against a holder’s U.S. federal income tax liability. A holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the Internal Revenue Service and furnishing any required information. Holders should consult their tax advisers as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.

288 UNDERWRITING AND PLAN OF DISTRIBUTION

Nature of the Offering The Offering consists of a public offering in Belgium and an offering to qualified and/or institutional investors in Belgium and internationally, including to qualified institutional buyers in the United States in reliance on Rule 144A under the Securities Act.

Each of the Underwriters has severally agreed to restrictions on where and to whom they and any dealer purchasing from them may offer and sell the Shares Offered as part of the distribution of the Shares Offered. Each of the Underwriters may offer and sell Shares Offered to qualified and/or institutional investors in Belgium and selected other jurisdictions outside of the United States as part of the institutional offering and to the public in Belgium as part of the public offering in Belgium. Certain of the Underwriters, through their respective selling agents, propose to resell the Shares Offered in the United States only to qualified institutional buyers in reliance on Rule 144A and only through broker-dealers who are registered as such under the U.S. Securities Exchange Act of 1934. Transactions between U.S. investors and any Underwriter that is not a U.S. broker/dealer will be effected by their respective selling agents noted in the preceding sentence in accordance with Rule 15a-6 under the U.S. Securities Exchange Act of 1934 and interpretations of the U.S. Securities and Exchange Commission thereunder. All offers and sales outside of the United States will be made in reliance on Regulation S under the Securities Act.

Underwriting UBS Limited, Deutsche Bank AG and Goldman Sachs International are Joint Global Coordinators. UBS Limited, Deutsche Bank AG, Goldman Sachs International, Fortis Bank SA/NV and KBC Securities SA/NV are Joint Bookrunners and Underwriters. Fortis Bank SA/NV and KBC Securities SA/NV are Belgian Joint Lead Managers.

The Company, the Selling Shareholders and the Underwriters expect (but have no obligation) to enter into an Underwriting Agreement upon the determination of the offer price, which is expected to take place on or about 29 October 2007. The entering into the Underwriting Agreement may depend on various factors including, but not limited to, market conditions and the result of the book-building process.

Subject to the terms and conditions to be set forth in the Underwriting Agreement, the Selling Shareholders will agree to sell the Shares Offered, and the Underwriters will severally agree to purchase the following percentage of the total number of Shares Offered:

% of total number of Shares Underwriters Offered UBS Limited ...... 23.50% Deutsche Bank AG ...... 23.50% Goldman Sachs International ...... 23.50% Fortis Bank SA/NV ...... 11.00% KBC Securities SA/NV ...... 11.00% Macquarie Europe Limited ...... 2.25% Royal Bank of Canada Europe Limited ...... 2.25% ING Belgium SA/NV ...... 1.00% Petercam SA/NV ...... 1.00% Bank Degroof SA/NV ...... 1.00% Total ...... 100.00%

The Underwriters will be under no obligation to purchase any Shares Offered prior to the execution of the Underwriting Agreement (and then only on the terms and subject to the conditions set out therein).

The Underwriting Agreement will provide that if an Underwriter defaults, in certain circumstances, the purchase commitments of the non-defaulting Underwriters may be increased or the Underwriting Agreement may be terminated.

The Underwriters will distribute the Shares Offered to investors, subject to prior sale, when, as and if delivered to them, subject to the satisfaction or waiver of the conditions that will be contained in the Underwriting Agreement, including the receipt by the Underwriters of officers’ certificates and legal opinions.

289 In the Underwriting Agreement, the Company and each of the Selling Shareholders will make certain representations and warranties and agree to indemnify the Underwriters against certain liabilities, including liability under the Securities Act.

The Underwriting Agreement will provide that the Joint Bookrunners will have the right to terminate, on behalf of the Underwriters, collectively but not individually, the Underwriting Agreement and their obligation thereunder to purchase and deliver the Shares Offered (i) upon the occurrence of certain events, such as the suspension of trading in the Company’s ordinary shares or in securities generally, on specified stock exchanges, or a material adverse change in the Company’s financial position, shareholders’ equity, results of operations or business affairs or in the financial markets, and (ii) if the conditions contained in the Underwriting Agreement, such as delivery of officers’ certificates and legal opinions, are not satisfied or waived. If the Underwriting Agreement is terminated, which can occur until the date of closing and settlement, the Offering will not take place, allocations of Shares Offered to investors will be cancelled, and investors will not have any claim to delivery of the Shares Offered. Please see “— Listing” beginning on page 292 for a description of certain consequences of such termination.

The Selling Shareholders have agreed to pay to the Underwriters a commission of 1.25% (1.5% in respect of the public offering in Belgium) of the aggregate offer price of the ordinary shares offered (including the aggregate offer price arising from any exercise of the Greenshoe Option). The Selling Shareholders may also, in their discretion, pay to the Underwriters an incentive fee of 1% of the aggregate offer price of the ordinary shares offered.

The aggregate of the administrative, legal and audit costs as well as the costs of publications, printing of this Prospectus and the remuneration of the CBFA and of Euronext Brussels, as well as the underwriting commissions (which include a discretionary component) are expected to amount to approximately 2.7% of the Offering (assuming the Increase Option and the Greenshoe Option are exercised in full and the discretionary component is paid to the Underwriters). All such expenses will be borne by the Selling Shareholders.

Lock-up Arrangements The Company will agree in the Underwriting Agreement that it will not subject to customary exceptions, during the period ending 180 days from the commencement of trading of the ordinary shares of the Company (i) offer, sell, contract to sell or otherwise dispose of any securities of the Company that are substantially similar to the ordinary shares of the Company, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive or acquire, ordinary shares of the Company or any such substantially similar securities (other than upon the conversion or exchange of convertible or exchangeable securities outstanding as of the date of the Underwriting Agreement), or (ii) make any short sale, engage in any hedging or other transaction that is designed to or that reasonably could be expected to lead to or result in a sale or disposition (even if such disposition would be by someone other than the Company), or enter into a transaction with similar economic effect, or publicly announce its intention to do any of the transactions mentioned in (i) or (ii) above, in each case, without the prior written consent of the Joint Bookrunners.

The Selling Shareholders will agree in the Underwriting Agreement that they will not, subject to customary exceptions, during the period ending 360 days from the commencement of trading of the ordinary shares of the Company (i) offer, sell, contract to sell or otherwise dispose of any securities of the Company that are substantially similar to the ordinary shares of the Company, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive or acquire, any ordinary shares of the Company or any such substantially similar securities, except for the delivery of ordinary shares of the Company pursuant to the Offering, or (ii) make any short sale, engage in any hedging or other transaction that is designed to or that reasonably could be expected to lead to or result in a sale or disposition (even if such disposition would be by someone other than the Selling Shareholders), or enter into a transaction with similar economic effect, or publicly announce their intention to do any of the transactions mentioned in (i) or (ii) above, in each case, without the prior written consent of the Joint Bookrunners.

Increase Option Depending on the volume of demand, the number of ordinary shares offered in the Offering may be increased by up to 25% of the aggregate number of ordinary shares initially offered in the Offering (the “Increase Option”, the shares initially offered and the shares offered as a result of the exercise of the Increase Option jointly being referred to as the “Shares Offered”). Any decision to exercise the Increase Option will be communicated at the latest on the date the offer price is announced, which is currently expected to be on or about 29 October 2007. To the extent such Increase Option is exercised, the Underwriters will severally purchase the additional ordinary shares in the same proportion as set forth in the table under “— Underwriting”.

290 Greenshoe and Price Stabilisation

The Selling Shareholders will grant to UBS Limited, as Stabilisation Manager, on behalf of itself and the Underwriters an option (the “Greenshoe Option”) pursuant to which the Underwriters have the option to purchase from them a number of ordinary shares representing a maximum of 15% of the total number of Shares Offered, solely to cover over-allotments, if any, at the offer price. The Underwriters may exercise the Greenshoe Option, in whole or in part, at any time in the period up to 30 days after the commencement of conditional trading in the ordinary shares of the Company on the Eurolist of Euronext Brussels. To the extent the Greenshoe Option is exercised, each Underwriter will become severally obligated, subject to certain conditions, to purchase the same proportion of ordinary shares of the Company for which the Greenshoe Option is exercised as that set forth in the table under “— Underwriting” above. Whether and the extent to which the Greenshoe Option has been exercised will be publicly announced within five business days after the end of the Stabilisation Period (as defined below).

In order to be able to effect any over-allotments made prior to the exercise of the Greenshoe Option, it is expected that the Underwriters will enter into a stock lending agreement with the Selling Shareholders.

In connection with the Offering, UBS Limited, as Stabilisation Manager may, itself or through affiliates, engage in stabilisation activity aimed at supporting the exchange or market price of the shares of the Company in order to offset selling pressure in those securities. Stabilisation will not be executed above the offer price. Such transactions may be effected on the Eurolist of Euronext Brussels in the over-the-counter market or otherwise.

The Stabilisation Manager is not obligated to stabilise and there is no guarantee that stabilisation will take place at all. Stabilisation, if undertaken at all, can be stopped at any time without prior notice. Stabilisation activity may take place from the date of commencement of conditional trading in the shares on the Eurolist of Euronext Brussels until up to 30 days thereafter (the “Stabilisation Period”).

Stabilisation may result in a market price of the shares of the Company that is higher than the price that might otherwise prevail, and the exchange or market price may reach a level that cannot be maintained on a permanent basis. The Greenshoe Option may facilitate stabilisation activities.

Within five business days after the end of the Stabilisation Period the following information will be made public, in accordance with Article 5, §2 of the Belgian Royal Decree of 17 May 2007: (i) whether or not stabilisation was undertaken, (ii) the date on which stabilisation started, (iii) the date on which stabilisation last occurred, and (iv) the price range within which stabilisation was carried out for each of the dates during which stabilisation transactions were carried out.

Plan of Distribution and Allocation

No less than 10% of the total number of Shares Offered (including the ordinary shares that are covered by the Increase Option, but excluding the Additional Shares) will be offered to retail investors in Belgium and, subject to sufficient retail demand, will be allocated to retail investors in Belgium. See “Information on the Public Offering in Belgium” beginning on page 294.

The Selling Shareholders reserve the right to withdraw the Offering or reduce the number of Shares Offered at any time prior to the allocation of the Shares Offered if, in their view, the quality of demand from institutional investors within the applicable offer price range for the Offering is not sufficient, or if required in order to comply with mandatory legal requirements. Any withdrawal of the Offering or reduction in the number of Shares Offered will be published in the Belgian press.

Offer Price

The final offer price will be determined within an offer price range, which will be announced on or about 15 October 2007, on the basis of a book-building process, conducted during the offering period, in which only institutional investors will participate. The offer price will be determined as soon as possible after the end of the offering period, and will be published in the Belgian press no later than on the first business day following its determination, which is expected to be on or about 29 October 2007, and no later than the fifth business day following the end of the offering period. The final offer price could be lower than the lower-end of the offer price

291 range. The offer price will be expressed in euro and will be exclusive of any taxes and expenses (see “Taxation — Belgian Tax Regime” beginning on page 280), which must be borne by the investors. The offer price will be the same for all categories of investors.

The Offer Price will be determined by the Selling Shareholders following recommendations from the Joint Bookrunners taking into account market conditions and factors such as: • Conditions in the financial markets; • A qualitative assessment of demand for the Shares Offered; • The Company’s financial information; • The history of, and the prospects for, the Company and the industry in which it competes; • An assessment of the Company’s management, its past and present operations and the prospects for, and timing of, its future revenues; • The present state of the Company’s development; • The above factors in relation to other companies engaged in activities similar to the Company’s; and • All other factors deemed appropriate.

Form and Delivery The Shares Offered and the Additional Shares, if any, are ordinary existing shares of the Company and entitle the holder to any dividends declared in respect of the fiscal year ending 31 December 2007 and future years.

The Shares Offered and the Additional Shares, if any, are securities in book-entry form and will initially be represented by one or more global certificates deposited with Euroclear Belgium. Interests in the Shares Offered and the Additional Shares, if any, will be credited on or about 1 November 2007 to the securities accounts of investors through the book-entry facilities of Euroclear Belgium, the Belgian central securities depository. Shareholders may at any time ask the Company for their shares in book-entry form to be converted into registered shares, or vice versa, at the cost of the shareholder.

The Shares Offered and the Additional Shares, if any, will be fully paid-up upon their delivery and freely transferable, subject to any lock-up arrangements entered into in connection with the Offering. See “— Lock-up Arrangements” beginning on page 290.

The Shares Offered and the Additional Shares, if any, will entitle their holders to the same rights as the Company’s other ordinary shares. For a more detailed description of the Company’s ordinary shares, see “Description of Nyrstar’s Shares and Articles of Association — Share Capital and Shares” beginning on page 273.

Listing Application has been made for admission to listing on the Eurolist of Euronext Brussels of all ordinary shares of the Company, including the Shares Offered and the Additional Shares, if any. The shares of the Company are expected to be listed under the symbol “NYR” and international code number BE0003876936.

Commencement of conditional trading is expected to occur on or about 29 October 2007. The Shares Offered and the Additional Shares, if any, will be first listed and traded on an if-and-when-delivered basis, which means that conditional trading of the Shares Offered and of the Additional Shares, if any, will commence prior to the closing of the Offering, which is expected to occur on or about 1 November 2007, the third trading day following the date on which conditional trading is expected to commence (T+3).

Investors who wish to effect transactions in the ordinary shares of the Company prior to the closing of the Offering, whether such transactions are effected on the Eurolist of Euronext Brussels or otherwise, should be aware that the delivery of the ordinary shares may not take place on 1 November 2007 or at all if the Underwriting Agreement is terminated or if certain conditions, such as delivery of opinions and officers’ certificates, or events referred to in the Underwriting Agreement are not satisfied or waived, or occur on or prior to such date (see “— Underwriting” beginning on page 289). Euronext Brussels has indicated that it will cancel

292 all transactions in the ordinary shares of the Company effected on the Eurolist of Euronext Brussels if the ordinary shares are not delivered on the closing of the Offering.

Other Relationships Some of the Underwriters and their respective affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Company or the Selling Shareholders.

No Public Offering Outside Belgium No action has been or will be taken in any jurisdiction other than Belgium that would permit a public offering of the ordinary shares of the Company, or the possession, circulation or distribution of this prospectus or any other material relating to the Company or its ordinary shares in any jurisdiction where action for that purpose is required.

Accordingly, the ordinary shares of the Company may not be offered or sold, directly or indirectly, and neither the prospectus nor any other offering material or advertisements in connection with the Company’s ordinary shares may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country or jurisdiction. See “Selling and Transfer Restrictions” beginning on page 296. The Shares Offered and the Additional Shares, if any, have not been registered under the Securities Act, and may not be offered or sold within the United States except in certain transactions exempt from the registration requirements of the Securities Act.

Purchasers of the ordinary shares of the Company may be required to pay stamp duties and other charges, in accordance with the laws and practices of the country of purchase, in addition to the offer price.

Paying Agents and Related Services (Service Financier / Financiële Dienst) Certain services related to the shares of the Company (including payment of dividends and deposit of certificates issued with a view to attending Shareholders’ Meetings) shall be carried out in Belgium by Fortis Bank and KBC Bank at the cost of the Company (unless and until the Company advises otherwise by way of publication in the Belgian financial press). Investors should inform themselves about the amounts that other financial intermediaries may charge in connection with financial services.

293 INFORMATION ON THE PUBLIC OFFERING IN BELGIUM

The following information should be read together with the information provided under “Underwriting and Plan of Distribution”.

Retail Offering Period The offering period during which retail investors may submit a share application form will begin on 15 October 2007 and end at 4.00 p.m. Brussels time on 26 October 2007. The offering period may close earlier, in which case the early closing will be announced in the Belgian press, and the dates for pricing, allocation, listing and closing of the Offering may be adjusted accordingly. The offering period will in any event be open for at least six business days following publication of the prospectus. The offering period will be the same for retail and institutional investors, although the Selling Shareholders reserve the right to close the retail subscription up to one business day before the end of the institutional book-building if so required by the Underwriters for purposes of allocations of the Shares Offered and the Additional Shares, if any, among retail investors, in view of conditional trading.

Application Procedure for Retail Investors Retail investors wishing to purchase ordinary shares of the Company must submit a share application form, free of charge, stating the number of Shares Offered they wish to purchase, at the counters of Fortis Bank, KBC Bank, KBC Securities, Deutsche Bank, Bank Degroof, Petercam, ING Belgium and CBC Banque before 4.00 p.m. Brussels time on the last day of the offering period, subject to early closing. In the event of early closing, the dates for pricing, allocation, listing and closing of the Offering may be adjusted accordingly.

Applications may also be submitted through any other financial intermediary in Belgium. Investors should inquire about the costs that such financial intermediaries may charge and will be solely responsible for any such costs.

The allocation among applications from retail investors will be made on the basis of objective allocation criteria, which will include, among others, preferential treatment of applications received from retail investors before 4.00 p.m. Brussels time on 19 October 2007 (see “— Allocation to Retail Investors” beginning on page 295).

The Underwriters will reserve the right to reject, cancel or modify orders from institutional investors in whole or in part. If the Underwriters determine, or have reason to believe, that a single investor has submitted several orders through one or more Underwriters, they may reduce or disregard any or all such orders. In addition, the Underwriters may reduce or disregard any unusually large subscription if they believe that it could disrupt the secondary market.

In case of new developments, material errors or incorrect statements which could have an influence on the consideration of the ordinary shares of the Company and which must be reflected in a supplement to the prospectus, investors who have submitted an application for the ordinary shares of the Company prior to the publication of a supplement to the prospectus have the right to withdraw their application during at least two business days after publication of such supplement.

Retail Offer Price The offer price will be published in the Belgian press no later than on the first business day following its determination, which is expected to be on or about 29 October 2007, and no later than the fifth business day following the end of the offering period.

Retail investors will purchase ordinary shares of the Company at the offer price and will be legally bound to purchase the number of ordinary shares of the Company indicated in their share application form at the offer price. The final offer price could be lower than the lower-end of the offer price range. The maximum price for retail investors will not exceed the upper-end of the offer price range.

294 Allocation to Retail Investors Subject to sufficient retail demand, no less than 10% of the total number of Shares Offered (including the ordinary shares that are covered by the Increase Option, but excluding the ordinary shares in relation to which the Underwriters have been granted the Greenshoe Option) will be allocated to retail investors in Belgium (the “Minimum Retail Allocation”). For purposes of the Offering, orders placed by natural persons residing in Belgium and by Belgian legal entities applying for ordinary shares of the Company for an aggregate amount of less than EUR 250,000 shall be treated as part of the public offering in Belgium.

The aggregate number of ordinary shares of the Company allocated to retail investors will be determined after the end of the offering period. In the event that purchase orders received from retail investors in Belgium exceed the Minimum Retail Allocation, the allocation among applications from retail investors will be made on the basis of objective allocation criteria. Such criteria will include, among others, preferential treatment of applications received from retail investors before 4.00 p.m. Brussels time on 19 October 2007 or applications for Shares Offered submitted by retail investors to KBC Bank, Fortis Bank, KBC Securities, Deutsche Bank, Bank Degroof, Petercam, ING Belgium and CBC Banque.

The total number of ordinary shares offered, the number of ordinary shares effectively allocated to retail investors in Belgium and the allocation methodology applied will be published in the Belgian press, together with the offer price, on or about 29 October 2007, and in any case no later than the fifth business day following the end of the offer period.

Payment and Taxes The offer price of the allocated ordinary shares must be paid in full in euro, and is exclusive of any taxes (see “Taxation” beginning on page 280) and expenses (if any), which must be borne by the investors.

The offer price, together with any applicable costs and taxes, must be paid by investors in cash no later than two business days after publication of the offer price and the allocation, which is expected to be on 29 October 2007 (subject to early closing), unless the offering period closes earlier, and each investor must authorise its financial institution to debit its bank account for such amount for value on 1 November 2007. For further information about costs and taxes applicable to the subscription for and the subsequent trading of the relevant ordinary shares offered, see “— Application Procedure for Retail Investors” beginning on page 294 and “Taxation — Belgian Tax Regime” beginning on page 280.

295 SELLING AND TRANSFER RESTRICTIONS

Selling Restrictions General No action has been or will be taken in any jurisdiction other than Belgium that would permit a public offering of the Shares Offered and the Additional Shares, or the possession, circulation or distribution of this prospectus or any other material relating to the Company or the Shares Offered and the Additional Shares in any jurisdiction where action for that purpose is required.

Accordingly, the Shares Offered and the Additional Shares may not be offered or sold, directly or indirectly, and neither this prospectus nor any other offering material or advertisements in connection with the Shares Offered and the Additional Shares may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country or jurisdiction.

United States The Shares Offered and the Additional Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States, and may not be offered, sold pledged or otherwise transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable state securities laws. Accordingly, the Shares Offered and the Additional Shares will not be offered or sold in this Offering within the United States, except to qualified institutional buyers in reliance on Rule 144A under the Securities Act or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Transfers of the Shares Offered and the Additional Shares will be restricted and each purchaser will be deemed to have made acknowledgments, representations and agreements, as described under “— Transfer Restrictions”.

In addition, until 40 days after the commencement of the Offering, an offer or sale of the Shares Offered and the Additional Shares within the United States by a dealer (whether or not participating in the Offering) may violate the registration requirement of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A.

Canada This document is not, and under no circumstances is it to be construed as, a prospectus, an advertisement or a public offering of the securities described herein in Canada. No securities commission or similar authority in Canada has reviewed or in any way passed upon this document or the merits of the securities described herein, and any representation to the contrary is an offence.

Representations and Agreements by Purchasers The Offering is being made in Canada only in the Canadian provinces of Alberta, British Columbia, Ontario and Québec (the “Canadian Jurisdictions”) by way of a private placement of ordinary shares. The Offering in the Canadian Jurisdictions is being made pursuant to this prospectus through the Underwriters named in this prospectus or through their selling agents who are permitted under applicable law to distribute such securities in Canada. Each Canadian investor who purchases the ordinary shares will be deemed to have represented to the Company, the Selling Shareholders and the Underwriters that: (1) the offer and sale was made exclusively through this prospectus and was not made through an advertisement of the ordinary shares in any printed media of general and regular paid circulation, radio, television or telecommunications, including electronic display, or any other form of advertising in Canada, (2) such investor has reviewed the terms referred to below under “Canadian Resale Restrictions”, (3) where required by law, such investor is, or is deemed to be, acquiring the ordinary shares as principal for its own account in accordance with the laws of the Canadian Jurisdiction in which the investor is resident and not as agent or trustee and (4) such investor or any ultimate investor for which such investor is acting as agent is entitled under applicable Canadian securities laws to acquire the ordinary shares without the benefit of a prospectus qualified under such securities laws, and without limiting the generality of the foregoing: (i) in the case of an investor resident in Alberta, British Columbia or Québec, without the Underwriter having to be registered, (ii) in the case of an investor resident in Alberta, British Columbia or Québec, such investor is an “accredited investor” as defined in section 1.1 of National Instrument 45-106 — Prospectus and Registration Exemptions (“NI 45-106”), (iii) in the case of an investor resident in Ontario, such investor, or any ultimate investor for which such investor is acting as agent (a) is an “accredited investor”, other

296 than an individual, as defined in NI 45-106 and is a person to which a dealer registered as an international dealer within the meaning of section 98 of Regulation 1015 to the Securities Act (Ontario) (the “OSA”) in Ontario may sell the ordinary shares or (b) is an “accredited investor”, including an individual, as defined in NI 45-106 who is purchasing the ordinary shares from a fully registered dealer within the meaning of section 204 of Regulation 1015 to the OSA and (5) such investor, if not an individual or an investment fund, has a pre-existing purpose and was not established solely or primarily for the purpose of acquiring the ordinary shares in reliance on an exemption from applicable prospectus requirements in the Canadian Jurisdictions.

Each resident of Ontario who purchases the ordinary shares will be deemed to have represented to the Company and the Underwriters that such investor: (i) has been notified by the Company (a) that the Company is required to provide information (“personal information”) pertaining to the investor as required to be disclosed in Schedule I of Form 45-106F1 under NI 45-106 (including its name, address, telephone number and the number and value of any ordinary shares purchased), which Form 45-106F1 is required to be filed by the Company under NI 45-106, (b) that such personal information will be delivered to the Ontario Securities Commission (the “OSC”) in accordance with NI 45-106, (c) that such personal information is being collected indirectly by the OSC under the authority granted to it under the securities legislation of Ontario, (d) that such personal information is being collected for the purposes of the administration and enforcement of the securities legislation of Ontario and (e) that the public official in Ontario who can answer questions about the OSC’s indirect collection of such personal information is the Administration Assistant to the Director of Corporate Finance at the OSC, Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario M5H 3S8, Telephone: (416) 593-8086 and (ii) has authorised the indirect collection of the personal information by the OSC. Further, the investor acknowledges that its name, address, telephone number and other specified information, including the number of ordinary shares it has purchased and the aggregate purchase price to the purchaser, may be disclosed to other Canadian securities regulatory authorities and may become available to the public in accordance with the requirements of applicable laws. Each resident of Alberta, British Columbia or Québec who purchases the ordinary shares hereby acknowledges to the Company and the Underwriters that its name and other specific information, including the aggregate amount of the ordinary shares it has purchased and the aggregate purchase price to the investor, may be disclosed to Canadian securities regulatory authorities and become available to the public in accordance with the requirements of applicable Canadian securities laws. By purchasing the ordinary shares, each Canadian investor consents to the disclosure of such information.

Agreement by the Underwriters Each Underwriter has represented and agreed that the ordinary shares will be offered or sold, directly or indirectly, in Canada only in the Canadian Jurisdictions and in compliance with applicable Canadian securities laws and accordingly, any sales of ordinary shares will be made (i) through an appropriately registered securities dealer or in accordance with an available exemption from the registered securities dealer requirements of applicable Canadian securities laws and (ii) pursuant to an exemption from the prospectus requirements of such laws.

Language of Document Each purchaser of ordinary shares in Canada that receives a purchase confirmation hereby agrees that it is such purchaser’s express wish that all documents evidencing or relating in any way to the sale of such ordinary shares be drafted in the English language only. Chaque acheteur au Canada des valeurs mobilières recevant un avis de confirmation à l’égard de son acquisition reconnaît que c’est sa volonté expresse que tous les documents faisant foi ou se rapportant de quelque manière à la vente des valeurs mobilières soient rédigés uniquement en anglais.

Canadian Resale Restrictions The distribution of the ordinary shares in the Canadian Jurisdictions is being made on a private placement basis. Accordingly, any resale of the ordinary shares must be made (i) through an appropriately registered dealer or in accordance with an available exemption from the dealer registration requirements of applicable provincial securities laws and (ii) in accordance with, or pursuant to an exemption from, the prospectus requirements of such laws. Such resale restrictions may not apply to resales made outside of Canada, depending on the circumstances. Purchasers of ordinary shares are advised to seek legal advice prior to any resale of ordinary shares.

The Company is not, and may never be, a “reporting issuer”, as such term is defined under applicable Canadian securities legislation, in any province or territory of Canada and there currently is no public market for any of the securities of the Company in Canada, including the ordinary shares, and one may never develop. Under no circumstances will the Company be required to file a prospectus or similar document with any

297 securities regulatory authority in Canada qualifying the resale of the ordinary shares to the public in any province or territory of Canada. Canadian investors are advised that the Company currently has no intention of filing a prospectus or similar document with any securities regulatory authority in Canada qualifying the resale of the ordinary shares to the public in any province or territory in Canada.

Rights of Action for Damages or Rescission (Ontario) Securities legislation in Ontario provides investors in ordinary shares pursuant to this prospectus with a remedy for damages or rescission, or both, in addition to any other rights they may have at law, where this prospectus or any amendment to it, contains a “Misrepresentation”. Where used herein, “Misrepresentation” means an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make any statement not misleading in light of the circumstances in which it was made. These remedies, or notice with respect to these remedies, must be exercised or delivered, as the case may be, by the purchaser within the time limits prescribed by the applicable securities legislation.

Section 130.1 of the OSA provides that every purchaser of securities pursuant to an offering memorandum (such as this prospectus) shall have a statutory right of action for damages or rescission against the issuer in the event that the offering memorandum contains a Misrepresentation. A purchaser who purchases securities offered by the offering memorandum during the period of distribution has, without regard to whether the purchaser relied upon the Misrepresentation, a right of action for damages or, alternatively, while still the owner of the securities, for rescission against the issuer provided that: • If the purchaser exercises its right of rescission, it shall cease to have a right of action for damages as against the issuer; • The issuer will not be liable if it proves that the purchaser purchased the securities with knowledge of the Misrepresentation; • The issuer will not be liable for all or any portion of damages that it proves do not represent the depreciation in value of the securities as a result of the Misrepresentation relied upon; and • In no case shall the amount recoverable exceed the price at which the securities were offered.

Subject to the paragraph below, all or any one or more of the issuer and any selling securityholder are jointly and severally liable, and every person or company who becomes liable to make any payment for a Misrepresentation may recover a contribution from any person or company who, if sued separately, would have been liable to make the same payment, unless the court rules that, in all the circumstances of the case, to permit recovery of the contribution would not be just and equitable.

Despite the paragraph above, the issuer shall not be liable where it is not receiving any proceeds from the distribution of the securities being distributed and the Misrepresentation was not based on information provided by the issuer, unless the Misrepresentation (i) was based on information that was previously publicly disclosed by the issuer, (ii) was a Misrepresentation at the time of its previous public disclosure and (iii) was not subsequently publicly corrected or superseded by the issuer prior to the completion of the distribution of the securities.

Section 138 of the OSA provides that no action shall be commenced to enforce these rights more than: • In the case of an action for rescission, 180 days from the day of the transaction that gave rise to the cause of action; or • In the case of an action for damages, the earlier of: • 180 days from the day that the purchaser first had knowledge of the facts giving rise to the cause of action; or • Three years from the day of the transaction that gave rise to the cause of action.

The rights referred to in section 130.1 of the OSA do not apply in respect of an offering memorandum (such as this prospectus) delivered to a prospective purchaser in connection with a distribution made in reliance on the exemption from the prospectus requirement in section 2.3 of NI 45-106 (the “accredited investor exemption”) if the prospective purchaser is: • A Canadian financial institution (as defined in NI 45-106) or a Schedule III bank; • The Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); or

298 • A subsidiary of any person referred to in the bullet points above, if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary.

The foregoing summary is subject to the express provisions of the OSA and the rules, regulations and other instruments thereunder, and reference is made to the complete text of such provisions contained therein. Such provisions may contain limitations and statutory defences on which the Company and the Selling Shareholders may rely. Prospective purchasers should refer to the applicable provisions of the relevant securities legislation and are advised to consult their own legal advisers as to which, or whether any, of such rights may be available to them. The enforceability of these rights may be limited as described herein under “— Enforcement of Legal Rights”.

The rights of action discussed above will be granted to the purchasers to whom such rights are conferred upon acceptance by the relevant Underwriter of the purchase price for the ordinary shares. The rights discussed above are in addition to and without derogation from any other right or remedy which purchasers may have at law.

Enforcement of Legal Rights The Company is a limited liability company organised under the laws of Belgium. All of the directors and officers (or their equivalents) of the Company and the Selling Shareholders, as well as any experts named herein, may be located outside of Canada and, as a result, it may not be possible for purchasers to effect service of process within Canada upon the Company, the Selling Shareholders or such experts. All or a substantial portion of the assets of the Company, the Selling Shareholders and such experts may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against the Company, the Selling Shareholders or such experts in Canada or to enforce a judgment obtained in Canadian courts against the Company, the Selling Shareholders or such experts outside of Canada.

Canadian Tax Considerations and Eligibility for Investment This prospectus does not address the Canadian tax consequences of ownership of the ordinary shares. Prospective purchasers of ordinary shares should consult their own tax advisers with respect to the Canadian and other tax considerations applicable to their individual circumstances and with respect to the eligibility of the ordinary shares for investment by purchasers under relevant Canadian legislation.

Currency The offer price, financial statements and certain other financial information disclosed in this prospectus are presented in euro. The following table sets out for the periods indicated, the period-end and average Canadian Noon Rates(1) between the Canadian dollar (“CAD”) and the euro (expressed in CAD per EUR 1.00):

Period(2) Period-end Average 2006 ...... 1.5377 1.4237 2005 ...... 1.3805 1.5090 2004 ...... 1.6292 1.6169 2003 ...... 1.6280 1.5826 2002 ...... 1.6564 1.4832 Notes: (1) The term “Canadian Noon Rate” means the Bank of Canada noon exchange rate. (2) Each reference to a year is a year ended 31 December.

On 10 October 2007, EUR 1.00 = CAD 1.3892, based on the Canadian Noon Rate.

These exchange rates are provided only for the convenience of the reader. No representation is made that the euro amounts could have been converted into Canadian dollars at the above rates on any of the dates indicated or at any other rate.

For information on legislation relating to withholding taxes in respect of the ordinary shares, please refer to the section entitled “Taxation” beginning on page 280.

299 European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of the Shares Offered and the Additional Shares may not be made in that Relevant Member State other than the offer contemplated in the prospectus in Belgium once the prospectus has been approved by the competent authority in such Member State and published in accordance with the Prospectus Directive as implemented in Belgium except that an offer to the public in that Relevant Member State of any Shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State: • To legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; • To any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year, (ii) a total balance sheet of more than EUR 43,000,000 and (iii) an annual net turnover of more than EUR 50,000,000, as shown in its last annual or consolidated accounts; • To fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Joint Global Coordinators for any such offer; or • In any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Shares shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to the public” in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase any Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State.

France Neither this prospectus nor any other offering material relating to the Shares Offered and the Additional Shares has been submitted to the clearance procedures of the Autorité des marchés financiers in France. The Shares Offered and the Additional Shares have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the Shares Offered and the Additional Shares has been or will be (i) released, issued, distributed or caused to be released, issued or distributed to the public in France or (ii) used in connection with any offer for subscription or sale of the Shares Offered and the Additional Shares to the public in France. Such offers, sales and distributions will be made in France only (i) to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d’investisseurs), in each case investing for their own account, all as defined in and in accordance with Article L.411-2, D.411-1, D.411-2, D. 411-4, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier, (ii) to investment services providers authorised to engage in portfolio management on behalf of third parties or (iii) in a transaction that, in accordance with Article L.411-2-II-1°-or-2° of the French Code monétaire et financier, does not constitute a public offer (appel public à l’épargne) as a result of the aggregate amount of the offer, in one or several transactions over a period of twelve consecutive months, or, as the case may be, of the individual amount of investment by each investor, as such amounts are provided by Article 211-2 of the General Regulations (Règlement Général)oftheAutorité des marchés financiers. Such Shares Offered and the Additional Shares may be resold only in compliance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier and applicable regulations thereunder.

United Kingdom In the United Kingdom, this prospectus is being distributed only to, and is directed only at, persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or who are high net worth entities falling within Article 49 of the Order, and other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). The Offering and any related investment or investment activity to which this document relates is available only to relevant persons in the United Kingdom.

300 Australia This prospectus has not been and will not be lodged with the Australian Securities and Investments Commission or the Australian Stock Exchange, and is not a disclosure document for the purposes of Australian law. This prospectus (whether in preliminary or definitive form) may not be issued or distributed in Australia and no offer or invitation may be made in relation to the issue, sale or purchase of Shares Offered and the Additional Shares in Australia (including an offer or invitation received by a person in Australia) and no Shares Offered and the Additional Shares may be sold in Australia, unless the offer or invitation does not need disclosure to investors under Part 6D.2 or Division 2 of Part 7.9 of the Corporations Act 2001 (Cth). Restrictions on the resale of the Shares Offered and the Additional Shares in Australia may also apply under Australia’s Corporations Act and, as such, professional advice should be obtained in such a situation.

Japan The Shares Offered and the Additional Shares have not been and will not be registered under the Securities and Exchange Law of Japan, as amended, (the “SEL”) and, accordingly, each Underwriter has undertaken that it has not offered or sold, or will not offer or sell any Shares Offered and the Additional Shares, directly or indirectly, in Japan or to, or for the account or benefit of, any Japanese Person except under circumstances which will result in the compliance with the SEL and any other applicable laws and regulations promulgated by the relevant Japanese governmental and regulatory authorities and in effect at the relevant time. For the purposes of this paragraph, “Japanese Person” shall mean any person resident in Japan, including any corporation or other entity organised under the laws of Japan.

Kuwait No marketing or sale of the Shares Offered and the Additional Shares may take place in Kuwait unless the same has been duly authorised by the Kuwait Ministry of Commerce and Industry pursuant to the provisions of Law No. 31/1990 and the various ministerial regulations issued thereunder.

United Arab Emirates The Shares Offered and the Additional Shares will not be offered, sold or publicly promoted or advertised in the United Arab Emirates, other than in compliance with laws applicable in the United Arab Emirates governing the issue, offering and sale of securities. Furthermore, the information contained in this prospectus does not constitute a public offer of securities in the United Arab Emirates in accordance with the Commercial Companies Law (Federal Law No. 8 of 1984 (as amended)) or otherwise, and is not intended to be a public offer and, the information contained in this prospectus is not intended to lead to the conclusion of any contract of whatsoever nature within the territory of the United Arab Emirates.

Transfer Restrictions United States Because of the following restrictions, prospective investors are advised to consult legal counsel prior to making any offer for, resale, pledge or other transfer of, the Shares Offered and the Additional Shares.

The Shares Offered and the Additional Shares have not and will not be registered under the Securities Act or any state securities law. The Shares Offered and the Additional Shares in this offering may not be offered, sold or delivered within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state laws. Accordingly, the Shares Offered and the Additional Shares in this offering are being offered and sold: • In the United States only to “qualified institutional buyers”, as such term is defined under Rule 144A of the Securities Act (“Rule 144A”) in reliance on Rule 144A or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; and • Outside the United States pursuant to Regulation S under the Securities Act.

Each purchaser of Shares Offered and Additional Shares in this Offering within the United States pursuant to Rule 144A and each subsequent purchaser thereof, will be deemed to have represented and agreed as follows (terms used herein that are defined in Rule 144A or Regulation S are used herein as defined therein): • It (A) is a qualified institutional buyer, (B) is aware, and each beneficial owner of such Shares Offered and Additional Shares has been advised, that the sale of the Shares Offered and the Additional Shares is

301 being made in reliance on Rule 144A or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and (C) is acquiring such Shares for its own account or for the account of a qualified institutional buyer, as the case may be; • It understands that the Shares Offered and the Additional Shares have not been and will not be registered under the Securities Act and may not be reoffered, resold, pledged or otherwise transferred except (A)(i) to a person who it reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, (ii) in an offshore transaction complying with Rule 903 or Rule 904 of Regulation S or (iii) pursuant to an exemption from or in a transaction not subject to registration under the Securities Act provided by Rule 144 thereunder, if available, and (B) in accordance with all applicable securities laws of the states of the United States; • It acknowledges that the Shares Offered and the Additional Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act and that no representation is made as to the availability of the exemption provided by Rule 144 for resales of Shares Offered and the Additional Shares. • It agrees that, notwithstanding anything to the contrary in the foregoing, for so long as they are “restricted securities”, the Shares Offered and the Additional Shares in this Offering may not be deposited into any unrestricted depository receipt facility in respect of Shares Offered and the Additional Shares that may be established or maintained by a depository bank.

302 LISTING AND GENERAL INFORMATION

We have applied to list the Company’s ordinary shares on the Eurolist of Euronext Brussels under the symbol “NYR”. We expect conditional trading to commence on or about 29 October 2007 and will, as a result, be subject to Belgian securities regulations and authorities. Prior to the Offering, there has been no public market for the Company’s ordinary shares.

All consents, approvals, authorisations or other orders required for the sale of the ordinary shares under the laws of Belgium have been given or obtained.

It is expected that unconditional trading of the ordinary shares will take place on 1 November 2007. Prior to listing, it is expected that conditional dealings will be permitted by the Eurolist of Euronext Brussels in accordance with its rules. Transactions will normally be effected for settlement in euro and for delivery on the third working day after the day on which transactions have been made.

Except as disclosed in this prospectus, there has been no significant change in Nyrstar’s financial or trading position since 30 June 2007.

Except as disclosed in this prospectus, there are no governmental, legal or arbitration proceedings, including any such proceedings which are pending or threatened of which Nyrstar is aware, which may have or have had during the 12 months preceding the date of this prospectus, significant effects on Nyrstar’s financial position.

General On 22 September 2000, the stock exchanges of Amsterdam, Brussels and Paris merged to form Euronext, the first pan-European stock exchange. The Amsterdam, Brussels and Paris exchanges became wholly owned subsidiaries of Euronext N.V., a limited liability company incorporated under Dutch law. Euronext expanded in 2002 through the acquisition of the London International Financial Futures and Options Exchange and the Portuguese exchange, Bolsa de Valores de Lisboa e Porto.

These market operators have retained their own identity under the new names of Euronext Amsterdam N.V., Euronext Brussels SA/NV, Euronext Lisbon S.A. and Euronext Paris S.A., with respect to cash markets, and Euronext LIFFE, with respect to derivative trading. Each of these subsidiaries represents a portal to Euronext, whereby issuers, intermediaries and investors can gain access to a single, trans-national market. An issuer’s choice of portal determines the local legal and regulatory system applicable to its listed securities. The Company will be listed on the Eurolist of Euronext Brussels and will therefore be subject to Belgian securities regulations and authorities.

Euronext N.V. became a subsidiary of NYSE Euronext (Holding) N.V., a holding company incorporated in the Netherlands and created by the combination of NYSE Group, Inc. (a U.S. company incorporated in the state of Delaware) and Euronext N.V. through a mixed public offering launched on 15 February 2007. Since 4 April 2007, NYSE Euronext (Holding) N.V. has been listed on New York Stock Exchange and Euronext Paris. NYSE Group brings together six cash equities exchanges in five countries and six derivatives exchanges, and is a world leader for listings, trading in cash equities, equity and interest rate derivatives, bonds and the distribution of market data.

Euronext operates on an order-driven trading system, in which securities may be traded in either a continuous mode or an auction (fixing) mode. Euronext Brussels determines the mode in which securities are traded based on objective criteria, including the company’s expected trading volume, liquidity, historical information and participation in other internationally recognised indices. If the required criteria are satisfied, the issuer may list in the continuous mode, in which securities may be traded at any time during trading hours and trading prices are quoted in real time. If the required criteria are not met, the issuer may list in auction (fixing) mode, in which securities may be traded at auctions held twice a day. We have applied for the ordinary shares to be listed in the continuous mode.

Euronext Brussels trading hours begin at 9:00 a.m. and end at 5:30 p.m. on each business day in Brussels, Belgium. Following each day of trading, Euronext Brussels publishes a table of the prices of securities traded on its exchange in two prominent Belgian financial newspapers, De Tijd (Dutch) and L’Echo (French). These tables typically include price information and daily trading volumes, including block trades for each of the securities.

303 At 31 December 2006, 137 domestic and 68 foreign stocks were listed on Euronext Brussels. The trading volume on Euronext Brussels (based on the trades carried out through the central order book) was approximately EUR 104 billion in 2006, with a daily average of approximately EUR 407 million. At 31 December 2006, the total market capitalisation of the issuers whose stocks were listed on Euronext Brussels was approximately EUR 301 billion.

Indices Securities listed on Euronext Brussels may be included in one of three indices: BEL 20, BEL Mid and BEL Small. Euronext Brussels places securities in these indices based on the liquidity and free float capitalisation of the relevant instrument. Euronext Brussels launched the BEL Mid and BEL Small indices on 1 March 2005 as part of an initiative to increase the visibility of small and mid cap securities.

The BEL 20 index is a real-time basket index which reflects the continuous price evolution of the twenty most liquid Belgian shares listed on the exchange, and is the blue-chip index for Euronext Brussels. The BEL 20 index is made up of stocks which have a free-float market capitalisation equal to at least 300,000 times the BEL 20 index and have a free-float velocity of at least 30%. At year end 2006, the minimum required free-float market capitalisation for a BEL 20 member was EUR 1,320,000,000. The BEL Mid index is made up of stocks not included in the BEL 20 index that have a free-float market capitalisation between EUR 50,000 and EUR 300,000 times the BEL 20 index and have a free-float velocity of at least 10%. The BEL Small index is made up of stocks which have a free-float market capitalisation between EUR 5,000 and EUR 50,000 times the BEL 20 index and a free-float velocity of at least 10%. The free-float velocity of a company’s shares is calculated by taking the sum for the twelve previous months of the number shares traded each day divided by the outstanding number of shares existing on that same day. This velocity figure is then divided by the number of free float shares of the relevant company (expressed as a percentage of the total share capital) rounded to the next highest multiple of 5%.

Depending on whether the Company meets the relevant criteria, it may be eligible for inclusion in the BEL 20 index.

The new selection of the BEL 20 index constituents is published each year at the latest on the first trading day of February.

Brokerage Fees and Transaction Costs Members of Euronext Brussels primarily include credit institutions, investment firms and other intermediaries that are authorised to execute, buy and sell orders on the exchange. Members of Euronext Brussels charge negotiable brokerage fees to execute transactions on the Euronext market. Financial intermediaries that are not members of Euronext Brussels may charge additional brokerage fees. Trading fees are harmonised across all Euronext portals and members are required to select one of three fee packages for equity trading.

Belgian Tax on Stock Exchange Transactions The sale and purchase and, more generally, any disposal or acquisition for consideration of existing shares (the secondary market transactions) will give rise to a Belgian tax on stock exchange transactions (“TSET”) at the rate of 0.17% on the sum paid/received (with a maximum of EUR 500 per transaction and per party) if the acquisition takes place in Belgium through the intervention of a professional intermediary. No TSET is due on the acquisition of new shares (the primary market transactions). Since the ordinary shares of the Company offered to retail investors in Belgium are all existing ordinary shares, TSET will be due by retail investors in this Offering.

A separate tax is due from each party to the transaction. The tax on stock exchange transactions is payable by the professional intermediary.

The following categories of shareholders are exempt from the tax on stock exchange transactions: • Professional intermediaries described in Article 2, 9° and 10° of the Law of 2 August 2002, acting for their own account; • Insurance companies described in Article 2,§1oftheLawof9July 1975, acting for their own account; • Institutions for occupational retirement provision described in Article 2, 1° of the Law 27 October 2006, acting for their own account;

304 • Collective investment undertakings, acting for their own account; and • Non-residents acting for their own account if they deliver an affidavit to the intermediary in Belgium confirming their non-resident status.

Clearing and Settlement Transactions are cleared and settled on a delivery versus payment basis three business days following the trade date. The Euronext system clears and settles transactions through electronic book-entry changes in the accounts of participants. It thereby ensures that sellers receive cash upon delivery of the securities and that buyers receive the corresponding securities upon payment, and eliminates the need for physical movement of securities. LCH Clearnet, a wholly-owned subsidiary of Euronext, is the sole clearing house and counterparty of Euronext.

305 LEGAL MATTERS

Certain legal matters in connection with this offering will be passed upon for the Company and the Selling Shareholders by Linklaters LLP, with respect to the laws of the United States and Belgium. Certain legal matters in connection with this offering will be passed upon for the Underwriters by Cleary Gottlieb Steen & Hamilton LLP, with respect to the laws of the United States and Belgium.

306 INDEPENDENT AUDITORS

The Zinifex Carve-out Group Combined Selected Historical Financial Information as of and for the years ended 31 December 2005 and 2006, as of and for the six months ended 30 June 2006 and 2007 and as of and for the six months ended 31 December 2004 included in this prospectus has been reviewed by KPMG, Zinifex’s independent auditors, as indicated in their report appearing herein.

The Umicore Carve-out Group Combined Selected Historical Financial Information as of and for the years ended 31 December 2004, 2005 and 2006 and as of and for the six months ended 30 June 2006 included in this prospectus has been reviewed by PricewaterhouseCoopers Bedrijfsrevisoren/Reviseurs d’Entreprises, Umicore’s independent auditors, as indicated in their report appearing herein.

The Audited Zinifex Carve-out Group Combined Financial Statements as of and for the year ended 30 June 2007 included in this prospectus have been audited by KPMG, Zinifex’s independent auditors, as indicated in their audit report appearing herein which was qualified as the requirements of IAS 1 “Presentation of Financial Statements” have not been complied within respect of the presentation of comparative information for the year ended 30 June 2006.

The Audited Umicore Carve-out Group Combined Financial Statements as of and for the six months ended 30 June 2007 included in this prospectus have been audited by PricewaterhouseCoopers Bedrijfsrevisoren/Reviseurs d’Entreprises, Umicore’s independent auditors, as indicated in their audit report appearing herein which was qualified as (i) the requirements of IAS 1 “Presentation of Financial Statements” have not been complied within respect of the presentation of comparative information for the year ended 30 June 2006; and (ii) the requirements of IFRS 7 “Financial Instruments: Disclosures” and the Amendment to IAS 1 “Presentation of Financial Statements: Capital Disclosures” have not been complied within respect of the disclosures on the significance of financial instruments for an entity’s financial position and performance, and qualitative and quantitative disclosures on the nature and extent of risks.

The Nyrstar Pro Forma Consolidated Financial Information as at 30 June 2007 and for the six months ended 30 June 2007 and the year ended 31 December 2006 included in this prospectus has been reported on by Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren / Reviseurs d’Entreprises and PricewaterhouseCoopers Bedrijfsrevisoren / Reviseurs d’Entreprises, Nyrstar’s independent auditors, as indicated in their report appearing herein.

307 APPENDIX I: GLOSSARY

Abstracted Removed. Used in the context of drawing water from underground aquifers. Acid plant A facility that recovers sulphur dioxide from discharged gases and manufactures sulphuric acid from it. Ag Chemical symbol for silver. Air atomisation Process for the production of very fine metal particles by dropping molten metal into a stream of pressurised air. Alkaline The condition of water or soil which contains a sufficient amount of alkali substance to raise the pH above 7.0. See also: pH. Alloy Metal containing several components. Alloying A technique of combining or mixing two or more metals to make an entirely new metallic compound; for example, mixing copper and tin creates bronze. Anode Positively charged electrode in electrolysis; in zinc and cadmium electrolysis, the anode is a flat sheet of lead alloy containing typically 0.5% silver. Antimony A metallic element, often a pathfinder element for gold. As Chemical symbol for arsenic. Bag house A filtering device or facility in which particulates are removed from a stream of exhaust gases (as from a blast furnace) as the stream passes through a large cloth bag. Base Metal Non precious metal, usually refers to copper. lead, zinc. Batch leached Discontinuous leaching method in which a quantity of material is placed in a given volume of leachant solution for a set period of time. Batch purified Purification process using a discontinuous manner of operation. Beneficiation Mineral extraction: crushing and separating ore into valuable substances and waste by any of a variety of techniques. Blast furnace A tall shaft furnace used to smelt sinter and produce crude lead bullion and a slag. Bleed solution Solution drawn off to adjust production by pumping more fluids from the production zone than are injected. Block-mould Mould for the casting in a block shape. BLP Budel Leach Product, a material produced at the Budel smelter containing mainly lead, silver, silica and iron compounds. Bore Describes the act of drilling a hole and also the hole which has been drilled through a solid material, for example the ground.

308 Bullion Crude metal that contains impurities; needs to be refined to make market quality metal. Bund Containment around a tank designed to catch all the tank contents on any failure and prevent environmental damage. Cadmium A soft bluish-white ductile malleable toxic bivalent metallic element; occurs in association with zinc ores. CAGR Compound Annual Growth Rate. Cake The solid mass remaining after the liquid that contained it has been removed. Calcine Product of roasting zinc sulphide concentrates; mainly zinc oxide, also with silica and iron compounds, lead compounds, minor elements and residual combined sulphur. Capping Rock overlying the mineral body of a mine. Catalytic conversion Conversion of a substance into another using a catalyst. Catalyst Any substance that initiates a reaction and enables it to take place under milder conditions than in the absence of the catalyst. The catalyst remains chemically unchanged after the reaction. Cathode Negatively charged electrode in electrolysis; in zinc and cadmium electrolysis, the cathode is a flat sheet of aluminium. Cell house The location in the production process where zinc metal is electrolytically plated onto aluminium cathodes. Cell room current efficiency See: Current efficiency. Cement, cementation The process of obtaining a metal from a solution of one of its compounds by precipitation with another metal (e.g., obtaining copper from a solution of copper sulphate by adding metallic zinc). CGG Continuous Galvanising Grade zinc; contains alloying agents such as aluminium. lead and selenium in specific qualities desired by customers; used in continuous strip galvanising plants. Cobalt A hard, lustrous, silver-grey metal. Codex Alimentarium A collection of internationally recognised standards, codes of practice, guidelines and other recommendations relating to foods, food production and food safety under the aegis of consumer protection. Coke Product made by de-volatilisation of coal in the absence of air at high temperature. Concentrate Material produced from metalliferous ore by mineral processing or beneficiation; commonly based on sulphides of zinc, lead and copper; in a concentrate, the abundance of a specific mineral is higher than in the ore. Continuous galvanising A system for providing a continuous supply of material to be galvanised.

309 Conversion Cost Operating cost for a smelter to produce market quality metal, not including the cost of raw materials. Copper cementate Metallic copper obtained by cementation. Copper sulphate A copper salt made by the action of sulphuric acid on copper oxide. Cupellation A refining process for precious metals performed at high temperatures with oxygen to oxidise and separate the residual base metals into a slag which can be physically separated from the precious metal doré. Current efficiency (CE) Measure of the efficiency of utilisation of the electrical current for metal deposition in electrolysis, compared with the theoretical maximum. Debismuthising Process for the removal of bismuth from lead. Dedicated pond Pond reserved exclusively for the storage of a given product or material. Dehalogenation kiln Furnace to remove halogens from a material making it suitable for further treatment. Desilverising A method for removing silver from lead. Dewatering A process usually used to remove water from wet solids or slurries by draining, pressing, pumping. Die-casting A process for producing parts in large quantities, by injecting molten metal under pressure into a steel die. DLA sales Sales to U.S. Defense Logistics Agency. dmt Dry metric tonne. Dross Solid scum that forms on top of molten metals as a result of oxidation; must be removed for recycle. Dry limed Product obtained after the addition of dry lime. The resulting product has a dryer appearance and its handing is improved. Effluent Liquid waste. Usually refers to discharge from industrial processes or from sewage treatment plants. Electric arc furnace Furnace widely used in steelmaking operations based upon scrap steel feed. Electric arc furnace dust A solid waste generated in the collection of particulate material during steelmaking process in an electric arc furnace. Electrolysis The process by which metals (here zinc, cadmium, and copper) are ‘won’ or deposited from solution onto a cathode by the passage of an electric current through the solution between anode and cathode. Electrolyte Solution containing metals (here zinc, cadmium, copper and silver) circulating in an electrolysis cell. Electrolytic smelting Smelting that roasts and then leaches concentrates to produce a zinc bearing solution. Zinc is subsequently recovered from the solution using electro-winning and then melted and cast into slabs. Electrostatic mist precipitator An installation used to clean dust from roaster flue gases before the acid plant; may be dry or wet.

310 Electrowinning The process of removing metal from a metal bearing solution by passing an electric current through the solution. EPA Environment Protection Authority of a state, provincial or federal government. Eutectic A eutectic or eutectic mixture is a mixture of substances at such proportions that the melting point is as low as possible. At this temperature all components crystallise simultaneously from molten liquid solution. EZDA Proprietary zinc die-casting alloy made at the Hobart smelter; the alloy contains aluminium and magnesium. Ferrite Oxides that contain iron. Fixed film reactor A series of tanks where plastic media is used in as a base on which to grow bacteria which are then used in the treatment of process effluent, specifically at Budel. Flotation A method of mineral concentration, usually of sulphide ores, by which valuable mineral particles adhere to froth bubbles for collection as a concentrate; waste particles remain in the slurry for eventual disposal as a tailing. Flue gas Gas that exits to the atmosphere via a flue, which is a pipe or channel for conveying exhaust gases from a fireplace, furnace, boiler or generator. Fluid bed See: Fluid bed roasting. Fluidised bed roasting Process where air is blown through a bed of particles to provide buoyancy and separation so that particles can circulate as if suspended in a fluid. This allows intimate contact between the air and the particles, accelerating the oxidation reaction at high temperature. Fluoride A salt of hydrofluoric acid. Fluxes Additives to a feed mix made to produce a fluid slag in the furnace; typical fluxes are lime, silica and iron oxide. Fore-hearth Refractory-lined box that receives molten metal and slag that are tapped together from a blast furnace; separates the phases into two streams. Fuming, fume A process for recovering of zinc and lead from molten lead blast furnace slag by injecting coal; the metals are removed as vapours in the gas stream, and are reoxidised to form a fume that is collected. Galvanising Process of coating steel sheet or fabricated products with a thin layer of zinc for corrosion protection. Gangue The non-valuable minerals in an ore or concentrate. Geohydrological containment system System that prevents the spreading of polluted groundwater. Germanium A brittle grey crystalline element that is a semiconducting metalloid (resembling silicon).

311 Goethite FeO.OH., hydrated iron oxide: as a zinc production by-product it contains some zinc, lead, silver and other impurities. Grade Quantity of metal per unit weight of host rock. Greenhouse gases Gaseous components of the atmosphere that contribute to the greenhouse effect. Grinding Size reduction to relatively fine particles. Gypsum Calcium sulphate, hydrated. Halide Group of elements including fluorine, chlorine and iodine. Hearth Bottom part of a furnace where metal and slag are contained; in fluidised bed roasters, the bottom deck through which air enters. Heavy metals Metallic elements with relatively high atomic weights such as lead, cadmium, arsenic and mercury. HG High Grade Zinc; minimum 99.95% zinc, intermediate grade, may be used in blends for CG alloys. HLP1 Hobart Leach Product No 1, a material containing lead, silver and zinc values; sometimes termed PLR. Hot Acid Leaching (HAL) Process whereby zinc-ferrite porous particles are leached inside a cascade of continuous stirring-tank reactors by relatively concentrated sulphuric acid solutions at temperatures close to 90°C. Hot dip galvanising The process of coating iron or steel with a thin zinc layer, by passing the iron or steel through a molten bath of zinc at a temperature of around 460°C. Horizontal retort A zinc-smelting process that employs large, honeycomblike batteries of fireclay or silicon-carbide retorts set horizontally in a gas- or coal-fired furnace. Hydrogeological containment System that prevents the spreading of polluted groundwater. Hydrometallurgical The treatment of ores and concentrates using a wet process that usually involves the dissolution of some component and its subsequent recovery from solution. Indium A rare, soft silvery metallic element. Induction furnace Furnace that heats metals without fuel combustion; the metal is heated by an electromagnetic field created by electrical windings or inductors. Intermediate copper cementate See: Cementation. Iron arsenic speiss See: Speiss. Iron precipitation Removal of iron from an aqueous solution by precipitating it as a solid compound. Iron reduction The process of reducing by chemical or electrochemical means; in this case applied to ferric iron. ISF, ISP- Imperial Smelter Furnace/ Imperial Smelter A blast furnace smelting technology in which a zinc Process and lead-bearing sinter and coke are heated in a furnace. The zinc is volatilised and subsequently recovered prior to further refining and casting into slabs.

312 Jarosite An iron sulphate mineral often formed as zinc smelter waste. Jobbing galvanising market Galvanising activities performed on a non regular basis for various customers and various types of metallic parts. kt Thousand tonnes. kW Kilowatt. kWh Kilowatt hour. lb Pound. Leachate The liquid produced when water percolates through any permeable material. Leaching A process using a chemical solution to dissolve solid matters. Lead oxide sinter cake The product of the sintering operation at Port Pirie. It is a hard porous rock like structure which is rich in lead (approximately 48%), predominantly in lead oxide. Lead rolling mill Rolling mill used for the production of lead sheets. Lead sulphate A white crystal or powder compound of lead, sulphur and oxygen. It often forms at and is most readily seen at the terminals of lead acid car batteries. In this prospectus it describes a residue produced in the leach stage of zinc smelters. Life-of-mine Number of years that an operation is planning to mine and treat ore, taken from the current mine plan. Limestone A sedimentary rock consisting chiefly of calcium carbonate mainly as calcite. Liquation The process of heating a metallic mixture or alloy to separate from it the metal which melts at a lower temperature. LME London Metal Exchange. LSLC Lead Sulphate Leach Concentrate; same as SLR or HLP2. LTIFR Lost Time Injury Frequency Rate per million man- hours. m Metre. M Million. m3 Cubic metre. Matte Mixed sulphide compound produced in a furnace; at the Port Pirie smelter matte is a lead-copper-sulphur material. Metals sulphide A compound of sulphur with a metal. Mercury Filter Cake (MFC) The product of the filtration of mercury residues recovered from the acid plant at the Hobart smelter. MW Megawatt. Neutral Leach (NL) Leach stage using very low acidity; provides feed solution for purification.

313 Neutral zinc solution Solution produced at the exit of the neutral leaching stage. This solution contains the zinc dissolved from the calcine and will be further purified before electrolysis. Neutralisation pond See “Neutralisation sludge landfill”. Neutralisation sludge landfill Landfill used for the storage of sludge coming from the treatment of plant effluents. OEM Original equipment manufacturer: a company that designs and specifies products under its own company name and brand. OHS Occupational Health and Safety. Open cut mining Mine operated in the open air as opposed to underground mining. Optical emission spectroscopy Technique for chemical analysis where material is heated to a high temperature, causing its electrons to release light of a particular wavelength, depending on the elements. Ore Mineral bearing rock. Oxidation The process by which minerals are altered by the addition of oxygen in the crystal structures. Oxide washing Process to remove halides from zinc secondaries. Paragoethite Form of goethite made as a by-product of zinc production, so named since the process differs from the normal ‘goethite process’. Pb Lead. pH Measure of the acidity of a solution: neutral is 7; the lower the pH below 7 the more acidic is the solution; the higher the pH above 7 the more alkaline it is. Polyethylene A lightweight thermoplastic; used especially in packaging and insulation. Polypropylene A polymer of propylene used as a thermoplastic moulding material. Precipitation The formation of a solid from elements or compounds that are previously dissolved in solution, as a product of a chemical reaction. Pre-hydrolysis Process step for removing specific metallic compounds under a rather concentrated solid precipitate. Process water Water that serves in any level of the manufacturing process of certain products. Process gas Gas originated as a result of a metallurgical or chemical process. Pump and treat System that removes and cleans groundwater that was contaminated with a variety of dissolved materials. PW — Prime Western Refined zinc which contains 98.5% Zn. Pyrometallurgy Extractive metallurgy — the production of metals from ores and concentrates — based on use of high temperature furnaces. Rapping The process of removing hardened accumulated calcine from the boiler tubes and curtain walls in the boiler section of a roaster.

314 RCRA Resource Conservation and Recovery Act (United States). Reductant The element in a reduction-oxidation (redox) reaction that reduces the other element involved in the reaction to a lower oxidation state. For example converting the lead in lead oxide to lead metal in a blast furnace uses the carbon contained in coke as a reductant. Reverbatory furnace Metallurgical or process furnace which characteristically isolates the material being processed from contact with the fuel, but not from contact with the combustion gases. RLE process Roast Leach Electrowin; technology used for the production of zinc and which combines the roasting, leaching and electrowinning processes. See also definition of each individual process. Roaster In zinc production, a fluid-bed furnace used to oxidise zinc sulphide concentrates; operates typically at 930- 970°C; air injected through the furnace bottom ‘fluidises’ the bed of fine combusting solids. Roasting The process of burning concentrates in a furnace to convert the contained metals into a more readily recovered form. Rotary furnace A furnace consisting of a refractory-lined chamber that rotates about a horizontal axis and that uses one or more flames to heat the walls of the furnace and lead-bearing scrap to such a temperature (greater than 980 °C) that lead compounds are chemically reduced to elemental lead metal. Secondaries See: Secondary materials. Secondary materials By-products of industrial processes such as smelting and refining that are then available for further treatment/recycling. It also includes scrap from metal machining processes and from end-of-life materials. SHG Special High Grade Zinc; minimum 99.995% zinc; premium quality, used by die-casters; traded on the LME; attracts a price margin over lower grades. Silica Hot Acid Leach (SiHAL) Leaching process used at the Budel smelter to take silica and iron in calcine into solution. Silica The chemical compound silicon dioxide, also known as silica, is the oxide of silicon. Silver crust An intermediate product of the lead refining process at Port Pirie. The silver crust is formed by mixing zinc metal into a molten lead bath, where it forms a crystalline alloy with any precious metals contained, for example silver and gold. The crystalline alloy accumulates in a solid crust on the surface from where it can be removed. Sinter A hard, porous, agglomerated intermediate material made by oxidation at moderately high temperature of sulphide concentrates, fluxes and returns on a grate conveyor termed a sinter machine. Slab-mould Mould used for the casting of ingots or slabs. Slag Mixture of oxides produced in molten form in a furnace at high temperature.

315 Slurry Suspension of finely divided solids in a liquid, usually aqueous. Smelting Chemical reduction of a metal from its ore by fusion. Softening Oxidation process that removed arsenic and antimony from lead bullion; so named as arsenic and antimony make lead into a hard alloy. Solvent extraction Method used in hydrometallurgy for metal recovery and/or purification; metal(s) are transferred to and from a selective organic liquid that is dissolved in a type of kerosene. Speiss Intermetallic compound containing arsenic; at the Port Pirie smelter, speiss is an iron-arsenic compound. Spent electrolyte Electrolyte discharged from the electrolysis cells; compared with the feed electrolyte, the solution has a lower level of the metal being electrowon (i.e., zinc, copper) and correspondingly elevated acid level. Spicing A technique to increase the level of desired metals in a concentrate or other material by blending in a small amount of an alternate concentrate or material, which is rich in the desired metals. Spent solution See: Spent electrolyte. Sprue The waste material filling or protruding from the hole through which molten material is channelled into a mould after hardening. Stacker/strappers Machines used during the casting of zinc ingots. The stacker piles up 25 kg ingots into a bundle of 1 tonne. The strapping machine puts steel straps around the bundle. Stevedoring services Services related to the loading and unloading of ships. Straight line casting machines Machine used for the casting of zinc ingots where the moulds are placed on a straight line chain. Stripping Removal of metal from material on which it has precipitated or been adsorbed, e.g., gold from carbon or copper from cathodes. Sulphate A salt or ester of sulphuric acid. Sulphide concentrate The product, usually of the flotation process, in which sulphide particles are removed from the crushed rock, containing predominantly sulphide minerals. Sulphides Minerals consisting of a chemical combination of sulphur with metals. Superphosphate fertiliser A type of fertiliser used in agricultural application produced from among other ingredients, clean sulphuric acid. t Tonne. Tailings Material rejected from a treatment plant after the recoverable valuable minerals have been extracted. Tank-house Facility for electrolytic refining of metal. Thermal zinc recovery operation Process for the recovery of zinc based on pyrometallurgical operations.

316 Tolling treatment The processing of raw materials into a value added form for a fee during which the processor at no stage takes ownership of the raw materials or of the products of the process. Usually the processor commits to achieving certain targets in terms of processing rate, recovery and quality of product. tpa Tonnes per annum. Treatment charges An annually negotiated fee that may be linked to metal prices, paid by the miner or seller to a smelter as a concession on the cost of the metal concentrate or secondary materials that the smelter purchases. Tube bundles Bundle formed by steel tubes and used in steam boilers. μg/dL Micrograms per decilitre; the standard units for reporting levels of lead in blood. Updraft sintering Production process for sinter where the air passes from the bottom to the top of the layer of material to be sintered. See also: Sinter. Vacuum dezincing During vacuum dezincing, a vacuum is drawn on the molten lead by submerging an inverted bell into the agitated metal. Vaporised zinc condenses on the inner surface o f the bell, and solid zinc is scraped from the dome after the vacuum is broken. The zinc is recycled to desilverising. Vetiver Vetiver (Vetiveria zizanoides) is a clump-forming grass up to 2 meters in height with roots that can penetrate to 3 meters deep. VRLA Lead alloy for Valve Regulated Lead Acid batters. Waste heat boiler Device for heat recovery as steam from roaster flue gases; used to generate power or for process heat in smelter. Weak Acid Leach Leaching stage at low acidity. Wet ton A wet ton is an ordinary ton of the material in its natural, wet state. Zinc ashes Mix of metallic zinc and zinc oxides formed on top of a bath of molten zinc. Zinc ferrite A ferrite containing zinc. Zinc liquor Zinc solution. Zinc silicate A group of similar zinc minerals, rich in zinc and silica, that are not readily processed in conventional RLE plants without certain necessary modifications to minimise loss of the zinc into the leach residues. This material is alternately suited to processing through pyrometallurgical plants. Zn Zinc.

317 APPENDIX II: INTRODUCTION TO FINANCIAL INFORMATION

The historical combined financial information of the Zinifex Carve-out Group and the Umicore Carve-out Group included in this appendix and appearing elsewhere in this prospectus is based on International Financial Reporting Standards (“IFRS”) and International Financial Reporting Standards as endorsed by the European Union, applied historically by each of Zinifex Limited and Umicore SA/NV, respectively, after applying certain carve-out principles and adjustments. Certain significant differences exist between IFRS and U.S. generally accepted accounting principles (“U.S. GAAP”). Accordingly, references to IFRS in this prospectus should not be construed as compliant with or equivalent to U.S. GAAP.

The Nyrstar Pro Forma Consolidated Financial Information has been prepared in accordance with Commission Regulation (EC) No. 809/2004. For the avoidance of doubt, it does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the U.S. Securities and Exchange Commission.

Also where indicated, the historical combined financial information of the Zinifex Carve-out Group and the Umicore Carve-out Group have been audited (in accordance with International Standards on Auditing (“ISA”) or reviewed (in accordance with International Standards on Review Engagements (“ISRE”), respectively, as indicated in the reports included herein. Additionally, this prospectus includes a report issued in accordance with International Standard on Assurance Engagements (“ISAE”) 3000 on the Nyrstar Pro Forma Financial Information, ISAs, ISRE and ISAEs differ in certain significant respects from U.S. generally accepted auditing standards (“U.S. GAAS”), and accordingly references to ISA, ISRE or ISAE in this prospectus should not be construed as compliant with or equivalent to U.S. GAAS.

318 APPENDIX III: INDEX TO HISTORICAL FINANCIAL INFORMATION

Page CHAPTER I: UNAUDITED ZINIFEX CARVE-OUT GROUP COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION Basis of Preparation ...... F-1 Zinifex Carve-out Group Combined Selected Historical Financial Information for the Years Ended 31 December 2006 and 2005, and Six Months Ended 31 December 2004 ...... F-3 Zinifex Carve-out Group Combined Selected Historical Financial Information for the Six Months Ended 30 June 2007 and 2006 ...... F-5 Independent Accountant’s Review Report on the Zinifex Carve-out Group’s Combined Selected Historical Financial Information ...... F-7 CHAPTER II: UNAUDITED UMICORE CARVE-OUT GROUP COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION Basis of Preparation ...... F-8 Umicore Carve-Out Group Combined Selected Historical Financial Information for the Years Ended 31 December 2006, 2005 and 2004 ...... F-9 Umicore Carve-Out Group Combined Selected Historical Financial Information for the Six Months Ended 30 June 2007 and 2006 ...... F-15 ISRE 2400 Review Report of the Auditors on Umicore Carve-out Group’s Combined Selected Historical Financial Information ...... F-18 CHAPTER III: AUDITED ZINIFEX CARVE-OUT GROUP COMBINED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 Audited Zinifex Carve-out Group Combined Income Statement for the Year Ended 30 June 2007 ...... A-3 Audited Zinifex Carve-out Group Combined Statement of Recognised Income and Expense for the Year Ended 30 June 2007 ...... A-4 Audited Zinifex Carve-out Group Combined Balance Sheet as at 30 June 2007 ...... A-5 Audited Zinifex Carve-out Group Combined Statement of Cash Flows for the Year Ended 30 June 2007 ...... A-6 Notes to the Audited Zinifex Carve-out Group Combined Financial Statements for the Year Ended 30 June 2007 ...... A-8 Directors’ Declaration ...... A-32 Independent Auditors’ Report to the Directors of Zinifex Limited ...... A-33 CHAPTER IV: AUDITED UMICORE CARVE-OUT GROUP COMBINED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 Audited Umicore Carve-out Group Combined Income Statement for the Six Months Ended 30 June 2007 ...... A-34 Audited Umicore Carve-out Group Combined Balance Sheet as at 30 June 2007 ...... A-35 Audited Umicore Carve-out Group Combined Cash Flow Statement for the Six Months Ended 30 June 2007 ...... A-36 Audited Umicore Carve-out Group Combined Statement of Recognised Income and Expenses for the Six Months Ended 30 June 2007 ...... A-37 Notes to the Audited Umicore Carve-out Group Combined Financial Statements for the Six Months Ended 30 June 2007 ...... A-38 Auditor’s Report on Umicore Carve-out Group Combined Financial Statements ...... A-68

319 APPENDIX IV: INDEX TO PRO FORMA FINANCIAL INFORMATION

Page

PRO FORMA FINANCIAL INFORMATION Independent Assurance Report on the Nyrstar Pro Forma Consolidated Financial Information ...... PF-2 CHAPTER I: UNAUDITED NYRSTAR PRO FORMA CONSOLIDATED FINANCIAL INFORMATION General Framework ...... PF-3 Basis of Preparation ...... PF-4 Pro Forma Consolidated Balance Sheet as at 30 June 2007 ...... PF-7 Selected Pro Forma Consolidated Income Statement Information Before Net Financing Costs and Income Tax for the Six-Month Period Ended 30 June 2007 ...... PF-8 Selected Pro Forma Consolidated Income Statement Information Before Net Financing Costs and Income Tax for the Year Ended 31 December 2006 ...... PF-9 Notes to the Pro Forma Adjustments ...... PF-10 CHAPTER II: SUPPLEMENTARY NOTES TO THE NYRSTAR PRO FORMA CONSOLIDATED FINANCIAL INFORMATION ...... PF-17

320 CHAPTER I ZINIFEX CARVE-OUT GROUP COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION

BASIS OF PREPARATION The Zinifex Carve-out Group Combined Selected Historical Financial Information has been prepared from the books and records maintained by Zinifex Limited and its subsidiaries, for illustrative purposes only, to present the combined results of the Zinifex Carve-out Group after giving effect to the separation of the zinc and lead alloying, refining and smelting businesses of Zinifex Limited. This financial information is presented in Euros and has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards and the accounting policies set out in Note 1 to the Zinifex Carve-out Group Combined Financial Statements set out in Chapter III of Appendix III of the prospectus.

As Zinifex’s financial year ends on 30 June, the Zinifex Carve-out Group Combined Selected Historical Financial Information: (i) As of and for the six months ended 31 December 2004 was derived from Zinifex’s interim consolidated financial report for the half year ended 31 December 2004; (ii) As of and for the year ended 31 December 2006, was derived by aggregating its results for the 12-month period ended 30 June 2006 and the six months ended 31 December 2006 and deducting the results of the six months ended 31 December 2005; (iii) As of and for the year ended 31 December 2005, was derived by aggregating its results for the 12-month period ended 30 June 2005 and the six months ended 31 December 2005 and deducting the results of the six months ended 31 December 2004; (iv) As of and for the six months ended 30 June 2007, was derived by deducting its results for the six months ended 31 December 2006, from the twelve month period ended 30 June 2007; and (v) As of and for the six months ended 30 June 2006, was derived by deducting its results for the six months ended 31 December 2005 from the 12-month period ended 30 June 2006.

Amounts presented have been translated from Australian Dollars (AUD) to Euros (EUR) at the period end rates applicable to balance sheet items and the average rates applicable to income statement and cash flow items, as set out below: Period end Average rate rate EUR/AUD rate Financial year ended 31 December 2006 ...... 0.6013 0.6000 31 December 2005 ...... 0.6238 0.6128 Six months ended 30 June 2007 ...... 0.6295 0.6081 30 June 2006 ...... 0.5842 0.6043 31 December 2004 ...... 0.5728 0.5821

The Zinifex Carve-out Group Combined Selected Historical Financial Information does not include income statement information or cash flow information below profit before net financing costs and income tax. The pro forma tax profile and gearing of Nyrstar differ substantially from that of the Zinifex Carve-out Group, which, historically, has been operated under different corporate structures and, therefore, a comparison of historical net financing cost and income tax expense is not considered to be meaningful, appropriate or representative. For the same reason, only limited cash flow information has been presented in relation to both operating activities before financing and to capital expenditure.

The Zinifex Carve-out Group Combined Selected Historical Financial Information is not necessarily indicative of the future operating results or financial status of the assets comprised therein and does not purport to be indicative of what the operating results and financial status of such assets would have been if the Zinifex Carve-out Group had been operated as a separate entity as of dates or for the periods presented due to a number of factors including those listed below: • It does not reflect the strategies and corporate structure that the Zinifex Carve-out Group may have employed had the zinc and lead alloying, refining and smelting businesses been operating as a combined group;

F-1 • It does not reflect the fact that the contractual terms between the Zinifex Carve-out Group and its customers and suppliers may have been different had the zinc and lead alloying, refining and smelting businesses been operating as a combined group; and • It does not reflect the operating risks that the Zinifex Carve-out Group may have been subject to had the zinc and lead alloying, refining and smelting businesses been operating as a combined group.

The Zinifex Carve-out Group Combined Selected Historical Financial Information is presented in an abbreviated form insofar as it does not include all of the disclosures required by IFRS.

F-2 ZINIFEX CARVE-OUT GROUP COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION FOR THE YEARS ENDED 31 DECEMBER 2006 AND 2005, AND SIX MONTHS ENDED 31 DECEMBER 2004

Selected Income Statement Information before Net Financing Costs and Income Tax

Year ended Six months ended 31 December 31 December 2006 2005 2004 (EUR millions) Unaudited Revenue ...... 2,126.8 1,134.1 476.2 Profit from operating activities before depreciation and amortisation ...... 387.5 88.1 23.8 Depreciation and amortisation ...... 37.4 29.6 14.4 Profit from operating activities ...... 350.1 58.5 9.4 Share of profit of equity accounted investees ...... — — — Profit before net financing costs and income tax ...... 350.1 58.5 9.4

Selected Balance Sheet Items

As at 31 December 2006 2005 Allocated assets ...... 1,077.5 677.2 Allocated liabilities ...... 489.2 391.6

Selected Cash Flow Information

Year ended 31 December 2006 2005 (EUR millions) Unaudited Profit from operating activities ...... 350.1 58.5 Depreciation and amortisation ...... 37.4 29.6 Other non-cash expenses ...... 9.8 11.0 Changes in working capital ...... (298.5) (56.4) Profit from operating activities before depreciation and amortisation and net of changes in working capital ...... 98.8 42.7 Capital expenditure ...... (79.0) (47.5) Profit from operating activities before depreciation and amortisation net of changes in working capital and less capital expenditures ...... 19.8 (4.8)

Selected Segment Information

Year ended 31 December 2006 Other (including Hobart Port Pirie Budel Clarksville eliminations) Total (EUR millions) Revenue External ...... 648.8 424.4 734.4 300.9 18.3 2,126.8 Intersegment ...... 33.8 1.3 18.0 — (53.1) — 682.6 425.7 752.4 300.9 (34.8) 2,126.8 Profit before net financing costs and income tax ..... 159.0 33.2 134.3 24.5 (0.9) 350.1 Including Depreciation and amortisation ...... 15.5 10.3 6.0 3.8 1.8 37.4 Allocated assets ...... 298.4 238.1 395.5 125.3 20.2 1.077.5 Allocated liabilities ...... 84.0 127.4 236.9 66.5 (25.6) 489.2

F-3 Year ended 31 December 2005 Other (including Hobart Port Pirie Budel Clarksville eliminations) Total (EUR millions) Revenue External ...... 313.7 339.8 322.0 149.2 9.4 1,134.1 Intersegment ...... 0.3 0.4 — — (0.7) — 314.0 340.2 322.0 149.2 8.7 1,134.1 Profit before net financing costs and income tax ..... 17.8 12.8 24.3 (0.9) 4.5 58.5 Including Depreciation and amortisation ...... 11.2 9.3 5.1 1.9 2.1 29.6 Allocated assets ...... 175.1 171.9 216.2 82.5 31.5 677.2 Allocated liabilities ...... 77.9 124.7 159.9 44.6 (15.5) 391.6

F-4 ZINIFEX CARVE-OUT GROUP COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2007 AND 2006

Selected Income Statement Information before Net Financing Costs and Income Tax

Six months ended 30 June 2007 2006 (EUR millions) Unaudited Revenue ...... 1,242.7 954.3 Profit from operating activities before depreciation and amortisation ...... 131.5 153.5 Depreciation and amortisation ...... (21.6) (17.4) Profit from operating activities ...... 109.9 136.1 Share of profit of equity accounted investees ...... — — Profit before net financing costs and income tax ...... 109.9 136.1

Selected Balance Sheet Items

As at 30 June 2007 2006 Allocated assets ...... 1,105.7 892.4 Allocated liabilities ...... 405.9 493.7

Selected Cash Flow Information

Six months ended 30 June 2007 2006 (EUR millions) Unaudited Profit from operating activities ...... 109.9 136.1 Depreciation and amortisation ...... 21.6 17.4 Other non-cash expenses ...... 4.7 4.7 Changes in working capital ...... 61.1 (76.9) Profit from operating activities before depreciation and amortisation and net of changes in working capital ...... 197.3 81.3 Capital expenditure ...... (40.1) (50.1) Profit from operating activities before depreciation and amortization net of changes in working capital and less capital expenditures ...... 157.2 31.2

Selected Segment Information

Six months ended 30 June 2007 Other (including Hobart Port Pirie Budel Clarksville eliminations) Total (EUR millions) Revenue External ...... 347.5 299.6 379.4 202.0 14.2 1,242.7 Intersegment ...... 7.7 0.6 10.4 3.6 (22.3) — 355.2 300.2 389.8 205.6 (8.1) 1,242.7 Profit before net financing costs and income tax ..... 28.0 14.7 57.2 6.9 3.1 109.9 Including Depreciation and amortisation ...... 7.5 6.5 3.3 3.4 0.9 21.6 Allocated assets ...... 332.6 289.0 339.8 109.2 35.1 1,105.7 Allocated liabilities ...... 88.5 159.5 121.6 51.5 (15.2) 405.9

F-5 Six months ended 30 June 2006 Other (including Hobart Port Pirie Budel Clarksville eliminations) Total (EUR millions) Revenue External ...... 251.3 218.6 321.0 152.5 10.9 954.3 Intersegment ...... 4.0 0.8 16.7 — (21.5) — 255.3 219.4 337.7 152.5 (10.6) 954.3 Profit before net financing costs and income tax . . . 59.3 16.7 47.2 11.7 1.2 136.1 Including Depreciation and amortisation ...... 7.3 4.7 2.8 1.7 0.9 17.4 Allocated assets ...... 221.1 186.9 342.5 110.3 31.6 892.4 Allocated liabilities ...... 83.5 114.0 252.4 57.7 (13.9) 493.7

F-6 INDEPENDENT ACCOUNTANT’S REVIEW REPORT ON THE ZINIFEX CARVE-OUT GROUP’S COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION

To the Board of Directors of Zinifex Limited We have reviewed the Zinifex Carve-out Group’s combined selected historical financial information as of and for the years ended 31 December 2005 and 2006 and as of and for the six month periods ended 31 December 2004, 30 June 2006 and 30 June 2007 (together the “Zinifex Carve-out Group’s combined selected historical financial information”) set out on pages F-1 to F-6 in Chapter I of Appendix III of the prospectus.

Management’s responsibility The management of Zinifex Limited is responsible for the preparation and presentation of the Zinifex Carve-out Group’s combined selected historical financial information in accordance with the basis of preparation set out on pages F-1 to F-2 of this financial information. This financial information has been prepared from the books and records maintained by Zinifex Limited and its subsidiaries, for illustrative purposes only, to present the combined results of the Zinifex Carve-out Group after giving effect to the separation of the zinc and lead alloying, refining and smelting businesses of Zinifex Limited, according to the basis of preparation described on pages F-1 to F-2.

Independent accountant’s responsibility Our responsibility is to issue a report on this financial information based on our review. We conducted our review in accordance with the International Standard on Review Engagements 2400 “Engagements to Review Financial Statements”. This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial information is free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Conclusion Based on our review, nothing has come to our attention that causes us to believe that the Zinifex Carve-out Group’s combined selected historical financial information has not been prepared, in all material respects, in accordance with the basis of preparation of the Zinifex Carve-out Group’s combined selected historical financial information set out on pages F-1 to F-2 in Chapter I of Appendix III.

Emphasis of matter Without qualifying our statement, we draw attention to the basis of preparation of the Zinifex Carve-out Group’s combined selected historical financial information set out on pages F-1 to F-2 in Chapter I of Appendix III. The financial information comprises aggregated financial information of the zinc and lead alloying, refining and smelting businesses of Zinifex Limited and its subsidiaries. This financial information may not necessarily be indicative of the results of operations that would have been achieved if the zinc and lead alloying, refining and smelting businesses of Zinifex Limited had operated as an independent entity.

KPMG Melbourne, Australia

10 October 2007

F-7 CHAPTER II UMICORE CARVE-OUT GROUP COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION

BASIS OF PREPARATION The Umicore Carve-out Group Combined Selected Historical Financial Information has been prepared from the books and records maintained by Umicore SA and its subsidiaries, for illustrative purposes only, to present the combined results of the Umicore Carve-out Group after giving effect to the separation of the zinc alloying and smelting business of Umicore Group.

The Umicore Carve-out Group Combined Selected Historical Financial Information has been derived from the segment information reported in the Umicore Group audited financial statements as of and for the years ended 31 December 2004, 2005 and 2006 and the unaudited interim financial information of the Umicore Group as of and for the six months ended 30 June 2006, in each case prepared in Euros and in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). In particular, the Umicore Carve-out Group Combined Selected Historical Financial Information has been derived from Umicore’s Zinc Specialties segment, which has been adjusted to remove the activities and assets of that segment which will not be transferred to Nyrstar SA/NV. Segment information is used for 2004, 2005 and 2006 because Umicore’s principal carve-out assets and operations in Belgium and France were only transferred to separate legal entities on 30 November 2006 with a retroactive accounting and tax opening of 1 July 2006.

The Umicore Carve-out Group Combined Historical Financial Information as of and for the six months ended 30 June 2007 is based on the Audited Umicore Carve-out Group Combined Financial Statements as of 30 June 2007. See “Audited Carve-out Combined Financial Statements”.

The Umicore Carve-out Group Combined Selected Historical Financial Information does not include income statement information below Profit before Net Financing Costs and Income Tax. Many of the businesses of the Umicore Carve-out Group transferred to Nyrstar did not previously operate as separately incorporated entities; therefore, historical information below Profit Before Net Financing Costs And Income Tax does not exist for those businesses. In addition, the pro forma tax profile and gearing of Nyrstar differ substantially from that of the Umicore Carve-out Group, which, historically, has been operated under different corporate structures and, therefore, a comparison of historical interest and tax expense is not considered to be meaningful, appropriate or representative. For the same reason, only limited cash flow information has been presented in relation to both operating activities before financing and to capital expenditure.

The Umicore Carve-out Group Combined Historical Financial Information is not necessarily indicative of the future operating results or financial condition of the assets comprised therein and does not purport to be indicative of what the operating results and financial status of such assets would have been if the Umicore Carve-out Group had been operated as a separate entity as of the dates or for the periods presented due to a number of factors including those listed below: • It does not reflect the strategies and corporate structure that the Umicore Carve-out Group may have employed had the zinc alloying, refining and smelting businesses been operating as a combined group; • It does not reflect the fact that the contractual terms between the Umicore Carve-out Group and its customers and suppliers may have been different had the zinc alloying, refining and smelting businesses been operating as a combined group; and • It does not reflect the operating risks that the Umicore Carve-out Group may have been subject to had the zinc alloying, refining and smelting businesses been operating as a combined group.

The Umicore Carve-out Group Combined Selected Financial Information is presented in an abbreviated form insofar as it does not include all the disclosures required by the International Accounting Standards applicable to annual financial reports.

F-8 UMICORE CARVE-OUT GROUP COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION FOR THE YEARS ENDED 31 DECEMBER 2006, 2005 AND 2004

Selected Balance sheet items and Income Statement Information before Net Financing Costs and Income Tax

Year ended 31 December 2006 2005 2004 (EUR millions) Unaudited Turnover ...... 1,107.6 713.2 712.8 Profit/(Loss) from operating activities before depreciation, amortisation and other non cash expenses ...... 23.2 23.1 87.9 Depreciation and amortisation ...... 25.4 39.2 34.4 Other non cash expenses ...... 32.8 30.4 5.3 Profit/(Loss) from operating activities ...... (35.0) (46.5) 48.2 Share of profits in investments accounted for using the equity method ...... 9.2 2.8 1.1 Profit/(Loss) before net financing costs and income tax ...... (25.8) (43.7) 49.3 Allocated assets(1) ...... 708.2 414.6 344.7 Allocated liabilities(1) ...... 275.4 232.9 169.8 Note: (1) The allocated assets and liabilities as disclosed include only the assets and liabilities which are part of the capital employed as defined by Umicore, i.e., mainly property, plant and equipment, provisions, inventories, accounts receivables and payables and the currency translation differences. Net debt components, deferred tax assets and liabilities and assets and liabilities connected to the recognition of fair value reserves and the IAS 39 effects are not allocated.

Selected Cash Flow Information

Year ended 31 December 2006 2005 2004 (EUR millions) Unaudited Profit/(Loss) before net financing costs and income tax ...... (25.8) (43.7) 49.3 Depreciation and amortisation ...... 25.4 39.2 34.4 Other non-cash expenses(1) ...... 32.8 30.4 5.3 Changes in working capital ...... (208.8) (58.1) n/a Profit/(loss) before net financing costs and income tax, and before depreciation and amortisation and other non-cash expenses, net of changes in working capital ...... (176.4) (32.2) n/a Capital expenditure ...... (29.5) (22.4) (24.9) Profit/(loss) before depreciation and amortisation and other non-cash expenses, net of changes in working capital and less capital expenditures ...... (205.9) (54.6) n/a Note : (1) Other non-cash expenses relate to IAS 39 effects and to increases/reversals of provisions. IAS 39 effects relate to non-cash timing differences due to the non-application of IAS 39 hedge accounting for transactional hedges. (2) N/A indicates that the information is not available.

F-9 Reconciliation with Umicore Segment Information as Included in the Umicore Group Audited Consolidated Financial Statements

Year ended 31 December 2006 B A Umicore Umicore A Umicore Zinc Zinc Umicore Zinc Alloys Umicore Specialties “Other Alloys business Carve-out segment businesses” business alignments Group (EUR millions) Turnover External ...... 1,452.2 857.1 595.1 512.5 1,107.6 Intersegment Umicore ...... 41.2 0.0 41.2 (41.2) — Total turnover(1) ...... 1,493.4 857.1 636.3 471.3 1,107.6 Profit/(Loss) from operating activities before depreciation, amortisation and non-cash expenses ...... 75.3 59.8 15.5 7.7 23.2 Depreciation and amortisation ...... 40.4 15.0 25.4 — 25.4 Other non cash expenses ...... 39.2 6.4 32.8 — 32.8 Profit/(Loss) from operating activities ...... (4.3) 38.4 (42.7) 7.7 (35.0) Share of profits in investments accounted for using the equity method ...... 24.3 6.7 17.6 (8.4) 9.2 Profit/(Loss) before net financing costs and income tax ...... 20.0 45.1 (25.1) (0.7) (25.8) Allocated assets(2) ...... 1,291.7 540.4 751.3 (43.1) 708.2 Allocated liabilities(3) ...... 512.1 208.0 304.1 (28.7) 275.4 Notes: (1) The 2006 Umicore Annual Report reports EUR 1,657 million for external Umicore Zinc Specialties segment turnover and EUR 1,698 million for total segment turnover. The amounts in the table above are adjusted for EUR 204 million intercompany eliminations, which have not been applied. This does not impact on operating results. (2) The 2006 Umicore Annual Report reports EUR 1,342 million for Umicore Zinc Specialties segment allocated assets. The corresponding amount in the table above is adjusted by EUR51 million for intercompany eliminations, which have not been applied. (3) The 2006 Umicore Annual Report 2006 reports EUR 563 million for Umicore Zinc Specialities segment allocated liabilities. The corresponding amount in the table above is adjusted by EUR 51 million for intercompany eliminations, which have not been applied.

Year ended 31 December 2005 B A Umicore Umicore A Umicore Zinc Zinc Umicore Zinc Alloys Umicore Specialties “Other Alloys business Carve-out segment businesses” business alignments Group (EUR millions) Turnover External ...... 940.7 453.2 487.5 225.7 713.2 Intersegment Umicore ...... 25.5 — 25.5 (25.5) — Total turnover ...... 966.2 453.2 513.0 200.2 713.2 Profit/(Loss) from operating activities before depreciation, amortisation and non-cash expenses ...... 61.4 36.8 24.6 (1.5) 23.1 Depreciation and amortisation ...... 54.1 14.9 39.2 — 39.2 Other non-cash expenses ...... 36.4 6.0 30.4 — 30.4 Profit/(Loss) from operating activities ...... (29.1) 15.9 (45.0) (1.5) (46.5) Share of profits in investments accounted for using the equity method ...... 3.7 (1.6) 5.3 (2.5) 2.8 Profit/(Loss) before net financing costs and income tax ...... (25.4) 14.3 (39.7) (4.0) (43.7) Allocated assets ...... 699.6 270.1 429.5 (14.9) 414.6 Allocated liabilities ...... 342.7 109.8 (232.9) 232.9

F-10 Year ended 31 December 2004 B A Umicore Umicore A Umicore Zinc Zinc Umicore Zinc Alloys Umicore Specialties “Other Alloys business Carve-out segment businesses” business alignments Group (EUR millions) Turnover External ...... 933.8 401.8 532.0 180.8 712.8 Intersegment Umicore ...... 34.4 34.4 (34.4) — Total turnover ...... 968.2 401.8 566.4 146.4 712.8 Profit/(Loss) from operating activities before depreciation, amortisation and non-cash expenses ...... 130.5 41.1 89.4 (1.5) 87.9 Depreciation and amortisation ...... 45.8 11.4 34.4 — 34.4 Other non-cash expenses ...... 5.8 0.5 5.3 — 5.3 Profit/(Loss) from operating activities ...... 78.9 29.2 49.7 (1.5) 48.2 Share of profits in investments accounted for using the equity method ...... 3.4 1.4 2.0 (0.9) 1.1 Profit/(Loss) before net financing costs and income tax ...... 82.3 30.6 51.7 (2.4) 49.3 Allocated assets ...... 567.9 209.1 358.8 (14.1) 344.7 Allocated liabilities ...... 260.8 91.0 169.8 — 169.8 Notes : Note A: The split of the Umicore Zinc Specialties segment into Umicore Zinc Alloys business and Umicore other businesses Introduction The historical segment information is based on the segment information included in the audited financial statements of the Umicore Group as of and for the years ended 31 December 2004, 2005 and 2006.

The structure of the primary segment reporting of Umicore is based mainly on the metal applications. As such, Zinc Specialties is a separate segment. Internally Umicore breaks down segment reporting to a business unit level. Each business unit has its own management and its own controlling and reporting structure.

All Umicore activities and businesses contributed to Nyrstar were formerly part of the Zinc Specialties segment of Umicore, but not all activities and businesses that were formerly part of this segment became part of Nyrstar. Only the Umicore Zinc Alloying business unit became a part of the Nyrstar activities together with part (a 24.9% stake) out of the total 46.9 % stake held by Umicore in Padaeng combining to form the “Umicore carve-out Group”. The Zinc Chemicals and Building Products building units within Umicore’s Zinc Specialties segment remained within Umicore.

Legal Entities Included in the Umicore Carve-out Group The following legal entities of the Umicore Group will be contributed to Nyrstar:

Umicore Legal Entity Shareholding (per cent.) Umicore Zinc Alloys France SAS ...... 100(1) Umicore Zinc Alloys Belgium SA/NV ...... 100(1) Umicore Zinc Alloys Germany GmbH ...... 100(2) Föhl China Co., Ltd ...... 50 Zinc Alloys International SA/NV ...... 100 Umicore Yunnan Zinc Alloys Co., Ltd ...... 60 Padaeng Industry Public Company Ltd ...... 24.9 GM-Metal SAS ...... 100 Galva 45 S.A...... 66(3) Notes : (1) These entities did not exist prior to 1 July 2006, the date as of which the Zinc Alloys activities in Belgium (the Balen and Overpelt sites) and France (the Auby site) were each carved out respectively from

F-11 Umicore SA/NV (for Belgium) and Umicore France (for France) and became wholly owned subsidiaries of Umicore. Segment information prior to that date is therefore based on analytical accounting data taken from Umicore SA/NV (for Belgium) and Umicore France SAS (for France). (2) This entity did not exist prior to 1 January 2007, the date on which the German sales activities for Zinc Alloys were carved out from Umicore Marketing Services Deutschland GmbH, which in turn merged with Metall Dinslaken GmbH & Co. KG on 1 September 2006. Segment information prior to that date is therefore based on analytical accounting data taken from Umicore Marketing Services Deutschland and Metall Dinslaken, except for the allocated assets and liabilities as at end 2006, where the opening Balance Sheet as at 1 January 2007 of Umicore Zinc Alloys Germany has been used. (3) Umicore’s shareholding in Galva 45 increased from 55% to 66% on 18 April 2007.

Legal Entities Excluded from the Umicore Carve-out Group Umicore’s global sales network is supported by a number of subsidiaries that act as intermediate or local sales agent for the business units of the group. In the case of Zinc Alloys, these are: • Umicore Marketing Services Italia • Umicore Marketing Services Lusitana • Umicore Marketing Services UK • Umicore Marketing Services Korea • Umicore Marketing Services Far East • Umicore Marketing Services Japan • Umicore Marketing Services Thailand • Umicore Marketing Services Shanghai • Umicore Marketing Services Taiwan • Umicore Marketing Services Malaysia

Within the Umicore segment information, these subsidiaries allocate their profit before taxes and net financing costs to the segments, that they support. These subsidiaries are not part of Nyrstar’s scope of consolidation; accordingly their profit before taxes and net financing costs will remain entirely within the Umicore Group. The Umicore Zinc Alloys business alignments to the Umicore Carve-out Group take that into account.

Additionally, some commercial operations of the Zinc Alloys business were carried out by Umicore Marketing Services Belgium, This subsidiary is not part of Nyrstar’s scope of consolidation but its activities have since 1 January 2007 been integrated within Umicore Zinc Alloys Belgium SA. The allocated profit before taxes and net financing costs of that activity are therefore included in the financial information of the Umicore Carve-out Group.

Note B: The Umicore Zinc Alloys Business Alignments Turnover The external turnover reported included sales invoiced to external customers by the Umicore Marketing Services companies, acting as sales intermediaries or agents for Zinc Alloys. The alignment within the turnover figure does not exclude the gross profit realised by these companies, but the impact of that is assessed to be immaterial.

Umicore Zinc alloys business inter-segment turnover, predominantly with Umicore’s precious metals services segment (mainly sales of leaching residues containing lead and precious metals), has been entirely reclassified as external turnover within the context of the Umicore Carve-out Group.

All eliminated intercompany turnover within the Umicore Zinc Specialties segment that concerns turnover between the Umicore Zinc Alloys business and the other Zinc business are added as external turnover.

These sales comprise: • Transactions between the Zinc Alloys business unit and the Umicore Building Products business unit (primarily sales of Zinc cathodes); and • Transactions between the Zinc Alloys business unit and Zinc Chemicals business unit (primarily sales of zinc cathodes, liquid zinc, and sales of zinc containing residues).

F-12 Profit/(loss) from Operating Activities Profit/(loss) from Operating Activities includes all the results of the Umicore Zinc Alloys business transactional and structural metal and currency hedging as defined in the Financial Risk Management note to the Umicore Carve-out Group Financial Information included in the A-Pages. The effect of aligning this policy to the different policies of Nyrstar is described and quantified in Chapter I of “Nyrstar Pro Forma Consolidated Financial Information” section.

Profit from Operating Activities is based on Umicore Zinc Alloys business segment information, adjusted to reflect the scope of Nyrstar activities as follows: • Profits from Operating Activities of the excluded Umicore Marketing Services companies, which were allocated to the Umicore Zinc Alloys results, have been excluded for all periods; and • An eliminated intercompany gain, recorded in 2006 on the sale of metal stock between Zinc Alloys and the Umicore Building Products business unit, has been re-integrated.

Share of Profits in Investments Accounted for Using the Equity Method Umicore held 46.9 per cent. of the shares of Padaeng Industry Public Company Limited. A shareholding representing 24.9 per cent. of the total shares was transferred to Nyrstar. Accordingly, the Umicore equity results and allocated assets have been adjusted by a ratio of 24.9/46.9 to reflect the lower shareholding of Nyrstar in Padaeng Industry Public Company Limited for all periods.

Allocated Assets and Liabilities The following alignments took place: • For 2006, all allocated assets and liabilities based on the balance sheet of Umicore Marketing Services Deutschland have been replaced by the opening balance sheet at 1 January 2007 of Umicore Zinc Alloys Germany; • For 2006, the assets and liabilities connected to the Calais site have been excluded; • For all periods, the asset value of Padaeng has been limited to 24.9/46.9 of its value in the Umicore Zinc Alloys business segment information; and • For 2006, the allocated assets and liabilities of the excluded Umicore Marketing Services companies have been excluded. For 2005 and 2004, no assets nor liabilities of excluded Umicore Marketing Services companies were allocated and so no adjustment was necessary.

Calais assets and liabilities excluded The Umicore carve-out group activity in France is lodged in a number of legal entities, one of them being Umicore Zinc Alloys France (UZAF). UZAF has always operated on two sites in an integrated way : Calais and Auby were fully interconnected.

Pre-handling and roasting of part of the zinc concentrates took place in Calais with output then going to the Auby smelting operations for further refining towards zinc metal The historical figures of the Umicore Carve-out Group include the results of the activity executed on the Calais site.

The activities at Calais were stopped at end 2005 following a restructuring of the French Umicore carve-out activities. Towards the end of 2006 all decommissioning activities were finalized except for the actual demolition of some infrastructure and soil clean-up. With the end of all industrial activities, the site was reclassified as real estate. In accordance with the BCSA the Calais real estate does not transfer to Nyrstar. Ther real estate was sold byUZAF to another Umicore (non carve-out) legal entity prior to 31 August 2007.

The Umicore carve-out group figures at end 2006 and end June 07, have anticipated the execution of this requirement, hence the value of the real estate has been backed out of the UZAF balance sheet. At 30 June 2007, the Calais real estate assets comprised approximately EUR 1 million of PPE (mainly land) with associated liabilities of approx EUR 12 million (primarily environmental liabilitiesrelating to demolition and soil rehabilitation).

F-13 Additional Financial Information in Relation to the Nyrstar Pro Forma Consolidated Financial Information and to the Operating and Financial Review and Prospects section Bridge between the Umicore Legal Entities Contributed and the Nyrstar Segment Information as included in the Nyrstar pro forma Consolidated Financial Information

Future Nyrstar Segment Umicore Legal Entity

Auby ...... Umicore Zinc Alloys France SAS Balen ...... Umicore Zinc Alloys Belgium SA/NV Umicore Zinc Alloys Germany GmbH(1) Chinese Operations ...... Föhl China Co., Ltd Zinc Alloys International SA/NV Umicore Yunnan Zinc Alloys Co., Ltd Other Operations ...... Padaeng Industry Public Company Limited GM-Metal SAS Galva 45 S.A. Note: (1) For the historical segment data, the results and the balance sheet data for the German activities are considered to be part of the Nyrstar segment “Balen”, since it is mainly this plant that delivers the products sold on the German market.

Breakdown of the Selected Balance Sheet Items and Income Statement Information of the Umicore Carve-out Group into the Nyrstar Segments

Year ended 31 December 2006 Chinese Balen Auby operations Other Total (EUR millions) External turnover ...... 618.0 355.8 80.1 53.7 1,107.6 Profit/(Loss) before net financing costs and income tax ...... (84.3) 45.0 (1.1) 14.6 (25.8) Including Depreciation and amortisation ...... 12.0 9.9 0.8 2.7 25.4 Other non-cash expenses ...... 4.9 27.9 — — 32.8 Allocated assets ...... n/a n/a n/a n/a 708.2 Allocated liabilities ...... n/a n/a n/a n/a 275.4 Note: (1) N/A indicates that the information is unavailable.

.

Year ended 31 December 2005 Chinese Balen Auby operations Other Total (EUR millions) External turnover ...... 487.4 191.4 — 34.4 713.2 Profit/(Loss) before net financing costs and income tax ...... (24.4) (24.0) — 4.7 (43.7) Including Depreciation and amortisation ...... 13.0 24.1 — 2.1 39.2 Other non-cash expenses ...... 8.4 22.0 — — 30.4 Allocated assets ...... n/a n/a n/a n/a 414.6 Allocated liabilities ...... n/a n/a n/a n/a 232.9 Note: (1) N/A indicates that the information is unavailable.

F-14 UMICORE CARVE-OUT GROUP COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2007 AND 2006

Addendum to Basis of Preparation The basis of preparation and the reconciliation with published Umicore segment information for the six months ended 30 June 2007 are the same as those used to prepare the Umicore Carve-out Group financial information for the years ended 31 December 2006, 2005 and 2004.

The Umicore Carve-out Group Combined Historical Financial Information as of and for the six months ended 30 June 2007 are based directly on the Audited Umicore Carve-out Group Combined Financial Statements as of 30 June 2007. For full details see the chapter entitled “Audited Umicore Carve-out group Combined Financial Statements for the six months ended 30 June 2007”.

Selected Balance Sheet Items and Income Statement Information before Net Financing Costs and Income Tax

Six months Six months ended ended 30 June 30 June 2007 2006 (EUR millions) Unaudited Turnover ...... 798.7 531.7 Profit/(Loss) from operating activities before depreciation, amortisation and other non cash expenses ...... 45.8 (6.8) Including Depreciation and amortisation ...... 10.7 12.1 Other non-cash expenses ...... (17.0) 0.0 Profit/(loss) from operating activities ...... 52.1 (18.9) Share of profits in investments accounted for using the equity method ...... 3.3 5.5 Profit/(loss) before net financing costs and income tax ...... 55.4 (13.4) Allocated assets(1) ...... 739.9 687.0 Allocated liabilities(1) ...... 285.8 380.8 Note: (1) The allocated assets and liabilities as disclosed include only the assets and liabilities which are part of the capital employed as defined by Umicore, i.e., mainly property, plant and equipment, provisions, inventories, accounts receivables and payables and the currency translation differences. Net debt components, deferred tax assets and liabilities and assets and liabilities connected to the recognition of fair value reserves and the IAS 39 effects are not allocated.

Selected Cash Flow Information

Six months Six months ended ended 30 June 30 June 2007 2006 (EUR millions) Unaudited Profit/(Loss) before net financing costs and income tax ...... 55.4 (13.4) Depreciation and amortisation ...... 10.7 12.1 Other non-cash expenses(1) ...... (17.0) — Changes in working capital ...... (13.2) (118.0) Profit/(loss) before net financing costs and income tax, and before depreciation and amortisation and other non-cash expenses, net of changes in working capital ..... 35.9 (119.3) Capital expenditure ...... (14.1) (12.5) Profit/(loss) before depreciation and amortisation and other non-cash expenses, net of changes in working capital and less capital expenditures ...... 21.8 (131.8)

F-15 Note : (1) Other non-cash expenses relate to IAS 39 effects and to increases/reversals of provisions. IAS 39 effects relate to non-cash timing differences due to the non-application of IAS 39 hedge accounting for transactional hedges.

Reconciliation with Umicore Segment Information as Published in the Umicore Group Interim Unaudited Consolidated Financial Statements for the six months ended 30 June 2006

Six months ended 30 June 2006 B A Umicore Umicore A Umicore Zinc Zinc Umicore Zinc Alloys Umicore Specialties “Other Alloys business Carve-out segment businesses” business alignments Group (EUR millions) Turnover External ...... 670.9 387.3 283.6 248.1 531.7 Intersegment Umicore ...... 18.7 18.7 (18.7) — Total turnover ...... 689.6 387.3 302.3 229.4 531.7 Profit/(Loss) from operating activities before depreciation, amortisation and non-cash expenses ...... 31.7 38.5 (6.8) — (6.8)) Depreciation and amortisation ...... 19.4 7.3 12.1 — 12.1 Non-cash expenses ...... 2.5 2.5 — — — Profit/(Loss) from operating activities ...... 9.8 28.7 (18.9) — (18.9) Share of profits in investments accounted for using the equity method ...... 15.6 5.2 10.4 (4.9) 5.5 Profit/(Loss) before net financing costs and income tax ...... 25.4 33.9 (8.5) (4.9) (13.4) Allocated assets ...... 1,201.5 493.9 707.6 (20.6) 687.0 Allocated liabilities ...... 585.6 194.2 391.4 (10.6) 380.8

The notes above for the full years 2004, 2005 and 2006 are also applicable to the six month periods ending 30 June 2006 and 30 June 2007.

Additional Financial Information in relation to the Nyrstar Pro Forma Consolidated Financial Information and the Operating and Financial Review and Prospects Section Breakdown of the Selected Balance Sheet Items and Income Statement Information of the Umicore Carve-out Group into the Future Nyrstar Segments for the six months ended 30 June 2006

Six months ended 30 June 2006 Chinese Balen Auby operations Other Total (EUR millions) External Turnover ...... 323.4 182.1 — 26.2 531.7 Profit/(loss) before net financing costs and income tax ...... (51.6) 29.1 — 9.1 (13.4) Including Depreciation and amortisation ...... 6.0 4.6 — 1.5 12.1 Other non-cash expenses ...... (4.0) 4.0 — — — Allocated assets ...... n/a n/a — n/a 687.0 Allocated liabilities ...... n/a n/a — n/a 380.8

Note : (1) N/A indicates that the information is not available.

F-16 Reconciliation of the June 30 2007 Allocated Assets and Liabilities of the Umicore Carve-out Group to the Total Assets and Liabilities of the Historical Umicore Carve-out Group Balance Sheet Contributed to Nyrstar (See the “Audited Umicore Carve-out group Combined Financial Statements for the six months ended 30 June 2007 and see note 3 of the Nyrstar Pro Forma Consolidated Financial Information in Chapter I of the Nyrstar pro forma financial information pages).

Assets Liabilities Allocated Assets and Liabilities of the Umicore Carve-out Group(1) ...... 739.9 285.8 Assets/liabilities not reported as part of the allocated assets/liabilities excl IAS 39 impact .... 187.3 294.2 IAS 39 impact ...... 34.0 165.8 Inter-company elimination ...... (66.5) (66.5) Total assets and liabilities of the Historical Umicore Carve-out Group Balance Sheet ... 894.7 679.3 Note: (1) The allocated assets and liabilities of the Umicore Carve-out Group include only the assets and liabilities, which are part of the capital employed as defined by Umicore. Assets and liabilities not reported in the Allocated Assets are mainly deferred tax assets, and cash and cash equivalents. Allocated liabilities comprise current loans granted and fair value cash-flow hedge reserve related payables and financial debt.

F-17 ISRE 2400 REVIEW REPORT OF THE AUDITORS ON UMICORE CARVE-OUT GROUP’S COMBINED SELECTED HISTORICAL FINANCIAL INFORMATION

To the Board of Directors of Umicore We have reviewed the accompanying Umicore Carve-out Group’s combined selected historical financial information, as of 31 December 2004, 31 December 2005 and 31 December 2006 and for the twelve-month periods then ended, set forth on pages F-8 to F-14 in Chapter II of Appendix III of the prospectus, and as of 30 June 2006 and for the six-month period then ended, set forth on pages F-15 to F-17 in Chapter II of Appendix III of the prospectus.

Management’s Responsibility The management of Umicore NV/SA is responsible for the preparation and presentation of the Umicore Carve-out Group’s combined selected historical financial information in accordance with the basis of preparation set out on page F-8 to this financial information. This financial information has been prepared from the books and records maintained by Umicore SA/NV and its subsidiaries, for illustrative purposes only, to present the combined results of the Umicore Carve-out Group after giving effect to the separation of the zinc smelting and alloying business of Umicore SA/NV, according to the basis of preparation described on page F-8.

Independent Accountant’s Responsibility Our responsibility is to issue a report on this financial information based on our review. We conducted our review in accordance with the International Standard on Review Engagements 2400 “Engagements to Review Financial Statements”. This Standard requires that we plan and perform the review to obtain moderate assurance about whether the financial information is free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Conclusion Based on our review, nothing has come to our attention that causes us to believe that the Umicore Carve-out Group’s combined selected historical financial information has not been properly prepared, in all material respects, in accordance with the basis of preparation of the Umicore Carve-out Group’s combined selected historical financial information as set out on page F-8 of Chapter II of Appendix III.

Emphasis of Matter Without qualifying our statement, we draw attention to the basis of preparation of the Umicore Carve-out Group’s combined selected historical financial information set out on page F-8 of Chapter II of Appendix III. The financial information comprises aggregated financial information of the zinc smelting and alloying business of Umicore SA/NV and its subsidiaries. This financial information may not necessarily be indicative of the results of operations that would have been achieved if the zinc smelting and alloying business of Umicore had operated as a separate and standalone entity.

10 October 2007

PricewaterhouseCoopers Bedrijfsrevisoren – Réviseurs d’Entreprises Represented by Raf Vander Stichele Bedrijfsrevisor

F-18 AUDITED CARVE-OUT COMBINED FINANCIAL STATEMENTS

1. Audited Zinifex Carve-out Group Combined Financial statements for the year ended 30 June 2007

A-1 ZINIFEX CARVE-OUT GROUP (a division of Zinifex Limited)

Combined Financial Statements for the year ended 30 June 2007

A-2 Combined income statement for the year ended 30 June 2007

Zinifex Carve-out Group for the year ended 30 June 2007 Notes Combined 2007 €m Revenue ...... 4 2,412.8 Other income ...... 5 6.4 Raw materials used ...... (1,575.0) Stores and consumables used ...... (56.9) Employee benefits expense ...... (111.3) Energy expenses ...... (143.0) Depreciation and amortisation expenses ...... 6 (41.4) Contracting and consulting expenses ...... (57.6) Freight expenses ...... (41.4) Net foreign exchange losses ...... (14.9) Other expenses ...... (53.1) Profit before net financing income and income tax ...... 324.6 Interest revenue ...... 7 11.0 Financing costs ...... 7 (6.8) Net financing income ...... 4.2 Profit before income tax ...... 328.8 Income tax expense ...... 8 (42.7) Profit for the year ...... 286.1

Attributable to: Equity holder of the Zinifex Carve-out Group ...... 286.1

The above income statement should be read in conjunction with the accompanying notes.

A-3 Combined statement of recognised income and expense for the year ended 30 June 2007

Zinifex Carve-out Group for the year ended 30 June 2007 Notes Combined 2007 €m Total recognised income and expense for the year Items recognised directly in equity (net of tax) Foreign exchange translation differences ...... 20(a) (12.1) Defined benefit superannuation — actuarial gains ...... 20(b) 3.9 Net income/(expense) recognised directly in equity ...... (8.2) Recognised income and expense for the year Net profit for the year after income tax ...... 286.1 Total recognised income and expense for the year ...... 277.9

Attributable to: Equity holder of the Zinifex Carve-out Group ...... 277.9

The above statement of recognised income and expense should be read in conjunction with the accompanying notes.

A-4 Combined balance sheet as at 30 June 2007

Zinifex Carve-out Group as 30 June 2007 Notes Combined 2007 €m Current assets Cash and cash equivalents ...... 9 74.6 Trade and other receivables ...... 10 321.5 Inventories ...... 11 309.7 Current tax receivable ...... 14 8.2 Other financial assets ...... 12 17.6 Prepayments ...... 8.5 Total current assets ...... 740.1 Non-current assets Property, plant and equipment ...... 13 330.7 Deferred tax assets ...... 14 34.9 Total non-current assets ...... 365.6 Total assets ...... 1,105.7 Current liabilities Trade and other payables ...... 15 247.9 Current tax payable ...... 14 10.9 Finance lease liabilities ...... 16 0.7 Other financial liabilities ...... 12 23.5 Provisions ...... 17 25.8 Total current liabilities ...... 308.8 Non-current liabilities Finance lease liabilities ...... 16 1.2 Provisions ...... 17 88.9 Retirement benefit obligations ...... 18 7.2 Total non-current liabilities ...... 97.3 Total liabilities ...... 406.1 Net assets ...... 699.6 Combined Equity Issued capital ...... 19 264.6 Reserves ...... 20 55.3 Retained earnings ...... 20 379.7 Total combined equity attributable to equity holder of the Zinifex Carve-out Group ...... 699.6

The above balance sheet should be read in conjunction with the accompanying notes.

A-5 Combined statement of cash flows for the year ended 30 June 2007

Zinifex Carve-out Group for the year ended 30 June 2007 Notes Combined 2007 €m Cash flows from operating activities Receipts from customers ...... 2,340.0 Payments to suppliers and employees ...... (2,049.3) Income taxes paid ...... (32.1) Financing costs paid ...... (6.8) Interest received ...... 11.0 Net cash inflows from operating activities ...... 26 262.8 Cash flows from investing activities Payments for property, plant and equipment and major cyclical maintenance ...... (65.8) Proceeds from sale of property, plant and equipment ...... 0.2 Net cash (outflows) from investing activities ...... (65.6) Cash flows from financing activities Repayments of related party borrowings ...... (174.6) Repayments of finance lease liabilities ...... (0.7) Net cash (outflows) from financing activities ...... (175.3) Net increase in cash held ...... 21.9 Cash and cash equivalents at the beginning of the year ...... 53.5 Effects of exchange rate changes on foreign currency denominated cash balances ...... (0.8) Cash and cash equivalents at the end of the year ...... 9 74.6

The above statement of cash flows should be read in conjunction with the accompanying notes.

A-6 Notes to the Combined Financial Statements 30 June 2007

Zinifex Carve-out Group for the year ended 30 June 2007 Contents of the notes to the financial statements

Page 1 Summary of significant accounting policies ...... A-8 2 Critical accounting estimates and judgements ...... A-15 3 Operating segments ...... A-16 4 Revenue ...... A-17 5 Other income ...... A-17 6 Depreciation and amortisation expense ...... A-17 7 Net financing income/(costs) ...... A-18 8 Income tax ...... A-18 9 Cash and cash equivalents ...... A-18 10 Trade and other receivables ...... A-18 11 Inventories ...... A-18 12 Other financial assets and liabilities ...... A-19 13 Property, plant and equipment ...... A-20 14 Current and deferred tax assets and liabilities ...... A-21 15 Trade and other payables ...... A-22 16 Finance lease liabilities ...... A-22 17 Provisions ...... A-23 18 Retirement benefit obligations ...... A-24 19 Issued capital ...... A-27 20 Reserves and retained profits ...... A-27 21 Financial risk exposures ...... A-28 22 Joint ventures ...... A-29 23 Commitments for expenditure ...... A-30 24 Contingent liabilities ...... A-30 25 Related parties ...... A-30 26 Reconciliation of profit after income tax to net cash flows from operating activities ...... A-31 27 Events occurring after reporting date ...... A-31

A-7 Notes to the financial statements 30 June 2007

Zinifex Carve-out Group for the year ended 30 June 2007 1 Summary of significant accounting policies Zinifex Carve-out Group, its Operations and Basis of Presentation The Zinifex Carve-out Group comprises the zinc and lead alloying, refining and smelting business of Zinifex Limited (“Zinifex”). The Zinifex Carve-out Group includes Zinifex’s Hobart Refinery business (Australia) and certain legal entities being Port Pirie Smelter (Australia), Budel Refinery (Netherlands) and Clarksville Refinery (United States) together with Zinifex’s 50% interest in Australian Refined Alloys (which operates lead acid battery recycling facilities in Australia) and 50% interest in Genesis Alloys (a joint venture which produces alloys in China).

In April 2007, Zinifex announced that it had signed a Business Combination and Shareholders’ Agreement (“BCSA”) with Umicore SA/NV (“Umicore”), a Belgian listed materials technology company, to combine their respective zinc and lead smelting, refining and alloying businesses to create Nyrstar NV (“Nyrstar”). Under the BCSA, Zinifex has agreed to transfer the Zinifex Carve-out Group to Nyrstar, a company which has been incorporated in Belgium for the purpose of acquiring those businesses, in exchange for shares in Nyrstar. Zinifex and Umicore intend to undertake an IPO of shares in Nyrstar on Euronext Brussels (“Euronext”). These Combined Financial Statements have been prepared in anticipation of Nyrstar’s requirement to file certain information regarding the IPO with Euronext.

These Combined Financial Statements of the Zinifex Carve-out Group, prepared in accordance with the requirements of International Financial Reporting Standards (“IFRS”) and interpretations adopted by the International Accounting Standards Board and Zinifex accounting policies as of and for the period presented include all assets, liabilities, revenues and expenses that are directly attributable to the Zinifex Carve-out Group as operated by Zinifex. The financial statements do not include the disclosure requirements of IAS 1 Presentation of Financial Statements with regards to the presentation of comparative information for the comparable period, being the year ended 30 June 2006.

The Zinifex Carve-out Group has elected to early adopt IFRS 8 Operating Segments in the reporting period beginning 1 July 2006.

The following accounting standards and interpretation were available for early adoption but have not been applied by the Zinifex Carve-out Group in these Combined Financial Statements: • Amendment to IAS 1, Capital Disclosures, requires an entity to disclose information that enables users of its financial statements to evaluate the entity's objectives, policies and processes for managing capital. This standard, which is applicable for annual periods beginning on or after 1 January 2007, will not have an impact on the results of the Zinifex Carve-out Group but will require additional disclosures with respect to the Zinifex Carve-out Group’s capital. • IFRS 7 Financial Instruments: Disclosures and the Amendment to IAS 1 Presentation of Financial Statements: Capital Disclosures, requires extensive disclosures about the significance of financial instruments for an entity’s financial position and performance, and qualitative and quantitative disclosures on the nature and extent of risks. IFRS 7 and amended IAS 1, which is applicable for annual periods beginning on or after 1 January 2007, will not have an impact on the results of the Zinifex Carve-out Group but will require additional disclosures with respect to the Zinifex Carve-out Group’s financial instruments and share capital. • IFRIC 14 — IAS 19 — Limit On A Defined Benefit Asset, Minimum Funding Requirements And Their Interaction, provides guidance on minimum funding requirements in respect of post-employment or other long-term defined benefit plans. The Interpretation becomes mandatory for the Zinifex Carve-out Group’s 2008 annual financial statements. The Zinifex Carve-out Group has not yet determined the potential effect of the Interpretation.

Other interpretations issued and available for early adoption but not applied by the Zinifex carve-out Group have not been included above as they are not expected to have a significant impact on the financial statements of the Zinifex Carve-out Group.

A-8 The Combined Financial Statements also comply with the requirements of IFRS as adopted by the European Union (“EU-IFRS”) except for: • IAS 1 Presentation of Financial Statements as it does not include comparative information for the comparable period, being the year ended 30 June 2006; and • IAS 14 Segment Reporting as the Zinifex Carve-out Group has elected to early adopt the requirements of IFRS 8 Operating Segments. IFRS 8 had not been endorsed by the European Commission at the date of these Combined Financial Statements.

The Zinifex Carve-out Group operates as an integrated part of the Zinifex Group. The Combined Financial Statements included herein may not necessarily be indicative of the Zinifex Carve-out Group’s financial position, results of operations, or cash flows had the Zinifex Carve-out Group operated as a separate entity during the period presented or for future periods.

Critical accounting estimates and judgements The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying Zinifex’s accounting policies. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Refer Note 2 for more detail on critical accounting estimates and judgements.

Basis of combination (i) Principles of combination The Combined Financial Statements include the combined financial information of Zinifex’s operations comprising the Zinifex Carve-out Group. All significant intercompany balances and transactions with combined businesses have been eliminated. However, intercompany trading and loan balances with Zinifex’s non-Zinifex Carve-out Group businesses and subsidiaries have not been eliminated, but are presented as balances and transactions with related parties.

(ii) Joint ventures The Zinifex Carve-out Group’s interest in joint venture operations has been included in the Combined Financial Statements by bringing to account the Zinifex Carve-out Group’s share in each of the individual assets and liabilities of the joint ventures, and the Zinifex Carve-out Group’s share of income earned and expenses incurred.

Financial instruments Commodity hedging, via the use of metal futures, is undertaken to ensure the Zinifex Carve-out Group is exposed to fluctuations in commodity prices in relation to its unrecognised firm commitments arising from sales contracts. The Zinifex Carve-out Group has adopted a policy that it will not enter into any speculative commodity hedging. The Zinifex Carve-out Group does not enter into forward exchange contracts or currency options to hedge transactions denominated in a foreign currency.

Derivatives are initially recognised at their fair value on the date the derivative contract is entered into. The method of recognising the changes in fair value subsequent to initial recognition is dependent upon whether the derivative is designated as a hedging instrument, the nature of the underlying item being hedged and whether the arrangement qualifies for hedge accounting. The Zinifex Carve-out Group designates certain derivatives as either fair value hedges or cash flow hedges.

At the inception of the hedge, the Zinifex Carve-out Group documents the relationship between the hedging instrument and the underlying hedged item, as well as the risk management objective and strategy for undertaking the hedging transaction. The Zinifex Carve-out Group also documents at inception and throughout the life of the hedge, whether the derivative has been or will continue to be highly effective in offsetting changes in the fair value or cash flows associated with the underlying hedged item.

A-9 (i) Fair value hedges A hedge of the fair value of a recognised asset or liability or of a firm commitment is referred to as a fair value hedge. Changes in the fair value of derivatives that are designated and qualify as fair value hedges, are recorded in the income statement, together with changes in the fair value of the underlying hedged item attributable to the risk being hedged.

(ii) Cash flow hedges A hedge of the fair value of a highly probable forecast transaction is referred to as a cash flow hedge.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised outside of the income statement, directly in equity in the hedging reserve. Changes in the fair value of cash flow hedges relating to the ineffective portion are recorded in the income statement. Amounts accumulated in the hedging reserve are recycled in the income statement in the same period when the underlying hedged item is recorded in the income statement. When a hedge no longer meets the criteria for hedge accounting, and the underlying hedged transaction is no longer expected to occur, any cumulative gain or loss recognised in the hedging reserve is transferred to the income statement. When a hedge is sold or terminated, any gain or loss made on termination is only deferred in the hedging reserve where the underlying hedged transaction is still expected to occur.

(iii) Derivatives that do not qualify for hedge accounting Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the income statement. Where an embedded derivative is identified and the derivative’s risks and characteristics are not considered to be closely related to the underlying host contract, the fair value of the derivative is recognised on the combined balance sheet and changes in the fair value of the embedded derivative are recognised in the combined income statement.

Foreign exchange (iv) Presentation and functional currency The Combined Financial Statements are presented in Euros which will be the functional and presentation currency of Nyrstar. Items included in the financial statements of each operation in the Zinifex Carve-out Group are measured using their functional currency, being the currency of the primary economic environment in which they operate.

(v) Financial statements of foreign operations The income statement and balance sheet of each operation in the Zinifex Carve-out Group entities that has a functional currency different to Euros are translated into the presentation currency as follows: • assets and liabilities are translated at the closing rate at the end of the financial year; • revenues and expenses are translated at rates approximating the exchange rates ruling at the dates of the transactions; and • all resulting exchange differences are recognised as a separate component of equity.

Exchange differences arising from the translation of the net investment in foreign operations are released into the income statement upon disposal.

(vi) Foreign currency transactions Monetary items denominated in foreign currencies have been translated into the respective functional currencies at the rates of exchange ruling at the balance date. Gains and losses on translation are recognised in the income statement for the period. All other transactions in foreign currencies during the year have been recognised at the exchange rates ruling at the time of the transactions.

Inventories Stocks of finished metals, concentrates and work in progress are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the

A-10 estimated costs of completion and selling expenses. By-products inventory on hand obtained as a result of the production process are valued at the lower of cost and net realisable value. Cost includes expenditure incurred in acquiring and bringing the stock to its existing condition and location and includes an appropriate portion of fixed and variable overhead expenses, including depreciation and amortisation. Stores of consumables and spares are valued at cost with due allowance for obsolescence. In each case, cost is determined on an average cost basis.

Income tax During the period presented, not all businesses in the Zinifex Carve-out Group are separate taxpayers as their operations form part of other controlled entities of Zinifex. The tax expense in these Combined Financial Statements has been determined using a method consistent with a stand alone taxpayer basis, as if each business was a separate taxpayer. Income tax payable has been recognised in the combined balance sheet either as a current tax liability where amounts are payable by a legal entity in the Zinifex Carve-out Group to the relevant taxation authority or as payables to related parties where the business is not a separate taxpayer.

The income tax expense or revenue for the period is the current tax payable on the taxable income for the period based on the income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the combined financial report, and to unused tax losses. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

Deferred tax assets and liabilities arise as a result of temporary differences, which are differences between the tax base of an asset or liability and its carrying amount in the financial statements. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable profits will be available to utilise those temporary differences and losses.

Leases Leases of plant and equipment for which the Zinifex Carve-out Group assumes substantially all of the risks and benefits of ownership, are classified as finance leases, while other leases are classified as operating leases. Finance leases are capitalised with a lease asset and liability equal to the present value of the minimum lease payments being recorded at the inception of the lease. Capitalised lease assets are amortised on a straight-line basis to their residual value over the term of the lease, or where it is likely that the Zinifex Carve-out Group will obtain ownership of the asset, for the life of the asset. Each finance lease repayment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Lease payments made under operating leases are recognised in equal installments over the accounting periods covered by the lease term.

Property, plant and equipment (vii) Property, plant and equipment Items of property, plant and equipment are carried at cost. The cost of self-constructed assets includes the cost of materials, direct labour, and an appropriate proportion of production overheads. The cost of self- constructed assets and acquired assets include estimates of the costs of dismantling and removing the assets and restoring the site on which they are located. All items of property, plant and equipment, are depreciated on a straight-line basis. Freehold land is not depreciated. Useful lives are based on the shorter of the useful life of the asset and the remaining life of the operation, where the asset is being utilised. Depreciation rates are reviewed regularly and reassessed in light of commercial and technological developments.

The expected useful lives are the lesser of the life of the operation or as follows:

• Buildings ...... 40years • Plant and equipment ...... 5–15 years

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Spare parts purchased for particular items of plant, are capitalised and depreciated on the same basis as the plant to which they relate.

A-11 (viii) Construction in progress During the construction phase, self-constructed assets are classified as construction in progress within property, plant and equipment. Once commissioned these assets are reclassified to Property, plant and equipment, at which time they will commence being depreciated.

(ix) Major cyclical maintenance expenditure The Zinifex Carve-out Group recognises in the carrying amount of an item of plant and equipment the incremental cost of replacing a component part of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the Zinifex Carve-out Group, the cost incurred is significant in relation to the asset and the cost of the item can be measured reliably. Accordingly, major overhaul expenditure, is capitalised and depreciated over the period in which benefits are expected to arise (typically three to four years). All other repairs and maintenance are charged to the combined income statement during the financial period in which the costs are incurred.

(x) Impairment of assets Assets that have a finite life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying value exceeds the recoverable amount.

The asset’s recoverable amount is the higher of the asset’s fair value less cost to sell and its value in use. For the purpose of assessing impairment, assets are grouped together at the lowest level for which there are separately identifiable cash inflows. These groups are referred to as ‘cash generating units’.

The asset’s value in use is the net amount expected to be recovered through the cash flows arising from its continued use and subsequent disposal, or arising on the sale of an asset held for resale. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

Any impairment in the carrying amount is recognised as an expense in the combined income statement in the reporting period in which the write-down occurs.

Where this assessment indicates a loss in value of the assets of an operation, an appropriate write-down is made. No assets are carried in excess of their recoverable amount.

The recoverable amount of the Zinifex Carve-out Group’s operations is subject to cyclical variation because of changes in internationally determined metal prices and exchange rates.

Employee benefits (xi) Wages and salaries and annual leave Liabilities for wages and salaries, including non-monetary benefits and annual leave are recognised in respect of employees’ services up to the reporting date, calculated as undiscounted amounts based on remuneration wage and salary rates that the entity expects to pay at the reporting date including related on-costs, such as payroll tax. Annual leave liabilities are disclosed in the combined balance sheet as provisions while accrued wages and salaries are disclosed as other payables.

(xii) Long-term employee benefits A liability for long-term employee benefits is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of service provided by employees up to the balance sheet date. Consideration is given to expected future wage and salary levels including related on-costs, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match the estimated future cash flows.

(xiii) Defined contribution plans Obligations for contributions to defined contribution pension plans are recognised as an expense in the combined income statement as incurred.

A-12 (xiv) Defined benefit plans A liability or asset in respect of defined benefit superannuation or medical plans is recognised in the combined balance sheet. This liability (or asset) is measured as the present value of the defined benefit obligation at the balance sheet date plus unrecognised actuarial gains (less unrecognised actuarial losses) less the fair value of any fund assets belonging to the plan and any unrecognised past service cost. The present value of the defined benefit obligations is based on expected future payments that arise from membership of the fund to the balance sheet date. This obligation is calculated annually by independent actuaries using the projected unit credit method.

Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match the estimated future cash flows. Any future taxes that are funded by the entity and are part of the provision of the defined benefit obligation are taken into account when measuring the net asset or liability. Any movements in the net defined benefit assets or liabilities are recognised in the combined income statement during the period, except for actuarial gains and losses that are recognised directly in equity. Where necessary the Zinifex Carve-out Group share of Zinifex plans are reflected in these financial statements.

(xv) Employee bonuses The Zinifex Carve-out Group recognises a liability and expense for employee bonuses where contractually obliged or where there is a past practice that has created a constructive obligation.

Provisions A provision is recognised if, as a result of a past event, the Zinifex Carve-out Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of benefits will be required to settle the obligation.

(i) Workers’ compensation Provision is made for outstanding claims, including any incurred but not reported claims, where any controlled entity self-insures for risks associated with workers’ compensation. Outstanding claims are recognised when an incident occurs that may give rise to a claim and are measured at the cost that the entity expects to incur in settling the claims, discounted using a rate that reflects current market assessments of the time value of money and risks specific to the liability. An independent actuary provides the calculation of the value of outstanding claims. Each period the impact of the unwind of discounting is recognised in the income statement as a financing cost.

(ii) Restoration obligations In accordance with Zinifex’s published Sustainable Development policy and applicable legal requirements, provision is made for the anticipated costs of future restoration and rehabilitation of smelting and refining sites to the extent that a legal or constructive obligation exists. The provision includes costs associated with dismantling of assets, reclamation, monitoring, water purification and coverage and permanent storage of historical residues. The provision is based upon current costs and has been determined on a discounted basis with reference to the current legal framework and current technology. Each period the impact of the unwind of discounting is recognised in the income statement as a financing cost. Any change in the restoration provision is recorded against the carrying value of the provision and the related asset, only to the extent that it is probable that future economic benefits associated with the restoration expenditure will flow to the entity, with the effect being recognised in the income statement on a prospective basis over the remaining life of the relevant operation. The restoration provision is separated into current (estimated costs arising within 12 months) and non-current components based on the expected timing of these cash flows.

Sales revenue Sales revenue is stated on a gross basis, with freight and realisation expenses included in the cost of sales. Sales of metals, concentrates and by-products are only recognised when the significant risks and rewards of ownership have been transferred to external customers, pursuant to enforceable sales contracts.

A-13 Net financing costs Financing costs include: • interest on short-term and long-term borrowings; • amortisation of discounts or premiums relating to borrowings; • amortisation of ancillary costs incurred in connection with the arrangement of borrowings; • finance lease charges; and • the impact of the unwind of discount on long-term provisions for restoration and workers’ compensation.

Financing costs are calculated using the effective interest method. Financing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other financing costs are expensed as incurred.

Net financing costs represent financing costs net of any interest received on funds invested. Interest income is recognised as it accrues using the effective interest method.

Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank overdrafts are repayable on demand and are shown within borrowings in current liabilities on the combined balance sheet. For the purposes of the combined statement of cash flows, cash includes cash on hand and deposits at call which are readily convertible to cash and are subject to an insignificant risk of changes in value, net of any outstanding bank overdrafts which are recognised at their principal amounts.

Trade and other payables These amounts represent liabilities for goods and services provided to the Zinifex Carve-out Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. These amounts are carried at amortised cost.

Trade receivables Trade receivables represent amounts owing for goods and services supplied by the Zinifex Carve-out Group prior to the end of the financial period which remain unpaid. They arise from transactions in the normal operating activities of the Zinifex Carve-out Group.

Trade receivables are carried at amortised cost, less any impairment losses for doubtful debts. An impairment loss is recognised for trade receivables when collection of the full nominal amount is no longer probable.

Where settlement of any part of cash consideration receivable is deferred, the amounts receivable in the future are discounted to their present value.

Dividends Provision is made for the amount of any dividend declared on or before the end of the financial period but not distributed at the balance date.

Goods and services tax Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authorities. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authorities is included as a current asset or liability in the combined balance sheet. Cash flows are included in the combined statement of cash flows inclusive of GST.

A-14 Segment reporting Operating segments are components of the Zinifex Carve-out Group about which separate financial information is available that is evaluated regularly by the Zinifex Carve out Group’s key management personnel in deciding how to allocate resources and in assessing performance.

Segment information that is internally evaluated is prepared in conformity with the accounting policies adopted for preparing the Combined Financial Statements.

The division of the Zinifex Carve-out Group’s results and assets into segments has been ascertained by reference to direct identification of assets and revenue/cost centers and where interrelated segment costs exist, an allocation has been calculated on a pro rata basis of the identifiable assets and/or costs. Management believes intersegment pricing is on an arm’s-length market basis.

Rounding of amounts The Combined Financial Statements have been rounded to € millions.

2 Critical accounting estimates and judgements Estimates and judgements used in developing and applying the accounting policies are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The Zinifex Carve-out Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and underlying assumptions are reviewed on an ongoing basis.

The critical estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are listed below.

(a) Critical accounting estimates and assumptions (i) Impairment of assets The recoverable amount of each ‘cash generating unit’ is determined as the higher of the asset’s fair value less costs to sell and its value in use. These calculations require the use of estimates and assumptions such as discount rates, exchange rates, commodity prices, future capital requirements and future operating performance. As at 30 June 2007 the carrying amount of property, plant and equipment for the Zinifex Carve-out Group is € 330.7 million — refer note 13.

(ii) Restoration obligations Provision is made for the anticipated costs of future restoration and rehabilitation of smelting and refining sites to the extent that a legal or constructive obligation exists. These provisions include future cost estimates associated with reclamation, plant closures, waste site closures, monitoring, demolition, decontamination, water purification and permanent storage of historical residues. These future cost estimates are discounted to their present value. The calculation of these provision estimates requires assumptions such as application of environmental legislation, plant closure dates, available technologies and engineering cost estimates. A change in any of the assumptions used may have a material impact on the carrying value of restoration provisions. As at 30 June 2007 the carrying value of restoration provisions is € 85.6 million — refer note 17.

(iii) Retirement benefit obligations An asset or liability in respect of defined benefit pension or medical plans is recognised on the combined balance sheet. The present value of a defined benefit obligation is dependent upon a number of factors that are determined on an actuarial basis. The Zinifex Carve-out Group determines the appropriate discount rate to be used at the end of each year. The Zinifex Carve-out Group’s retirement benefit obligations are discussed in more detail in Note 18. At 30 June 2007 a liability with respect to retirement benefit obligations of € 7.2 million was recognised.

A-15 (b) Critical judgements in applying the Group’s accounting policies (i) Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable profits are available to utilise those temporary differences and losses, and the tax losses continue to be available having regard to the nature and timing of their origination and compliance with the relevant tax legislation associated with their recoupment. As at 30 June 2007 the Zinifex Carve-out Group had net deferred tax assets of €34.9 million — refer note 14.

3 Operating segments The Zinifex Carve-out Group’s divisions are managed on a site-by-site basis, and the operating segments are as follows:

Hobart Refinery The Hobart refinery is a large-scale electrolytic zinc refinery located on the Derwent River in Tasmania’s capital city, Hobart. A significant portion of Hobart’s zinc output is converted into high-value diecast alloy for sale into Asia, particularly China.

Port Pirie Smelter The Port Pirie smelter is located on the eastern side of the Spencer Gulf in South Australia, approximately 200 kilometres north of Adelaide, South Australia. Port Pirie is the world’s largest primary lead smelting facility and a leading global silver producer. The majority of Port Pirie’s lead output is exported, primarily to Asia.

Australian Refined Alloys (ARA) Australian Refined Alloys is an acid battery and lead recycling business owned 50 per cent by Zinifex Carve-out Group and 50 per cent by Sims Group. It operates the only lead acid battery recycling facilities in Australia at Alexandria in Sydney and Laverton North in Melbourne.

Budel Refinery The Budel refinery is located at Budel Dorplein in the Netherlands, close to the Belgian border. It is a large- scale electrolytic zinc refinery producing zinc and zinc alloys for the European market.

Clarksville Refinery The Clarksville refinery is located on the Cumberland River close to Clarksville, Tennessee in the United States of America. Clarksville is a mid-scale electrolytic zinc refinery producing zinc and zinc alloys and supplying customers in the United States mid-west.

Zinifex Metals Pty Ltd Zinifex Metals is located in Melbourne. Its principal activity is the sales and marketing of zinc, lead and silver metals together with various alloys and by-products.

Geographical areas Although the Zinifex Carve-out Group’s divisions are managed on a site-by-site basis, they operate in three main geographical areas:

Australia The country of the Zinifex Carve-out Group and the area in which the Hobart refinery, the Port Pirie smelter and the Australian Refined Alloys business operate.

Europe Comprises the operations associated with the Budel refinery.

United States of America Comprises the operations associated with the Clarksville refinery.

A-16 Zinifex Carve-out Group for the year ended 30 June 2007

Port Zinifex Hobart Pirie Budel Clarksville Zinifex Carve-out 2007 Refinery Smelter ARA Refinery Refinery Metals Eliminations Group €m €m €m €m €m €m €m €m

Sales to external customers ...... 744.3 504.5 21.4 792.6 350.0 — — 2,412.8 Intersegment sales ...... 37.6 1.1 — 11.7 3.6 — (54.0) — Total segment revenue ...... 781.9 505.6 21.4 804.3 353.6 — (54.0) 2,412.8 Other income ...... 0.2 0.9 — (0.1) — 5.4 — 6.4 Changes in inventories ...... (0.6) (2.0) — 2.2 0.4 — — — Raw materials ...... (513.6) (332.7) (6.9) (513.5) (262.3) — 54.0 (1,575.0) Stores and consumables ...... (15.2) (17.4) (1.3) (13.6) (9.4) — — (56.9) Employee benefits expense ...... (27.2) (35.0) (2.3) (28.6) (15.1) (3.1) — (111.3) Energy expenses ...... (31.8) (30.6) (0.4) (65.0) (15.2) — — (143.0) Depreciation and amortisation ...... (15.7) (12.1) (1.8) (6.5) (5.3) — — (41.4) Contracting and consulting expense .... (16.6) (19.2) (1.5) (13.7) (5.9) (0.7) — (57.6) Freight expense ...... (17.3) (4.2) (0.6) (6.5) (7.6) (5.2) — (41.4) Net foreign exchange (losses)/gains .... (1.4) 0.2 — (4.5) (4.3) (4.9) — (14.9) Other expenses ...... (14.7) (22.1) (0.3) (10.3) (9.2) 3.5 — (53.1) Profit before net financing income and income tax ...... 128.0 31.4 6.3 144.2 19.7 (5.0) — 324.6 Net financing income/(costs) ...... 2.6 (1.8) 0.1 2.2 (2.6) 3.7 — 4.2 Profit/(loss) before income tax ...... 130.6 29.6 6.4 146.4 17.1 (1.3) — 328.8 Income tax (expense) ...... (42.7) Profit for the year ...... 286.1 Total assets ...... 332.6 289.0 38.3 339.8 109.2 18.0 (21.2) 1,105.7 Total liabilities ...... (88.5) (159.5) (1.7) (121.6) (51.6) (4.4) 21.2 (406.1) Net assets ...... 244.1 129.5 36.6 218.2 57.6 13.6 0 699.6 Acquisition of PP&E and major cyclical maintenance ...... 18.9 32.4 0.3 9.5 7.2 — — 68.3

Zinifex Carve-out Geographical areas 2007 Australia Europe USA Eliminations Group €m €m €m €m €m Sales to external customers ...... 1,270.2 792.6 350.0 — 2,412.8 Property, plant and equipment ...... 248.5 67.5 14.7 — 330.7

Combined Zinifex Carve-out Group for the year ended 30 June 2007 2007 €m 4 Revenue Sales revenue Sale of goods ...... 2,412.8

5 Other income Net gain on disposal of property, plant and equipment ...... 0.1 Other income ...... 6.3 6.4

6 Depreciation and amortisation expense Depreciation and amortisation ...... 41.4

A-17 Combined Zinifex Carve-out Group for the year ended 30 June 2007 2007 €m

7 Net financing income/(costs) Interest revenue Interest income ...... 11.0 Financing costs Interest and finance charges paid/payable ...... (4.3) Unwind of discount on long-term provisions ...... (2.5) Total financing costs ...... (6.8) Net financing income / (costs) ...... 4.2

8 Income tax (a) Income tax (expense) recognised in the income statement Current income tax (expense) ...... (84.4) Deferred income tax benefit ...... 41.7 Income tax (expense) ...... (42.7) Deferred income tax benefit included in income tax expense comprises: Increase in deferred tax assets ...... 2.8 Decrease in deferred tax liabilities ...... 38.9 41.7 (b) Numerical reconciliation of income tax (expense) to pre-tax net profit Profit before income tax ...... 328.8 Tax at the Australian tax rate of 30% ...... (98.6) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Non-taxable amounts ...... 20.1 Other ...... (1.3) (79.8) Difference in overseas tax rates ...... 1.4 Tax assets recouped during the period ...... 34.3 (Under) provision for previous years ...... (0.4) Net adjustment to deferred tax balances due to tax rate decrease in foreign jurisdiction ...... 1.8 Income tax (expense) ...... (42.7)

9 Cash and cash equivalents Cash at bank and on hand ...... 74.6

Cash at bank earned a weighted average interest rate of 4.99% per annum.

10 Trade and other receivables Trade receivables — external ...... 208.5 Trade receivables — related parties ...... 1.1 Loans to related parties — interest bearing ...... 108.4 Other receivables ...... 3.5 Total trade and other receivables ...... 321.5

11 Inventories Raw materials ...... 152.8 Work in progress ...... 96.2 Finished goods ...... 47.3 Stores and consumables ...... 13.4 Total inventories ...... 309.7

A-18 Combined Zinifex Carve-out Group for the year ended 30 June 2007 2007 €m

Inventories pledged as security Inventories are included in assets pledged as security for financing arrangements under the Zinifex group borrowing facilities. Refer Note 16 for more information.

12 Other financial assets and liabilities Current assets Fair value of derivatives ...... (a) 8.3 Fair value of underlying hedged risk ...... (a) 9.3 Total current other financial assets ...... 17.6 Current liabilities Fair value of derivatives ...... (a) 10.3 Fair value of underlying hedged risk ...... (a) 8.3 Embedded derivatives ...... (b) 4.9 Total current other financial liabilities ...... 23.5

(a) Instruments used by the Zinifex Carve-out Group to manage commodity price risk exposures In the normal course of business, the Zinifex Carve-out Group is exposed to fluctuations in commodity prices. Derivative financial instruments are used to hedge exposures to commodity prices. In accordance with the Zinifex risk management policies, derivatives are not used for speculative purposes. Accounting for these instruments is outlined in Note 1.

The Zinifex Carve-out Group is exposed to commodity price volatility on commodity sales made by the refineries and smelter and raw materials purchased by the refineries and smelter. The Zinifex Carve-out Group may enter into zinc, lead and silver futures and swap contracts to hedge certain forward fixed price sales to customers in order to achieve the relevant metal price at the date that the transaction is settled. These instruments are referred to as ‘fixed forward hedges’ and the terms of these contracts are rarely more than 24 months. The Zinifex Carve-out Group may enter into zinc and lead futures and swap contracts to more closely align the time at which the price for externally sourced concentrate purchases is set to the time at which the price for the sale of metal produced from that concentrate is set. These instruments are referred to as ‘metal at risk’ hedges and the terms of these contracts are normally between one and three months. There were no ‘metal at risk’ hedges at 30 June 2007.

Fixed forward hedges have been accounted for as fair value hedges. Where fair value hedges satisfy the requirements of hedge accounting, movements in the fair value of the hedging instrument and the offsetting change in fair value of the underlying hedged item attributable to the risk being hedged are recognised in the income statement. The fair value of both the hedging instrument and the underlying hedged item are recorded on the balance sheet as Other financial assets and liabilities. At 30 June 2007 the fair value of derivatives hedging fixed forward sales contracts resulted in a payable of €2.0 million being recognised on the combined balance sheet with an offsetting asset of €1.0 million being the fair value of the underlying hedged items attributable to the risk being hedged. These amounts are recorded on the balance sheet as follows:

Fair value of derivatives hedging fixed forward sales contracts Current assets — fair value of derivatives ...... 8.3 Current liabilities — fair value of derivatives ...... (10.3) (2.0) Fair value of the underlying hedged items Current asset — fair value of underlying hedged risk ...... 9.3 Current liabilities — fair value of underlying hedged risk ...... (8.3) 1.0

The fair value of commodity futures and swap contracts is determined using listed market prices or by discounting the contractual forward price and deducting the current spot price. Refer Note 21 where a summary of the derivative financial instruments hedging commodity price risks is provided.

A-19 Combined Zinifex Carve-out Group for the year ended 30 June 2007 2007 €m

(b) Embedded derivatives Where an embedded derivative is identified and the derivative’s risks and characteristics are not considered to be closely related to the underlying host contract, the fair value of the derivative is recognised on the combined balance sheet and changes in the fair value of the embedded derivative are recognised in the combined income statement.

The fair value of the embedded derivative has been measured using the standard binomial method. As at 30 June 2007 an amount of €4.9 million has been recognised within current Other financial liabilities. The change in fair value during the year ended 30 June 2007 of €3.4 million was recognised in the combined income statement within energy expenses.

13 Property, plant and equipment Freehold land and buildings (a) ...... 36.6 Plant and equipment (b) ...... 242.2 Leased plant and equipment (c) ...... 1.8 Major cyclical maintenance expenditure (d) ...... 12.7 Construction in progress (e) ...... 37.4 Net carrying value (f) ...... 330.7

(a) Freehold land and buildings At cost ...... 39.6 Accumulated depreciation ...... (3.0) 36.6 Opening carrying amount ...... 35.6 Additions ...... 0.3 Transfers from construction in progress ...... 0.1 Depreciation charge ...... (0.7) Exchange differences ...... 1.3 Closing carrying amount ...... 36.6

(b) Plant and equipment At cost ...... 319.7 Less: Accumulated depreciation ...... (77.5) 242.2 Opening carrying amount ...... 210.7 Transfers from construction in progress ...... 45.8 Disposals ...... (0.1) Depreciation charge ...... (27.4) Exchange differences ...... 13.2 Closing carrying amount ...... 242.2

(c) Leased plant and equipment At cost ...... 2.6 Less: Accumulated amortisation ...... (0.8) 1.8 Opening carrying amount ...... — Transfers from construction in progress ...... 2.5 Amortisation charge ...... (0.7) Closing carrying amount ...... 1.8

A-20 Combined Zinifex Carve-out Group for the year ended 30 June 2007 2007 €m (d) Major cyclical maintenance expenditure At cost ...... 32.7 Less: Accumulated amortisation ...... (20.0) 12.7 Opening carrying amount ...... 12.0 Additions ...... 3.0 Transfers from construction in progress ...... 9.7 Amortisation charge ...... (12.6) Exchange differences ...... 0.6 Closing carrying amount ...... 12.7

(e) Construction in progress Opening carrying amount ...... 28.9 Additions ...... 65.0 Transferred out of construction in progress ...... (58.1) Exchange differences ...... 1.6 Closing carrying amount ...... 37.4

(f) Total property, plant and equipment Opening carrying amount ...... 287.2 Additions ...... 68.3 Disposals ...... (0.1) Depreciation charge ...... (28.1) Amortisation charge ...... (13.3) Exchange differences ...... 16.7 Closing carrying amount ...... 330.7

Refer Note 2 for discussion of the critical accounting estimates and judgments made in regard to property, plant and equipment. Refer Note 16 for discussion of the Zinifex Carve-out Group’s assets pledged as security and details of finance lease commitments.

14 Current and deferred tax assets and liabilities (a) Deferred tax assets and liabilities Recognised Opening in income Closing Combined €m balance statement balance Combined 2007 €m Deferred tax assets Employee benefits ...... 6.4 (0.1) 6.3 Embedded derivatives ...... 2.3 (0.9) 1.4 Restoration provisions ...... 14.7 2.1 16.8 Tax losses ...... 23.7 1.7 25.4 47.1 2.8 49.9 Set–off of deferred tax liabilities ...... 1.3 (15.0) Net recognised deferred tax assets ...... 48.4 34.9 Deferred tax liabilities Depreciation ...... 14.1 2.7 16.8 Inventories ...... 39.2 (40.0) (0.8) Other ...... 0.6 (1.6) (1.0) 53.9 (38.9) 15.0 Set–off against deferred tax assets ...... 1.3 (15.0) Net recognised deferred tax liabilities ...... 55.2 —

A-21 Combined Zinifex Carve-out Group for the year ended 30 June 2007 2007 €m (b) Unrecognised deferred tax assets Unused tax losses and temporary differences for which no deferred tax asset has been recognised . . . 53.9 Potential tax benefit @ 30% ...... 16.2

(c) Current tax receivable Current tax receivable ...... 8.2

(d) Current tax payable Current tax payable ...... 10.9

15 Trade and other payables Current Trade payables ...... 99.0 Other payables ...... 1.4 Loans from related parties — non interest bearing ...... 147.5 247.9

16 Finance lease liabilities Current Lease liabilities ...... 0.7

Non–current Lease liabilities ...... 1.2

(a) Finance lease Commitments in relation to finance leases are payable as follows:

Within one year ...... 1.1 Later than one year but not later than five years ...... 1.1 2.2 Future finance charges ...... (0.3) Recognised as a liability ...... 1.9

(b) Financing arrangements The Zinifex Carve-out Group has the following financing facilities at year end: (i) All lease facilities are fully drawn at year end. (ii) Zinifex has a syndicated loan facility of €188.0 million (AUD 300 million) provided by a syndicate of six banks. Certain entities in the Zinifex Carve-out Group are party to this facility at 30 June 2007. This facility may be drawn in Australian dollars and expires in April 2009. The interest rate is based on the bank bill swap reference rate for the interest period selected by Zinifex plus a margin determined by Zinifex’s recent financial performance. Interest is paid at the end of each period. There are no fixed repayment terms under the syndicated loan facility. The facility is subject to a number of financial covenants, with which Zinifex has remained in compliance during the period, and is fully secured against the consolidated entity’s assets under a security trust deed.

The above facility was amended subsequent to year-end — refer to Note 27 for details.

A-22 Combined Zinifex Carve-out Group for the year ended 30 June 2007 2007 €m

17 Provisions Current Employee benefits ...... 18.1 Workers’ compensation ...... 2.6 Restoration of smelting and refining operations (a) ...... 5.1 25.8 Non–current Employee benefits ...... 4.9 Workers’ compensation ...... 3.5 Restoration of smelting and refining operations (b) ...... 80.5 88.9 (a) Restoration of smelting and refining operations — current Carrying amount at start of year ...... 5.2 Foreign exchange translation ...... (0.1) Carrying amount at end of year ...... 5.1

(b) Restoration of smelting and refining operations — non–current Carrying amount at start of year ...... 77.2 Payments/other sacrifices of economic benefits ...... (0.1) Unwind of discount ...... 2.5 Foreign exchange translation ...... 0.9 Carrying amount at end of year ...... 80.5 Total provisions Current ...... 25.8 Non current ...... 88.9 114.7

A-23 18 Retirement benefit obligations a) Superannuation and post-retirement plans The Zinifex Carve-out Group participates in a number of superannuation and retirement benefit plans. The plans provide benefits on retirement, disablement, death, retrenchment or withdrawal from service, the principal types of benefits being lump sum defined benefits and lump sum defined contribution benefits.

Employees were members of the following plans at 30 June 2007:

Defined contribution plans • Zinifex Australia Limited Superannuation Accumulation Plan, reviewed as at 30 June 2007 by R.R Codron FIAA of William M Mercer Pty Ltd.

Defined benefit plans • Zinifex Australia Limited Superannuation Defined Benefit Plan, reviewed as at 30 June 2007 by R.R Codron FIAA of William M Mercer Pty Ltd. • Zinifex Clarksville Inc Hourly Employees’ Pension Plan, Zinifex Clarksville Inc Salaried Employees’ Retirement Plan, The Pension Plan of Zinifex Clarksville Inc for Bargaining Unit Employees and Zinifex Clarksville Inc/Jefferson City Zinc Pension Plan for Bargaining Unit Employees (Zinifex Clarksville Pension Plans) all had actuarial assessments performed as at 30 June 2007 by J.C. Thacker EA of Bryan, Pendleton, Swats & McAllister LLS. • Employees of Zinifex Netherlands (Holdings) BV are members of a multi-employer Metal and Electricity industry defined benefit pension plan (PME) and specific employees are members of an Excedent Pension Plan. PME are unable to provide the Zinifex Carve-out Group with the necessary information for defined benefit accounting to be applied and consequently the PME plan has been accounted for as a defined contribution plan. The total surplus assets in the PME plan as per their report dated 31 December 2006 was €7.7 million. Defined benefit accounting is applied for the Excedent Pension Plan. Actuarial assessments for the Excedent Pension Plan are performed by Aon Consulting Actuaries.

Medical benefit plans • Zinifex Clarksville Inc Post Retirement Medical Benefit and Life Insurance Plan (“PRMB&LI”), reviewed as at 30 June 2007 by PricewaterhouseCoopers actuaries. Defined benefit accounting is applied for the PRMB&LI. b) Balance sheet amounts The following sets out details in respect of the defined benefit obligations only.

The most recent actuarial assessments of the Zinifex Australia Limited Superannuation Defined Benefit Plan as at 30 June 2007 indicated that the plan had a surplus of funds, based on accrued benefits, of € 4.5 million. The last actuarial review of the Zinifex Australia Limited Superannuation Defined Benefit Plan’s financial position carried out as at 30 June 2007 indicated that the plan’s assets were sufficient to satisfy all benefits that would have been vested under the plan in the event of: termination of the plan; voluntary termination of the employment of each employee on the initiative of that employee; and compulsory termination of the employment of each employee by the employer.

The most recent actuarial assessments of the Zinifex Clarksville pension and retirement plans as at 30 June 2007 indicated that the plans had a net deficit of funds, based on accrued benefits, of € 1.6 million. In relation to the Zinifex Clarksville pension and retirement plans, minimum funding requirements are being satisfied annually by the Zinifex Carve-out Group. Cash funding requirement calculations are performed separate from the accounting disclosures each year according to US funding rules.

The most recent actuarial assessments of Zinifex Netherlands (Holdings) BV Excedent Pension Plan as at 30 June 2007 indicated that the plan had a deficit of funds, based on accrued benefits of € 1.8 million.

A-24 The most recent actuarial assessments of the Zinifex Clarksville PRMB&LI as at 30 June 2007 indicates a defined benefit obligation of € 8.3 million. There is no requirement to set funds aside for this plan and therefore the fair value of the plan’s assets are nil.

The amounts recognised on the combined balance sheet have been determined as follows:

Zinifex Zinifex Australia Zinifex Zinifex Netherlands Total Defined Clarksville Clarksville Holdings Defined Benefit Pension PRMB&LI Excedent Benefit Plan Plans Plan Plan Plans Combined 2007 €m €m €m €m €m Present value of the defined benefit obligation .... 11.8 19.9 8.3 12.3 52.3 Fair value of defined benefit plan assets ...... (16.3) (18.3) — (10.5) (45.1) Net (asset)/liability in the balance sheet ...... (4.5) 1.6 8.3 1.8 7.2 c) Plan assets The major categories of plan assets are as follows: Combined 2007 Cash ...... 2.3 1.7 — — 4.0 Equity instruments ...... 10.4 11.0 — — 21.4 Debt instruments ...... 2.3 5.6 — — 7.9 Property ...... 1.3 — — — 1.3 Other assets(i) ...... — — — 10.5 10.5 16.3 18.3 — 10.5 45.1

(i) Plan assets split by major category are not available for the Zinifex Netherlands Holdings Excedent Plan, therefore all assets been classified within Other assets. d) Reconciliation of present value of defined benefit obligation The present value of all defined benefit obligations are as follows:

Combined 2007 Balance at the beginning of the year ...... 12.8 21.5 9.6 15.2 59.1 Current service cost ...... 0.5 0.3 0.3 0.3 1.4 Interest cost ...... 0.6 1.2 0.5 0.6 2.9 Actuarial gains/(losses) ...... (0.2) 0.6 0.4 (2.2) (1.4) Contributions by plan participants ...... 0.3 — — — 0.3 Benefits paid ...... (2.2) (0.9) (1.3) (0.6) (5.0) Foreign exchange translation gains/(losses) ...... — (2.8) (1.2) (1.0) (5.0) Balance at the end of the year ...... 11.8 19.9 8.3 12.3 52.3

A-25 e) Reconciliation of fair value of plan assets A reconciliation of the fair value of plan assets is as follows:

Zinifex Zinifex Zinifex Zinifex Netherlands Total Hobart Clarksville Clarksville Holdings defined Benefit Pension PRMB&LI Excedent benefit Plan Plans Plan Plan plans Combined 2007 €m €m €m €m €m Balance at the beginning of the year ...... 15.1 18.2 — 10.9 44.2 Expected return on plan assets ...... 0.9 1.1 — 0.4 2.4 Actuarial gains/ (losses) ...... 1.7 0.8 — — 2.5 Contributions by employer ...... 0.4 1.3 — 0.5 2.2 Contributions by plan participants ...... 0.4 — — — 0.4 Benefits paid ...... (2.2) (0.9) — (0.5) (3.6) Foreign exchange translation gains/(losses) ...... — (2.2) — (0.8) (3.0) Balance at the end of the year ...... 16.3 18.3 — 10.5 45.1 f) Amounts recognised in income statement The amount recognised in the combined income statement during the year was €1.9 million as follows:

Combined 2007 Current service cost ...... 0.5 0.3 0.3 0.3 1.4 Interest cost ...... 0.5 1.3 0.6 0.6 3.0 Expected return on plan assets ...... (0.9) (1.2) — (0.4) (2.5) Total amounts included in employee benefits expense ...... 0.1 0.4 0.9 0.5 1.9 Actual return on plan assets ...... (2.5) (2.0) — (0.4) (4.9) g) Principal actuarial assumptions The principal actuarial assumptions used were expressed as weighted averages as follows:

Combined 2007 Discount rate ...... 5.30% 6.25% 6.25% 4.75% Expected return on plan assets ...... 6.90% 7.00% N/a 4.75% Expected future salary increases ...... 4.50% 3.50% N/a 2.00%

Annual increase in healthcare costs Initial trend rate ...... N/a N/a 8.00% N/a Ultimate trend rate ...... N/a N/a 5.00% N/a Years until ultimate is reached ...... N/a N/a 6 N/a

The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The expected rate of return is based on historical returns.

A-26 19 Issued capital As discussed in Note 1, the Combined Financial Statements of the Zinifex Carve-out Group represent the Combined Financial information of the zinc and lead alloying, refining and business of Zinifex Limited.

The issued capital presented in the balance sheet comprises the aggregated issued capital of the following legal entities within the Zinifex Carve-out Group:

Combined Zinifex Carve-out Group for the year ended 30 June 2007 2007 €m Budelco BV ...... — Buzifac BV ...... — Buzipon BV ...... — Buzisur BV ...... — Zinifex Budel BV ...... — Zinifex Clarksville Inc Maryland (US) ...... — Zinifex Hong Kong Limited ...... — Zinifex Metals Pty Ltd ...... — Zinifex Netherlands (Holdings) BV ...... — Zinifex Port Pirie Pty Ltd ...... — Zinifex Resources (US), Inc...... 264.6 Zinifex Taylor Chemicals, Inc...... — 264.6

20 Reserves and retained profits Reserves (a) ...... 55.3 Retained profits (b) ...... 379.7 Total reserves and retained profits ...... 435.0

(a) Reserves Movements in foreign currency translation reserve: Foreign currency translation reserve at beginning of year ...... 67.4 Net exchange differences on translation of overseas controlled entities ...... (12.1) Foreign currency translation reserve at end of year ...... 55.3

(b) Retained profits Movements in retained profits: Retained profit at beginning of year ...... 89.7 Net profit after tax ...... 286.1 Defined benefit superannuation — actuarial gains/(losses) recognised directly in equity ...... 3.9 Retained profit at end of year ...... 379.7

(c) Nature and purpose of reserves Foreign currency translation reserve Exchange differences arising on the translation of foreign controlled entities are taken to the foreign currency translation reserve, as described in accounting policy Note 1.

A-27 21 Financial risk exposures In the normal course of business, the Zinifex Carve-out Group is exposed to fluctuations in commodity prices and exchange rates, interest rate risk, credit risk and liquidity risk. Derivative financial instruments are used to hedge exposures to commodity prices. In accordance with the Zinifex Carve-out Group’s risk management policies, derivatives are not used for speculative purposes. This note summarises the various financial risk exposures of the Zinifex Carve-out Group.

(a) Financial risk exposures of the Zinifex Carve-out Group (i) Commodity price risk management The Zinifex Carve-out Group is exposed to commodity price volatility on commodity sales made by refineries and smelter and raw materials purchased by the refineries and smelter. The Zinifex Carve-out Group may enter into zinc, lead and silver futures and swap contracts to hedge certain forward fixed price sales to customers in order to achieve the relevant metal price at the date that the transaction is settled. These instruments are referred to as ‘fixed forward hedges’ and the terms of these contracts are rarely more than 24 months. The Zinifex Carve-out Group may enter into zinc and lead futures and swap contracts to more closely align the time at which the price for externally sourced concentrate purchases is set to the time at which the price for the sale of metal produced from that concentrate is set. These instruments are referred to as ‘metal at risk’ hedges and the terms of these contracts are normally between one and three months.

The following table sets out a summary of the derivative financial instruments hedging commodity price risks at 30 June 2007.

30 June 2007 Maturity date of transactions for six months ending 30/06/09 & Average 31/12/07 30/06/08 31/12/08 beyond Price US$ Face value Face value Face value Face value per tonne of contracts of contracts of contracts of contracts Total €m €m €m €m €m (i) Zinc Contracts purchased ...... 3,392.6 100.2 5.7 0.1 — 106.0 Contracts sold ...... (3,316.4) (19.1) (5.6) — — (24.7) Net position ...... 81.1 0.1 0.1 — 81.3 (ii) Lead Contracts purchased ...... 2,599.0 0.6 — — — 0.6 Contracts sold ...... — — — — — — Net position ...... 0.6 — — — 0.6

(ii) Foreign exchange risk management The Zinifex Carve-out Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than Australian dollars. The currencies giving rise to this risk are primarily US dollars and EURO. The Zinifex Carve-out Group does not enter into derivative financial instruments to hedge transactions denominated in a foreign currency.

(iii) Interest rate risk management The Zinifex Carve-out Group is exposed to interest rate volatility on deposits and borrowings. The Zinifex Carve-out Group may enter into interest rate swaps whereby the Zinifex Carve-out Group agrees to pay interest on a fixed rate basis and receive interest on a floating rate basis. At 30 June 2007 no interest rate swap contracts are in place nor were any used during the current or prior year.

A-28 The Zinifex Carve-out Group’s exposure to interest rate risk and effective weighted average interest rate is set out in the following table:

Weighted average Floating Non- Fixed Interest rate risk exposures interest interest interest interest 30 June 2007 Notes rate rate bearing rate Total % €m €m €m €m Financial assets Cash ...... 9 4.99 74.6 — — 74.6 Related party receivables ...... 10 6.03 108.4 1.1 — 109.5 Trade receivables ...... 10 — — 208.5 — 208.5 Other financial assets ...... 12 — — 17.6 — 17.6 Other receivables ...... 10 — — 3.5 — 3.5 183.0 230.7 — 413.7 Financial liabilities Trade payables ...... 15 — — 99.0 — 99.0 Other payables ...... 15 — — 1.4 — 1.4 Related party payables ...... 15 — — 147.5 — 147.5 Other financial liabilities ...... 12 — — 23.5 — 23.5 Lease liability ...... 16 9.37 — — 1.9 1.9 — 271.4 1.9 273.3 Net financial assets/(liabilities) ...... 74.6 67.7 (1.9) 140.4

(iv) Credit risk management Credit risk represents the loss that would be recognised if the counterparties to financial instruments fail to perform as contracted. The credit risk on financial assets of the Zinifex Carve-out Group, which have been recognised on the combined balance sheet, is the carrying amount, net of any provisions for doubtful debts.

Credit risk in trade receivables is also managed in the following ways: • Payment terms vary from 5 to 30 days after the end of the month of delivery for domestic sales, and for international sales this can vary from cash sales to the term stated in the letter of credit; • A regular risk assessment process is undertaken with credit limits imposed on customers; • Export sales are predominantly covered by a letter of credit with approved financial institutions, with the exception of • Trafigura and Lee Kee as noted below; and • Credit insurance is obtained for most export sales debtors on open terms.

Credit risk arising from dealings in financial instruments is controlled by a strict policy of credit approvals, limits and monitoring procedures.

The Zinifex Carve-out Group had no significant concentration of credit with any single counterparty during the financial year, apart from the sales agreements and arrangements with Trafigura and Lee Kee which contributed combined revenues of approximately 25% and 12% respectively.

(v) Liquidity risk management Liquidity risk arises from the possibility that a market for derivatives may not exist in some circumstances. To counter this risk, the Zinifex Carve-out Group only uses derivatives in highly liquid markets.

(b) Fair value of financial assets and financial liabilities The carrying amount of all financial assets and liabilities recognised at amortised cost on the combined balance sheet approximates their fair value.

22 Joint ventures The Zinifex Carve-out Group has a 50% interest in the Genesis joint venture in China which manufactures and sells alloy products.

A-29 The Zinifex Carve-out Group has a 50% interest in the Australian Refined Alloys (ARA) joint venture to produce and market lead alloys from secondary materials. The Zinifex Carve-out Group’s share of operating assets employed in the Australian Refined Alloys joint venture are included in the Zinifex Carve-out Group balance sheet under the following classifications:

Combined Zinifex Carve-out Group for the year ended 30 June 2007 2007 €m Receivables ...... 3.8 Inventories ...... 1.2 Plant and equipment ...... 10.9 Other assets ...... 0.2 Share of assets employed in joint venture ...... 16.1

23 Commitments for expenditure (a) Capital commitments Commitments for acquisition of plant and equipment contracted for at the reporting date but not recognised as liabilities, payable:

Within one year ...... 9.3

(b) Operating leases Commitments in relation to operating leases contracted for at the reporting date but not recognised as liabilities, payable:

Within one year ...... 0.2 Later than one year but not later than five years ...... 0.1 0.3

Non-cancellable operating lease commitments relate primarily to the lease of a building.

24 Contingent liabilities Guarantees Zinifex Carve-out Group has guaranteed the obligations of certain group entities in relation to Bankers’ Undertakings and cash deposits provided by the Group’s bankers to the Workers’ Compensation authorities. These guarantees amount to €5.4 million. Provision is made in the financial statements for expected benefits accruing to past and present employees in relation to workers’ compensation (refer Note 17).

Bank guarantees have been provided to the Zinifex Carve-out Group with respect to contractual relationships between Zinifex Carve-out Group and third parties. These guarantees amount to €1.5 million.

Certain controlled entities of Zinifex Carve-out Group, which include the parent entity, are also party to the Security Trust Deed with respect to the Zinifex Limited syndicated loan facility. Refer Note 16 for more information with respect to this facility. The fair value of the financial guarantee liability for this contract has been assessed as nil at 30 June 2007.

Legal actions Certain businesses of the Zinifex Carve-out Group are defendants from time to time in legal proceedings arising from the conduct of their business. The Zinifex Carve-out Group does not consider that the outcome of any proceedings ongoing at balance date, either individually or in aggregate, is likely to have a material effect on its financial position. Where appropriate, provisions have been made.

25 Related parties a) Transactions with related parties These Combined Financial Statements include transactions with affiliated companies. The Zinifex Carve-out Group entered into transactions with Zinifex and its subsidiaries for the sales of inventory as well as corporate services provided by Zinifex Limited for the period presented.

A-30 Purchases from Zinifex subsidiaries amount to €800.4 million for the year ended 30 June 2007, and relate to purchases of raw materials which management believes are on arm's length terms as pricing is based on the relevant metal prices as determined by reference to quotations on the London Metals Exchange and other factors such as benchmark agreements negotiated within the zinc and lead industries.

At 30 June 2007, Zinifex Carve-out Group has advanced surplus funds to Zinifex subsidiaries of €108.4 million (refer Note 10). These amounts are reflected in receivables from related parties in the Combined Balance Sheet and bear interest at commercial rates.

At 30 June 2007, the Zinifex Carve-out group had loans from Zinifex entities of €147.5 million (refer Note 15). The loans are non-interest bearing and repayable at call.

General and administration expenses include charges for corporate costs from Zinifex of €16.7 million for the year ended 30 June 2007. Corporate expenses include accounting, finance, human resources, legal, and certain other administrative services. Management considers that such charges, based on actual costs incurred by Zinifex, have been made on a reasonable basis, but may not necessarily be indicative of the costs the Zinifex Carve-out Group would have incurred had the Zinifex Carve-out Group operated as a separate entity during the period presented. b) Outstanding balances with related parties The following balances are outstanding at the reporting date in relation to transactions between related parties:

Combined Zinifex Carve-out Group for the year ended 30 June 2007 2007 €m Receivables Related entities ...... 109.5 Payables Related entities ...... 147.5

26 Reconciliation of profit after income tax to net cash flows from operating activities Profit for the year ...... 286.1 Depreciation and amortisation ...... 41.4 Net foreign exchange differences ...... (11.6) Change in assets and liabilities: Receivables — current ...... (63.4) Prepayments ...... 7.0 Inventories ...... (19.2) Other financial assets ...... 19.6 Other financial liabilities ...... (21.8) Retirement benefit obligations ...... 2.6 Payables ...... 27.1 Provisions ...... (15.5) Current tax assets ...... 58.9 Deferred tax assets ...... (48.4) Net cash inflow from operating activities ...... 262.8

27 Events occurring after reporting date The $188.0 million syndicated loan facility (as detailed in Note 16) was cancelled and the drawn amount prepaid in August 2007. The securities held over the Zinifex consolidated entity’s asset under a security trust deed were discharged.

At the general meeting of members of Zinifex Ltd held on 26 July 2007, Zinifex Ltd shareholders approved the proposed combination of the Zinifex smelting business (Zinifex Carve-out Group) and the Umicore business described in the memorandum that was sent to the shareholders with the advice of meeting. Work is on track to form Nyrstar in September 2007.

There have been no other events that have occurred subsequent to the reporting date which would have a material effect on the Zinifex Carve-out Group's combined financial statements at 30 June 2007.

A-31 Directors’ Declaration

Directors’ declaration 1 In the opinion of the directors of Zinifex Carve-out Group: (a) the financial statements and notes: (i) present fairly the financial position of the Zinifex Carve-out Group as at 30 June 2007 and of its performance, as represented by the results of its operations and its cash flows, for the year ended on that date; and (ii) comply with International Financial Reporting Standards to the extent described in Note 1 to the financial statements.

Signed in accordance with a resolution of the directors.

A H Barnes Acting Chief Executive Officer Melbourne 31 August 2007

A-32 Independent auditors’ report to the directors of Zinifex Limited

We have audited the accompanying Combined Financial Statements of the Zinifex Carve-out Group of Zinifex Limited, which comprise the balance sheet as at 30 June 2007, and the income statement, statement of recognised income and expense and cash flows statement for the year ended on that date, and a summary of significant accounting policies and other explanatory notes.

Directors’ responsibility for the Combined Financial Statements The directors of Zinifex Limited are responsible for the preparation and fair presentation of the Combined Financial Statements in accordance with International Financial Reporting Standards. The Combined Financial Statements contain an aggregation of financial information relating to the Zinifex Carve-out Group of Zinifex Limited and has been prepared from the books and records maintained by Zinifex Limited and its controlled entities. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the Combined Financial Statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility Our responsibility is to express an opinion on the Combined Financial Statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the Combined Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Qualification As set out in Note 1 to the financial statements, the requirements of IAS 1 Presentation of Financial Statements have not been complied with in regards to the presentation of comparative information for the comparable period, being the year ended 30 June 2006.

Qualified Auditor’s Opinion In our opinion, except for the matter noted in the preceding qualification paragraph, the Combined Financial Statements present fairly, in all material respects, the financial position of the Zinifex Carve-out Group as of 30 June 2007 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Emphasis of Matter Without further qualification of our opinion, we draw attention to Note 1 to the financial statements. The Combined Financial Statements present aggregated financial information of the Zinifex Carve-out Group of Zinifex Limited and its controlled entities. The Zinifex Carve-out Group operates as an integrated part of the Zinifex group and within the Zinifex group infrastructure. The Combined Financial Statements may not necessarily be indicative of the Zinifex Carve-out Group’s financial position, results of operations, or cash flows had the Zinifex Carve-out Group operated as a separate entity during the period presented or for future periods.

KPMG Melbourne 31 August 2007

A-33 CHAPTER V AUDITED UMICORE CARVE-OUT GROUP COMBINED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2007

AUDITED UMICORE CARVE-OUT GROUP COMBINED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2007

Six months ended Notes 30 June 2007 EUR Millions Turnover ...... 798.7 Other operating income ...... 9.7 Operating income ...... 808.5 Raw materials and consumables ...... -658.2 Payroll and related benefits ...... 9 -45.8 Depreciation and impairments ...... 10 -10.7 Other operating expenses ...... 10 -41.7 Operating expenses ...... -756.4 RESULT FROM OPERATING ACTIVITIES ...... 52.1 Financial income ...... 11 1.7 Financial expenses ...... 11 -7.3 Foreign exchange gains and losses ...... 11 -0.3 Share in result of companies using the equity method ...... 16 3.3 PROFIT (LOSS) BEFORE INCOME TAX ...... 49.5 Income taxes ...... 12 -13.7 PROFIT (LOSS) OF THE PERIOD ...... 35.8 of which: Group share ...... 35.1 Minority share ...... 0.7

The notes on pages A-38 to A-67 are an integral part of these combined financial statements.

A-34 AUDITED UMICORE CARVE-OUT GROUP COMBINED BALANCE SHEET AS AT 30 JUNE 2007

Notes 30 June 2007 EUR Millions NON-CURRENT ASSETS ...... 238.7 Intangible assets ...... 13,14 6.4 Property, plant and equipment ...... 15 136.5 Investments accounted for using the equity method ...... 16 27.6 Trade and other receivables ...... 19 1.0 Deferred tax assets ...... 20 67.2 CURRENT ASSETS ...... 656.1 Current loans granted ...... 17 24.6 Inventories ...... 18 219.3 Trade and other receivables ...... 19 316.8 Cash and cash equivalents ...... 21 95.3 TOTAL ASSETS ...... 894.8 EQUITY OF THE GROUP ...... 22 215.4 Equity attributable to equity holders of the parent ...... 201.9 Minority interest ...... 13.5 NON-CURRENT LIABILITIES ...... 66.6 Provisions for employee benefits ...... 25 26.3 Financial debt ...... 23 0.5 Deferred tax liabilities ...... 20 1.1 Provisions ...... 26,27 38.7 CURRENT LIABILITIES ...... 612.8 Financial debt ...... 23 266.3 Trade and other payables ...... 24 329.0 Income tax payable ...... 9.2 Provisions ...... 26,27 8.3 TOTAL EQUITY & LIABILITIES ...... 894.8

The notes on pages A-38 to A-67 are an integral part of these combined financial statements.

A-35 AUDITED UMICORE CARVE-OUT GROUP COMBINED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2007

Notes June 30, 2007 EUR Millions Profit and loss of the period ...... 35.8 Adjustments for profit of equity companies ...... -3.3 Adjustment for non-cash transactions ...... 28 -4.5 Adjustments for items to disclose separately or under investing and financing cash flows . . . 28 11.5 Change in working capital requirement ...... -10.6 Cash flow generated from operations 28.8 Dividend received ...... 6.1 Tax paid during the period ...... -15.2 Net cash flow generated by (used in) operating activities 19.8 Acquisition of property, plant and equipment ...... 15 -14.3 Acquisition of new subsidiaries (net of cash acquired) ...... -12.4 Sub-total acquisitions -26.7 Disposal of property, plant and equipment ...... 0.1 Disposal of intangible assets ...... 0.1 Repayment of loans ...... 17 15.3 Sub-total disposals 15.5 Net cash flow generated by (used in) investing activities -11.2 Interest received ...... 1.6 Interest paid ...... -6.3 New loans ...... 76.7 Repayment of loans ...... -26.3 Dividends paid ...... -8.9 Net cash flow generated by (used in) financing activities 36.8 Effect of exchange rate fluctuations on cash held ...... 0.0 Net cash flow of the period 45.4 Net cash and cash equivalents at the beginning of the period ...... 49.5 Net cash and cash equivalents at the end of the period ...... 21 94.9 of which cash and cash equivalents ...... 95.3 of which bank overdrafts ...... -0.4

The notes on pages A-38 to A-67 are an integral part of these combined financial statements.

A-36 AUDITED UMICORE CARVE-OUT GROUP COMBINED STATEMENT OF RECOGNISED INCOME AND EXPENSES FOR THE SIX MONTHS ENDED 30 JUNE 2007

Notes 30 June 2007 EUR Millions Changes in cash flow hedge reserves ...... 182.6 Changes in post employment benefit reserves ...... -0.2 Changes in share-based payment reserves ...... 0.3 Changes in deferred taxes directly recognised in equity ...... -61.6 Changes in currency translation differences ...... 2.2 Net income (expense) recognised directly in equity ...... 22 123.4 Profit (loss) of the period ...... 35.8 Total recognised income ...... 159.2 of which: Group share ...... 158.5 Minority share ...... 0.7

The notes on pages A-38 to A-67 are an integral part of these combined financial statements.

A-37 NOTES TO THE AUDITED UMICORE CARVE-OUT GROUP COMBINED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2007

The present combined financial statements set forth on pages A-34 to A-37, for the period ended 30 June 2007 were authorized for issue by the Board of Directors on 05 October 2007.

Note 1 — Basis of Preparation The Umicore Carve-out Group comprises the zinc alloying, refining and smelting business of the Umicore group (“Umicore”). The Umicore Carve-out Group subsidiaries and associates included in these Combined Financial Statements are disclosed in note 5.

In April 2007, Umicore announced that it had signed a Business Combination and Shareholders’ Agreement (“BCSA”) with Zinifex Ltd. (“Zinifex”), an Australian listed materials technology company, to combine their respective zinc and lead smelting, refining and alloying businesses to create Nyrstar s.a. (“Nyrstar”). Under the BCSA, Umicore has agreed to transfer the Umicore Carve-out Group to Nyrstar, a company which has been incorporated in Belgium for the purpose of acquiring those businesses, in exchange for shares in Nyrstar. Zinifex and Umicore intend to undertake an IPO of shares in Nyrstar on Euronext Brussels (“Euronext”). These Combined Financial Statements have been prepared in anticipation of Nyrstar’s requirement to file certain information regarding the IPO with Euronext. The assets and liabilities included in the Combined Financial Statements will be legally bound together after the reporting date and that will happen simultaneously with a creation of the Nyrstar Joint-Venture following the execution of the BCSA.

These Combined Financial Statements of the Umicore Carve-out Group have been prepared in accordance with IFRS as adopted by European Union and Umicore accounting policies as of and for the Period presented, with an exception of the following departures from IFRS as adopted by the EU: • The presentation and disclosure requirements of IAS 1 Presentation of Financial Statements. These Combined Financial Statements do not present comparative information for the comparable period, being the year ended 30 June 2006. • IFRS 7 Financial Instruments: Disclosures and the Amendment to IAS 1 Presentation of Financial Statements: Capital Disclosures.

The disclosures about the significance of financial instruments for an entity’s financial position and performance, and qualitative and quantitative disclosures on the nature and extent of risks have not been presented in these Combined Financial Statements.

These departures from IFRS as adopted by the EU result from the fact that: • Umicore’s principal carve-out assets and operations in Belgium and France were only transferred to separate legal entities on 30 November 2006 (with an opening balance sheet date 1 July 2006). Therefore these Combined Financial Statements do not present comparative information for the year ended 30 June 2006; • An entity shall apply IFRS 7 Financial Instruments: Disclosures and the Amendment to IAS 1 Presentation of Financial Statements: Capital Disclosures for annual periods beginning on or after 1 January 2007. Umicore’s management is currently assessing the impact of these standards on the Group’s operations and the 2007 Annual Report, however the current status of this project is not sufficiently advanced at the level of Umicore Group to enable the Carve-out Group to prepare Combined Financial Statements in compliance with IFRS 7.

In all other material respects, IFRS as adopted by the European Union have been applied.

The Umicore Carve-out Group operates as an integrated part of Umicore and within the Umicore group infrastructure. The Combined Financial Statements included herein may not necessarily be indicative of the Umicore Carve-out Group’s financial position, results of operations, or cash flows had the Umicore Carve-out Group operated as a separate entity during the period presented or for future periods. These Combined Financial Statements include all assets, liabilities, revenues and expenses that are directly attributable to the Umicore Carve-out Group as operated by Umicore. Additionally, these Combined Financial Statements include a reasonable allocation of expenses incurred by Umicore as a result of the option plans granted to its employees, as

A-38 discussed in the note 9. Umicore management (“Management”) considers that such expenses have been allocated on a reasonable basis, but are not necessarily indicative of the costs that would have been incurred if the Umicore Carve-out Group was a stand-alone entity.

The combined financial statements are presented in millions of Euros, rounded to the nearest thousand, and have been prepared on a historical cost basis, except for those items that are measured at fair value in accordance with IFRS.

The following new Interpretation is issued and adopted by the EU at the date these financial statements were authorised for issue but not yet mandatory: IFRIC 11, IFRS 2 Group and Treasury share Transactions (applicable for accounting years beginning on or after 1 March 2007). At this stage, the Umicore Carve-out Group does not expect the first adoption of this Interpretation to have any material financial impact on the financial statements.

Note 2 — Accounting Policies Principles of Combination and Segmentation The Combined Financial Statements include the combined financial information of Umicore’s operations comprising the Umicore Carve-out Group. The combined financial information included in the Umicore Carve Out Group has been derived from the “Zinc Specialities” Segment of Umicore and has been adjusted to remove the assets, liabilities, income and expenses of the entities included in that segment that will not be transferred to Nyrstar under the terms of the BCSA. Note 5 lists all entities included in the combination as of 30 June 2007.

Inter-company balances, transactions, and unrealised gains and losses on transactions between the entities included in these Combined Financial Statements have been eliminated in full. The intercompany trading balances with Umicore’s non-Umicore Carve-out Group businesses and subsidiaries have not been eliminated, but are presented as balances and transactions with related parties.

To account for an acquisition of an entity by the Umicore Carve-Out Group, the purchase method is used in these Combined Financial Statements. The assets, liabilities and contingent liabilities of the acquired entity are measured at their fair values at the date of acquisition. The cost of acquisition is measured as the fair value of assets given up, shares issued or liabilities undertaken at the date of acquisition, plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the Carve Out Group’s share of the fair value of the net assets of the entity acquired is recorded as goodwill (see Section on Intangible Assets). If the Carve-Out Group’s share in the fair value of the net assets exceeds the cost of acquisition, the excess is recognised immediately in profit and loss. Where necessary, the acquired entities’ accounting policies have been changed to ensure consistency with the policies adopted by the Carve-out Group.

The entities in which the Carve-out Group has a significant influence over the financial and operating policies, but not control, typically evidenced by an ownership of between 20 to 50% of the voting rights, are accounted for using the equity method. Under this method, the Carve-out Group’s share of the post-acquisition profits or losses is recognised in the income statement, and its share of post-acquisition movements in reserves and retained earnings is recognised directly in equity.

A joint venture is a contractual arrangement whereby the Carve-out Group and other parties undertake, directly or indirectly, an economic activity that is subject to joint control. The joint ventures entered into by the Carve-out Group are accounted for using the equity method.

Unrealised gains on transactions between the company and its associates or joint ventures are eliminated to the extent of the Carve-out Group’s interest in the associates and joint ventures. Unrealised losses are also eliminated, unless the transaction provides evidence of impairment.

The Carve-out Group’s investments in associates and joint ventures include the goodwill on acquisitions, net of impairment. Note 5 lists all significant associates and joint ventures of the company as at the closing date.

The Note 7 provides the Carve-out Group’s segment information. The definition of segments has been based on the set-up of the Umicore Carve-out Group. A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products and services within a particular

A-39 economic environment that are subject to risks and return that are different from those of segments operating in other environments. The primary segments of the Carve-out Group are the business segments. The company’s secondary segments are the geographical segments.

The Umicore Carve-Out Group applied a parent company model to account for acquisitions of minority interests. Any difference between the acquisition cost and the carrying amount of the net assets attributable to minority shareholders is recognised as an adjustment to goodwill (see Note 14).

Inflation Accounting As at 30 June 2007, there is no entity in the Carve-out Group having a functional currency belonging to a hyperinflationary economy.

Foreign Currency Translation Functional currency: items included in the financial statements of each entity in the Carve-out Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity. The consolidated financial statements are presented in euros which is the functional currency of the parent. To consolidate the Group and each of its subsidiaries, the financial statements are translated as follows: • Assets and liabilities at the year-end rate as published by the European Central Bank. • Income statements at the average exchange rate for the year. • The components of shareholders’ equity at the historical exchange rate.

Exchange differences arising from the translation of the net investment in foreign entities, joint ventures and associated entities at the period-end exchange rate are recorded as part of the shareholders’ equity under “currency translation differences”.

When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as local currency assets and liabilities of the foreign entity and are translated at the closing rate.

Foreign Currency Transactions Foreign currency transactions are recognised during the period in the functional currency of each entity at exchange rates prevailing at the date of transaction. The date of a transaction is the date at which the transaction first qualifies for recognition. For practical reasons a rate that approximates the actual rate at the date of the transaction is used at some operations, for example, an average rate for the week or the month in which the transactions occur. Subsequently, monetary assets and liabilities denominated in foreign currencies are translated at the closing rate at the balance sheet date. Gains and losses resulting from the settlement of foreign currency transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement as financial result. In order to hedge its exposure to certain foreign exchange risks, the Carve-out Group has entered into certain forward contracts (see section on Financial instruments).

Property, Plant and Equipment Property, plant and equipment is recorded at historical cost, less accumulated depreciation and impairment losses. Cost includes all direct costs and appropriate allocation of indirect costs incurred to bring the asset to working condition for its intended use.

There are no borrowing costs capitalised in the costs of the assets. All borrowing costs are recognised as expenses in the period when incurred.

Repair and maintenance costs are expensed in the period in which they are incurred, if they do not increase the future economic benefits of the asset.

A-40 The straight-line depreciation method is applied through the estimated useful life of the assets. Useful life is the period of time over which an asset is expected to be used by the company. Otherwise they are classified as separate components of items of property, plant and equipment. Those major components of items of property, plant and equipment that are replaced at regular intervals are accounted for as separate assets as they have useful lives different from those items of property, plant and equipment to which they relate. The typical useful life per main type of property, plant and equipment are as follows:

Land ...... Non-depreciable Buildings — Industrial buildings ...... 20years — Improvements to buildings ...... 10years — Other buildings such as offices and laboratories ...... 40years — Investment properties ...... 40years Plant, machinery and equipment ...... 10years — Furnaces ...... 7years — Small equipment ...... 5years Furniture and vehicles — Vehicles ...... 5years — Mobile handling equipment ...... 7years — Computer equipment ...... 3to5years — Furniture and office equipment ...... 5to10years

For material newly acquired or constructed assets, the useful life is separately assessed at the moment of the investment request and can deviate from the above standards.

Assets are reviewed for an indication of impairment at each balance sheet date to assess whether they are recoverable in the form of future benefits. If the recoverable amount has decreased below the carrying amount, an impairment loss is recognised and accounted for as an operational charge. To assess impairments, assets are grouped in cash generating units (CGU) at the lowest level for which separately identifiable cash flows exist. (see section on impairment of assets).

A cash-generating unit is the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.

Intangible Assets & Equity Transaction Expenses Goodwill Goodwill represents the excess of the cost of an acquisition of a controlled entity, associate or jointly controlled entity over the Carve-out Group’s share in the fair value of the identifiable assets and liabilities of the acquired entity at the date of acquisition. Goodwill is recognised at cost less any accumulated impairment losses.

Goodwill from associates and joint ventures is presented in the balance sheet on the line “Investments accounted for under the equity method”, together with the investment itself.

To assess impairment, goodwill is allocated to a CGU. At each balance sheet date, these CGUs are tested for impairment, meaning an analysis is performed to determine whether the carrying amount of goodwill allocated to the CGU is fully recoverable. If the carrying amount is not fully recoverable, an appropriate impairment loss is recognised in the income statement. These impairment losses are never reversed.

The excess of the Carve-out Group’s interest in the fair value of the net identifiable assets acquired over the cost of acquisition is recognised in the income statement immediately.

Research and Development Research costs related to the prospect of gaining new scientific or technological knowledge and understanding are recognised in the income statement as an incurred expense. Development costs are defined as costs incurred for the design of new or substantially improved products and for the processes prior to commercial production or use. They are capitalised if, among others, the following conditions are met: • The intangible asset will give rise to future economic benefits, or in other words, the market potential has been clearly demonstrated; and • The expenditures related to the process or product can be clearly identified and reliably measured.

A-41 In case it is difficult to clearly distinguish between research or development costs, the costs are considered as being research. If development costs are capitalised they are amortised using a straight-line method over the period of their expected benefit.

Other Intangible Assets All of the following types are recorded at historical cost, less accumulated amortisation and impairment losses, except for government granted CO2 emission rights which are valued at the prevailing market price at the day of the grant: • Concessions, patents, licenses: are amortised over the period of their legal protection; • Software and related internal development costs: are typically amortised over a period of five years;

•CO2 emission rights: are not amortised but can be impaired; and • Land use rights: are typically amortised over the contractual period.

Lease Lease operations can be divided into two types of lease.

Finance Lease Leases under which the Carve-out Group assumes a substantial part of the risks and rewards of ownership are classified as finance leases. They are measured at the lower of fair value and the estimated present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses. Each lease payment is allocated between the liability and finance charges so as to achieve a constant periodic rate of interest on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in long-term payables. The interest element is charged to the income statement over the lease period. Leased assets are depreciated over the shorter of the useful life and the lease term.

Operating Lease Leases under which a substantial part of the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Among other items, the Carve-out Group leases metals to and from third parties for specified periods for which the Carve-out Group receives or pays fees. The metal leases from third parties are classified as operating leases and are reported as off balance sheet commitments (see note 30). All payments or receipts under operating lease are recognised as an operating expense respectively income in the income statement using the straight-line method.

Available-For-Sale Financial Assets, Loans and Non Current Receivables All movements in available-for-sale financial assets, loans and receivables are accounted for at trade date. Financial assets available for sale are carried at fair value. Unrealised gains and losses from changes in the fair value of such assets are recognised in equity as available-for sale financial assets reserves. When the assets are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses. Loans and receivables are carried at amortised cost less any impairment. Own shares, are deducted from equity.

Inventory Inventories are carried at the lower of cost or net realisable value. Cost comprises direct purchase or manufacturing costs and an appropriate allocation of overheads.

Inventories are classified as: 1. Base products with metal hedging; 2. Base products without metal hedging; 3. Consumables; 4. Advances paid; and 5. Contracts in progress.

A-42 Base products with metal hedging are metal-containing products on which the Carve-out Group is exposed to metal price fluctuation risks and where the Carve-out Group applies an active and structured risk management process to minimise the potential adverse effects of market price fluctuations on the financial performance of the Group. The metal contents are classified in inventory categories that reflect their specific nature and business use. Depending on the metal inventory category, appropriate hedging mechanisms are applied. A weighted average is applied per category of inventory except for the inventories valued at fair value (see section on Financial Instruments).

Base products without metal hedging and consumables are valued using the weighted average cost method.

Write-downs on inventories are recognised when turnover is slow or where the carrying amount is exceeding the net realisable value, meaning the estimated selling price less the estimated costs of completion and the estimated cost necessary to make the sale. Write-downs are presented separately.

Advances paid are down-payments on transactions with suppliers for which the physical delivery has not yet taken place and are booked at nominal value.

Contracts in progress are valued using the percentage-of-completion method.

Trade and Other Receivables Trade and other receivables are measured at amortised cost, i.e., at the net present value of the receivable amount. Unless the impact of discounting is material, the nominal value is taken. Receivables are written down for irrecoverable amounts.

Trade receivables of which substantially all the risks and rewards have been transferred are derecognised from the balance sheet.

The positive fair value of derivative financial instruments is included under this heading.

Cash and Cash Equivalents Cash includes cash-in-hand and cash with banks. Cash equivalents are short-term, highly liquid investments that are readily convertible into known amounts of cash, have maturity dates of three months or less and are subject to an insignificant risk of change in value. These items are carried in the balance sheet at nominal value or amortised cost. Bank overdrafts are included in the current liabilities on the balance sheet.

Impairment of Non-financial Assets Property, plant and equipment and other non-current assets, including intangible assets and financial assets not held for trading, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If any such indication exists, the recoverable amount of the asset is estimated.

The recoverable amount is the higher of an asset’s net selling price and value in use. To estimate the recoverable amount of individual assets the company often determines the recoverable amount of the cash- generating unit (CGU) to which the asset belongs.

Whenever the carrying amount of an asset exceeds its recoverable value, an impairment loss is recognised as an expense immediately.

A reversal of impairment losses is recognised when there is an indication that the impairment losses recognised for the asset or for the CGU no longer exist or have decreased. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Share capital and reserves The legal entities included in the combined financial statements will be legally bound together after the reporting date and that will happen simultaneously with a creation of the Nyrstar Joint-Venture following the execution of the BSCA. The combination of the legal entities presented in these financial statements is different than a consolidation. The reserves of the Carve-out Group represent the total share capital and retained earnings of the individual legal entities adjusted by the investment values of the entities within the Carve-out Group.

A-43 Any subsidiary which has been transferred from the Umicore Group to the Carve-out Group during the period is considered as a capital reimbursement to the Umicore Group and therefore be presented as ‘change in scope’ within the Combined Statement of Changes in Equity.

Minority Interests Minority interests include a proportion of the fair value of identifiable assets and liabilities recognised upon acquisition of a subsidiary, together with the appropriate proportion of subsequent profits and losses.

In the income statement, the minority share in the Carve-out Group’s profit or loss is presented separately from the Carve-out Group’s consolidated result.

Provisions Provisions are recognised in the balance sheet when: • There is a present obligation (legal or constructive) as a result of a past event. • It is probable that an outflow of resources will be required to settle the obligation. • A reliable estimate can be made on the amount of the obligation.

A constructive obligation is an obligation that derives from company actions where, by an established pattern of past practice or published policies, the company has indicated that it will accept certain responsibilities and, as a result, the company has created a valid expectation that it will discharge those responsibilities.

The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the balance sheet date and taking into account the probability of the possible outcome of the event. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation. The result of the yearly discounting of the provision, if any, is accounted for as a financial result.

The main types of provision are the following:

Provisions for Employee Benefits See section on Employee benefits

Environmental Obligations Environmental provisions are based on legal and constructive obligations from past events, in accordance with the company’s published environmental policy and applicable legal requirements. The full amount of the estimated obligation is recognised, except for the provision for pond covering and restoring the landscape. For this specific type of provision the obligation is gradually recognised according to the actual usage of the ponds.

Other Provisions Includes provisions for litigation, onerous contracts, warranties, exposure to equity investments and restructuring. A provision for restructuring is recognised when the company has approved a detailed and formal restructuring plan and the restructuring has either commenced or has been announced publicly before the balance sheet date. Any restructuring provision only includes the direct expenditure arising from the restructuring which is necessarily entailed and is not associated with the ongoing activities of the Company.

Employee Benefits Short-term Employee Benefits This includes wages, salaries and social security contributions, paid annual leave and sick leave, bonuses and non-monetary benefits, and is taken as an expense in the relevant period. Bonuses are received by all company managers and are based on key target financial indicators. The amount of the bonus is recognised as an expense, based on an estimation made at the balance sheet date.

A-44 Post Employment Benefits (Pensions, Medical Care) The Carve-out Group has various pension and medical care schemes in accordance with the conditions and practices of the countries it operates in. The schemes are generally funded through payments to insurance companies or trustee-administered funds.

Defined Benefit Plan The Carve-out Group has accounted for all legal and constructive obligations both under the formal terms of defined benefit plans and under the company’s informal practices.

The amount presented in the balance sheet is based on actuarial calculations (using the projected unit credit method) and represents the present value of the defined benefit obligations, adjusted for unrecognised past service costs, and reduced by the fair value of the plan assets.

Unrecognised past service costs result from the introduction of new benefit plans or changes in the benefits payable under an existing plan. The past service costs for which the benefits are not yet vested (the employees must deliver employee services before the benefits are granted) are amortised on a straight-line basis over the average period until the new or amended benefits become vested.

All actuarial gains and losses following changes in the actuarial assumptions of post-employment defined benefit plans are recognised through equity in the period in which they occur and are disclosed in the statement of income and expense as post employment benefit reserves.

Defined Contribution Plans The Carve-out Group pays contributions to publicly or privately administered insurance plans. The payments are recognised as expenses as they fall due, and as such are included in personnel costs.

Other Long-term Employee Benefits (Jubilee Premiums) These benefits are accrued for their expected costs over the period of employment using an accounting methodology similar to that for defined benefit pension plans. These obligations are in general valued annually by independent qualified actuaries. All actuarial losses or gains are immediately recognised in the income statement.

Termination Benefits (Pre-retirement Plans, Other Termination Obligations) These benefits arise as a result of the Carve-out Group’s decision to terminate an employee’s employment before the normal retirement date or of an employee’s decision to accept voluntary redundancy in exchange for those benefits. When they are reasonably predictable in accordance with the conditions and practices of the countries the company operates in, future obligations are also recognised.

These benefits are accrued for their expected costs over the period of employment, using an accounting methodology similar to that for defined benefit pension plans. In general, these obligations are valued annually by independent qualified actuaries. All actuarial losses or gains are immediately recognised in the income statement.

Presentation The impact of employee benefits on results is booked under operating results in the income statement, except for the interest and discount rate impacts which are classified under financial results.

Financial Liabilities All movements in financial liabilities are accounted for at trade date.

Borrowings are initially recognised as proceeds received, net of transaction costs. Subsequently they are carried at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on issue. Any differences between cost and redemption value are recognised in the income statement upon redemption.

A-45 Trade And Other Payables Trade payables are measured at amortised cost, i.e., at the net present value of the payable amount. Unless the impact of discounting is material, the nominal value is taken.

The negative fair value of derivative financial instruments is included under this heading.

Income Taxes Taxes on profit or loss of the year include current and deferred tax. Such taxes are calculated in accordance with the tax regulations in effect in each country the company operates in.

Current tax is the expected tax payable on the taxable income of the year, using tax rates enacted at the balance sheet date, and any adjustment to tax payable (or receivable) in respect of previous years.

Deferred taxes are calculated using the liability method on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. These taxes are measured using the rate prevailing at the balance sheet date or future applicable tax rates formally announced by the government in the country the Company operates in.

Deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax assets and liabilities are offset and presented net only if they relate to income taxes levied by the same taxation authority on the same taxable entity.

Revenue Recognition Goods Sold and Services Rendered Revenue from the sale of goods in transformation activities is recognised when significant risks and rewards of ownership have been transferred to the buyer, and no significant uncertainties remain regarding recovery of the consideration due, associated costs or the possible return of the goods.

Revenue from refining activities is recognised when the metal reference stage is reached. Metal reference is a generally recognised standard form of metal, with defined metal content, traded on well-established markets for commodities.

Revenue from services rendered is recognised by reference to the stage of completion of the transaction when this can be measured reliably.

Government Grants A government grant is accounted for in the balance sheet initially as deferred income when there is reasonable assurance that it will be received and that the company will comply with the conditions attached to it. Grants are recognised in the income statement over the period necessary to match them with the costs they are intended to compensate.

Financial Instruments The Carve-out Group uses derivative financial and commodity instruments primarily to reduce the exposure to adverse fluctuations in foreign exchange rates, commodity prices, interest rates and other market risks. The company uses mainly spot and forward contracts to cover the metal and currency risk, and swaps to hedge the interest rate risk. The operations carried out on the futures markets are not of a speculative nature.

Transactional Risks — Fair Value Hedging Derivative financial and commodity instruments are used for the protection of the fair value of underlying hedged items (assets, liabilities and firm commitments) and are recognised initially at fair value at trade date.

All derivative financial and commodity instruments are subsequently measured at fair value at the balance sheet date via the “Mark-to-Market” mechanism. All gains and losses are immediately recognised in the income statement — as an operating result, if commodity instruments, and as a financial result in all other cases.

The hedged items (physical commitments and commercial inventory, primarily) are valued at fair value when hedge accounting can be documented according to the criteria set out in IAS 39.

A-46 In the absence of obtaining fair value hedge accounting at inception as defined under IAS 39, the hedged items are kept at cost and are submitted to the valuation rules applicable to similar non-hedged items, i.e., the recognition at the lower of cost or market (IAS 2) for inventories, or the recognition of provisions for onerous contracts (IAS 37) for physical commitments (see also in note 10 — IAS 39 impact).

When there is a consistent practice of trading of metals through the use of commodity contracts by a dedicated subsidiary or a CGU of the Carve-out Group and by which the entity takes delivery of the underlying to sell it within a short period after delivery for the purpose of generating a profit from short-term fluctuations in price or trading margins, the inventory is valued at fair value through the income statement and the related physical and/or commodity commitments are classified as derivative and measured at fair value through the income statement.

Structural Risks — Cash Flow Hedging Derivative financial and commodity instruments used for the protection of future cash flows are designated as hedges under cash-flow hedge accounting. The effective portion of changes in the fair value of hedging instruments which qualify as cash flow hedges are recognised in the combined shareholders equity as hedging reserves until the underlying forecasted or committed transactions occur (i.e., affect the income statement). At that time the recognised gains and losses on the hedging instruments are transferred from equity to the income statement.

When a hedging instrument expires, is sold, terminated, or if it is exercised before the underlying forecasted or committed transactions occurred, the profit or loss is maintained in equity until the hedged transactions occur.

If the hedged transactions are no longer probable or the hedges become ineffective, then any gains or losses which were deferred in equity are immediately recognised in the income statement.

In the absence of obtaining cash-flow hedge accounting at inception as defined under IAS 39, then the fair value of the related hedging instruments are recognised in the income statement instead of the equity and this prior to the occurrence of the underlying forecasted or committed transactions (see also in note 10 — IAS 39 impact).

Embedded Derivatives Executory contracts (the “host contract”) may sometimes contain embedded derivatives. Embedded derivatives cause some or all of the cash flows that would otherwise be expected from the host contract, to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, or other variable. If it is concluded that such a derivative is not closely related to the host contract, it is separated from the host contract and accounted for under the rules of IAS 39 (fair value through profit or loss). The host contract is accounted for using the rules applicable to executory contracts, which effectively means that such a contract is not recognised in the balance sheet or profit and loss before delivery on the contract takes place. (see also in note 10 — IAS 39 impact).

Non Recurring Results and IAS 39 Effect Non-recurring results relate primarily to restructuring measures, impairment of assets and other income or expenses arising from events or transactions that are clearly distinct from the ordinary activities of the company.

IAS 39 effect relates to non-cash timing differences in revenue recognition due to the non-application of or non-possibility of obtaining IAS 39 hedge accounting at inception to: (a) Transactional hedges, which implies that hedged items can no longer be measured at fair value and must be submitted to the valuation rules applicable to similar non-hedged items, i.e., the recognition at the lower of cost or market (IAS 2) for inventories, or the recognition of provisions for onerous contracts (IAS 37) for physical commitments; (b) Structural hedges, which implies that the fair value of the related hedging instruments are recognised in the income statement instead of the equity and this prior to the occurrence of the underlying forecasted or committed transactions; and (c) Derivatives embedded in executory contracts, which implies that fair value on the embedded derivatives are recognised in the income statement as opposed to the executory component where no fair value measurement is allowed.

Note 10 provides more details on these results.

A-47 Note 3 — Financial Risk Management The Carve-out Group’s activities are exposed to a variety of risks, including changes in metal prices, foreign currency exchange rates, certain market-defined commercial conditions, and interest rates as well as credit and liquidity risks. The Carve-out Group’s overall risk management programme seeks to minimise the adverse effects on the financial performance of the Carve-out Group by hedging most of these risks through the use of financial and insurance instruments.

Currency Risk The Carve-out Group’s currency risk can be split into three distinct categories: structural, transactional and translational.

Structural Risk A portion of the Carve-out Group’s revenues is structurally related to USD, while many of the operations are located outside the USD zone (particularly in Europe and Asia). Any change in the USD exchange rate against the Euro or other currencies which are not pegged to the USD will have an impact on the company’s results. The largest portion of this currency exposure derives from USD denominated metal prices, which have an impact on treatment or refining charges and on the value of surplus metal recovered from materials supplied for treatment.

The Carve-out Group has a policy of hedging forward its structural currency exposure, either in conjunction with the hedging of structural metal price exposure or in isolation, when the currency exchange rates or the metal price expressed in euros are above their historical average and at a level where attractive margins can be secured.

In the absence of any hedging of the non-metal-price-related structural US dollar exposure and at prevailing exchange rates at the end of June 2007, a strengthening of the US dollar by 1 US cent towards the Euro gives rise to an increase in revenues and operating result in the order of EUR 2.8 million on an annual basis. Conversely, a weakening of the dollar by 1 US cent against the Euro gives rise to a decrease of the same magnitude on an annual basis.

The sensitivity level is a short-term guide and is somewhat theoretical since the exchange rate level often impacts changes in commercial conditions negotiated in US dollars and elements outside the Carve-out Group’s control, such as the influence that the dollar exchange rate may have on dollar-denominated metals prices, movements in which have an effect on the Carve-out Group’s (see Metal Price Risk below).

Transactional Risk The Carve-out Group is also subject to transactional risks in respect of currencies, i.e., the risk of currency exchange rates fluctuating between the time the price is fixed with a customer or supplier and the time the transaction is settled. The Carve-out Group systematically hedges against such transactional risk, primarily through forward contracts.

Translational Risk The Carve-out Group is an international company and has foreign operations which do not have the Euro as their functional currency. When such results are consolidated into Carve-out Group combined financial statements, the translated amount is exposed to variations in the value of such local currencies against the Euro. The Carve-out Group does not hedge against such risk (See Notes 1 and 2, Basis of preparation and Accounting policies).

Metal Price Risk Structural Risk The Carve-out Group is exposed to structural metals-related price risks. Those risks derive mainly from the impact that metal prices have on treatment or refining charges and on surplus metals recovered from materials supplied for treatment. The Carve-out Group has a policy of hedging forward such metal price exposure if metal prices expressed in Euros are above their historical average and at a level where attractive margins can be secured. The extent to which metal price risk can be hedged forward depends on the liquidity of the relevant markets.

A-48 The metals price risk is primarily related to zinc, in the absence of any hedging mechanisms, a change of EUR 100 per tonne in the LME zinc price leads to a short-term sensitivity at revenue and operating profit level of about EUR 15 million to EUR 17 million per annum for the Zinc Alloys business and Padaeng (24.9 % stake).

The impact of price changes for the other metals is not significant.

Structural metal price hedging Transactional Risk

The Carve-out Group faces transactional price risks on metals purchased and sold. The raw materials used and the metals or products manufactured by The Carve-out Group are generally purchased and sold on the same basis, for instance using the relevant London Metal Exchange quotations, thereby allowing the use of certain hedging instruments. In this respect the Carve-out Group’s policy is to hedge the transactional risk to the maximum extent possible, primarily through forward contracts. Transactional risk is the risk of the price of the metal fluctuating between the time the price is fixed with a customer or a supplier and the time the transaction is settled.

Other Commercial Risks

The Carve-out Group faces certain structural commercial risks in some of its businesses. These risks can be functions of supply chain structure or the production of unavoidable waste streams from the Carve-out Group’s production processes.

For the former, the most significant exposure arises from the throughput of zinc concentrates. The Carve-out Group processes more than 600,000 tonnes of zinc concentrates. If annually negotiated treatment charges (the income the Carve-out Group receives for processing zinc concentrates) change by USD 10 per tonne it results in an impact on revenues and operating performance of approximately USD 5.8 million. This sensitivity is separate from the effect on zinc treatment charges brought about by changes in the zinc price. The Carve-out Group seeks to smooth the effect of short-term changes in treatment charges by negotiating longer-term supply contracts; the company also seeks to reduce its exposure to treatment charges by maximising the input of recycled zinc in its flow sheet.

For the latter, the most significant exposure arises from the Carve-out Group’s production of sulphuric acid. Sulphuric acid is an unavoidable by-product of the Carve-out Group’s zinc smelting operations. The Carve-out Group produces some 500,000 tonnes of sulphuric acid per year. A change in the European market price for sulphuric acid of EUR 10 would result in an impact on revenues and operating performance of approximately EUR 5 million.

Credit Risk Credit Risk and Concentration of Credit Risk

Credit risk is the risk of non payment from any counterparty in relation to sales of goods or metal lease operations. In order to manage the credit exposure, the Carve-out Group has determined a credit policy with credit limit requests, approval procedures, continuous monitoring of the credit exposure and dunning procedure in case of delays.

The credit risk resulting from sales is, to a certain extent, covered by credit insurance, letters of credit or similar secure payment means. One global credit insurance contract has been put in place on a Umicore world- wide basis. This contract protects the Umicore group companies against insolvency, political and commercial risks with an individual deductible per invoice of 5%. The annual global indemnification cap is set at EUR 20 million per annum.

The Carve -out Group has determined that in a certain number of cases where the cost of credit insurance was disproportionate in relation to the risk to be insured or where customer concentration is not compatible with the provisions of the existing credit insurance contracts, no credit coverage would be sought.

A-49 In 2000, the Carve-out Group entered into the overall Umicore group’s securitisation programme with a major international bank through which it sells its trade receivables on a recurring, non-recourse basis. It has been renewed several times, the last time in May 2007. At the end of June 2007, this programme had a maximum coverage of EUR 125 million for the entire Umicore group of which the Carve-out Group subscribed for EUR 48 million. According to the BCSA agreement to set-up Nyrstar, the Carve-out Group stepped out of that programme prior to 31 August 2007.

Liquidity Risk Liquidity risk is being addressed by maintaining a sufficient degree of diversification of funding sources. These include committed and uncommitted short and medium term bank facilities in addition to the trade receivables securitisation programme set-up in 2000, but of which the Carve-out Group stepped out prior to 31 August 2007 (see above).

Note 4 — Critical Estimates and Judgments Estimates and judgments used in developing and applying the Carve-out Group’s combined financial statements are continually evaluated and are based on historical experience and other factors, including the expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results.

Assumptions and estimates are applied when: • Assessing the need for and measurement of impairment losses; • Accounting for pension obligations; • Recognising and measuring provisions for tax, environmental, warranty and litigation risks, product returns, and restructuring; • Determining inventory write-downs; • Assessing the extent to which deferred tax assets will be realised; and • Useful lives of Property, Plant and Equipment and Intangible assets excluding goodwill.

The critical estimates and judgments that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are listed below.

Impairment of Goodwill The recoverable amount of each cash generating unit is determined as the higher of the asset’s fair value less costs to sell and its value in use in accordance with the accounting policy. These calculations require the use of estimates and assumptions such as discount rates, exchange rates, commodity prices future capital requirements and future operating performance. As at 30 June 2007 the carrying amount of the goodwill for the Carve-out Group is EUR 5.6 million — refer to note 14.

Rehabilitation Obligations Provision is made for the anticipated costs of future rehabilitation of industrial sites and surrounding areas to the extent that a legal or constructive obligation exists in accordance with accounting policy dealing with provisions. These provisions include future cost estimates associated with reclamation, plant closures, waste site closures, monitoring, demolition, decontamination, water purification and permanent storage of historical residues. These future cost estimates are discounted to their present value. The calculation of these provisions estimates requires assumptions such as application of environmental legislation, plant closure dates, available technologies and engineering cost estimates. A change in any of the assumptions used may have a material impact on the carrying value of rehabilitation provisions. As at 30 June 2007, the carrying amount of rehabilitation provisions is EUR 9.6 million — refer to note 26.

Defined Benefit Obligations An asset or liability in respect of defined benefit plan is recognised on the balance sheet in accordance with accounting policy dealing with employee benefits. The present value of a defined benefit obligation is dependant upon a number of factors that are determined on an actuarial basis. The consolidated entity determines the

A-50 appropriate discount rate to be used at the end of each year. The consolidated entity’s employee benefit obligations are discussed in more detail in Note 25. At 30 June 2007, a liability with respect to employee benefit obligations of EUR 26.3 million was recognised.

Recovery of Deferred Tax Assets At 30 June 2007, the Carve-out Group recognised a deferred tax asset of EUR 67.2 million of which EUR 43.5 million are related to fair value reserves and EUR 23.7 million to temporary differences and tax losses. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable profits are available to use those temporary differences and losses. The actual tax results in future periods may differ from the estimate made at the time the deferred taxes are recognised.

Other assumptions and estimates are disclosed in the respective notes relevant to the item where the assumptions or estimates were used for measurement.

Note 5 — Carve-out Group Companies

Umicore Zinc Alloys France SAS ...... 100% Umicore Zinc Alloys Belgium SA/NV (BE 865.131.221) ...... 100% Umicore Zinc Alloys Germany GmbH ...... 100% Föhl China Co., Ltd ...... 50% Zinc Alloys International SA/NV (BE 890.085.856) ...... 100% Umicore Yunnan Zinc Alloys Co., Ltd ...... 60% Padaeng Industry Public Company Ltd ...... 24.9% GM-Metal SAS ...... 100% Galva 45 S.A...... 66%

Note 6 — Foreign Currency Measurement For the main currencies applicable with the Carve-out Group’s combined entities and investments, the prevailing rates used for presentations into the Carve-out Group’s presentation currency are as follows:

Average rates Closing rate for the six as of months ended 30 June 2007 30 June 2007 Thai Baht ...... 42,6150 44,2784 Chinese Yuan ...... 10,2816 10,2567

A-51 Note 7 — Segment Information Segment Information for the six months ended 30 June 2007 PRIMARY SEGMENT INFORMATION (by business group)

Chinese Balen Auby Operations Other Unallocated Total (EUR Millions) Total segment turnover ...... 753.2 228.0 75.2 44.4 -302.0 798.7 of which external turnover ...... 488.3 199.4 75.2 35.9 798.7 of which inter-segment turnover ...... 265.0 28.6 8.5 -302.0 Operating result ...... 6.7 42.1 1.6 1.7 52.1 Recurring ...... 8.4 21.2 1.6 1.7 32.9 Non-recurring ...... -1.0 -1.0 -2.0 IAS 39 effect ...... -0.7 21.8 21.2 Equity method companies ...... -0.1 3.4 3.3 Recurring ...... -0.1 3.4 3.3 Net financial cost ...... -5.9 -5.9 Income taxes ...... -13.7 -13.7 Minority interest ...... -0.7 -0.7 Net profit for the year ...... 6.7 42.1 1.5 5.1 -20.3 35.1 Consolidated total assets ...... 433.9 183.2 42.2 80.6 154.9 894.8 Segment assets ...... 433.9 183.2 41.9 53.3 712.3 Investments in associates ...... 0.3 27.3 27.6 Unallocated assets ...... 154.9 154.9 Consolidated total liabilities ...... 165.9 94.1 8.2 17.6 393.6 679.4 Segment liabilities ...... 165.9 94.1 8.2 17.6 285.8 Unallocated liabilities ...... 393.6 393.6 Capital expenditure ...... 8.8 4.2 0.3 0.8 14.1 Depreciation and amortisation ...... 5.3 4.4 0.8 1.1 11.6 Non-cash expenses other than depreciation ... 3.3 -20.4 0.1 0.0 -17.0 Impairment losses/ (Reversal of impairment losses) ...... -1.3 0.2 0.0 0.1 -1.0

SECONDARY SEGMENT INFORMATION (by geographical area) North South Europe Asia-Pacific America America Africa Total (EUR Millions) Total segment turnover ...... 674.4 116.3 2.9 5.0 798.7 Total assets ...... 818.3 76.5 894.8 Capital expenditure ...... 13.8 0.3 14.1

The Umicore Carve-out Group has identified the following business segments on the basis of the principal business activities and economic environments in which it operates and in which Umicore Carve-out Group entities are represented: • Balen Smelter (Umicore Zinc Alloys Belgium (including the Overpelt site) and Umicore Zinc Alloys Germany GmbH); • Auby Smelter (Umicore Zinc Alloys France); • Chinese Operations (Föhl China Co., Ltd and Umicore Yunnan Zinc Alloys Co., Ltd); and • Other operations (Padaeng Industry Public Company Ltd, GM-Metal SAS and Galva 45 S.A.).

Note 8 — Business combinations The stake in Galva 45 has increased from 55% to 66%. This increase has an impact of EUR 1.2 million on the minorities of the Carve-out Group (see Note 22).

A-52 Note 9 — Payroll and Related Benefits

30 June 2007 EUR Millions Payroll and related benefits Wages, salaries and direct social advantages ...... -30.0 Employer’s social security and defined benefit contributions ...... -14.1 Other charges for personnel ...... -0.2 Temporary staff ...... -2.0 Employer’s voluntary contributions-other ...... -0.2 Share-based payments ...... -0.3 Pensions paid directly to beneficiaries ...... -0.6 use and reversals) ...... 1.7 מ / Provisions for employee benefits (+ increase -45.8 Average headcount in the Carve-out Group Managers ...... 128 Non-managers ...... 2,078 TOTAL ...... 2,206

Share-based payments for an amount of EUR 0.3 million concern the part of the share-based payment expenses recognised by the Umicore Group directly allocated to the carved-out entities’ management. The stock option plan of this expense at the level of Umicore Group is calculated by an external actuary, using the Present Economic model which takes into account all features of the stock option plans and the volatility of the underlying stock. The volatility has been determined using the historical volatility of the Umicore Group shareholders’ return over the different averaging periods and different terms. The free share part of the expense at the level of Umicore Group is valued at the market price of the shares at the grant date.

Note 10 — Depreciations, impairment losses and other operating expenses

Six months ended 30 June 2007 EUR Millions

Depreciation and impairment result Depreciation of fixed assets ...... -11.6 Impairment loss on fixed assets ...... -0.1 Inventory and bad debt provisions ...... 1.0 Depreciation and impairment result ...... -10.7

Other operating expenses Services and outsourced refining and production costs ...... -42.9 Royalties, licence fees, consulting and commissions ...... -3.0 Other operating expenses Increase and decrease in provisions ...... 0.3 Use of provisions ...... 4.5 Capital losses on disposal of assets ...... -0.5 -41.7

A-53 Non-recurring results and IAS 39 impact included in the operating results

Six months ended 30 June 2007 Non- IAS 39 Total recurring effect Recurring EUR Millions Turnover ...... 798.7 -5.0 803.7 Other operating income ...... 9.7 1.4 8.3 Operating income ...... 808.5 -3.6 812.0

Raw materials and consumables used ...... -658.2 20.3 -678.6 Payroll and related benefits ...... -45.8 0.0 -45.8 Depreciation and impairment results ...... -10.7 1.4 -12.1 Other operating expenses ...... -41.7 -2.0 3.0 -42.6 Operating expenses ...... -756.4 -2.0 24.7 -779.1 RESULT FROM OPERATING ACTIVITIES ...... 52.1 -2.0 21.2 32.9

The non recurring items are related to the repair of ponds in Auby and to the adjustment of the provision needed in Balen to cover the clean-up costs of the close surroundings soils.

IAS 39 had a positive effect on operating result of EUR 21.2 million. Of this amount, EUR -0.6 million concerned timing differences in revenue recognition that relate primarily to transactional hedges. The remaining EUR 21.8 million effect was related to changes to energy pricing structures in France which have led to a reversal of previous negative impacts linked to the accounting treatment of an embedded derivative (hybrid instrument which links part of the electricity costs to the evolution of the zinc price).

Note 11 — Net Finance Costs

30 June 2007 EUR Millions Interest income ...... 1.6 Interest expenses ...... -6.4 Discounting of non-current provisions ...... -0.5 Foreign exchange gains and losses ...... -0.3 Other financial income ...... 0.2 Other financial expenses ...... -0.4 -5.9

The interest expenses are mainly related to interests on loans and overdrafts.

A-54 Note 12 — Income Taxes

30 June 2007 EUR Millions Income tax expense Recognised in the income statement Current income tax ...... -11.9 Deferred income tax ...... -1.8 Total tax expense ...... -13.7 Relationship between tax expense (income) and accounting profit Result from operating activities ...... 52.1 Finance cost — Net ...... -5.9 Profit (loss) before income tax of consolidated companies ...... 46.2 Weighted average theoretical tax rate (%) ...... 34.37 Income tax at the weighted average theoretical domestic tax rates ...... -15.9 Tax effect of: Expenses not deductible for tax purposes ...... -0.3 Income not subjected to tax ...... -0.2 Sundry deduction from the taxable base: Notional interests deductions ...... 0.8 Tax computed on other basis ...... 0.3 Previous years corrections ...... 2.0 Other ...... -0.5 Tax expense at the effective tax rate for the year ...... -13.7

Excluding the impact of non-recurring items and of IAS 39 effect, the recurring effective tax rate for June 2007 is 26.22%.

Note 13 — Intangible Assets Other than Goodwill

CO2 emission Software rights Total EUR Millions At the end of 2006 Gross value ...... 15.9 2.3 18.2 Accumulated amortisation ...... -15.6 -1.6 -17.2 Net book value at the end of 2006 ...... 0.3 0.7 1.0 — amortisation charged (included in “Depreciation and impairments”) ...... -0.1 -0.1 — impairment losses recognised (included in “Depreciation and impairments”) ..... -0.1 -0.1 As of 30 June 2007 ...... 0.2 0.6 0.8 Gross value ...... 15.9 2.3 18.1 Accumulated amortisation ...... -15.7 -1.7 -17.4 Net book value at of June 2007 ...... 0.2 0.6 0.8

Within the framework of the Kyoto protocol, the EU emission trading system has been put in place in 2005. Therefore the Flemish Government granted a number of emission rights to the Flemish sites of certain companies, including Umicore and covering a period of 3 years (2005-2007). There are no pledges on, or restrictions to, the title on intangible assets, other that disclosed in Note 30.

A-55 Note 14 — Goodwill

30 June 2007 EUR Millions At the end of 2006 Gross value ...... 5.3 Impairment losses ...... 0 NET BOOK VALUE AT THE END OF 2006 ...... 5.3 — change in scope of consolidation ...... 0.3 As of 30 June 2007 ...... 5.6 Gross value ...... 5.6 Accumulated impairment losses ...... 0 NET BOOK VALUE AS OF 30 JUNE 2007 ...... 5.6

The change in scope of the period is linked to the acquisition of an additional shareholding in Galva 45 from 55 to 66%.

This table includes goodwill related to fully consolidated companies only, while goodwill relating to companies accounted for the equity method is detailed in Note 16. The goodwill is fully allocated to the “Other” primary segment.

Management tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy. The recoverable amounts of cash-generating units to which goodwill is allocated have been determined based on value-in-use calculations, by means of discounted cash-flow modelling on the basis of the Umicore Group’s operational plans. The weighted average cost of capital which is used as discounting factor is adjusted to the situation of each business segment ans is at least 9% pre-tax based.

Note 15 — Property, Plant and Equipment

Plant, Construction Lands machinery Furniture Other in progress and and and tangible and advance buildings equipment vehicles assets payments Total EUR Millions At the end of 2006 Gross value ...... 113.2 510.4 13.8 0.5 14.7 652.5 Accumulated amortisation ...... -81.2 -425.1 -11.7 -0.5 0.0 -518.4 Net book value at the end of 2006 ...... 32.0 85.3 2.1 0.0 14.7 134.1 — additions ...... 0.7 1.2 0.4 12.0 14.3 — disposals ...... -0.5 -0.5 — amortisation charged (included in “Depreciation and impairments”) ...... -2.0 -9.1 -0.4 -11.5 — other movements ...... 1.6 7.0 0.2 -8.8 0.0 As of 30 June 2007 ...... 31.8 84.4 2.3 0.0 17.9 136.5 Gross value ...... 114.9 517.1 14.2 0.5 17.9 664.7 Accumulated amortisation ...... -83.1 -432.7 -11.9 -0.5 0.0 -528.3 Net book value at the end of June 2007 ...... 31.8 84.4 2.3 0.0 17.9 136.5

The increase in constructions in progress is mainly related to new compacting installations, to the maintenance of a roaster and the revamp of the electrical installation of leaching in Balen and also to the installations for cementing and elimination of acids in Auby.

Management determines the estimated useful lives and related depreciation charges for property, plant and equipment. Management uses standard estimates based on a combination of physical durability and projected product life or industry life cycles. These useful lives could change significantly as a result of technical innovations, market developments or competitor actions. Management will increase the depreciation charge where useful lives are shorter than previously estimated, or it will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold.

There are no pledges on, or restrictions to, the title on property, plant and equipment.

A-56 Note 16 — Investments for Using Equity Method The investments in companies accounted for using the equity method are composed mainly by the following associates and joint ventures:

Measurement Percentage currency 30 June 2007 Associates Padaeng Industry Public Company Ltd ...... THB 24.90 Joint ventures Föhl China ...... CNY 50.00

Net book value Goodwill TOTAL EUR Millions At the end of 2006 ...... 19.5 3.6 23.2 — profit for the year ...... 3.3 3.3 — dividend distributed or received ...... -6.1 -6.1 — other reserves ...... 5.1 5.1 — translation adjustments ...... 1.9 0.4 2.2 As of 30 June 2007 ...... 23.6 4.0 27.6 Of which joint ventures ...... 0.3 0.3

Umicore Carve-out Group’s share in the aggregated balance sheet and income statement items of the associates and joint ventures would have been as follows:

30/06/07 EUR Millions Assets ...... 42.4 Liabilities ...... 17.5 Turnover ...... 37.7 Net result ...... 3.3

Based on its publicly quoted stock price as at June 30 2007, the fair value of Umicore carved-out entities’ investment in Padaeng Industry Ltd would be EUR 50.5 million.

Note 17 — Loans Granted Loans granted EUR Millions CURRENT FINANCIAL ASSETS At the end of 2006 ...... 39.9 — decrease ...... -15.3 As of 30 June 2007 ...... 24.6

Loans granted are mainly related to margin calls.

Note 18 — Inventories 30 June 2007 EUR Millions Analysis of inventories Base product with metal hedging — gross value ...... 185.6 Base product without metal hedging — gross value ...... 14.7 Consumables — gross value ...... 24.3 Write-downs ...... -15.1 Advances paid ...... 9.7 Total inventories ...... 219.3

No significant write-downs have been done during the period.

There are no pledges on, or restrictions to, the title on inventories.

A-57 Based on metal prices and currency exchange rates prevailing at the closing date, the value of the metal inventory would be about EUR 72.1 million higher that the current book value. However, most of these inventories cannot be realised as they are tied up in manufacturing and commercial operations.

Note 19 — Trade and Other Receivables Notes 30 June 2007 EUR Millions Non current Cash guarantees and deposits ...... 1.0 Total ...... 1.0 Current Trade receivables (at cost) ...... 276.3 Trade receivables (write down) ...... -1.8 Other receivables (at cost) ...... 5.8 Other receivables (write down) ...... -1.2 Fair value receivable financial instruments held for cash flow hedging ...... 29 18.1 Fair value receivable other financial instruments ...... 29 18.3 Deferred charges and accrued income ...... 1.3 Total ...... 316.8

Note 20 — Deferred Tax Assets and Liabilities 30 June 2007 EUR Millions Tax assets and liabilities Deferred tax assets ...... 67.2 Income tax payable ...... -9.2 Deferred tax liabilities ...... -1.1 Assets Liabilities Net 30 June 2007 30 June 2007 30 June 2007 At the end of preceding financial year ...... 134.6 -7.4 127.2 Deferred tax recognised in the P&L ...... -8.0 6.2 -1.8 Deferred tax recognised in equity ...... -59.4 0.0 -59.4 As of 30 June 2007 ...... 67.2 -1.1 66.1 Assets Liabilities Net 30 June 2007 30 June 2007 30 June 2007 Deferred tax in respect of each type of temporary differences Property, plant and equipment ...... -0.9 -0.9 Inventories ...... 1.0 -0.5 0.5 Accounts receivable ...... 1.3 -6.4 -5.1 Group shareholder’s equity ...... -0.2 -0.2 Provisions for employee benefits ...... 3.6 3.6 Provisions for environment ...... 3.3 3.3 Provisions for other liabilities and charges ...... 0.3 0.3 Current provisions for environment ...... 0.6 0.6 Trade and other payables ...... 51.3 -0.4 51.0 Total deferred tax due to temporary differences ...... 61.4 -8.3 53.1 Tax losses to carry forward ...... 12.5 12.5 Other ...... 0.5 0.5 Total tax assets/liabilities ...... 74.4 -8.3 66.1 Compensation of assets and liabilities within same entity ...... -7.2 7.2 Net amount ...... 67.2 -1.1 66.1 Deferred tax assets are only recognised to the extent that their utilisation is probable, i.e. if a tax benefit is expected in future periods. All deferred tax assets of the period have been recognised. The actual tax results in future periods may differ from the estimate made at the time the deferred taxes are recognised.

A-58 Note 21 — Cash and Cash Equivalents 30 June 2007 EUR Millions Cash and cash equivalents Short-term investments : bank term deposits ...... 14.7 Short-term investments : term deposits (other) ...... 70.3 Cash-in-hands and bank current accounts ...... 10.3 Total cash and cash equivalents ...... 95.3

Bank overdrafts ...... 0.4 (included in current financial debt in the balance sheet) Net cash as in Cash Flow Statement ...... 94.9

All cash and cash equivalents are fully available for the Carve-out Group.

Note 22 — Combined Statement of Changes in Equity Attributable to equityholders of the Group Currency translation differences and other Minority TOTAL Reserves reserves interest EQUITY EUR Millions Balance at 31 December 2006 ...... 275.5 -212.6 14.2 77.1 Changes in cash flow hedge reserves ...... 182.6 182.6 Changes in post employment benefit reserves ...... -0.2 -0.2 Changes in share-based payment reserves ...... 0.3 0.3 Changes in deferred taxes directly recognised in equity ...... -61.6 -61.6 Changes in currency translation differences ...... 2.2 2.2 Net income (expense) recognised directly in equity ...... 123.4 123.4 Result of the period ...... 35.1 0.7 35.8 Total recognised income ...... 35.1 123.4 0.7 159.2 Dividends ...... -8.8 -0.2 -8.9 Changes in scope ...... -10.7 -1.2 -12.0 Balance at 30 June 2007 ...... 291.0 -89.2 13.5 215.4

The reserves of the Carve-out Group represent the total share capital and retained earnings of the individual legal entities adjusted by the investment values of the entities within the Carve-out Group (see section Share capital and reserves in the Accounting Policies). GM Metal and Galva 45 have been transferred from the Umicore Group to the Carve-out Group during the period and therefore are presented as ‘change in scope’ within the Combined Statement of Changes in Equity for an amount of EUR 10.7 million. Share-based payments concern Umicore stock option plans allocated to carved-out entities’ management. Deferred taxes Post- Share- Cash flow recognised employment based Currency hedge directly in benefit payment translation reserves equity reserves reserves differences TOTAL Balance at 31 December 2006 ...... -308.4 105.0 -5.9 0.5 -3.7 -212.6 Gains and losses recognised inequity ...... 74.2 -24.7 -0.2 49.3 Gains and losses derecognised in equity ..... 108.9 -37.0 0.0 0.3 72.2 Exchange differences ...... -0.5 0.2 0.0 2.2 1.8 Balance at 30 June 2007 ...... -125.8 43.5 -6.1 0.8 -1.5 -89.2

The net gains recognised in equity regarding cash flow hedges (EUR 74.2 million) are the changes in fair value of new cash flow hedging instruments or existing at the opening but which have not yet expired at period end. The net gains derecognised from equity (EUR 108.9 million) are the fair values of the cash-flow hedging related instruments which expired during the period. The related impact on deferred tax is also recognised in equity. Exchange differences arising on translation of foreign controlled entities are taken to the foreign currency reserve as described in Note 2 “Accounting policies”.

A-59 Note 23 — Financial Debt

Bank loans EUR Millions NON-CURRENT At the end of 2006 ...... 0.6 — Transfers ...... -0.1 As of 30 June 2007 ...... 0.5

Bank loans Other loans Total CURRENT PORTION OF LONG-TERM FINANCIAL DEBTS At the end of 2006 ...... 0.4 1.5 1.9 — Increase / decrease ...... -0.1 -1.5 -1.6 As of 30 June 2007 ...... 0.2 0.0 0.2

Short term loan: Short term Bank commercial bank loans overdrafts Securitisation paper Other loans Total EUR Millions CURRENT At the end of 2006 ...... 16.7 1.2 52.3 8.8 135.7 214.8 — Increase / decrease ...... 4.3 -0.9 -4.2 -8.8 60.9 51.3 As of 30 June 2007 ...... 21.1 0.4 48.1 0.0 196.5 266.1

The other loans are mainly related to loans granted by the coordination centre of Umicore.

The 0.5 Million book value of the non current financial debt can be considered as its fair value.

A. Analysis by Maturity Dates

2009 2010 2011 2012 After 2012 Total EUR Millions Long-term bank loans ...... 0.2 0.1 0.1 0.1 0.5

Non-current financial debts B. Analysis of Long Term Debts by Currencies (Including Current Portion)

Other Euro US Dollar currencies Total Long-term bank loans ...... 0.7 0.7 Non-current financial debts ...... 0.7 0.7

Note 24 — Trade Debt and Other Payables

Notes 30 June 2007 EUR Millions Current Trade payables ...... 123.3 Advances received on contracts in progress ...... 5.0 Tax — other than income tax -payable ...... 14.3 Payroll and related charges ...... 21.2 Other amounts payables ...... 0.4 Accrued interest payable ...... 0.3 Fair value payable financial instrument held for cash flow hedging ...... 29 142.5 Fair value payable other financial instruments ...... 29 14.3 Accrued charges and deferred income ...... 7.5 329.0

A-60 Note 25 — Provisions for Employee Benefits The Carve-out Group has various legal and constructive defined benefit obligations, the vast majority of which are situated in the Belgian and French operations and most of them being “final pay” plans.

Post- Termination employment Post- benefits Other long- benefits, employment early term pensions benefits - retirement employee and similar other & similar benefits Total EUR Millions At the end of 2006 ...... 4.2 12.6 8.1 2.3 27.2 — Increase (included in “Payroll and related benefits”) ...... 0.4 0.3 0.7 — Reversal (included in “Payroll and related benefits”) ...... -0.5 -0.5 — Use (included in “Payroll and related benefits”) . . . -1.0 -0.1 -0.8 -1.9 — Interest and discount rate impacts (included in “Finance cost — Net”) ...... 0.1 0.3 0.2 0.6 — Recognised in equity ...... 0.7 -0.5 0.2 As of 30 June 2007 ...... 4.4 12.3 7.0 2.6 26.3

30/06/2007 (EUR thousand) Belgium ...... 10.0 France ...... 15.8 Germany ...... 0.5 Total ...... 26.3

This table shows the balances and the movements on provisions for employee benefits of the fully consolidated subsidiaries only.

The following disclosure requirements under IAS 19 amended were derived from the reports obtained for practically all plans from external recognised actuaries.

30 June 2007 (EUR millions) Change in benefit obligation Benefit obligation at beginning of the year ...... 41.1 Current service cost ...... 0.6 Interest cost ...... 0.8 Actuarial (gain)/loss ...... -0.1 Benefits paid from plan/company ...... -2.4 Net transfer in/(out) (including the effect of any business combinations/divestitures) . . 0.8 Benefit obligation at end of the year ...... 40.8 Change in plan assets Fair value of plan assets at the beginning of the year ...... 13.6 Expected return on plan assets ...... 0.3 Actuarial gain/(loss) on plan assets ...... -0.4 Employer contributions ...... 2.0 Benefits paid from plan/company ...... -2.4 Acquisition/divestitures ...... 0.9 Fair value of plan assets at the end of the year ...... 13.9

A-61 Pension plans in Belgium and France are wholly or partly funded with assets covering a substantial part of the obligations. All other plans are unfunded.

30 June 2007 (EUR millions) Amount recognised in the balance sheet Present value of funded obligations ...... 17.7 Fair value of plan assets ...... 13.9 Deficit (surplus) for funded plans ...... 3.8 Present value of unfunded obligations ...... 23.1 Unrecognised past service (cost) benefit ...... -0.6 Net liability (asset) ...... 26.3 Components of pension costs Amounts recognised in profit and loss statement Current service cost ...... 0.6 Interest cost ...... 0.9 Expected return on plan assets ...... -0.3 Total pension cost recognised in P&L account ...... 1.2 Actual return on plan assets Actual return on plan assets ...... -0.1 Amounts recognised in statement of recognised income and expense Actuarial gains and losses of the year ...... 0.2 Cumulative actuarial gains and losses ...... 5.9 Total recognised in the SoRIE ...... 6.1

The interest cost and return on plan assets as well as the discount rate impact on the non-post employment benefit plans included in the amortised actuarial losses or gains, are recognised under the finance cost in the income statement (see note 11). All other elements of the expense of the year are classified under the operating result.

Actuarial losses of the year recognised in equity originate mainly from a slight increase in discount rates on the pension plans and by lower actual return on plan assets for the pension funds in Belgium.

The policy to amortise the actuarial gains and losses is the experience policy.

30 June 2007 Principal Actuarial Assumptions Weighted average assumptions to determine benefit obligations Discount rate (%) ...... 5.00 Rate of compensation increase (%) ...... 2.00 Rate of price inflation (%) ...... 2.00 Weighted average assumptions to determine net cost Discount rate (%) ...... 4.31 Expected long-term rate of return on plan assets during financial year (%) ...... 5.00 Rate of compensation increase (%) ...... 1.84 Rate of price inflation (%) ...... 2.00

30 June 2007 Percentage Expected of plan return on plan assets assets Plan Assets Equity securities % ...... 49.83 4.10 Debt Securities % ...... 0.00 0.00 Real Estate % ...... 0.00 0.00 Other % ...... 50.17 5.00 Total (%) ...... 100.00

Other plan assets are predominantly invested in insurance contracts and bank term deposits. The expected long term rate of return on assets assumptions is documented for the individual plans.

A-62 Six months ended 30 June 2007 (EUR Millions) History of Experience Gains and Losses Difference between the expected and actual return on plan assets Amount ...... 0.4 Percentage of plan assets (%) ...... 3 Experience (gain)/loss on plan liabilities Amount ...... 1.3 Percentage of present value of plan liabilities (%) ...... 3 Required Disclosures for Post-retirement Medical Plans Assumed health care trend rate Immediate trend rate (%) ...... 5.00 Ultimate trend rate (%) ...... 5.00 Year that the rate reaches ultimate trend rate ...... 2007

Six months ended 30 Valuation Valuation trend trend +1% -1% Sensitivity to trend rate assumptions Effect on total service cost and interest cost components ...... 0.1 -0.1 Effect on defined benefit obligation ...... 2.2 -1.7

30 June 2007 (EUR millions) Balance sheet reconciliation Balance sheet liability (asset) ...... 27.2 Pension expense recognised in P&L in the financial year ...... 1.2 Amounts recognised in SORIE ...... 0.2 Employer contributions made in the financial year ...... -0.8 Benefits paid directly by company in the financial year ...... -1.2 Amounts recognized due to plan combinations ...... -0.1 Other ...... -0.2 Balance sheet liability (asset) as of end of the year ...... 26.3

Note 26 — Environmental Provisions

Provisions for soil clean-up Other & site environmental rehabilitation provisions TOTAL EUR Millions At the end of 2006 ...... 14.3 31.0 45.3

— Increase ...... 1.1 2.2 3.3 — Reversal ...... -0.8 -0.8 — Use (included in “Other operating expenses”) ...... -4.0 -0.2 -4.2 — Discounting (included in “Finance cost -Net”) ...... -0.1 -0.1 As of 30 June 2007 ...... 10.6 32.9 43.5

Of which — Non Current ...... 8.8 26.5 35.2 — Current ...... 1.8 6.5 8.3

Provisions for environmental legal and constructive obligations are recognised and measured by reference to an estimate of the probability of future cash outflows as well as to historical data based on the facts and circumstances known at the reporting date. The actual liability may differ from the amounts recognised.

‘Other environmental provisions’ relate mainly to the covering of ponds of the Belgian and French sites.

Management expects the most significant cash outflows on these projects to take place in the coming 1 to 6 years.

A-63 Note 27 — Provisions for Other Liabilities and Charges

Provisions Provisions for for other reorganization liabilities & and restructuring charges TOTAL EUR Millions At the end of 2006 ...... 2.6 4.0 6.6

— Increase ...... 0.4 0.4 — Reversal ...... -3.2 -3.2 — Use (included in “Other operating expenses”) ...... -0.3 -0.3 As of 30 June 2007 ...... 2.3 1.2 3.5

Of which — Non Current ...... 2.3 1.1 3.5 — Current ...... 0.0 0.0 0.0

Provisions are recognised and measured by reference to an estimate of the probability of future outflow of cash as well as to historical data based on the facts and circumstances known at the reporting date. The actual liability may differ from the amounts recognised.

Provisions for reorganisation and restructuring are mainly related to the restructuring of Calais (shutdown of the plant) and Auby (closing of half the cellhouse) in 2005.

Provisions for other liabilities and charges are mainly due to non tax litigations in UZAB.

No assessment can be done on the expected timing of outflow of the non-current part of the provisions for other liabilities and charges.

Note 28 — Note to the Combined Cash Flow Statement Definitions The cash flow statement identifies operating, investing and financing activities for the period.

The Carve-out Group uses the indirect method for the operating cash flows. The net profit and loss is adjusted for: • the effects of non-cash transactions such as provisions, write-downs, etc., and the variance in operating capital requirements; and • items of income or expense associated with investing or financing cash flows.

30 June 2007 EUR Millions Adjustments for non cash transactions ...... -4.5 Depreciations ...... 11.6 Adjustment IAS 39 ...... -14.1 Inventories and bad debt provisions ...... 0.4 Share-based payment ...... 0.3 Change in provisions ...... -2.9 Other ...... 0.1 Adjustments for items to disclose separately or under investing and financing cash flows 11.5 Tax charge of the period ...... 6.3 Interest (income) charges ...... 4.9 (Gain) loss on disposal of fixed assets ...... 0.3

A-64 Note 29 — Financial Instruments The Carve-out Group uses metal derivatives quoted mainly on the London Metal Exchange and currency derivatives with reputated brokers and banks and this to hedge its structural and transactional metal, as well as currency risks.

Financial Instruments Related to Cash-flow Hedging

Notional or Contractual amount Fair value 30 June 2007 30 June 2007 EUR Millions Forward commodities sold ...... 210.4 -142.5 Forward currency contracts sold ...... 227.3 18.1

Total fair value impact subsidiaries ...... -124.4 Recognised under trade and other receivables ...... 18.1 Recognised under trade and other payables ...... -142.5

The principles and documentation on the hedged risks as well as the timing related to the Carve-out Group’s cash flow hedging operations are included in note 3 Financial risk management.

The fair values of the effective hedging instruments are in first instance recognised in the fair value reserves recorded in equity and are derecognised when the underlying forecasted or committed transactions occur (see note 22).

The forward commodities sold contracts are set up to hedge on the following commodities: zinc, silver, copper and lead.

The forward currency contracts are set up to hedge USD towards Euro for the majority of operations but the contract are also set up to cover other currency such as DKK, GBP, JPY amongst others.

The average maturity date of financial instruments related to cash-flow hedging is January 2008 for the forward commodities sold and for the forward currency contracts.

The terms and conditions of the forward contracts are common market conditions.

In those circumstances whereby the hedge accounting documentation as defined under IAS 39 is not available, financial instruments used to hedge structural risks for metals and currencies are measured as if they were held for trading. However, such instruments are being used to hedge future probable cash-flows and are not speculative in nature.

Other Financial Instruments

Notional or contractual amount Fair value 30 June 2007 30 June 2007 (EUR millions)

Forward LME sales ...... 89.7 6.8 Forward LME purchases ...... -93.8 -2.8 Forward currency contracts sold ...... 151.3 1.5 Forward currency contracts bought ...... -123.0 -1.5 Total fair value impact subsidiaries ...... 4.0 Recognised under trade and other receivables ...... 18.3 Recognised under trade and other payables ...... -14.3

The principles and documentation related to the Group’s transactional hedging are included in note 3 Financial risk management. In the absence of hedge accounting documentation as defined under IAS 39, financial instruments used to hedge transactional risks for metals and currencies are measured as if they were held for trading. However, such instruments are being used to cover existing transactions and firm commitments and are not speculative in nature.

A-65 The fair values are immediately recognised in the income statement under “Other operating income” for the commodity instruments and the Net Finance cost for the currency instruments.

Embedded Derivatives In 2006 a contractual situation has been identified at Umicore Zinc Alloys France which links part of the electricity costs (host contract) to the evolution of the Zinc price (Embedded derivatives). At last year closing, the discounted fair value amounted to EUR 27.6 million or a fair value change of EUR 15.0 million recognised in the income statement as well.

In 2007, changes to energy pricing structures in France have led to a reversal of previous negative impacts linked to the accounting treatment of an embedded derivative. The reversal had a positive, non-cash impact at EBIT level of EUR 21.8 million.

Note 30 — Off Balance Sheet Commitments

30 June 2007 (EUR Millions) RIGHTS AND COMMITMENTS NOT REFLECTED IN THE BALANCE SHEET Guarantees constituted by third parties on behalf of the Group ...... 239.5 Guarantees constituted by the Group on behalf of third parties ...... 4.7 Guarantees received ...... 7.9 Commercial commitments for commodities purchased (to be received) ...... 239.4 Commercial commitments for commodities sold (to be delivered) ...... 370.4

Guarantees Constituted by Third Parties on behalf of the Carve-out Group Guarantees constituted by third parties on behalf of the Carve-out Group are secured and unsecured guarantees given by third parties to the creditors of the group guaranteeing that the Group’s debts and commitments, actual and potential, will be satisfactorily discharged.

Guarantees Constituted by the Carve-out Group on behalf of third parties Guarantees constituted by the Carve-out Group on behalf of third parties are guarantees or irrevocable undertakings given by the Carve-out Group in favour of third parties guaranteeing the satisfactory discharge of debts or of existing or potential commitments by the third party to its creditors.

Guarantees Received Guarantees received are pledges and guarantees received guaranteeing the satisfactory discharge of debts and existing and potential commitments of third parties towards the Carve-out Group, with the exception of guarantees and security in cash.

Commercial Commitments Commercial commitments are firm commitments to deliver or receive metals to customers or from suppliers at fixed prices.

Note 31 — Contingencies The Carve-out Group has certain pending files that can be qualified as contingent liabilities or contingent assets, according to the definition of IFRS.

Environmental Issues See note 26 on environmental provisions where the topic is covered in detail including the status from a contingency point of view.

Others In addition to the above, the Carve-out Group is the subject of a number of claims and legal proceedings incidental to the normal conduct of its business. Management does not believe that such claims and proceedings are likely, on aggregate, to have a material adverse effect on the financial condition of the Carve-out Group.

A-66 Note 32 — Related Parties This note includes all transactions and outstanding balances with companies accounted for using the equity method. All transactions with related parties are done at market conditions.

30 June 2007 EUR Millions Transactions with joint ventures and associates Operating income ...... 11.3 Operating expenses ...... -5.7 Dividends received ...... 6.1 Outstanding balances with joint ventures and associates Current trade and other payables ...... 0.2

Key management compensation details have not been provided as part of the related parties disclosures since there is no formal Board or executive committee at the level of the Carve-out Group of Umicore.

These Combined Financial Statements include sales to Umicore subsidiaries for an amount of EUR 303.0 million, purchases from Umicore subsidiaries for an amount of EUR 51.8 million and other operating expenses charged by Umicore subsidiaries for an amount of EUR 18.4 Million. The management believes that all those transactions are on arm’s length terms. The financial expenses of the carved out group toward Umicore companies amount to 4.8 million.

At 30 June 2007, Umicore Carve-out Group has a balance of accounts receivable from Umicore subsidiaries of EUR 123.4 million and accounts payable to Umicore subsidiaries for EUR 21.2 million.

The net financial debt payable to Umicore entities at 30 June 2007 amounts to EUR 183.7 million.

Note 33 — Events after the Balance Sheet Date Umicore announced on 3 September that, as of 31 August 2007, it had completed the transfer of its zinc smelting and alloying assets to Nyrstar, thereby formally launching the joint-venture with Zinifex and creating the world’s largest zinc producer.

As at July 31, Umicore Zinc Alloys Belgium sold and settled in cash to Umicore Belgium all outstanding metal and related currency cash-flow hedges maturing after August 31 for the amount of EUR 109 million.

During the course of August, Umicore Zinc Alloys France sold and settled in cash to Umicore France the Calais site (land and buildings) including the rehabilitation and clean-up liabilities for the amount of EUR 9.8 million.

Note 34 — IFRS developments The following new standards and interpretations issued but not yet effective in 2007 have not been early applied by the Group: • IFRS 8, “Operating Segments” (applicable for accounting years beginning on or after 1 January 2009) (not yet endorsed by the EU); • Amendment to IAS 23, “Borrowing costs” (applicable for accounting years beginning on or after 1 January 2009) (not yet endorsed by the EU); • IFRIC 11, “Group and Treasury Share Transactions” (applicable for accounting years beginning on or after 1 March 2007)(endorsed by the EU); • IFRIC 12, “Service Concession Arrangements” (applicable for accounting years beginning on or after 1 January 2008) (not yet endorsed by the EU); • IFRIC 13 Customer Loyalty Programs (applicable for accounting years beginning on or after 1 July 2008) (not yet endorsed by the EU); and • IFRIC 14 ‘IAS 19 — The limit on a defined benefit asset, minimum funding requirements and their interaction’ (applicable for accounting years beginning on or after 1 January 2008) (not yet endorsed by the EU).

A-67 AUDITOR’S REPORT ON UMICORE CARVE-OUT GROUP COMBINED FINANCIAL STATEMENTS To the Board of Directors of Umicore INDEPENDENT AUDITORS’ REPORT TO THE DIRECTORS OF UMICORE We have audited the accompanying Combined Financial Statements of the Umicore Carve-out Group of Umicore, which comprise the balance sheet as at 30 June 2007, and the income statement, statement of recognised income and expense and cash flows statement for the six-month period then ended, and a summary of significant accounting policies and other explanatory notes as included in appendix III, chapter IV, of this prospectus.

(a) Directors’ responsibility for the Combined Financial Statements

The directors of Umicore are responsible for the preparation and fair presentation of the Combined Financial Statements in accordance with International Financial Reporting Standards as adopted by the European Union. The Combined Financial Statements contain an aggregation of financial information relating to the Umicore Carve-out Group of Umicore and have been prepared from the books and records maintained by Umicore and its controlled entities. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the Combined Financial Statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

(b) Auditor’s responsibility

Our responsibility is to express an opinion on the Combined Financial Statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the Combined Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

(c) Qualifications

As set out in Note 1 to the Combined Financial Statements following IFRS requirements have not been complied with : • The presentation and disclosure requirements of IAS 1 Presentation of Financial Statements have not been complied with in regards to the presentation of comparative information for the comparable period, being the year ended 30 June 2006; and • IFRS 7 Financial Instruments : Disclosures and the Amendment to IAS 1 Presentation of Financial Statements : Capital Disclosures. The disclosures about the significance of financial instruments for an entity’s financial position and performance, and qualitative and quantitative disclosures on the nature and extent of risks have not been presented in these Combined Financial Statements.

(d) Qualified Auditor’s Opinion

In our opinion, except for the matters noted in the preceding qualification paragraph, the Combined Financial Statements present fairly, in all material respects, the financial position of the Umicore Carve-out Group as of 30 June 2007 and of its financial performance and its cash flows for the six-month period then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

A-68 (e) Emphasis of Matter

Without further qualification of our opinion, we draw attention to Note 1 to the financial statements. The Combined Financial Statements present aggregated financial information of the Umicore Carve-out Group of Umicore and its controlled entities. The Umicore Carve-out Group operates as an integrated part of the Umicore group and within the Umicore group infrastructure. The Combined Financial Statements may not necessarily be indicative of the Umicore Carve-out Group’s financial position, results of operations, or cash flows had the Umicore Carve-out Group operated as a separate entity during the period presented or for future periods.

10 October 2007

PricewaterhouseCoopers Bedrijfsrevisoren Represented by Raf Vander Stichele Bedrijfsrevisoren

A-69 [THIS PAGE INTENTIONALLY LEFT BLANK] PRO FORMA FINANCIAL INFORMATION

PF-1 INDEPENDENT ASSURANCE REPORT ON THE NYRSTAR PRO FORMA FINANCIAL INFORMATION

To the Board of Directors of Nyrstar SA/NV We report on the pro forma consolidated financial information, set out in Chapter I of Appendix IV of the prospectus, and on the supplementary notes to the pro forma consolidated financial information, set out in Chapter II of Appendix IV of the prospectus, (hereafter, collectively referred to as the “Pro Forma Financial Information”), which has been compiled as described in the basis of preparation note set out in section 2 of the pro forma consolidated financial information (the “Basis of Preparation”), for illustrative purposes only, to provide information about how the acquisition by Nyrstar SA/NV (the “Company”), of the zinc and lead smelting, alloying and refining assets and operations of Zinifex Limited and Umicore SA/NV might have affected its consolidated balance sheet as at 30 June 2007, and its selected consolidated income statement information before net financing costs and income tax for the six month period ended 30 June 2007 and for the year ended 31 December 2006, prepared on the basis of the accounting policies adopted by the Company. Because of its nature, the Pro Forma Financial Information addresses a hypothetical situation and therefore does not represent the Company’s actual financial position as at 30 June 2007 had the acquisition occurred on that date, or its results for the periods presented had the acquisition occurred on 1 January 2006.

Management is responsible for the compilation of the Pro Forma Financial Information in accordance with the requirements of the Commission Regulation (EC) No 809/2004.

Our responsibility is to express an opinion, as required by item 7 of Annex II of the Commission Regulation (EC) No 809/2004, as to the proper compilation of the Pro Forma Financial Information. We are not responsible for expressing any other opinion on the Pro Forma Financial Information or on any of its constituent elements. In particular, we do not accept any responsibility for any financial information previously reported on and used in the compilation of the Pro Forma Financial Information beyond that owed to those to whom reports or opinions were addressed at the date of their issue.

We conducted our work in accordance with International Standard on Assurance Engagements 3000, Assurance Engagements Other Than Audits or Reviews of Historical Financial Information. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted underlying financial information with the source documents, considering the evidence supporting the pro forma adjustments and discussing the Pro Forma Financial Information with Company management.

In our opinion, the Pro Forma Financial Information has been properly compiled on the basis stated in the Basis of Preparation and such basis is consistent with the accounting policies of the Company as described in the Basis of Preparation of the Pro Forma Financial Information.

Brussels, 10 October 2007

PricewaterhouseCoopers Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren Bedrijfsrevisoren Represented by Represented by

Peter Van den Eynde Benoit Van Roost Bedrijfsrevisor Bedrijfsrevisor

PF-2 CHAPTER I NYRSTAR PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

1. General Framework 1.1 Pro Forma Consolidated Financial Information The Nyrstar Pro Forma Consolidated Financial Information comprises the following: • Pro Forma Consolidated Balance Sheet as at 30 June 2007; • Selected Pro Forma Consolidated Income Statement Information before net financing costs and income tax expense for the six months ended 30 June 2007 and for the year ended 31 December 2006; and • Notes to the Pro Forma adjustments.

The Supplementary Notes to the Nyrstar Pro Forma Consolidated Financial Information, included in Chapter II of Appendix IV, provide supplementary information about the impact of the pro forma adjustments on selected balance sheet and segment items.

The Nyrstar Selected Pro Forma Consolidated Income Statement Information before net financing costs and income tax has been provided only to the level of profit before net financing costs and income tax. The tax profile and gearing of Nyrstar differ substantially from those of the Zinifex Carve-out Group and the Umicore Carve-out Group, which, historically, have been operated under different corporate structures and, therefore, a comparison of historical interest and tax expense is not considered to be meaningful, appropriate or representative.

The Nyrstar Pro Forma Consolidated Financial Information is unaudited.

The Nyrstar Pro Forma Consolidated Financial Information should be read in conjunction with: • the Zinifex Carve-out Group Combined Selected Historical Financial Information included in Chapter I of Appendix III in this prospectus as at 30 June 2007 and for the six months then ended, and for the year ended 31 December 2006; • Umicore Carve-out Group Combined Selected Historical Financial Information included in Chapter II of Appendix III in this prospectus as at 30 June 2007 and for the six months then ended, and for the year ended 31 December 2006; • the Audited Zinifex Carve-out Group Combined Financial Statements included in Chapter III of Appendix III in this prospectus as at 30 June 2007 and for the year then-ended; and • the Audited Umicore Carve-out Group Combined Financial Statements included in Chapter IV of Appendix III in this prospectus as at 30 June 2007 and for the six months then-ended.

1.2 Nyrstar Nyrstar SA/NV (the “Company”) was formed on 13 April 2007 for the purpose of acquiring, holding and operating the zinc and lead smelting, alloying and refining assets and operations of Zinifex Limited (“Zinifex”) and Umicore SA/NV (“Umicore”), pursuant to the Business Combination and Shareholders’ Agreement between Nyrstar SA/NV, Zinifex and Umicore dated 23 April 2007 (the “BCSA”). Prior to the acquisition by the Company of the Zinifex Carve-out Group and the Umicore Carve-out Group on 31 August 2007, the Company had minimal assets and conducted no operations.

1.3 Overview of the Impact of BCSA on the Pro Forma Consolidated Financial Information Under the terms of the BCSA, Zinifex Limited and Umicore SA/NV subscribed to a capital increase by Nyrstar on 31 August 2007, the proceeds of which were used to acquire the Zinifex Carve-out Group and Umicore Carve-out Group. Financial debt also financed a part of the acquisition price. The purchase price paid by the Company to Zinifex Limited and Umicore SA/NV for the acquisition of the Zinifex Carve-out Group and the Umicore Carve-out Group on 31 August 2007 was determined under the BCSA which includes a mechanism for the valuation of the Zinifex Carve-out Group and the Umicore Carve-out Group on such date. The resultant valuations, which are enterprise values assuming zero net debt, were used for the purposes of reflecting the business combination in the pro forma consolidated financial information. The acquisition by the Company of the

PF-3 Zinifex Carve-out Group and the Umicore Carve-out Group has been accounted for as a reverse acquisition. Considering the relative sizes of the net assets and operations of the businesses respectively contributed by Zinifex and by Umicore to the Company, the Zinifex Carve-out Group has been identified as the acquirer for accounting purposes while Nyrstar and the Umicore Carve-out Group have been considered as the acquirees for accounting purposes. Accordingly, the assets and liabilities of the Zinifex Carve-out Group have been accounted for in the Nyrstar Pro Forma Consolidated Financial Information based on their pre-combination carrying amounts, restated to comply with the Nyrstar accounting policies, while the assets and liabilities of Nyrstar and the Umicore Carve-out Group have been recorded at their fair values.

For the purposes of accounting for the business combination in Nyrstar’s first consolidated financial statements as at and for the period ending 31 December 2007, fair values for the assets and liabilities of Nyrstar and the Umicore Carve-out Group will be determined as of 31 August 2007, the date of acquisition by the Company of the Zinifex Carve-out Group and the Umicore Carve-out Group.

For the purposes of accounting for the business combination in the Nyrstar Pro Forma Consolidated Financial Information, as the fair values of the assets and liabilities of Nyrstar and the Umicore Carve-out Group as at 31 August 2007 are not currently available, the corresponding fair values as of 30 June 2007, which will differ from those as at 31 August 2007, have been used for the purposes of determining the relevant pro forma adjustments in the Nyrstar Pro Forma Consolidated Financial Information as at 30 June 2007 and for the six months ended 30 June 2007 and for the year ended 31 December 2006.

The BCSA provides that the Company will pay purchase price adjustments to Zinifex Limited and to Umicore SA/NV in the event that the value of the Company as inferred from the initial public offering exceeds by more than 5 per cent the aggregate values for which the Zinc businesses of Zinifex and Umicore were acquired on 31 August 2007. In such case, this would be financed by way of an additional capital increase to be subscribed for in cash by Zinifex and Umicore. The part of any additional capital increase relating to the acquisition of the Umicore Carve-out Group would result in a corresponding increase in pro forma consolidated shareholders’ equity, while the part of any additional capital increase relating to the acquisition of the Zinifex Carve-out Group would not have an impact on pro forma consolidated shareholders’ equity due to the application of reverse acquisition accounting principles.

The Company would use the proceeds of the additional capital increase to pay to Umicore and to Zinifex the related purchase price adjustment. As the Company is currently unable to estimate the amount of this price adjustment, it has not been reflected in the Pro Forma Consolidated Financial Information. This payment, if any, would result in additional goodwill being recognised in respect of the acquisition of the Umicore Carve-out Group. However, in relation to the acquisition of the Zinifex Carve-out Group, the extra payment would not result in additional goodwill being recognised because of the application of the reverse acquisition principles outlined in the Basis of Preparation below. Instead, the related capital increase has been eliminated in the Pro Forma Consolidated Balance Sheet.

The BCSA also provides for an adjustment to the purchase price in respect of the modelled working capital, net debt and net current tax liabilities of the Zinifex Carve-out Group and the Umicore Carve-out Group as at 31 August 2007. The adjustment will take place no earlier than thirty business days after 31 August 2007. The adjustment mechanism will result in additional cash in- or outflows for the company, but will not impact goodwill or shareholders’ equity, as referred to in the previous paragraph. These cash in-or outflows are not reflected in the Pro Forma Consolidated Balance Sheet as at 30 June 2007, as their details are not currently available.

2. Basis of Preparation 2.1 Overview of Pro Forma Consolidated Financial Information The Company acquired the Zinifex Carve-out Group and the Umicore Carve-out Group on 31 August 2007: • The Pro Forma Consolidated Balance Sheet of the Company gives pro forma effect to the acquisitions of the Zinifex Carve-out Group and the Umicore Carve-out Group by Nyrstar, as if the acquisitions had occurred on 30 June 2007, and gives pro forma effect to the net debt levels set out in the BCSA as if such net debt levels existed at 30 June 2007. • The Nyrstar Selected Pro Forma Consolidated Income Statement Information before net financing costs and income tax of the Group for the six months ended 30 June 2007 and for the year ended 31 December 2006 gives pro forma effect to the acquisitions of the Zinifex Carve-out Group and the Umicore Carve-out Group by Nyrstar as if the acquisitions had occurred on 1 January 2006.

PF-4 The Nyrstar Pro Forma Consolidated Financial Information has been prepared and is intended for illustrative purposes only and addresses a hypothetical situation and therefore does not purport to represent the results of operations and the financial position that the Company would actually have obtained during the periods presented and is not necessarily indicative of the results the Company expects in future periods. In this respect, the Selected Pro Forma Consolidated Income Statement Information before net financing costs and income tax, among other things: • Does not reflect net financing costs and income tax expense as the tax profile and gearing of Nyrstar differ substantially from those of the Zinifex Carve-out Group and the Umicore Carve-out Group; • Does not reflect the strategies and corporate structure that Nyrstar may have employed had the smelting businesses been operating as a combined group; • Does not reflect the fact that the contractual terms between Nyrstar and its customers and suppliers may have been different had the smelting businesses been operating as a combined group; • Does not reflect the operating risks that Nyrstar may have been subject to had the smelting businesses been operating as a combined group; and • Does not reflect the results of any Financial Risk Management, such as transaction hedging, that Nyrstar may have employed. Conversely, the Pro Forma Consolidated Balance Sheet does reflect cash and financial debt balances, giving effect to the provisions of the BCSA, as well as the tax impacts of the business combination. On 31 August 2007 Umicore SA/NV and the Company agreed to the sale by Umicore SA/NV of its 50% shareholding in Föhl China Co., Ltd. ("Föhl") to the Company. Completion is subject to certain conditions, the fulfilment of which remain pending at the date of the prospectus. Accordingly, it is currently not certain whether the shares in Föhl will effectively be transferred to the Company and when such transfer will occur. The Pro Forma Consolidated Financial Information has been prepared to give effect to the intended transfer of the shares in Föhl to the Company, which has been accounted for using the equity method. In the event that such transfer cannot, for any reason, ultimately be effected, the line item “investment in associates and joint ventures” in the Pro Forma Consolidated Balance Sheet as at 30 June 2007 would decrease in an amount of EUR 8 million. The line item “share of profit of equity accounted investees” in the Pro Forma Consolidated Income Statement Information before Net Financing Costs and Income Tax for the six month period ended 30 June 2007 and for the period ended 31 December 2006 would be increased by EUR 0.1 million and reduced by EUR 0.3 million respectively. The Pro Forma Consolidated Financial Information has been prepared in accordance with Commission Regulation (EC) No. 809/2004. For the avoidance of doubt, it does not purport to be in compliance with Article 11 of Regulation S-X of the Rules and Regulations of the U.S. Securities and Exchange Commission.

2.2 Underlying financial information The Pro Forma Consolidated Balance Sheet of Nyrstar and subsidiaries (collectively the “Group”) as at 30 June 2007 has been compiled on the basis of the Audited Zinifex Carve-out Combined Financial Statements included in Chapter III of Appendix III in this prospectus and the Audited Umicore Carve-out Combined Financial Statements included in Chapter IV of Appendix III in this prospectus respectively. The Nyrstar Selected Pro Forma Consolidated Income Statement Information before net financing costs and income tax of the Group for the six months ended 30 June 2007 and for the year ended 31 December 2006 is based on the Zinifex Carve-out Group Combined Selected Historical Financial Information and the Umicore Carve-out Group Combined Selected Historical Financial Information for the six months ended 30 June 2007 and for the year ended 31 December 2006 included in Chapters I and II of Appendix IV in this prospectus.

2.3 Accounting policies The Pro Forma Consolidated Financial Information has been compiled on the basis of the accounting policies of the Company. These accounting policies are the accounting policies of the Zinifex Carve-out Group, as set out in the Audited Zinifex Carve-out Combined Financial Statements included in Chapter III of Appendix III in this prospectus, except that: • The Company accounts for joint ventures using the equity method whereas the Zinifex Carve-out Group accounted for joint ventures using the proportional consolidation method; • The Zinifex Carve-out Group does not have an accounting policy for reverse acquisition accounting as this policy has not been applied by the entity; and

PF-5 • The Company presents segment information in accordance with the requirements of IAS 14, Segment Reporting, whereas the Zinifex Carve-out Group has elected to early adopt the requirements of IFRS 8, Operating Segments, in the Audited Zinifex Carve-out Combined Financial as at 30 June 2007 and for the year then ended.

2.4 Nature of pro forma adjustments In accordance with the requirements of the Commission Regulation (EC) No 809/2004, the Pro Forma Consolidated Financial Information includes adjustments that are factually supported, directly attributable to the transaction, and appropriate and complete for the purpose for which the Pro Forma Consolidated Financial Information has been prepared.

Pro forma adjustments have been recorded to give effect to: • The alignment to Nyrstar accounting policies, and the related tax effects; • The impact of the business combination comprising: • the recording of the fair values of the assets and liabilities of Nyrstar and the Umicore Carve-out Group and the related tax effects; • the tax impact resulting from the Company’s acquisition of the assets and liabilities of one of the Zinifex Carve-out group entities, resulting in the tax value of the assets transferred being higher than the carrying value; • The alignment to the net debt level, as provided for in the BCSA, as of 30 June 2007, being the date of the Pro Forma Consolidated Balance Sheet; and • The impact on the Pro Forma Consolidated Balance Sheet of the assignment by Umicore Carve-out Group of its strategic hedge assets to Umicore SA/NV for fair market value on 31 July 2007.

Additional details of the pro forma adjustments are included in this Chapter and in The Supplementary Notes to the Nyrstar Pro Forma Consolidated Financial Information (Chapter II of Appendix IV).

The pro-forma adjustments are based on estimates, currently available information and certain assumptions that management believes are reasonable and which are subject to revision as additional information becomes available in relation to the closing of the business combination.

2.5 Intercompany eliminations All intercompany balances and transactions between the Zinifex Carve-out Group and the Umicore Carve-out Group have been eliminated.

2.6 Foreign Currency Measurement For the main currencies applicable with the Group’s consolidated entities and investments, the rates used for translation into the Group’s presentation currency are as follows (per EUR 1):

Average rates for the Closing rate at Six months ended Year ended 30 June 2007 30 June 2007 31 December 2006 US dollars ...... 1.3505 1.3291 1.2556 Australian dollar ...... 1.5886 1.6549 1.6668 Thai Baht ...... 42.6150 44.2784 47.5936 Chinese Yuan ...... 10.2816 10.2567 10.0096

PF-6 3. Pro Forma Consolidated Balance Sheet as at 30 June 2007 The Pro Forma Consolidated Balance Sheet of Nyrstar has been prepared to illustrate the impact of the acquisition of the Zinifex Carve-out Group and the Umicore Carve-out Group as if the acquisitions had occurred on 30 June 2007. The pro forma adjustments are described in section 6.

Zinifex Umicore Elimination Nyrstar Carve-out Carve-out Pro forma of inter- Nyrstar Pro SA/NV Group Group adjustments company Forma (Unaudited) (Audited) (Audited) (Section 6) balances Consolidated Notes (a) (b) (EUR millions) Goodwill ...... — — 5.7 182.5 — 188.2 Intangible assets ...... — — 0.7 — — 0.7 Property, plant and equipment ...... — 330.7 136.5 368.5 — 835.7 Investment in associates and joint ventures ...... — — 27.6 67.8 — 95.4 Deferred tax assets ...... — 34.9 67.2 28.4 — 130.5 Other assets ...... — — 1.0 (0.1) — 0.9 Total non-current assets ...... — 365.6 238.7 647.1 — 1,251.4 Inventories ...... — 309.7 219.3 69.9 — 598.9 Trade and other receivables ...... — 321.5 316.8 (130.4) (46.7) 461.2 Other financial assets ...... — 17.6 24.6 (24.6) — 17.6 Current tax assets ...... — 8.2 — — — 8.2 Other assets ...... — 8.5 — (0.1) — 8.4 Cash and cash equivalents ...... 0.1 74.6 95.3 (70.0) — 100.0 Total current assets ...... 0.1 740.1 656.0 (155.2) (46.7) 1,194.3 Total Assets ...... 0.1 1,105.7 894.7 491.9 (46.7) 2,445.7 Equity attributable to equity holders of the parent ...... 0.1 699.6 201.9 522.1 — 1,423.7 Minority interests ...... — — 13.5 6.4 — 19.9 Total equity ...... 0.1 699.6 215.4 528.5 — 1,443.6 Borrowings ...... — 1.2 0.5 (1.7) — — Retirement & benefit obligations ..... — 7.2 26.3 — — 33.5 Non-current provisions ...... — 88.9 38.6 (0.3) — 127.2 Deferred tax liabilities ...... — — 1.1 153.7 — 154.8 Total non current liabilities ...... — 97.3 66.5 151.7 — 315.5 Trade and other payables ...... — 247.9 329.0 (270.8) (46.7) 259.4 Borrowings ...... — 0.7 266.3 83.0 — 350.0 Other financial liabilities ...... — 23.5 — — — 23.5 Current tax liabilities ...... — 10.9 9.2 — — 20.1 Current provisions ...... — 25.8 8.3 (0.5) — 33.6 Total current liabilities ...... — 308.8 612.8 (188.3) (46.7) 686.6 Total Equity and Liabilities ...... 0.1 1,105.7 894.7 491.9 (46.7) 2,445.7

Notes (a) Derived from the audited Zinifex Carve-out Group Combined Financial Statements as at and for the year ended 30 June 2007, included in Chapter III of Appendix III of the prospectus. (b) Derived from the audited Umicore Carve-out Group Combined Financial Statements as at and for the six months ended 30 June 2007, included in Chapter IV of Appendix III of the prospectus.

PF-7 4. Selected Pro Forma Consolidated Income Statement Information before Net Financing Costs and Income Tax for the six month period ended 30 June 2007 The Selected Pro Forma Consolidated Income Statement Information before Net Financing Costs and Income Tax Expense of Nyrstar SA/NV for the six months ended 30 June 2007 has been prepared to illustrate the impact of the acquisition of the Zinifex Carve-out Group and the Umicore Carve-out Group as if the acquisitions had occurred on 1 January 2006. The pro forma adjustments are described in section 7.

Zinifex Umicore Elimination Carve- out Carve-out Pro-forma of inter- Nyrstar Group Group adjustments company Pro (Unaudited) (Audited) (Section 7) transactions Forma Notes (a) (b) (c) (EUR millions) Revenue ...... 1,242.7 798.7 (13.0) (19.5) 2,008.9 Result from operating activities before depreciation and amortisation ...... 131.5 62.8 (11.6) — 182.7 Depreciation and amortisation ...... (21.6) (10.7) (6.8) — (39.1) Result from operating activities ...... 109.9 52.1 (18.4) — 143.6 Share of profit of equity accounted investees ...... — 3.3 4.2 — 7.5 Result before net financing costs and income tax .... 109.9 55.4 (14.2) — 151.1 of which Group share ...... 109.9 54.3 (14.4) — 149.8 Minority share ...... — 1.1 0.2 — 1.3

Notes (a) Derived from the reviewed Zinifex Carve-out Group Selected Historical Financial Information for the period ended 30 June 2007, included in Chapter I of Appendix III of the prospectus. (b) Derived from the audited Umicore Carve-out Group Combined Financial Statements as at and for the six months ended 30 June 2007, included in Chapter IV of Appendix III of the prospectus. (c) The pro forma adjustments do not include an adjustment for the incremental corporate costs in excess of those recorded in the underlying financial information of the Zinifex Carve-out Group and the Umicore Carve-out Group, as such incremental costs are not currently factually supportable. Additional information on these costs is included in section 7 of the Pro Forma Consolidated Financial Information, and elsewhere in the prospectus.

PF-8 5. Selected Pro Forma Consolidated Income Statement Information before Net Financing Costs and Income Tax for the period ended 31 December 2006 The Selected Pro Forma Consolidated Income Statement Information before Net Financing Costs and Income Tax Expense of Nyrstar SA/NV for the year ended 31 December 2006 has been prepared to illustrate the impact of the acquisition of the Zinifex Carve-out Group and the Umicore Carve-out Group as if the acquisitions had occurred on 1 January 2006. The pro forma adjustments are described in section 8.

Zinifex Umicore Elimination Carve- out Carve-out Pro-forma of inter- Group Group adjustments company Nyrstar Pro (Unaudited) (Unaudited) (Section 8) transactions Forma Notes (a) (b) (c) (EUR millions) Revenue ...... 2,126.8 1,107.6 (23.9) (37.2) 3,173.3 Result from operating activities before depreciation and amortisation ...... 387.5 (9.6) 58.1 — 436.0 Depreciation and amortisation ...... (37.4) (25.4) (8.0) — (70.8) Result from operating activities ...... 350.1 (35.0) 50.1 — 365.2 Share of profit of equity accounted investees . . . — 9.2 5.9 — 15.1 Result before net financing costs and income tax ...... 350.1 (25.8) 56.0 — 380.3 of which Group share ...... 350.1 (25.9) 55.4 — 379.6 Minority share ...... — 0.1 0.6 — 0.7

Notes (a) Derived from the reviewed Zinifex Carve-out Group Selected Historical Financial Information for the year ended 31 December 2006, included in Chapter III of Appendix III of the prospectus. (b) Derived from the reviewed Umicore Carve-out Group Selected Historical Financial Information for the year ended 31 December 2006, included in Chapter IV of Appendix III of the prospectus. (c) The pro forma adjustments do not include an adjustment for the incremental corporate costs in excess of those recorded in the underlying financial information of the Zinifex Carve-out Group and the Umicore Carve-out Group, as such incremental costs are not currently factually supportable. Additional information on these costs is included in section 8 of the Pro Forma Consolidated Financial Information, and elsewhere in the prospectus.

PF-9 6. Notes to the Pro Forma adjustments — Nyrstar Pro Forma Consolidated Balance sheet as at 30 June 2007 The following table sets out details of the pro forma adjustments to the Nyrstar Pro Forma Consolidated Balance Sheet as at 30 June 2007, which are further explained in this section.

BCSA impacts Nyrstar (excl. net Maximum Total Pro Business debt IPO Net Forma combination alignment) Debt Adjustments Notes to the pro forma adjustments (a) (b) (c) (EUR millions) Goodwill ...... 182.5 — — 182.5 Intangible assets ...... — — — — Property, plant and equipment ...... 368.5 — — 368.5 Investment in associates and joint ventures ...... 67.8 — — 67.8 Deferred tax assets ...... 2.2 26.2 — 28.4 Other assets ...... (0.1) — — (0.1) Total non-current assets ...... 620.9 26.2 — 647.1 Inventories ...... 69.9 — — 69.9 Trade and other receivables ...... (112.3) (18.1) — (130.4) Other financial assets ...... (24.6) — — (24.6) Current tax asset ...... — — — — Other assets ...... (0.1) — — (0.1) Cash and cash equivalents ...... (170.0) — 100.0 (70.0) Total current assets ...... (237.1) (18.1) 100.0 (155.2) Total Assets ...... 383.8 8.1 100.0 491.9 Equity attributable to equity holders of the parent ...... 621.5 150.6 (250.0) 522.1 Minority interests ...... 6.4 — — 6.4 Total equity ...... 627.9 150.6 (250.0) 528.5 Borrowings ...... (1.7) — — (1.7) Retirement & benefit obligations ...... — — — — Non-current provisions ...... (0.3) — — (0.3) Deferred tax liabilities ...... 153.7 — — 153.7 Total non-current liabilities ...... 151.7 — — 151.7 Trade and other payables ...... (128.3) (142.5) — (270.8) Borrowings ...... (267.0) — 350.0 83.0 Other financial liabilities ...... — — — — Current tax liabilities ...... — — — — Current provisions ...... (0.5) — — (0.5) Total current liabilities ...... (395.8) (142.5) 350.0 (188.3) Total Equity and Liabilities ...... 383.8 8.1 100.0 491.9

Notes (a) Business combination (i) The Umicore Carve-out Group has been identified as an acquiree in the context of the business combination. On this basis, the assets and liabilities contributed by Umicore have been adjusted to their fair value in accordance with IFRS 3 “Business combinations”, with the following result: (I) The property plant and equipment historical balances have been adjusted to reflect the fair value of those assets at 30 June 2007 as determined by independent external appraisals; (II) The investments in associates and joint ventures have been accounted at their fair values as determined by the BCSA; (III) The inventories have been recognised at their fair value; (IV) A deferred tax impact has been recognised on the fair value adjustments calculated on the basis of the tax rate applicable in the various jurisdictions; and

PF-10 (V) The Goodwill represents the difference between the consideration paid by Nyrstar for the Umicore Carve-out Group and the provisional fair values as at 30 June 2007 of the identifiable net assets of the Umicore Carve-out Group acquired, assuming a zero net debt level. The fair values as at 30 June 2007 of the identifiable Umicore Carve-out Group net assets were estimated by independent valuers, and will be updated as of the effective date of the acquisition of the Zinifex Carve-out Group and the Umicore Carve-out Group by the Company (31 August 2007), in connection with the preparation of the first financial statements of the Company. The goodwill recognised on the acquisition is attributable mainly to the Company’s workforce, insignificant intangible assets relating to supplier agreements which could not be quantified, and synergies expected to be achieved from integrating the Umicore Carve-out Group into Nyrstar. Details are set out in the table below:

(EUR millions) Provisional cost of acquisition of Umicore Carve-out Group ...... 977.2 Adjustment to zero net debt level at 30 June 2007 Š Net debt (refer to note (a) (ii)) ...... (140.4) Š Assignment of cash flow hedges (refer to note (b) (ii)) ...... (124.4) Total impact of zero net debt adjustment ...... (264.8) Book value of net assets acquired ...... (201.9) Fair value adjustments Š PP&E ...... (379.5) Š Inventory ...... (71.1) Š Investments in associates and joint ventures ...... (31.1) Š Related deferred tax impact ...... 153.7 Net impact of fair value adjustments ...... (328.0) Total goodwill adjustment ...... 182.5

(ii) The valuation of the Umicore Carve-out Group has been determined on an enterprise basis, assuming zero net debt. The Pro Forma Consolidated Balance Sheet gives effect to the zero net debt adjustment based on the net debt position of the Zinifex Carve-out Group and the Umicore Carve-out Group as at 30 June 2007. The zero net debt adjustment as at 30 June 2007 has been determined as follows:

Zinifex Carve- Umicore Carve- out Group out Group (EUR millions) Cash and cash equivalents ...... 74.6 95.3 Long-term borrowings ...... (1.2) (0.5) Short-term borrowings ...... (0.7) (266.3) Other cash and cash equivalent / borrowings balances ...... (43.4) 24.7 Net impact of zero net debt adjustment ...... 29.3 (146.8) Impact on total equity (reverse acquisition reserve) ...... 29.3 Impact on goodwill (reduction in purchase price) ...... (140.4) Impact on minorities ...... 6.4

(iii) The Zinifex Carve-out Group has been identified as the acquirer in the context of the business combination and its assets and liabilities have been recorded at their pre-combination carrying amounts, restated to comply with Nyrstar accounting policies. Joint ventures held by the Zinifex Carve-out Group were consolidated using the proportional method under Zinifex accounting policies. Under Nyrstar’s accounting policies joint ventures are accounted for using the equity method. As a result, the assets and liabilities of Australian Refined Alloys were derecognised and replaced by the share of the Group in the equity value of this joint venture. This accounting policy alignment has no impact on the Group’s equity. (iv) In a reverse acquisition, the amount recognised as equity is determined by adding the cost of the business combination to the pre-business combination equity of the accounting acquirer (Zinifex Carve-out Group). Because Umicore Carve-out and Nyrstar SA/NV are both deemed to be acquirees for accounting purposes, the cost of the business combination comprises the share capital issued by the Company for the purpose of acquiring the Umicore Carve-out Group, and the share capital issued by the Company at incorporation (the Company’s activities between its incorporation date and 31 August 2007 were minimal). Nyrstar funded the acquisition of the Zinifex Carve-out Group through the issuance of new shares and to a lesser extent with PF-11 financial debt. The new shares issued in this respect will be eliminated on consolidation, while the assumption by the consolidated entity of the related debt has resulted in an offsetting entry against shareholders’ equity.

The table below provides details of the determination of the pro forma consolidated equity attributable to the equity holders of the parent at June 30, 2007:

(EUR millions) Contributed equity of Zinifex Carve-out Group ...... 699.6 Pro forma adjustments impacting Zinifex Carve-out Group ...... 26.2 Provisional shares issued for acquisition of Umicore Carve-out Group ...... 883.8 Cost of contribution of Nyrstar ...... 0.1 Establishment costs (refer to note (c)(iii)) ...... (18.0) Impact of debt used to finance acquisition of Zinifex Carve-out Group ...... (138.7) Impact of net debt adjustment (per BCSA) on contributed equity of Zinifex Carve-out Group ...... (29.3) Equity attributable to equity holders of the parent ...... 1,423.7

(b) BCSA impacts The following adjustments have been recorded to reflect specific provisions of the BCSA:

(i) The assets and liabilities of the Hobart Smelter were acquired by the Group from Zinifex resulting in the tax value of the net assets transferred being higher than the carrying value and necessitating the recognition of a deferred tax asset of EUR 26.2 million. (ii) The Umicore Carve-out Group assigned all of its cash flow hedges to Umicore SA/NV for fair market value on 31 July 2007. A pro forma adjustment has been recorded in the Pro Forma Consolidated Balance Sheet to give effect to this transaction as if it had occurred on 30 June 2007, representing a net reduction in liabilities of EUR 124.4 million. Following this assignment, the related deferred tax asset has changed in its nature from a temporary difference to a tax loss carried forward.

(c) Nyrstar Maximum IPO Net Debt In respect of the Company’s net debt at the time of the listing, the BCSA specifies a maximum net debt position at the date of the IPO (Maximum IPO Net Debt) as follows: (i) That Nyrstar’s net debt at the time of the listing be at a prudent level as determined by the Company, Zinifex Limited and Umicore SA/NV. On 30 August 2007, the Company entered into a EUR 350 million multicurrency bridge revolving facility agreement with a consortium of banks. The facility is at an initial interest rate of EURIBOR +15 basis points; (ii) That Nyrstar also maintain a minimum cash balance of EUR 100 million to fund its normal operating cash cycle; and (iii) That the resultant Maximum IPO Net Debt (EUR 250 million) of the Company at 31 August 2007 be used to partially fund the purchase price for Zinifex Carve-out Group and the Umicore Carve-out Group, and to settle the establishment costs. The BCSA provides that the establishment costs incurred by the shareholders of Nyrstar on the Company’s behalf should be reimbursed to the shareholders by the Company prior to the listing of the Company. These costs amounted to approximately EUR 18 million. A pro forma adjustment has been recorded to equity to give effect to this liability as if it had existed at 30 June 2007.

The combined effect of the above provisions is that at 31 August 2007, the Company’s consolidated balance sheet should indicate a cash balance of EUR 100 million and financial debt of EUR 350 million. A pro forma adjustment has been recorded to give effect to the above assumptions as if they had occurred on 30 June 2007 and, accordingly, the Pro Forma Consolidated Balance Sheet as at 30 June 2007 reflects the above cash and financial debt balances.

PF-12 7. Notes to the Pro Forma adjustments — Pro Forma Consolidated Income Statement Information Before Net Financing Costs and Income Tax Expense for the six months ended 30 June 2007 Alignment of accounting policies JVs accounted Total Property, Lower of Non-metal Metal for under accounting Impact of Total pro Plant & Revenue Cost or inventory inventory equity policy business forma Equipment Recognition Market valuation valuation method alignments combination adjustments Notes to the pro forma adjustments (a) (b) (c) (d) (e) (f) (g) (EUR millions) Revenue ...... — — — — — (13.0) (13.0) — (13.0) Result from operating activities before depreciation and amortisation ...... — 1.1 (3.0) 26.6 (31.2) (5.1) (11.6) — (11.6) Depreciation and amortisation ...... 3.3 — (1.4) — — 0.9 2.8 (9.6) (6.8) Result from operating activities ...... 3.3 1.1 (4.4) 26.6 (31.2) (4.2) (8.8) (9.6) (18.4) Share of profit of equity accounted investees ...... — — — — — 4.2 4.2 — 4.2 Result before net financing costs and income tax ...... 3.3 1.1 (4.4) 26.6 (31.2) — (4.6) (9.6) (14.2) of which Group share ..... 3.1 1.1 (4.4) 26.6 (31.2) — (4.8) (9.6) (14.4) Minority share . . . 0.2 — — — — — 0.2 — 0.2

Notes (a) The increase of the useful lives of property, plant and equipment compared to those previously applied by Umicore SA/NV resulted in a reversal of depreciation charges amounting to EUR 3.3 million. (b) Under Umicore SA/NV accounting policies, revenue from refining activities was recognised when the metal reference stage (cathode) was reached. Nyrstar recognizes all revenue when the significant rewards of ownership have been transferred to a third party. The reversal of the revenue recognised by Umicore SA/NV in this context had a positive impact of EUR 1.1 million on the result from operating activities. (c) The Umicore Carve-out Group measured and recorded Lower of Cost or Market (LoCoM) charges on metal inventory within the income statement notwithstanding the fact that these LoCoM charges were potentially compensated by the gross margins to be realised upon the sale of the finished products containing this metal. Umicore SA/NV has reviewed the LoCoM charges previously recorded and has assessed the probability that these charges will be compensated by subsequent gross margin to be realised resulting in a decrease of the result from operating activities of EUR 4.4 million (including a EUR 1.4 million negative impact on amortisation). (d) The non-metal part of the Umicore inventories, composed of non-paid metal (i.e. refined zinc produced by the smelter over and above the metal content the smelter has paid for in concentrates it purchases from the miner), treatment charges and conversion costs was valued at the annual weighted average price. Nyrstar accounting policies require the non-paid metal and the treatment charges to be valued using the FIFO principle and the conversion costs to be valued at the three month average cost. This change has increased the result from operating activities by EUR 26.6 million. (e) The Umicore Carve-out Group holds inventories of metal containing base products of which the metal contents are classified in categories reflecting their specific nature and business use. Each category is valued using the weighted average. Nyrstar does not use these categories; therefore all metal inventory is valued at the weighted average price. The valuation impact of combining all metal categories and applying one weighted average to them within the metal price environment of 2007 has a negative impact on the result from operating activities amounting to EUR 27.6 million.

PF-13 Metal inventories of Umicore Carve-out Group are valued at the rolling monthly average zinc price whereas Nyrstar accounting policies require it to be valued using the weighted average method. This change results in a negative impact on the result from operating activities amounting to EUR 3.6 million. (f) The impact of the change in accounting policies results from the adoption of the equity method of accounting for joint ventures, which were previously, consolidated using the proportional method according to the Zinifex Limited accounting policies. These changes have no impact on the overall reported profit. (g) The additional depreciation charge arising from the recognition of the Property, Plant and Equipment of the Umicore Carve-out Group at their fair value amounts to EUR 9.6 million.

Other Notes

• No impact has been recorded in the Selected Pro Forma Consolidated Income Statement Information before net financing costs and income tax of the Group in respect of the fair value step up recorded to inventories as at 30 June 2007. • No pro forma adjustment has been recorded to reflect the incremental corporate costs that will be incurred by Nyrstar on the basis that the incremental amounts of such costs, i.e. the costs in excess of those recorded in the underlying financial information of the Zinifex Carve-out Group and the Umicore Carve-out Group, are not currently factually supportable. These incremental corporate costs, which have been estimated at between EUR 15 million and EUR 20 million on an annual basis, include: • New corporate office in London, and the creation of regional operating centres in Balen and Melbourne; • Remuneration of directors and executive management — the total remuneration paid to directors and executive management is not expected to exceed EUR 1.3 million for the remainder of the financial year 2007 and EUR 7.0 million for the financial year 2008); • Employee share acquisition plan which has an estimated cost of EUR 3.6 million at the time of grant. The cost of delivering the shares at the time of vesting of the Employee Awards may increase or decrease proportionately with an increase or decrease in the Company’s share price over the relevant period following the Offering; and • Executive long term incentive plan annual grants are estimated to have a notional cost of between EUR 3.8 million and EUR 7.6 million The cost of delivering the shares at the time of vesting of the Executive Awards may increase or decrease proportionately with an increase or decrease in the Company’s share price over the relevant period following the Offering.

PF-14 8. Notes to the Pro Forma adjustments — Pro Forma Consolidated Income Statement Information Before Net Financing Costs and Income Tax Expense for the year ended 31 December 2006

Alignment of accounting policies JVs Lower accounted Total Property, of Cost Non-metal Metal for under accounting Impact of Total pro Plant & Revenue or inventory inventory equity policy business forma Equipment Recognition Market valuation valuation method alignments combination adjustments Notes to the pro forma adjustments (a) (b) (c) (d) (e) (f) (g) (EUR millions) Revenue ...... — (4.7) — — — (19.2) (23.9) — (23.9) Result from operating activities before depreciation and amortisation .. — (4.7) 1.9 (4.0) 72.6 (7.7) 58.1 — 58.1 Depreciation and amortisation . . . 6.9 — 1.1 — — 1.8 9.8 (17.8) (8.0) Result from operating activities ..... 6.9 (4.7) 3.0 (4.0) 72.6 (5.9) 67.9 (17.8) 50.1 Share of profit of equity accounted investees ..... — — — — — 5.9 5.9 — 5.9 Result before net financing costs and income tax ...... 6.9 (4.7) 3.0 (4.0) 72.6 — 73.8 (17.8) 56.0 of which Group share .... 6.5 (4.7) 3.0 (4.0) 72.6 — 73.4 (18.0) 55.4 Minority share .... 0.4 — — — — — 0.4 0.2 0.6

Notes (a) The increase of the useful lives of property, plant and equipment compared to those previously applied by Umicore SA/NV resulted in a reversal of depreciation charges amounting to EUR 6.9 million. (b) Under Umicore SA/NV accounting policies, revenue from refining activities was recognised when the metal reference stage (cathode) was reached. Nyrstar recognizes all revenue when the significant rewards of ownership have been transferred to a third party. The reversal of the revenue recognised by Umicore SA/NV in this context had a negative impact of EUR 4.7 million on the revenue and on the result from operating activities. (c) The Umicore Carve-out Group measured and recorded Lower of Cost or Market (LoCoM) charges on metal inventory within the income statement notwithstanding the fact that these LoCoM charges were potentially compensated by the gross margins to be realised upon the sale of the finished products containing this metal. Umicore SA/NV has reviewed the LoCoM charges previously recorded and has assessed the probability that these charges will be compensated by subsequent gross margin to be realised resulting in an increase of the result from operating activities of EUR 3 million (including a EUR 1.1 million positive impact on amortisation). (d) The non-metal part of the Umicore inventories, composed of non-paid metal (i.e. refined zinc produced by the smelter over and above the metal content the smelter has paid for in concentrates it purchases from the miner), treatment charges and conversion costs was valued at the annual weighted average price. Nyrstar accounting policies require the non-paid metal and the treatment charges to be valued using the FIFO principle and the conversion costs to be valued at the three month average cost. This change has reduced the result from operating activities by EUR 4 million. (e) The Umicore Carve-out Group holds inventories of metal containing base products of which the metal contents are classified in categories reflecting their specific nature and business use. Each category is valued using the weighted average. Nyrstar does not use these categories; therefore all metal inventory is valued at the weighted average price. The valuation impact of combining all metal categories and applying one weighted average to them within the metal price environment of 2006 has a positive impact on the result from operating activities amounting to EUR 69.7 million.

PF-15 Metal inventories of Umicore Carve-out Group are valued at the rolling monthly average zinc price whereas Nyrstar accounting policies require it to be valued using the weighted average method. This change results in a positive impact on the result from operating activities amounting to EUR 2.9 million. (f) The impact of the change in accounting policies results from the adoption of the equity method of accounting for joint ventures, which were previously, consolidated using the proportional method according to the Zinifex Limited accounting policies. These changes have no impact on the overall reported profit. (g) The additional depreciation charge arising from the recognition of the Property, Plant and Equipment of the Umicore Carve-out Group at their fair value amounts to EUR 17.8 million.

Other Notes

• No impact has been recorded in the Selected Pro Forma Consolidated Income Statement Information before net financing costs and income tax of the Group in respect of the fair value step up recorded to inventories as at 30 June 2007. • No pro forma adjustment has been recorded to reflect the incremental corporate costs that will be incurred by Nyrstar on the basis that the incremental amounts of such costs, i.e. the costs in excess of those recorded in the underlying financial information of the Zinifex Carve-out Group and the Umicore Carve-out Group, are not currently factually supportable. These incremental corporate costs, which have been estimated at between EUR 15 million and EUR 20 million on an annual basis, include: • New corporate office in London, and the creation of regional operating centres in Balen and Melbourne; • Remuneration of directors and executive management — the total remuneration paid to directors and executive management is not expected to exceed EUR 1.3 million for the remainder of the financial year 2007 and EUR 7.0 million for the financial year 2008); • Employee share acquisition plan which has an estimated notional cost of EUR 3.6 million (the cost of actually purchasing the shares at the time they vest will vary directly with variations in the share price); and • Executive long term incentive plan annual grants are estimated to have a notional cost of between EUR 3.8 million and EUR 7.6 million (the cost of actually purchasing the shares at the time they vest will vary directly with variations in the share price).

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PF-16 CHAPTER II SUPPLEMENTARY NOTES TO THE NYRSTAR PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The Supplementary Notes to the Nyrstar Pro Forma Consolidated Financial Information provide supplementary information about the impact of the pro forma adjustments on selected balance sheet items as at 30 June 2007.

The Supplementary Notes to the Unaudited Nyrstar Pro Forma Consolidated Financial Information have been prepared and are intended for illustrative purposes only and address a hypothetical situation and therefore do not purport to represent the results of operations and the financial position that we would actually have obtained during the periods presented and are not necessarily indicative of the results we expect in future periods.

Supplementary Note S1 — Property, Plant and Equipment

Zinifex Umicore Carve-out Carve-out Pro Forma Adjustments Group Group Alignment Gross Net BCSA impacts to Nyrstar Elimination of Nyrstar Pro book book Business (excl. net debt net debt inter-company Forma Pro Forma as at 30 June 2007 values values combination alignment) level balances Consolidated (EUR millions) Land and buildings ...... 39.6 31.9 54.9 — — — 126.4 Plant, machinery and equipment . . 355.0 84.4 308.0 — — — 747.4 Furniture and vehicles ...... — 2.3 — — — — 2.3 Construction in progress ...... 37.4 17.9 (0.1) — — — 55.2 Total ...... 432.0 136.5 362.8 — — — 931.2 Accumulated depreciation ...... (101.3) — 5.7 — — — (95.6) Net book value at 30 June 2007 ...... 330.7 136.5 368.5 — — — 835.7

PF-17 Supplementary Note S2 — Deferred Taxes

Pro Forma Adjustments Alignment Zinifex Umicore Business BCSA impacts to Nyrstar Elimination of Nyrstar Pro Carve-out Carve-out combination (excl. net debt net debt inter-company Forma Pro Forma as at 30 June 2007 Group Group (a) alignment) level balances Consolidated (EUR millions) Deferred Tax Assets Property, plant and equipment ...... — — 2.5 24.9 — — 27.4 Inventories ...... — 1.0 — 1.3 — — 2.3 Accounts receivables ...... — 1.3 — — — — 1.3 Provisions for employee benefits . . . 6.3 3.6 (0.3) — — — 9.6 Provisions for environment ...... 16.8 3.9 — — — — 20.7 Other provisions ...... 25.4 0.3 — — — — 25.7 Trade and other payables ...... 1.4 51.3 (42.3) — — — 10.4 Sub-total ...... 49.9 61.4 (40.1) 26.2 — — 97.4 Tax losses carried forward ...... — 12.5 42.3 — — — 54.8 Other ...... — 0.5 — — — — 0.5 Total deferred tax asset ...... 49.9 74.4 2.2 26.2 — — 152.7 Compensation of assets/liabilities per fiscal entity ...... (15.0) (7.2) — — — — (22.2) Net amount ...... 34.9 67.2 2.2 26.2 — — 130.5

(a) Refer to section 6, note (b)(ii) of the Pro Forma Consolidated Financial Information.

PF-18 Pro Forma Adjustments Alignment Zinifex Umicore BCSA impacts to Nyrstar Elimination of Nyrstar Pro Carve-out Carve-out Business (excl. net debt net debt inter-company Forma Pro Forma as at 30 June 2007 Group Group combination alignment) level balances Consolidated (EUR millions) Deferred Tax Liabilities Property, plant and equipment ...... 16.8 0.9 129.5 — — — 147.2 Inventories ...... (0.8) 0.5 24.2 — — — 23.9 Accounts receivables ...... — 6.4 — — — — 6.4 Other provisions ...... — 0.1 — — — — 0.1 Trade and other payables ...... — 0.4 — — — — 0.4 Sub-total ...... 16.0 8.3 153.7 — — — 178.0 Other ...... (1.0) — — — — — (1.0) Total deferred tax liability ...... 15.0 8.3 153.7 — — — 177.0 Compensation of assets/liabilities per fiscal entity ...... (15.0) (7.2) — — — — (22.2) Net amount ...... — 1.1 153.7 — — — 154.8

Supplementary Note S3 — Trade and Other Receivables

Pro Forma Adjustments Alignment Zinifex Umicore BCSA impacts to Nyrstar Elimination of Nyrstar Pro Carve-out Carve-out Business (excl. net debt net debt inter-company Forma Pro Forma as at 30 June 2007 Group Group combination alignment) level balances Consolidated (EUR millions) Trade and Other Receivables Trade receivables ...... 209.6 274.5 (28.3) — — (46.7) 409.1 Other receivables ...... 111.9 5.9 (84.0) — — — 33.8 Fair value financial instruments held for Cash Flow hedging ...... — 18.1 — (18.1) — — — Fair value other financial instruments ...... — 18.3 — — — — 18.3 Total trade and other receivables ...... 321.5 316.8 (112.3) (18.1) — (46.7) 461.2

PF-19 Supplementary Note S4 — Employee Benefits The Group participates in a number of superannuation and retirement benefit plans. The plans provide benefit on retirement, disablement death, retrenchment or withdrawal from service, the principal types of benefits being lump sum defined benefits and lump sum defined contribution benefits. The amount included in the pro forma consolidated balance sheet arising from these plans is as follows:

Pro Forma Adjustments Alignment Zinifex Umicore BCSA impacts to Nyrstar Elimination of Nyrstar Pro Carve-out Carve-out Business (excl. net debt net debt inter-company Forma Pro Forma as at 30 June 2007 Group Group combination alignment) level balances Consolidated (EUR millions) Retirement Benefit Obligations Present value of funded obligations ...... 52.3 17.7 — — — — 70.0 Fair value of plan assets ...... 45.1 13.9 — — — — 59.0 Deficit (surplus) for funded plans . . . 7.2 3.8 — — — — 11.0 Present value of unfunded obligations ...... — 23.1 — — — — 23.1 Unrecognised past service (cost) benefit ...... — (0.6) — — — — (0.6) Net liability (asset) ...... 7.2 26.3 — — — — 33.5

Supplementary Note S5 — Trade and Other Payables

Pro Forma Adjustments Alignment Zinifex Umicore BCSA impacts to Nyrstar Elimination of Nyrstar Pro Carve-out Carve-out Business (excl. net debt net debt inter-company Forma Pro Forma as at 30 June 2007 Group Group combination alignment) level balances Consolidated (EUR millions)

Trade and Other Payables Trade payables ...... 99.0 123.3 (1.0) — — (46.7) 174.6 Payroll and related charges ...... 1.5 21.2 — — — — 22.7 Loans from Zinifex Group Treasury ...... 147.4 — (127.3) — — — 20.1 Accrued interest payable ...... — 0.3 — — — — 0.3 Fair value payable finance instruments held for Cash Flow hedging ...... — 142.5 — (142.5) — — — Fair value payable other financial instruments ...... — 14.3 — — — — 14.3 Accrued charges and deferred income ...... — 27.4 — — — — 27.4 Total trade and other payables . . . 247.9 329.0 (128.3) (142.5) — (46.7) 259.4

PF-20 Supplementary Note S6 — Provisions

Pro Forma Adjustments Alignment Zinifex Umicore BCSA impacts to Nyrstar Elimination of Nyrstar Pro Carve-out Carve-out Business (excl. net debt net debt inter-company Forma Pro Forma as at 30 June 2007 Group Group combination alignment) level balances Consolidated (EUR millions)

Provisions Provision for reorganisation and restructuring ...... — 2.3 — — — — 2.3 Provision for soil clean up and site rehabilitation ...... 85.6 43.5 — — — — 129.1 Other environmental provisions .... — — — — — — — Provisions for other liabilities ...... 29.1 1.1 (0.8) — — — 29.4 Total ...... 114.7 46.9 (0.8) — — — 160.8 of which current ...... 25.8 8.3 (0.5) — — — 33.6 non-current ...... 88.9 38.6 (0.3) — — — 127.2 Total provisions ...... 114.7 46.9 (0.8) — — — 160.8

Supplementary Note S7 – Segment Information Business segments The Group has identified the following business segments on the basis of the principal business activities and economic environments in which it operates: • Hobart Refinery; • Port Pirie Smelter; • Clarksville Refinery; • Budel Refinery; • Auby Smelter; • Balen Smelter (including the Overpelt site and Nyrstar Germany GmbH); • Chinese Operations (Föhl China Co., Ltd and Nyrstar Yunnan Zinc Alloys Co., Ltd); and • Other operations (mainly Padaeng Industry Public Company Ltd, Australian Refined Alloys Pty Ltd, Nyrstar Metals Pty Ltd, GM-Metal SAS and Galva 45 S.A.).

PF-21 Geographical segments The Group has identified the following geographical segments on the economic environments in which it operates: • Australia (including the Hobart Smelter, the Port Pirie smelter, Nyrstar Metals Pty Ltd and Australian Refined Alloys Pty Ltd; • Europe; (including the Budel Refinery, the Auby Smelter, the Balen Smelter (including the Overpelt site and Nyrstar Germany GmbH), GM-Metal SAS and Galva 45 SA); • America (Clarksville Refinery); • Asia (Föhl China Co., Ltd, Nyrstar Yunnan Zinc Alloys Co., Ltd and Genesis Recycling Technology (BVI) Ltd).

Business Segment Information for the Six Months Ended 30 June 2007

Chinese Hobart Port Pirie Budel Clarksville Balen Auby operations Other Eliminations Total (EUR millions) Total revenue ...... 355.2 300.2 389.8 205.6 753.1 228.0 75.2 45.6 (343.8) 2,008.9 External revenue ...... 347.5 299.6 374.5 202.2 474.4 198.4 75.2 37.1 — 2,008.9 Inter-segment revenue ...... 7.7 0.6 15.3 3.4 278.7 29.6 — 8.5 (343.8) — Profit from operating activities before depreciation and amortisation ...... 35.5 21.2 60.5 10.3 2.0 48.9 2.4 1.9 — 182.7 Depreciation and amortisation ...... (7.5) (6.5) (3.3) (3.4) (10.0) (7.0) (0.8) (0.6) — (39.1) Profit from operating activities ..... 28.0 14.7 57.2 6.9 (8.0) 41.9 1.6 1.3 — 143.6 Share of profits of equity accounted investees ...... — — — — — — (0.1) 7.6 — 7.5 Profit before taxes and net financing costs ...... 28.0 14.7 57.2 6.9 (8.0) 41.9 1.5 8.9 — 151.1 of which: Group’s share ...... 28.0 14.7 57.2 6.9 (8.0) 41.9 0.9 8.3 — 149.8 Minority interests ...... — — — — — — 0.6 0.6 — 1.3 Capital expenditure ...... (15.3) (13.6) (7.2) (3.8) (8.8) (4.2) (0.3) (0.8) — (54.0) Segments assets ...... 282.7 302.7 291.9 83.0 912.3 349.3 69.7 58.7 — 2,350.3 Investment in associates and joint ventures ...... — — — — — — 8.0 87.4 — 95.4 Segment liabilities ...... 101.6 130.3 179.6 31.9 319.9 171.5 16.0 51.3 — 1,002.1

PF-22 Geographic Segment Information for the Six Months Ended 30 June 2007

Australia Europe America Asia Eliminations Total (EUR millions) Total revenue 656.6 1,415.3 205.6 75.2 (343.8) 2,008.9 External revenue ...... 648.3 1,083.2 202.2 75.2 — 2,008.9 Capital expenditure ...... (28.9) (21.0) (3.8) (0.3) — (54.0) Segments assets ...... 592.3 1,603.2 83.0 71.8 — 2,350.3 Investment in associates and joint ventures ...... 36.7 — — 58.7 — 95.4 Segment liabilities ...... 241.6 705.7 31.9 22.9 — 1,002.1

Segment Information for the Year Ended 31 December 2006

Port Chinese Hobart Pirie Budel Clarksville Balen Auby operations Other Eliminations Total Total revenue ...... 682.6 425.7 752.4 300.9 1,093.9 489.1 80.1 61.2 (712.6) 3,173.3 External revenue ...... 648.8 424.4 718.9 300.9 593.2 354.2 80.1 52.8 — 3,173.3 Inter-segment revenue ...... 33.8 1.3 33.5 — 500.7 134.9 — 8.4 (712.6) — Profit from operating activities before depreciation and amortisation ...... 174.5 43.5 140.3 28.3 (26.1) 74.5 — 1.0 — 436.0 Depreciation and amortisation ...... (15.5) (10.3) (6.0) (3.8) (19.3) (14.2) (0.8) (0.9) — (70.8) Profit from operating activities ...... 159.0 33.2 134.3 24.5 (45.4) 60.3 (0.8) 0.1 — 365.2 Share of profits of equity accounted investees ...... — — — — — — (0.3) 15.4 — 15.1 Profit before taxes and net financing costs ...... 159.0 33.2 134.3 24.5 (45.4) 60.3 (1.1) 15.5 — 380.3 of which: Group’s share ...... 159.0 33.2 134.3 24.5 (45.4) 60.3 (0.8) 14.5 — 379.6 Minority interests ...... — — — — — — (0.3) 1.0 — 0.7 Capital expenditure ...... (23.5) (35.8) (13.2) (6.1) (15.3) (12.4) (0.5) (1.3) — (108.1)

Geographic Segment Information for the Year Ended 31 December 2006

Australia Europe America Asia Eliminations Total (EUR millions) Total revenue ...... 1,107.4 2,397.5 300.9 80.1 (712.6) 3,173.3 External revenue ...... 1,072.3 1,720.0 300.9 80.1 — 3,173.3 Capital expenditure ...... (59.3) (42.2) (6.1) (0.5) — (108.1)

PF-23 [THIS PAGE INTENTIONALLY LEFT BLANK] THE COMPANY Nyrstar NV Zinkstraat 1 2490 Balen Belgium LEGAL ADVISORS TO THE COMPANY As to Belgian law Linklaters LLP Baker & McKenzie CVBA Rue Brederode / Brederodestraat 13 Avenue Louise / Louizalaan 149 1000 Brussels 1050 Brussels Belgium Belgium As to U.S. law Linklaters LLP One Silk Street London EC2Y 8HQ United Kingdom THE SELLING SHAREHOLDERS Umicore SA/NV Zinifex Limited Rue du Marais / Broekstraat 31 Level 29, Freshwater Place 1000 Brussels 2 Southbank Boulevard Belgium Southbank Victoria Australia LEGAL ADVISOR TO THE SELLING SHAREHOLDERS As to Belgian law Linklaters LLP Rue Brederode / Brederodestraat 13 1000 Brussels Belgium As to U.S. law Linklaters LLP One Silk Street London EC2Y 8HQ United Kingdom INDEPENDENT AUDITORS OF THE COMPANY PricewaterhouseCoopers Bedrijfsrevisoren / Reviseurs Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren / Reviseurs d’Entreprises BCVBA/SCCRL d’Entreprises BCVBA/SCCRL Woluwe Garden Bourgetlaan / Avenue Bourget 40 Woluwedal 18 1030 Brussels Sint-Stevens-Woluwe Belgium Belgium INDEPENDENT AUDITORS OF THE SELLING SHAREHOLDERS Independent Auditor of Umicore SA/NV Independent Auditor of Zinifex Limited PricewaterhouseCoopers Bedrijfsrevisoren / Reviseurs KPMG d’Entreprises BCVBA/SCCRL 147 Collins Street Woluwe Garden Melbourne Woluwedal 18 Victoria 3000 1932 Sint-Stevens-Woluwe Australia Belgium JOINT GLOBAL COORDINATORS UBS Limited Deutsche Bank AG Goldman Sachs International 1 Finsbury Avenue 1 Great Winchester Street Peterborough Court London London 133 Fleet Street EC2M 2PP EC2N 2DB London United Kingdom United Kingdom EC4A 2BB United Kingdom JOINT BOOKRUNNERS UBS Limited Deutsche Bank AG Goldman Sachs Fortis Bank SA/NV KBC Securities SA/NV 1 Finsbury Avenue 1 Great Winchester Street International Montagne du Parc / Avenue du Port / London London Peterborough Court Warandeberg 3 Havenlaan 12 EC2M 2PP EC2N 2DB 133 Fleet Street 1000 Brussels 1080 Brussels United Kingdom United Kingdom London Belgium Belgium EC4A 2BB United Kingdom CO-MANAGERS Macquarie Europe Limited Royal Bank of Canada Bank Degroof SA/NV ING Belgium SA/NV Petercam SA/NV Level 30 Europe Limited Rue de l’Industrie / Avenue Marnix / Place Sainte Gudule / One Ropemaker Street 71 Queen Victoria Street Nijverheidstraat 44 Marnixlaan 24 Sint-Goedeleplein 19 London London 1040 Brussels 1000 Brussels 1000 Brussels EC2Y 9HD EC4V 4DE Belgium Belgium Belgium United Kingdom United Kingdom LEGAL ADVISOR TO THE JOINT GLOBAL COORDINATORS, JOINT BOOKRUNNERS AND CO-MANAGERS As to Belgian law Cleary Gottlieb Steen & Hamilton LLP Rue de la Loi / Wetstraat 57 1040 Brussels Belgium As to U.S. law Cleary Gottlieb Steen & Hamilton LLP 12, rue de Tilsitt 75008 Paris France [THIS PAGE INTENTIONALLY LEFT BLANK] Printed by RR Donnelley, 83107