IMPROVED OPERATING PERFORMANCE, HIGHER ZINC PRICE LIFT PROFIT

Pasminco recorded a profit after tax and abnormal items of $23.4 million for the 2000 year, an increase of $31.7 million from 1999`s result, which was an $8.3 million loss. The result included an abnormal loss of $11.6 million relating to the impact of the change in Australia`s corporate tax rate from 36% to 30% on the Group`s carried forward tax losses. There were no abnormal items in 1999.

Despite the return to profit Directors consider it more prudent to apply cash flow to debt reduction, and have decided therefore not to declare a final dividend in respect of the 2000 year.

Higher production and sales volumes were achieved, including record production levels at the Company`s Hobart, Clarksville and Port Pirie smelters, and costs were lower overall. However, this was partly offset by lower sales premiums and higher financing costs.

Results benefited significantly from higher zinc prices and the stronger Australian dollar/Dutch guilder exchange rate, offset by lower lead prices. The Group also benefited from tax credits arising from start-up of the Century mine. The average realised Australian/US dollar exchange rate was virtually unchanged year on year.

"The profit after tax, before abnormals, represents a $43 million improvement over last year, and was driven by a strong improvement in profit from operations," said Managing Director and Chief Executive David Stewart. "However, it is by no means an acceptable outcome and we acknowledge the need for substantial further improvement in results and returns to shareholders."

"The record output levels and strong financial results achieved at a number of the Group`s sites, together with the continued contribution from Century, augurs well for the Group`s prospects in the current year. We remain committed to continuing the drive to reduce our cost base, and capture the benefits of the investments made in Century, acquisitions and operational upgrades during the past two years. "

External Factors

The average realised zinc price was 14% higher in 2000, at US$1,138/tonne, compared with US$994/tonne in 1999. The realised lead price was lower, averaging US$465/tonne compared with US$518/tonne in 1999.

The average realised Australian/US dollar exchange rate for 2000 was 62.9 cents, compared with 62.4 cents in 1999. Although the exchange rate was virtually unchanged year on year, the Group incurred currency losses on the expiry of out-of-the-money options and repayment of US$ loans. The Australian dollar/Dutch guilder exchange rate averaged 1.39 guilders, compared with 1.24 guilders in 1999.

The combined impact of the higher zinc price, stronger Dutch guilder and lower lead price was to increase operating earnings by $98 million.

Operating Performance

Output of zinc and lead from the Company`s mines and smelters was 17% higher than the previous year.

Mine production was assisted by the contribution from the Century mine, which became operational from 1 March, and is ahead of the planned ramp-up schedule.

The Group`s smelters achieved record production, 13% ahead of last year. Hobart, Port Pirie and Clarksville smelters all set new annual production records, partially offset by lower production at the Budel smelter in the Netherlands due to a maintenance shutdown, and disappointing performance at Cockle Creek.

Higher production and sales volumes and the contribution from Century added $14 million in operating earnings. Lower costs, including the impact of the Elura insurance claim, added $8 million to earnings.

Improved production performance was offset by lower metal premiums of $4 million.

Outlook

The external environment remains favourable for the Company, with zinc and lead stocks declining and prices currently trading above the average levels achieved over the 1999 year.

Pasminco is now seeing the results of the significant investment in mine development and smelter upgrades during the past two years, and with solid operating performance and the current metal price and exchange rate environment maintained, would expect to improve its financial results markedly and resume dividend payment in the coming year.

For further information contact:

Trevor Shard
Group Manager - Investor Relations
61 3 9288 9186 or 0419 584515

Peter Griffin
Group Manager - Public Affairs
61 3 9288 0463 or 0419 314 265

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