Glossary

A

All in sustaining cost net of by-product credits (“AISC”)

Is defined as sustaining cash cost, net of by-product credits plus corporate general and administrative expenses, royalties and workers’ participation.

B

Brownfields project

An exploration or development project near or within an existing operation, which can share infrastructure and management.

By-products

A wide variety of chemical and metallurgic by products generated during the production processes in our smelters and mines to a broad customer base, which includes more than 25 different by-products, most of which are sold based on the characteristics of each market or region.

C

Cash cost net of by-product credits | Mining segment

For our mining operations, cash cost after byproduct credits includes all direct costs associated with mining, concentrating, leaching, solvent extraction, on-site administration and general expenses, any off-site services essential to the operation, concentrate freight costs, marketing costs and property and severance taxes paid to state or federal agencies that are not profit-related. Treatment and refining charges on metal sales, which are typically recognized as a deduction component of sales revenues, are added to cash cost. Cash cost net of by-products credits is measured with respect to zinc sold per mine.

Cash cost net of by-product credits | Smelting segment

For our smelting operations, cash cost, after by-product credits includes all the costs of smelting, including costs associated with labor, net energy, maintenance, materials, consumables and other on-site costs, as well as raw material costs. Cash cost net of by-products credits is measured with respect to zinc sold per smelter.

Concentration

The process by which crushed and ground ore is separated into metal concentrates and reject material through processes such as flotation.

Concentrate plant

A plant where metal concentration occurs.

Cut-off grade

Is the grade (i.e., the concentration of metal or mineral in rock) that determines the destination of the material during mining.

D

Development

The process of constructing a mining facility and the infrastructure to support the facility is known as mine development.

Diamond drilling

A method of drilling that uses a diamond bit, which rotates at the end of a drill rod or pipe. The opening at the end of the diamond bit allows a solid column of rock to move up into the drill pipe and be recovered at the surface. This column of rock is named drill core and is used for geological, geotechnical logging and for sampling for chemical analysis to define the metal content of the rock or mineralized material. Standard core sizes/diameters are 63.5 mm (defined as HQ), 46.7 mm (defined as NQ) and 36.5 mm (defined as BQ). Most drill rods are 10 feet long. After the first 10 feet are drilled, a new section of pipe is screwed into the top end, so the combination of pipes can be driven another 10 feet into the ground.

E

Exploration

Activities associated with ascertaining the existence, location, extent or quality of a mineral deposit.

Exploration stage property

Is a property that has no mineral reserves disclosed.

F

Free Zinc

Is the difference between the amount of zinc that is paid for in the concentrates and the total zinc recovered for sale by the smelter. The value of the zinc that is paid for corresponds to 85.0% of zinc content, which has historically been the industry standard, multiplied by the LME price of zinc. The zinc content which is not paid for is considered “free zinc.” The margin of a zinc smelter improves as the amount of metal in zinc concentrates that it can recover increases.

G

Greenfields project

An exploration or development projects that is located outside the area of influence of existing mine operations and/or infrastructure and will be independently developed and managed.

H

Homemarkets

Defined as our Latin America market, excluding Mexico.

I

Indicated Mineral Resource

Is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling.

Inferred Mineral Resource

Is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling.

J

K

L

LME

London Metal Exchange

LOM

Life of mine

M

Measured Mineral Resource

Is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling.

Metal concentrate

The crushed and ground material obtained after concentration, including zinc, lead and copper concentrates. This is the product from our mining operations. Most of the zinc concentrate we produce is used in our smelting operations and the remaining portion, along with our lead and copper concentrates, is sold to our customers.

Metallic zinc

Pure metal (99.995% zinc) obtained from the electrodeposition of a zinc sulfate solution, free of impurities, through the Roaster-Leaching-Electrolysis (“RLE”) process.

Mineralization

The process or processes by which a mineral or minerals are introduced into a rock, resulting in a potentially valuable or valuable deposit.

Mineralized material

Mineral bearing material that has been physically delineated by one or more methods, including drilling and underground work, and is supported by sampling and chemical analysis. This material has been found to contain a sufficient amount of mineralization of an average grade of metal or metals to have economic potential that warrants further exploration evaluation. While this material is not currently or may never be classified as ore reserves, it is reported as mineralized material only if the potential exists for reclassification into the reserves category. This material cannot be classified in the reserves category until final technical, economic and legal factors have been determined. Under the SEC’s standards, a mineral deposit does not qualify as a reserve unless it can be economically and legally extracted at the time of reserve determination and it constitutes a proven or probable reserve (as defined below).

Mineral Reserve

Is an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.

Mineral Resource

Is a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable.

Mine site

An economic unit comprised of an underground and/or open pit mine, a treatment plant and equipment and other facilities necessary to produce metals concentrates, in existence at a certain location.

N

NSR

Net Smelter Return is the net revenue that the owner of a mining property receives from the sale of the mine’s metal/nonmetal products less transportation and refining costs.

NYSE

New York Stock Exchange.

O

New York Stock Exchange.

Surface mining in which the ore is extracted from a pit. The geometry of the pit may vary with the characteristics of the ore body.

Ore

A mineral or aggregate of minerals from which metal can be economically mined or extracted.

Ore grade

The average amount of metal expressed as a percentage, grams per tonne or in ounces per tonne.

P

PEA

Preliminary Economic Assessment

Premium

Is a price/charge based over the base LME price on sold metallic zinc and zinc oxide products to customers, which reflects a combination of factors, including the service provided by the smelter in delivering zinc or lead of a certain size, shape or quality specified by its customers and transportation costs, as well as the conditions of supply and demand 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 market dynamics.

Probable Mineral Reserve

Is the economically mineable part of an indicated and, in some cases, a measured mineral resource.

Production stage property

Is a property with material extraction of mineral reserves.

Proven Mineral Reserve

Is the economically mineable part of a measured mineral resource and can only result from conversion of a measured mineral resource.

Q

R

S

SEC

Securities and Exchange Commission.

Secondary feed materials

By-products of industrial processes such as smelting and refining that are then available for further treatment/recycling. It can cover foundry ashes, zinc oxides from brass and bronze production, electric arc furnace (“EAF”) dust and slags.

Sustaining cash cost net of by-product credits

Sustaining cash cost, net of by-product credits is defined as the cash cost, net of by-product credits plus non expansion capital expenditure, including sustaining health, safety and environment, modernization and other non-expansion related capital expenditures.

T

Tailings

Finely ground rock from which valuable minerals have been extracted by concentration.

Tonne

A unit of weight. One metric tonne equals 2,204.6 pounds or 1,000 kilograms. One short tonne equals 2,000 pounds. Unless otherwise specified, all references to “tonnes” in this report refer to metric tonnes.

Treatment charge (“TC”)

Is a discount per tonne of concentrates, which is determined by negotiation between the seller (a mine or a trading company) and the buyer (a smelter). Treatment charges can be benchmark TC (negotiated by the major miners and buyers), spot or negotiated.

U

V

W

X

Y

Z

Zinc equivalent

A metric used to compare mineralization that is comprised of different metals in terms of zinc. Copper, lead, silver and gold contents in our concentrate production converted to a zinc equivalent grade at the average benchmark prices.

Zinc oxide

A chemical compound that results from the sublimation of zinc (Zn-metal) by oxygen in the atmosphere. Zinc oxide is in the form of powder or fine grains that is insoluble in water but very soluble in acid solutions.