Horsehead Holding Corp. (Nasdaq: ZINC) commented today on activities
surrounding the transition of zinc production from its Monaca,
Pennsylvania facility to the new plant in Mooresboro, North Carolina
along with other recent developments.
Update Highlights
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Today we started the heat-up cycle required to commission the
induction melting furnace at our new zinc facility in Mooresboro, NC.
The furnace is expected to be ready for production near the end of
January 2014. We expect the cellhouse to be ready to produce first
zinc cathode to feed the melting facility shortly after the furnace is
fully commissioned. Start-up of the lead circuit is still expected by
the end of the second quarter of 2014. The anticipated ramp-up curve
of both the zinc plant and the lead recovery circuit are unchanged
from our previous expectations. We still expect to generate $90 to
$110 million of incremental EBITDA from this investment once fully
ramped-up.
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The zinc oxide and high purity zinc metal refinery operation at the
Monaca facility ceased operation on December 23, 2013. The smelting
operation has been reduced from six furnaces to five furnaces as
remaining zinc feedstock at the site is being converted to Prime
Western grade zinc metal. The smelting operation is expected to be
closed within a few weeks after first zinc production in Mooresboro.
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Horsehead Corporation has signed an Amended and Restated Option and
Purchase Agreement with Shell Chemical LP that, among other matters,
extends the period of time during which Shell can continue to perform
its evaluation of the Monaca site. This agreement also provides for
the start of demolition and related activities at the Monaca site at
Shell’s expense commencing in the first quarter of 2014 with respect
to certain portions of the site.
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A joint venture known as ThirtyOx, LLC has been created with Imperial
Zinc Corp. for the acquisition and processing of zinc-bearing
secondary materials. The processing operation will be located in North
Carolina near the Mooresboro facility. The majority of the feedstock
for the Mooresboro facility will be supplied by Horsehead’s EAF dust
recycling plants. ThirtyOx, LLC is expected to supply a portion of the
incremental zinc feed required by the Mooresboro plant by recovering
secondary zinc oxides from the residues generated by galvanizers,
die-casters and other users of zinc metal. Horsehead’s required
investment is expected to be less than $2 million at this time. This
facility is expected to be operational by mid-year 2014.
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The Company converted the remainder of its Q1 2014 put options with an
85 cent per pound strike price to fixed price swap contracts for the
same period at an average price of approximately 90 cents per pound.
The swaps were transacted without any payment by the Company. This
brings the total quantity covered under the forward fixed price swaps
for Q1 2014 to 8,800 tons per month. We have no zinc hedge positions
beyond Q1 2014.
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The Company also sold its copper-based powders business located in
Palmerton, PA. The business unit was considered to be non-core and was
not making a positive contribution toward earnings. Certain assets and
the production of copper powders will be relocated by the purchaser,
Royal Metal Powders, Inc., a subsidiary of American Chemet, to its
Maryville, TN facility. The Company will continue to operate its zinc
powder business.
“As the transition of zinc production to our Mooresboro, NC facility is
in the final stages, we have agreed with Shell that demolition and
related activities can commence immediately at our Monaca plant in
certain areas which may be expanded once the smelter is closed. These
activities will be undertaken in a manner that should not adversely
affect the wind down of our operations in Monaca,” said Jim Hensler,
President and CEO.
“With the closure of the zinc oxide refinery at Monaca, we will service
our zinc oxide customers from our facility at Zochem where our expansion
plans are on-schedule to meet our customer’s needs. We are excited that
we are entering the final weeks of this transition period of zinc metal
and zinc oxide production,” said Jim Hensler.
About Horsehead
Horsehead Holding Corp. (“Horsehead”) (Nasdaq: ZINC) is the parent
company of Horsehead Corporation, a leading U.S. producer of specialty
zinc and zinc-based products and a leading recycler of electric arc
furnace dust; The International Metals Reclamation Company (“INMETCO”),
a leading recycler of metals-bearing wastes and a leading processor of
nickel-cadmium (NiCd) batteries in North America; and Zochem Inc., a
zinc oxide producer located in Brampton, Ontario. Horsehead,
headquartered in Pittsburgh, Pa., employs approximately 1,100 people and
has seven facilities throughout the U.S. and Canada. Visit www.horsehead.net
for more information.
Cautionary Statement about Forward-Looking Statements
This press release contains forward-looking statements, including
statements about business outlook, future operating levels and
liquidity, proposed initiatives and strategy, financial and performance
targets and statements about historical results that may suggest trends
for our business. These statements are based on assumptions, estimates
and information available to us at the time of this press release and
are not guarantees of future performance. There are several factors that
may cause our actual results to differ materially from the
forward-looking statements, including, among others, the impact of
future market conditions or unexpected production disruptions, including
labor disruptions associated with the wind down of our Monaca facility,
on our results of operations, our future operating costs and production
levels and our expansion plans and initiatives, our ability to
successfully implement and maintain past and future price increases, our
ability to achieve the benefits we expect to achieve from the new zinc
plant once fully operational, the ultimate cost to construct and start
up the Mooresboro plant and our ability to pay these costs and maintain
adequate liquidity, and the success and timing of the start up of our
Mooresboro plant and our expansion plans and initiatives and their
impact on our future capabilities, capacity and production costs and our
financial results. Our actual results, performance or achievements could
differ materially from those expressed in, or implied by, the
forward-looking statements. We can give no assurances that any of the
events anticipated by the forward-looking statements will occur or, if
any of them does, what impact they will have on our results of
operations and financial condition. You should carefully read the
factors described in the “Risk Factors” section of our filings with the
Securities and Exchange Commission for a description of certain risks
that could, among other things, cause our actual results to differ from
these forward-looking statements. All forward-looking statements are
qualified in their entirety by this cautionary statement, and we
undertake no obligation to revise or update this earnings release to
reflect events or circumstances after the date hereof.
Copyright Business Wire 2013