Horsehead Holding Corp. Provides Update on Recent Events

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

• 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.
• 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.
• 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.
• 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.
• 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.
• 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.