Horsehead Holdings (ZINC +5.5%), North America's top zinc producer with 169K tons in sales last year, has several competitive advantages that could be strengthened with the opening of a major new plant and perhaps propel the company's shares by 40% or more, Barron's said in a weekend profile.
The Mooresboro, N.C., plant could lower ZINC's break-even costs by $0.20/lb. of zinc to $0.40-$0.45, vs. production costs of $0.85/lb. for miner Teck Resources (NYSE:TCK); the new plant also will produce a higher-grade of zinc than the now-closed facility in Monaca, Pa., greatly expanding ZINC's market.
Somerset Capital portfolio manager Ross Taylor thinks the new plant will be a game changer that could push ZINC's EBITDA to $180M-$200M by 2016.
Shares had spiked 10 days ago following a Seeking Alpha post by KL Investment Partners which also discussed ZINC's "transformative new facility."