Stillwater Advances Growth Strategy

BILLINGS, MT - Stillwater Mining Company reported consolidated net income for the 2012 first quarter of $2.4 million, or $0.02 per diluted share. Total revenues for the first quarter were $203.1 million. This compares to 2011 first quarter net income of $36.2 million, or $0.34 per diluted share, on revenues of $170.1 million. The results reflect 2012 first-quarter exploration expenses of $10.1 million, a $2.8 million write-off for a mineral exploration property, a $2.9 million foreign currency transaction gain, lower PGM prices and higher consolidated total cash costs. The higher revenues in the 2012 first quarter were driven by growth in recycling sales. The 2012 first quarter earnings per share also reflect an additional 12.0 million shares which were issued in October 2011 as part of the Altar acquisition.

The Company's mines produced a total of 120,800 ounces of palladium and platinum during the first quarter of 2012, a 7.9% decrease from the 131,200 ounce production in the first quarter of 2011 and a 6.0% increase from the 114,000 ounces produced during the fourth quarter of 2011. Most of the variability in production is the normal result of changes in mining conditions, the allocation of manpower and associated differences in mining productivities. Based on production results for the first quarter of 2012 and projections for the remainder of the year, the Company is reiterating its full year guidance for mined production of 500,000 ounces.

First quarter 2012 revenues from sales of mined production (including by-products) totaled $116.7 million, down from $122.0 million in the same period last year. Combined sales realizations decreased during the first quarter of 2012 for mined palladium and platinum ounces, averaging $875 per ounce, a 7.3% decrease from the $944 per ounce realized in the first quarter of 2011. The total quantity of mined palladium and platinum sold increased to 123,000 ounces in the first quarter of 2012, compared to 115,100 ounces sold during the same period in 2011, a 6.9% increase. Income in the first quarter of 2012 consisted of $28.3 million from mining operations and $2.4 million from recycling activities. For the first quarter of 2011, income from mining operations and recycling activities were $45.9 million and $2.9 million, respectively.

Total cash costs per mined ounce (a non-GAAP measure defined below) averaged $514 in the first quarter of 2012, compared to total cash costs of $437 per ounce for the first quarter of 2011. The increase in cash costs is primarily attributable to added labor in the miner training program, higher contractual wage and benefit rates, general inflation in supply costs and lower mine production. Taking these factors into account, costs for the 2012 first quarter were essentially on plan, so the Company is maintaining its total cash costs guidance of $500 per mined ounce for the full period of 2012.

During the first quarter of 2012, the Company processed recycling material containing 107,300 ounces of palladium, platinum and rhodium through the smelter and refinery, down slightly from the 115,600 ounces recycled during the first quarter of 2011. Recycling sales volumes, however, increased to 82,400 ounces in the first quarter of 2012, compared to 42,800 ounces in the first quarter of 2011, reflecting a higher proportion of recycling ounces purchased rather than tolled so far this year. Revenues from sales of purchased recycling materials totaled $85.7 million in the 2012 first quarter, up from $46.7 million in the same period last year. Tolling revenues declined to $0.7 million in this year's first quarter, compared to $1.4 million in the 2011 first quarter. The Company's recycling segment had net income for the first quarter of 2012 of $2.4 million (including financing income), compared to net income of $2.9 million reported for the first quarter of 2011. The Company's combined average realized price for sales of recycled platinum, palladium and rhodium declined to $1,039 per ounce in the 2012 first quarter from $1,094 per ounce in the first quarter of 2011.

Reviewing the Company's performance, Francis R. McAllister, Stillwater's Chairman and CEO, commented, "Overall, I am satisfied with the Company's performance during the first quarter. Mine output fell off early in the quarter but recovered as the quarter progressed and ended essentially on plan. On average, PGM prices were softer during the quarter than in the same period last year, but palladium and platinum prices did improve during the quarter over their lows at the end of 2011. As expected and as previously forecast, exploration expenses, primarily related to the Altar project, had a significant effect on our first quarter 2012 results. In addition, mined production was down from the exceptionally strong first quarter we experienced last year. I would like to point out that, although our first quarter 2012 operating performance was down in most respects from our performance in last year's first quarter, for the most part it was in-line with our internal expectations. Consequently, we are not adjusting our 2012 annual production guidance of 500,000 ounces or our guidance for total cash costs. Looking forward, I continue to believe that the supply and demand dynamics for PGMs -- and particularly for palladium -- are robust, and that our business will benefit from these fundamentals going forward.

"At our Altar copper-gold project in Argentina, the 2011-2012 exploration drilling season is now wrapping up with the onset of winter weather in the high Andes. During the drill season, a total of 72 new or deepened core holes totaling 27,000 meters were completed, adding significantly to the 149 core holes and 58,600 meters of delineation drilling completed previously. Once final assay results become available and are factored into our resource models, the Company anticipates providing an updated mineral resource estimate for Altar in late 2012. The exploration expense budget for the current drilling season is approximately $25 million. As most of the drilling work has now been completed, the majority of the costs for the 2011-2012 drilling season will be reflected as expense in first and second quarter 2012 results. The Company also continues to project exploration expenses of approximately $25 million at Altar for each of the next two drilling seasons. Though it is still early, we are highly encouraged by the initial indications from this year's drilling program at the Altar project.

"From an accounting standpoint, we must expense exploration costs. This was not previously an issue for the Company but with the Marathon and Altar acquisitions, both of which include exploration activities, we must now account for these costs through the income statement. These projects offer potential for future cash flow diversification and growth, but any significant financial benefit from these projects is at least five years away. Thus, in viewing our net income in the foreseeable future, shareholders should bear in mind that we are in the process of seeking to develop long term value for shareholders through these acquisitions.

"As we announced previously, the transaction with Mitsubishi Corporation related to our Marathon PGM-copper project in Canada has now been completed. Under this arrangement, Mitsubishi paid about $81.25 million dollars to acquire a 25% interest in our wholly owned subsidiary, Stillwater Canada Inc., which owns the Marathon project. In addition, the two companies contributed their respective 75/25 percent share of an initial cash call for Marathon, providing funding of $54.5 million within the venture, $40.9 million from Stillwater and $13.6 million from Mitsubishi. We are excited about this agreement as Mitsubishi represents a very strong, globally integrated business partner that will be able to assist in securing future financing of this project. Stillwater's total investment in these properties to date is about $159 million, suggesting a gain on the transaction of about $40 million, which will flow directly into equity under U.S. accounting rules governing proceeds from the sale of a minority interest. In terms of the Marathon project itself, we expect to submit our Environmental Assessment to the joint federal/provincial review panel by the end of the second quarter. This will be followed by a review process that is expected to require about a year to complete. Following final acceptance by the panel of the Environmental Assessment, we can begin the formal permitting phase of the project. In conjunction with these efforts, Stillwater has established and continues to build relationships with the communities in the area, including local First Nations and aboriginal groups.

"The Company continues to make progress at the Blitz and Graham Creek development projects, located adjacent to our existing mines. The launch chamber for the Blitz tunnel-boring machine (TBM) has been completed. We expect to take delivery of the TBM in May and June and, once installation is complete, place it into operation later this year or early next year. The plan for Blitz anticipates developing about 20,000 feet to the east of the existing Stillwater Mine infrastructure over a period of four or five years, using the TBM to develop on one level and driving a conventional drift parallel to the TBM and several hundred feet above it. We also hope to develop a new surface access that will intercept the Blitz development, accommodating workers and materials, as well as providing ventilation for the Blitz area.

The company's address is 1321 Discovery Dr., Billings, MT 59102, (406) 373-8700, fax: (406) 373-8701.