Company-Wide Review of Operations Undertaken At Stillwater

BILLINGS, MT - Stillwater Mining Company mines palladium and platinum from two underground mines located in south-central Montana. These mines together produced 120,000 ounces of palladium and platinum during the third quarter of 2008, a decline of 6.7% from the 128,600 ounces produced in the third quarter last year. Production at the Company's Stillwater Mine decreased slightly to 83,800 ounces, compared to 85,400 ounces in third quarter 2007, while East Boulder Mine production dropped to 36,200 ounces from 43,200 ounces in last year's third quarter. Stillwater Mine's reduced production reflected lower combined ore grades in the active mining areas, while the lower East Boulder Mine production was affected primarily by higher than planned attrition and a consequent shortage of skilled manpower. More than offsetting the lower production, however, average sales realizations on mined palladium and platinum ounces increased to $652 per ounce in this year's third quarter, up from $499 per ounce in the same period last year.
The Company also operates a smelting and refining complex in Columbus, Montana. In addition to processing the Company's mine concentrates, these facilities recycle catalyst materials received from third parties. The Company processed recycling material containing a total of 126,100 PGM ounces through the smelter and refinery during the third quarter 2008, up 27.9% from 98,600 ounces recycled during the same period last year. Recycling activities contributed about $17.4 million to the Company's operating margin (before corporate overhead and financing charges) during the third quarter of 2008, compared to about $6.2 million in the third quarter of 2007. The improved performance is primarily attributable to higher realized prices for PGMs.
Stillwater reported a third quarter 2008 net loss of $0.3 million, on revenues of $248.7 million. This compares to a third quarter 2007 loss of $11.1 million on revenues of $163.1 million. The 2008 third-quarter included $6.4 million of unusual expense for write-downs of product inventories and long-term investments, driven mostly by the recent decline in realizable prices for platinum-group metals (PGMs), the Company's primary products, and in prices for equities.
Net income for the first nine months of 2008 was $20.1 million. This compares to the first nine months of 2007, when the Company reported a net loss of $14.6 million, or $0.16 per share. The stronger 2008 results were driven by significantly higher realized prices for PGMs and by growth in the volume of recycled material processed.
Regarding the Company's performance, Francis R. McAllister, Stillwater Chairman and CEO, commented; "While we are a bit disappointed to report a small loss in this year's third quarter, clearly our broader attention at this point is on the deteriorating economic situation worldwide and its effect on our industry. Prices for our primary metals, palladium and platinum, are off more than 60% from their highs earlier this year and recently declined to levels last seen in 2005. Consequently, we are now in the process of reviewing all operations, recognizing that at current prices we must make some adjustments to conserve cash. We expect to complete this Company-wide review in the near future and will provide more specific details at that time.
The company's address is 1321 Discovery Drive, Billings, MT 59102, (406) 373-8700, fax: (406) 373-8701, email: [email protected].