Stillwater Mine Production Inreases

 

COLUMBUS, MT - Stillwater Mining Complex mines palladium and platinum from two underground mines located in south-central Montana. Operations at the two mines were restructured in late 2008 to reduce costs in response to a sharp decline in PGM prices. Despite the restructuring, these mines together produced 124,800 ounces of palladium and platinum during the first quarter of 2009, a bit ahead of plan for the first quarter and a decline of only 3.3% from the 129,000 ounces produced in the same quarter last year. Production at the Company's Stillwater Mine increased to 92,900 ounces, compared to 85,300 ounces in first quarter 2008, while East Boulder Mine production decreased to 31,900 ounces from 43,700 ounces in last year's first quarter.

Stillwater Mine's higher production benefited from the transfer of miners from the East Boulder Mine as part of the Company's restructuring plan, while the lower East Boulder Mine production likewise followed from fewer miners as a result of the restructuring plan and from a cost-based focus in determining the areas to be mined there. The average combined sales realization on mined palladium and platinum ounces declined to $510 per ounce in this year's first quarter from $625 per ounce in the same period last year, reflecting the late 2008 decline in PGM prices.

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 38,600 ounces of platinum, palladium and rhodium through the smelter and refinery during the first quarter 2009, about half the 78,100 ounces fed into the smelter during the same period last year. Recycling activities contributed about $1.1 million to the Company's operating margin (before corporate overhead and financing charges) during the first quarter of 2009, compared to about $3.9 million in the first quarter of 2008.

Volumes of material available for recycling have dropped off sharply with the decline in PGM prices and in response to a managed reduction in advances to suppliers, reflecting the market's reduced incentive to recycle at lower prices and steep losses incurred by many collectors in the industry as the value of their inventories declined. Volumes available for recycling appeared to be recovering somewhat as the first quarter of 2009 progressed, but remained far below the robust levels seen during 2008 -- about as planned.

Addressing the Company's 2009 first quarter financial performance, Francis R. McAllister, Stillwater Chairman and CEO, commented; "While we reported a loss of $11.6 million in this year's first quarter, in the current economic environment our eye remained on managing toward preserving liquidity. I am pleased to report that, following the significant steps taken to restructure our operations during the fourth quarter of 2008, our liquidity remained stable during the first quarter of 2009. Available cash and cash equivalents increased to $170.8 million at March 31, 2009 from $161.8 million at the end of last year; if we include highly liquid short-term investments together with our available cash, our available liquidity increased slightly to $181.8 million from $180.8 million at year-end 2008 -- again, about as planned.

The company’s address is 536 East Pike Avenue, P.O. Box 1330, Columbus, MT 59019, (406) 322-8700, fax: (406) 322-8701, email: [email protected].