Stillwater Mining Reports Profit for Second Quarter

 

COLUMBUS, MT - Stillwater Mining Company reported net profit for the 2009 second quarter of $4.2 million on revenues of $94.8 million. This compares to second quarter 2008 net income of $16.3 million on revenues of $233.1 million. The 2009 second quarter reflects much lower PGM prices than in the year earlier quarter, but also significant improvements in costs of production.

For the first six months of 2009, Stillwater Mining Company (the "Company") sustained a net loss of $7.4 million, or $0.08 per fully diluted share, on revenues of $180.6 million. In the first six months of 2008, the Company reported net income of $19.1 million, or $0.21 per diluted share, on revenues of $419.5 million. The first half of 2009 was characterized by much lower PGM prices and weaker performance from the Company's recycling segment than in the same period last year.

Operations at both mines in Montana were restructured in late 2008 to reduce costs and improve productivity in response to a precipitous drop in PGM prices. As a result of the Company's restructuring efforts, production of platinum and palladium at the Company's Stillwater Mine increased to 103,000 ounces in the second quarter of 2009 at a total cash cost of $318 per ounce(1), compared to 88,100 ounces in the same quarter of 2008 at a total cash cost of $357 per ounce. East Boulder Mine production in this year's second quarter decreased to 34,700 ounces at a total cash cost of $371 per ounce from 38,100 ounces at a total cash cost of $482 per ounce in last year's second quarter. Stillwater Mine's higher production benefited from the redeployment of miners from the East Boulder Mine as part of the Company's restructuring plan, while the lower East Boulder Mine production reflects reduced manpower as a result of the restructuring plan and a more cost-driven focus in determining the areas to be mined there. Productivity has improved at both operations in 2009. The average combined sales realization on mined palladium and platinum ounces, including the effect of contractual floor and ceiling prices, declined to $530 per ounce in this year's second quarter from $740 per ounce in the same period last year, reflecting the decline in PGM prices between the two periods.

The Company also operates a smelting and refining complex in Columbus, Montana. In addition to processing concentrates from the Company's mines, these facilities recycle catalyst materials purchased from or processed on behalf of third parties. Including both purchased and tolled material, the Company processed recycling material containing a total of 60,600 ounces of platinum, palladium and rhodium through the smelter and refinery during the second quarter 2009, slightly more than half the 115,000 ounces fed into the smelter during the same period last year. Recycling activities contributed about $1.6 million to the Company's operating margin (before corporate overhead and financing charges) during the second quarter of 2009, compared to about $5.8 million in the second quarter of 2008. Volumes of material available for recycling have dropped off sharply with the decline in PGM prices, reflecting the market's reduced incentive to recycle at lower prices, as well as the steep losses incurred by many collectors in the industry as the value of their inventories declined. Further, with new car sales sharply lower, existing vehicles are being driven longer reducing the number being recycled. Volumes available for recycling have strengthened somewhat as 2009 has progressed, but remain far below the robust levels seen during 2008.

Reviewing the Company's 2009 second quarter financial performance, Francis R. McAllister, Stillwater Chairman and CEO, commented: "Following the steep decline in PGM prices during the second half of 2008, Stillwater Mining Company undertook a significant restructuring of its operations in order to bring cash costs into line with the reality of market conditions. Although the process of realigning our business is still very much in progress, our results in the second quarter suggest we are making progress in implementing the restructuring. Combined total cash costs of our mining operations were $331 per ounce in this year's second quarter, down substantially from $396 per ounce for the full year 2008. Combining these lower total cash costs with our much reduced capital expenditure targets and a modest recovery in PGM prices to date in 2009, we not only have maintained our available liquidity essentially flat during the year as planned, but have enjoyed a profitable second quarter, as well.

The company’s address is 36 East Pike Avenue, P.O. Box 1330, Columbus, MT 59019, (406) 322-8700, fax: (406) 322-8701, email: [email protected].