Stillwater Mining’s Board of Directors has launched a rebuttal campaign against a hostile bid by the Clinton Group hedge fund and former Montana Gov. Brian Schweitzer to take over the PGM miner’s board of directors.

In a letter mailed to Stillwater Mining shareholders Wednesday, the current Stillwater Board of Directors stated “…it is disappointing that a hedge fund, the Clinton Group, is waging a battle for control of your company even though it only recently acquired just 1.2% of our outstanding shares and has no relevant experience investing in mining companies.”

“At Stillwater, the Clinton Group has leveled a number of misguided criticisms and self-serving demands against the company which either (a) offer no new strategies that the board is not already pursuing, or (b) are misinformed and/or misdirected and will, in our view, be value-destructive for Stillwater’s shareholders,” the letter said.

The Stillwater board accused Clinton Group of “offering no new ideas to create shareholder value.” The Stillwater directors asserted that the Clinton Group alleged lack of experience in mining has been demonstrated in demands that “will be destructive to the value of your investment.”

The Clinton Group contends that since Norilsk sold its shares in Stillwater Mining, “Stillwater has engaged in two value-destructive acquisitions…spent imprudently on marketing and other administrative matters, and executed an unnecessarily costly and dilutive financing transaction.”

“Meanwhile, the board has more than doubled the Chief Executive Officer’s annul pay and granted its own members hefty pay increases as well,” Clinton asserted.

The two “ill-conceived acquisitions” defined by Clinton include Stillwater’s US$450 million purchase of Peregrine Metals, which owns the mining rights to the Altar copper and gold deposit, as well as Stillwater’s US$125 million purchase of Marathon PGM.

“Together, we believe these acquisitions succeeded in distracting management, siphoning cash away from the company’s core PGM business and destroying stockholder capital; all this in pursuit of a misguided strategy of ‘diversity’,” said Clinton.

The hedge fund also claims that without the presence of a majority stockholder such as Norilsk to check [Stillwater’s] management “the expense base of the company has grown substantially and is draining cash flow away from stockholders.”

The eight nominees Clinton would like to appoint to the Stillwater board include former Montana Gov. Brian Schweitzer, a rumored candidate for the U.S. Senate seat held by Sen. Max Baucus, D-Montana.

In an interview with the Associated Press published Wednesday, Stillwater CEO Frank McAllister declined to comment on the former Montana governor’s participation in the board takeover bid

These nominees would replace Stillwater CEO Frank McAllister; cease all spending in Argentina and look at selling the Altar asset; possibly also dump Stillwater’s Canadian Marathon asset; and accelerate spending at the company’s flagship Montana PGM operations.

The Clinton slate also seeks to cease all spending in the International Palladium Alliance, the marketing arm of PGM producers.

Stillwater’s current board contends it has already accelerated spending and development of the company’s Montana operations.  The directors said Stillwater is also pushing toward completing a final updated engineering study on its Marathon PGM-copper project in Canada as soon as possible, claiming Marathon “remains the only advanced palladium-focused project of scale in North America.”

“Abandoning Altar now would be imprudent and value destructive,” the Stillwater board contends. “Pursuing ‘forced’ monetization alternative for Altar at this time, particularly our ability to advance the project on a relatively limited budget to prove out its significant upside, will not serve to maximize shareholder value.”

Meanwhile, the Stillwater directors argued, “Eliminating palladium marketing removes the only industry support for a re-rating against platinum. Every additional ounce of palladium demand we can potentially help facilitate, directly or indirectly, is of critical importance to our operational results.”

“The Clinton Group has no experience managing a declining resource, expansion projects or mining at depth,” Stillwater’s board asserted. “Your board has extensive operational experience in global mining and has already revitalized Stillwater to become the leading North American PGM producer.”