Mining improvements positively impact Stillwater's 3Q bottom line

While Stillwater lost the GM contract, struggled with lower PGM prices, and lower recycling volumes, the Montana-based PGM miner still reported a good quarter, thanks to significant operational improvements.

RENO, NV - 

Significant improvements in production costs counteracted lower PGM prices and lower recycling volumes to help the only U.S. PGM miner report a net profit of $4.4 million or 5-cents per share during the third quarter of this year.

Stillwater CEO Frank McAllister said, "I am very pleased to report that the company is making significant strides forward in redesigning its operations and improving mining operations. ...This restructuring of the way we operate is an urgent priority particularly in view of the expiration of our supply agreement with Ford at the end of the year."

"In the past, the floor prices of the automotive contracts have protected us during periods of low PGM prices," McAllister noted.  "The expiration of the floor prices will require us to be more resilient in responding to any downward pricing cycles. While there is still progress to be made in this area, I am particularly encouraged by the broad support within our company for these efforts and by the successes demonstrated to date."

Meanwhile, Stillwater has updated its full-year 2009 production guidance from 495,000 PGM ounces to 515,000 PGM ounces. Mine production in the third quarter was 129,100 PGM ounces or 79% of Stillwater's full-year target, bringing nine-month production to 391,600 ounces, well ahead of the production rate required to meet the original 2009 production guidance.

Stillwater also reported combed total cash costs for the third quarter at $357 per ounce and nine-month total cash costs averaging $363/oz. The company revised its 2009 guidance from $399/oz to $375/oz.

"On balance," McAllister said, "I believe we are on track to achieve and exceed most of the operational objectives we set for ourselves for 2009. As we had planned, to date our cash position is not only stable,  but actually growing; our capital and operating expenditures remain at or better than targeted levels; mine production should meet or exceed annual guidance; and morale at our operations continues to be positive."

"Despite the anguish associated with our earlier employee cutbacks and restructuring, our workforce has come through magnificently and I commend their initiative and resolve in response to these difficult adjustments," he added.

Despite the aforementioned improvements, Stillwater still reported a net loss of $3 million or negative 3-cents per share for this first nine months of this year, compared to a net income of $19.2 million or 21-cents per share for the same period of 2008.

For the third-quarter 2009, Stillwater reported a net income of $4.4 million or 5-cents per share, up from the third-quarter 2008 net income of $100,000 or less than one-cent per share. "Although the 2009 third quarter reflects sharply lower PGM prices and much lower recycling volumes processes than last year's third quarter, the significant improvements in costs of production have contributed significantly towards the profitability."

Disclaimer

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