STILLWATER MINING
COMPANY SWC reported today that its mined
production of palladium and platinum for the fourth quarter 2012 was
132,500 ounces and for the year 2012 was 513,700 ounces, exceeding
the Company's 2012 guidance of 500,000 ounces. Mined production for
2011 was 517,900 ounces. The Company also reported that mine
production guidance for 2013 is again projected at 500,000 ounces.
While not yet finalized, 2012 total cash costs per mined ounce (a
non-GAAP measure of extraction efficiency that is further defined in
the Company's filings with the U.S. Securities and Exchange Commission) are expected to be at or slightly below 2012 guidance of
$500. These will be above total cash costs per mined ounce of $420
for 2011.
Total cash costs for 2013 are expected to average about $560 per
mined ounce, reflecting ongoing increases in infrastructure
requirements at both of the Company's Montana mines as they continue
to go deeper and expand outward, increases in contractual labor
commitments, ongoing growth in the Company's workforce, training,
safety and mine support efforts to enable the Company's Montana
expansion projects, as well as general inflation. While the Company's
PGM industry peers face similar cost pressures from deepening and
receding face dynamics, Stillwater has fared better due to the
stratigraphy of its ore reserve and a more stable operating
environment. Furthermore, Stillwater has benefitted from palladium's
improved price relationship to that of platinum. For the past 24
months, the palladium-to-platinum price relationship has averaged
42%, compared to 26% between 2003 and 2010. This improved price relationship has positioned Stillwater as one of the lowest cost
primary PGM producers in the world. Given the positive outlook for
demand in the auto industry and expected favorable supply-demand
dynamics for palladium, the Company believes there is an opportunity
for the palladium-to-platinum price relationship to tighten further.
On the recycling side, the Company's volumes increased in the fourth
quarter 2012 to 118,600 ounces as PGM prices rebounded late in the
year and new shippers emerged. Recycling volumes, which are price
sensitive, had dipped during the middle part of 2012, but rebounded
as PGM prices increased during the fourth quarter. Total recycling
volumes for the year 2012 were 445,200 ounces of palladium, platinum
and rhodium compared to 486,700 ounces for 2011.
Commenting on the 2012 results, Frank McAllister, the Company's
chairman and CEO, stated, "These are dynamic times in the PGM
industry. Our mines continue to perform very well, with stable
production, well controlled, competitive cost structures and comparatively modest sustaining capital requirements, while other PGM
producers face very significant production, labor and cost
challenges. The dynamics of our industry are driven by continued
strong growth in demand, particularly for palladium, in the face of
ever increasing supply constraints globally. At this point, we find
ourselves one of the few PGM producers projecting a long-term growth
profile in PGMs, which we believe is built atop a foundation of
stable, highly cost-competitive and long-lived existing operations.
In particular, I am pleased to observe that the significant
investment we have made in the development of our Montana operations
these past several years has now progressed to the point where we can
begin to quantify the level of future growth achievable at those
operations.
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