Market Overview

Stillwater Mining Company Reports Fourth Quarter and Full-Year 2016 Results

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LITTLETON, Colo., Feb. 16, 2017 (GLOBE NEWSWIRE) -- Stillwater Mining Company ("Stillwater" or "the Company") (NYSE: SWC) today reported financial results for the quarter and year ended December 31, 2016.

Fourth Quarter 2016 Highlights:

  • Announced proposed acquisition of Stillwater by Sibanye Gold Limited ("Sibanye") for USD$18 per share in cash
  • PGM mined sales of 134,500 ounces, an increase of 11.8% from 120,300 ounces sold during the fourth quarter of 2015
  • Costs of metals sold of $525 per PGM mined ounce, down 1.7% from $534 per PGM mined ounce for the fourth quarter of 2015
  • PGM mined production of 132,100 ounces, compared to 132,400 PGM mined ounces during the fourth quarter of 2015; fourth quarter 2016 planned mined production was reduced by approximately 3,000 ounces due to weather-related road closures
  • All-in sustaining costs (AISC)* of $661 per PGM mined ounce produced, up 7.8% from $613 per PGM mined ounce for the fourth quarter of 2015
  • AISC for the fourth quarter of 2016 includes $15 per PGM mined ounce spend on productivity enhancement projects
  • Processed 169,200 ounces of recycled palladium, platinum and rhodium, an increase of 30.4% over 129,800 ounces recycled during the fourth quarter of 2015
  • Cash and cash equivalents plus highly liquid investments of $450.1 million at quarter end
  • Consolidated net income attributable to common stockholders of $6.0 million, equivalent to net income of $0.05 per diluted share

Full-Year 2016 Highlights:

  • Achieved all 2016 guidance metrics
  • Achieved a record safety performance for the second consecutive year, with a reportable incidence rate improvement of 14.2% compared to 2015
  • PGM mined sales of 549,200 ounces, an increase of 8.3% from 507,300 ounces sold during 2015
  • Costs of metals sold of $509 per PGM mined ounce, down 12.1% from $579 per PGM mined ounce for 2015
  • PGM mined production of 545,300 ounces, a 4.7% increase from 520,800 PGM mined ounces during 2015
  • AISC of $622 per PGM mined ounce produced, an improvement of 12.3% from $709 per PGM mined ounce for 2015
  • Processed a Company record 668,300 ounces of recycled palladium, platinum and rhodium, an increase of 21.3% over 551,100 ounces recycled during 2015
  • Consolidated net income attributable to common stockholders of $9.5 million, equivalent to net income of $0.08 per diluted share

Proposed Transaction with Sibanye:

On December 9, 2016, the Company entered into an agreement with Sibanye, under which Sibanye will acquire the Company for $18.00 per share in cash, representing an aggregate enterprise value of $2.2 billion. The $18.00 per share transaction price represents a 61% premium to Stillwater's volume-weighted average share price over the 52 weeks prior to the announcement of the transaction, a 25% premium to its volume-weighted share price over the 30 trading days prior to the announcement and a 23% premium to its closing share price on December 8, 2016.

The closing of the merger is subject to certain conditions including shareholder and regulatory approvals. Additional details regarding the proposed transaction are available in the preliminary proxy statement that was filed with the United States Securities and Exchange Commission on January 24, 2017. Pending the receipt of all required approvals or waivers, the Company currently anticipates the completion of the merger during the second quarter of 2017.

Commenting on the fourth quarter and full-year 2016 results, Mick McMullen, the Company's President and Chief Executive Officer stated, "We are proud to announce today that Stillwater has again achieved all annual guidance targets. These achievements during 2016 are significant as they have been accomplished in conjunction with another record safety performance and simultaneous progress on the Blitz project throughout the year. The Company improved on its previous safety record, achieved just last year, with a 14.2% safety incidence rate improvement for 2016. In addition, the Company achieved a recycling record, processing 668,300 ounces of palladium, platinum and rhodium during 2016.

"We continue our focus on Blitz, our primary growth project. The progress on the two critical path items to first production, the 56 East development heading and the 53 East decline continues ahead of plan. In addition, the Benbow access portal, on the east end of the Blitz project advanced over 240 feet during the fourth quarter of 2016 and continues to accelerate its development rates.

"AISC increased in the fourth quarter as spending on productivity improvement projects continued and we expect to see the benefits of this spend in the coming quarters. In addition, severe winter weather resulted in road closures that prevented access to the mines for several shifts during December and resulted in the loss of approximately 3,000 ounces of production. Despite this, the Company met its guidance for the year."

Mr. McMullen concluded, "I would like to thank our team for the continuous focus on improvement in all areas of the business. These efforts have resulted in another strong quarter and year in which our stated goals were achieved."

Fourth Quarter and Full-Year 2016 Results:

For the fourth quarter of 2016, the Company reported consolidated net income attributable to common stockholders of $6.0 million, equivalent to net income of $0.05 per diluted share. For the fourth quarter of 2015, the Company reported consolidated net income attributable to common stockholders of $4.4 million, equivalent to net income of $0.04 per diluted share. The increase in net income for the fourth quarter of 2016 was impacted by the rise in the number of mined PGM ounces sold and the higher sales price per PGM mined ounce realized compared to the fourth quarter of 2015. Underlying earnings* attributable to common stockholders for the fourth quarter of 2016 were $7.1 million (after tax), which excluded transactional costs associated with the proposed acquisition of the Company by Sibanye.

For the full-year 2016, the Company reported consolidated net income attributable to common stockholders of $9.5 million, equivalent to net income of $0.08 per diluted share. In 2015, the Company reported a consolidated net loss attributable to common shareholders of $11.9 million, equivalent to a loss of $0.10 per share. The increase in net income reflects the larger number of mined PGM ounces sold and the decrease in average sales price per mined PGM ounce during 2016. Underlying earnings* for 2016 were $10.6 million (after-tax) adjusted for transactional costs associated with the proposed acquisition of the Company by Sibanye, compared to underlying earnings of $26.1 million (after-tax) for 2015, adjusted for an impairment charge, loss on repurchase of a portion of the convertible debentures and reorganization charges.

PGM Mine Production Comparison:

    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
(Produced ounces)   2016   2015   2016   2015
Palladium   60,600   63,400   250,500   246,400
Platinum   18,400   18,900   76,500   73,400
Stillwater Mine Total   79,000   82,300   327,000   319,800
                 
Palladium   41,200   39,000   169,700   156,500
Platinum   11,900   11,100   48,600   44,500
East Boulder Mine Total   53,100   50,100   218,300   201,000
                 
Palladium   101,800   102,400   420,200     402,900  
Platinum   30,300   30,000   125,100     117,900  
Total   132,100   132,400   545,300     520,800  

Mine Production segment revenues (including proceeds from the sale of by-products) totaled $105.9 million in the fourth quarter of 2016, an increase from $84.7 million for the fourth quarter of 2015. The combined average realized price for the sales of mined palladium and platinum increased for the fourth quarter of 2016 to $741 per ounce, compared to $667 per ounce realized in the fourth quarter of 2015. The total quantity of mined palladium and platinum sold in the fourth quarter of 2016 was 134,500 ounces compared to 120,300 ounces sold in the fourth quarter of 2015.

For the full-year 2016, the Company reported Mine Production segment revenues (including the proceeds for the sale of by-products) of $405.1 million, down from $415.8 million in 2015. The combined average realized price for the sales of mined palladium and platinum was $694 for 2016, a decrease from $774 per ounce realized in 2015. The total quantity of mined palladium and platinum sold in 2016 was 549,200 ounces compared to 507,300 sold during 2015.

Total costs of metals sold from PGM mined production increased to $70.7 million in the fourth quarter of 2016 from $64.3 million in the fourth quarter of 2015. For the full-year 2016 Mine Production costs of metals sold decreased to $279.3 million from $294.0 million in 2015.

Recycling Activity Comparison:

    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
    2016   2015   2016   2015
Average tons of catalyst fed per day   24.3     17.9     24.7     20.9  
Tons processed   2,239     1,651     8,999     7,638  
Tons tolled   430     503     2,671     2,923  
Tons purchased   1,809     1,148     6,328     4,715  
PGM ounces fed   169,200     129,800     668,300     551,100  
PGM ounces sold   134,900     108,700     401,100     340,200  
PGM tolled ounces returned   31,800     54,700     228,300     205,000  

Total recycled PGM ounces fed to the smelter during the fourth quarter of 2016 were up 30.4% from the prior year quarter to 169,200 ounces. For the full-year 2016, the Company processed a record 668,300 recycled PGM ounces, an increase of 21.3% from 2015.

PGM Recycling segment revenues totaled $109.4 million for the 2016 fourth quarter, an increase from $87.2 million in the same period of 2015. The Company's combined average realized price for sales of recycled palladium, platinum and rhodium increased to $792 per ounce in the fourth quarter of 2016 compared to $782 per ounce in the fourth quarter of 2015. Recycling sales volumes for the fourth quarter of 2016 increased to 134,900 ounces from 108,700 ounces sold in the fourth quarter of 2015. In conjunction, tolled ounces returned to customers decreased to 31,800 ounces for the fourth quarter of 2016 from 54,700 ounces in the fourth quarter of 2015.

PGM Recycling segment revenues totaled $305.9 million for full-year 2016, compared to $310.2 million in 2015. For 2016, the Company's combined average realized sales price for recycled palladium, platinum and rhodium was $736 per ounce, down from $886 per ounce for 2015.  Recycling sales volumes for 2016 totaled 401,100 ounces, an increase from 340,200 ounces sold for 2015. For 2016, tolled ounces returned totalled 228,300, an increase from 205,000 returned in 2015.

PGM Recycling segment costs of metals sold totaled $106.1 million in the fourth quarter of 2016, an increase from $84.6 million in the fourth quarter of 2015. For the full-year 2016, PGM Recycling segment costs of metals sold decreased to $294.9 million from $300.7 million for 2015. A majority of the costs of metals sold from recycling in each period is attributable to the acquisition cost of purchasing recyclable materials for the Company's own account; therefore, the aggregate costs of metals sold from the PGM Recycling segment is driven by the volume and the value of the PGMs in the materials purchased by the Company.

General and administrative costs were $9.4 million in the fourth quarter of 2016, compared to $6.4 million incurred during the same period of 2015. Contributing to the increase in the fourth quarter of 2016 was the $1.7 million of transactional costs associated with the potential acquisition of the Company by Sibanye. For the full-year 2016, general and administrative costs were $34.7 million compared to $34.0 million in 2015.

Costs of Metals Sold Per PGM Mined Ounce:

Costs of metals sold per PGM mined ounce totaled $525 for the fourth quarter of 2016, a decrease from $534 recorded for the fourth quarter of 2015. For the full-year 2016, costs of metals sold per PGM mined ounce totaled $509, a decrease from $579 for 2015.

All-In Sustaining Costs Per PGM Mined Ounce Produced:

AISC per PGM mined ounce produced totaled $661 for the fourth quarter of 2016, an increase from $613 recorded for the same period of 2015. AISC per PGM mined ounce produced during the full-year 2016 was $622, a decrease from $709 for 2015.

    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
All-In Sustaining Costs Per PGM Mined Ounce
Combined Montana Mining Operations
  2016   2015   2016   2015
Total combined cash costs per PGM mined ounce, net of by-product and recycling credits *   $ 454     $ 450     $ 438     $ 495  
PGM Recycling income credit per mined ounce   29     21     23     19  
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