SOURCE: Stillwater Mining Company

Stillwater Mining Company

July 14, 2010 18:15 ET

Stillwater Mining Company Corporate Update

BILLINGS, MT--(Marketwire - July 14, 2010) -  STILLWATER MINING COMPANY (NYSE: SWC) today released comments from its Chairman and Chief Executive Officer, Francis R. McAllister, regarding the status of various Company initiatives after the first six months of 2010. Similar observations were included in a recent letter to employees.

First, I would like to reiterate from Stillwater Mining Company's 2009 Annual Report that our "strategy is to increase our ounce production on a solid foundation of safety excellence, an adequate developed state, low cost operations and project based managed growth." A detailed review of growth opportunities is being carried out, for the most part on the Stillwater Complex, but also on opportunities outside the Stillwater Complex. In addition, a corporate review of the cost advantages of adding a precious metals refinery is underway.

There are also changes taking place at our recycling operations, including the addition of a second smelting furnace (completed in May 2009), a dedicated recycle preparation/sample plant (July 2010), and an x-ray assay facility (October 2010). All are designed to make our recycling activities more competitive and to capture a larger portion of a growing recycling business. 

As a result of this growth, most of our recycling business has now been consolidated into our Metallurgical Complex office building and processing facilities, located in Columbus, Montana, where its management, commercial and accounting activities are now based. These operations soon will be folded into a separate new corporate subsidiary, Stillwater Metals Company. 

We also have reestablished our corporate presence in Billings, Montana. As part of the recycling consolidation, all accounting functions except those directly involved with recycling have now been relocated from Columbus to our former offices in Billings. And to provide a more visible business presence as we move forward, we also have recently moved the Company's headquarters office back to Billings, although with a somewhat leaner staff than before.

Norilsk Nickel, our Russian affiliate, announced earlier this year that it is considering a sale of its Stillwater interest -- at the moment they own about 51% of our outstanding shares. Norilsk has met with Stillwater's management regarding its intent, and we have offered to provide whatever assistance they might need; but at present we do not know the details or the timing of their plans.

It's worth observing that Norilsk's 2003 investment in Stillwater Mining Company was a highly successful palladium "marketing" move following the 2000/2001 palladium price run-up and subsequent price collapse. The transaction provided the U.S. auto industry with assurance of the continuing availability of palladium for their catalytic converters. It also kept Stillwater operating at a time when our finances were badly squeezed by the fall in the price of palladium. 

Our remaining long-term PGM supply contract with Ford Motor Company will expire at the end of 2010. The floor prices in this and other previous automotive supply contracts have provided great benefit to Stillwater during periods of low palladium prices. Whether or not we will be able to renew them on similar terms is not yet known. However, the analyses included in our 2009 Annual Report, in separate sections entitled The Independent Review of Operations; The Case for Palladium; and PGM Recycling, would suggest that such contracts are no longer as critical to our future as they once were.

We learned some important lessons from the 2008 market collapse which will guide our planning and operations for the future -- with the recent modest retreat in PGM prices serving as a reminder. We must continue to be cost conscious even in periods when PGM prices are stronger, while at the same time carefully allocating our available resources toward maintaining and strengthening the Company. So right now our focus is centered on executing our operating plan, expanding our marketing efforts, driving the growth of our recycling business and making sure that we have a pipeline of internal and external growth projects to sustain us into the future. 

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Stillwater Mining Company is the only U.S. producer of palladium and platinum and is the largest primary producer of platinum group metals outside of the Republic of South Africa and the Russian Federation. The Company's shares are traded on the New York Stock Exchange under the symbol SWC. Information on Stillwater Mining can be found at its Website: www.stillwatermining.com.

Some statements contained in this news release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, therefore, involve uncertainties or risks that could cause actual results to differ materially. These statements may contain words such as "believes," "anticipates," "plans," "expects," "intends," "estimates" or similar expressions. These statements are not guarantees of the Company's future performance and are subject to risks, uncertainties and other important factors that could cause our actual performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Additional information regarding factors which could cause results to differ materially from management's expectations is found in the section entitled "Risk Factors" in the Company's 2009 Annual Report on Form 10-K. The Company intends that the forward-looking statements contained herein be subject to the above-mentioned statutory safe harbors. Investors are cautioned not to rely on forward-looking statements. The Company disclaims any obligation to update forward-looking statements.