Denver-based Manville (NYSE) is looking to sell its 50% interest in the Stillwater mine, the world’s only economically viable primary source of platinum group metals outside South Africa. Manville, an international manufacturing and natural resource company, has retained Salomon Brothers Inc. to solicit bids for the platinum and palladium mining operation, considered to be independent of its mainstream businesses.
“We have received numerous unsolicited bids from interested parties over the last several months,” stated Manville President Tom Stephens. “If we can realize a premium value for this asset today and reinvest the proceeds, we believe this would enhance overall shareholder value.”
Barbara Alexander, managing director for Salomon Brothers, called the property “an extraordinary prize” for any mining company. But she also stated that it would be of even greater value for those needing long-term supplies of platinum and/or palladium for their own use or as a precious metals investment opportunity.
Manville’s partner at Stillwater is Chevron Resources, an affiliate of Chevron USA. But it was Manville geologists that first discovered platinum and palladium within the 28-mile-long Stillwater complex in 1967.
Mining operations began in late 1986 after 20 years of exploration and development. The mine is processing at the rate of about 900 tons of ore per day and this is expected to reach 1,000 tons per day by the middle of this year.
Evaluation work is starting on a second deposit which Manville spokesman Trish Bergeron said “could be producing an additional 1,500 tons of ore per day by 1995.”
Bergeron told The Northern Miner that Manville is not looking to divest itself of the 50% owned mine because of financial problems or a need to raise cash. The company intends to retain its pre-existing 5% royalty interest in the revenues of Stillwater’s mining operations.
The mine produces platinum, palladium and much smaller amounts of rhodium, ruthenium, osmium and iridium. One of the largest markets for platinum group metals is pollution control catalysts, particularly for automobiles. More than 80% of the world’s platinum group metals are currently supplied by South Africa and the Soviet Union.
According to Manville, the JM Reef at Stillwater contains on average as much platinum per ton of ore as the famous Merensky Reef in South Africa and seven times the amount of palladium.
Partners Manville and Chevron are building a smelter in Columbus, 40 miles from the mine site. This new US$6.6-million facility will further process Stillwater concentrate (matte) before final refining and increase revenues. Construction is well under way and the smelter is expected to be completed and in operation by early June of this year.
A workforce of about 450 is employed at the profitable Stillwater mine which contributes more than US$33 million annually to the Montana economy in wages, taxes and related spending. The operating company has been commended by the U.S. Forest Service for its environmentally conscientious operations.
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