Despite the temporary suspension of the semi-autogenous grinding (SAG) mill at its platinum-palladium mine in Montana,
The mine cranked out 98,000 oz. combined platinum-palladium — considerably less than expected but still greater than the 92,000 oz. produced in the third quarter of 1999.
“If the SAG mill had not been taken down for the planned upgrade, we could have produced over 105,000 oz.,” says Stillwater Chairman William Nettles.
In all, the underground operation mined 171,000 tons in the recent 3-month period, or 13% higher than a year ago.
Earnings in the recent period totalled US$14.6 million (or 37 per share) on revenue of US$52.6 million, compared with year-ago income of US$5.1 million (13 per share) on revenue of US$32.2 million.
Cash operating costs, at US$310 per oz., were higher than anticipated, owing largely to expenses incurred by contract mining on the eastern side of the Stillwater mine. By comparison, cash costs in the third quarter of 1999 were US$217 per oz.
Nonetheless, the robust platinum and palladium markets resulted in operational cash flow of US$33 million, or more than US$10 million per month.
Stillwater realized US$571 per oz. combined platinum-palladium during the third quarter, compared with US$360 per oz. a year ago. The average price of palladium was US$696 per oz., whereas platinum was US$538 per oz.
A new 3-year operating plan is designed to improve throughput to 2,800 tons per day by the end of three years, though this is less than the 3,000 tons the company had originally targeted.
“While the projections are lower, we believe we have put the planning in place, coupled with infrastructure upgrades, to be able to execute and deliver on these projections,” Nettles says.
Meanwhile, the company is moving ahead with the East Boulder project, 13 miles west of its namesake mine. Two tunnel-boring machines have reached the J-M reef, with the second machine turning parallel to the reef for a 1,000-ft. lateral drift. Once completed, Stillwater will begin a 100-hole drilling program to delineate reserves in preparation for production. The company will also begin construction of underground shops, warehouses, a crushing station and a backfill plant. Construction of the portal was 85% complete at the end of the quarter.
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