Stillwater improves production forecast

Emerging from a period of development glitches at its namesake operation in south-central Montana, platinum producer Stillwater Mining (SWC-X) is confident it has turned the corner and anticipates stronger results in the fourth quarter.

For the current year, Stillwater expects to produce 400,000 oz. platinum and palladium at a cash operating cost below US$195 per oz. However, in 2000, output should rise to 525,000-575,000 oz. at US$155-175 per oz. The projection is based on an average headgrade of 0.69 oz. per ton and a recovery rate of 91%. Throughput, by the end of 2000, is expected to approach 3,000 tons per day.

“The fact that production has started to increase reinforces our belief that the third quarter was the bottom,” says Chairman William Nettles. Production during that 3-month period was 94,000, or 17% short of target, whereas cash costs were US$217 per oz.

Since the third quarter, Stillwater has steadily increased the number of working faces, as well as the amount of sublevel mining, which is said to be well-suited to the vertically oriented J-M reef.

Meanwhile, construction at the East Boulder project, on the western edge of the J-M Reef, is continuing on schedule. The tailings plant and all surface buildings are complete and two tunnel-boring machines are progress.

Stillwater is also benefiting from stronger palladium prices, which recently exceeded US$440 per oz. — an increase attributable to uncertainty in the Russian market (a 5% export tax imposed on precious metals put an end to Russian shipments in May).

Platinum prices have been hovering around, and above, US$420 per oz.