Vancouver — The Stillwater and East Boulder mines failed to turn a profit for
The company owns and operates the Stillwater and East Boulder mines in Montana, as well as a nearby smelter and refinery. These operations incurred a net loss of US$1.2 million on revenue of US$127.4 million in the latest quarter, compared with earnings of US$13.9 million on revenue of US$100.7 million a year earlier.
The two underground mines produced 111,000 oz. palladium and 33,000 oz. platinum (or 144,000 oz. combined platinum group metals) in the first three months of this year, compared with 114,000 oz. palladium and 34,000 oz. platinum (148,000 oz. combined PGMs) a year earlier.
Ore at both mines is taken from the J-M reef, which has sufficient reserves and resources to operate for many years to come. The bulk of production still comes from the company’s namesake mine, which produced 105,000 oz. combined PGMs in the latest quarter.
Production from the newer and less developed East Boulder mine fell 9% to about 39,000 oz. from 43,000 oz. year earlier. This modest shortfall was attributed to refurbishment work.
Total cash costs in the latest quarter rose to US$314 per oz. PGMs from US$284 per oz. a year earlier. The combined average realized price was US$459 per oz. PGM, down modestly from US$482 per oz. a year earlier.
Stillwater has set four main goals: optimize the production and cost structure at its namesake mine; increase development at East Boulder in order to realize the benefits of operating at design capacity; expand its PGM recycling business; and raise awareness of palladium’s properties in order to increase demand for the metal.
The company wants to make the East Boulder mine more efficient. Toward that end, two ventilation shafts are being sunk. This and other improvements will allow full and better use of equipment and boost throughput.
Stillwater has pumped up development spending at both mines in order to boost production in the coming years. In the latest quarter, for example, primary development at Stillwater was up 15% to 9,153 ft., while development at East Boulder was up 58% to 5,762 ft.
Stillwater is the only producer of palladium and platinum in the U.S. Its largest shareholder is Russia’s Norilsk Nickel (NILSY-O).
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