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Stillwater Mining reports third-quarter losses

Stillwater Mining Co., the nation’s only producer of platinum and palladium, reported third-quarter losses of $1.6 million Monday, citing poor metal prices.

By BECKY BOHRER Associated Press Writer Montana Tracker in the Missoulian

The losses compared with a net income of $4.7 million during the same quarter last year, when officials with the Columbus-based company said prices for the two metals were considerably stronger. The decline translates into a loss of 2 cents per share for the quarter, compared with an 11-cent per share gain during the same period last year.

Officials told investors and others in a conference call Monday that continued lower palladium prices could affect the overall value of the company’s assets and require a reduction in ore reserves.

The timing of any writedown is still unclear and depends on several factors, including the price of the metal, said Francis McAllister, chairman and chief executive officer. But he said any adjustments are not expected to affect workers or operations.

Officials also said annual production was expected to fall below its forecast of 615,000 ounces of platinum and palladium to 574,000 ounces. McAllister said a big reason for the change is lower than expected productivity at Stillwater Mine near Nye.

Despite that change, overall production during the third quarter increased, Stillwater said. The company produced 146,000 ounces of platinum and palladium during the third quarter, compared with 139,000 ounces during the same period last year. Officials attributed the rise to increased production at the company’s East Boulder Mine near Big Timber.

The average realized combined price per ounce of the metals, however, was just $405, compared to $449 in the third quarter of 2002, the company said.

"In the third quarter of last year, realized prices were up substantially," John Pearson, investor relations representative, said Monday. "You can see how that affects revenues."

The company reported $58.2 million in revenue during the quarter, down from $66 million in the same quarter of 2002.

Earlier this year, the company closed a deal with Russian metals giant MMC Norilsk Nickel that Pearson said was seen also as a way to restore confidence in the palladium market.

Norilsk Nickel is one of the leading mining company’s in the world. The deal also gave Norilsk Nickel controlling interest in the company.

Stillwater Mining employs about 1,500 people. It has mines near Nye and Big Timber, in southern Montana, and a smelter and base metals refinery at Columbus.

The company’s stock closed at $6.49 a share Monday on the New York Stock Exchange, down slightly from its $6.85 closing price Friday.

On the Net:

Stillwater Mining Co.: http://www.stillwatermining.com/

http://missoulian.com/articles/2003/10/27/mtracker/news/76stillwater.txt

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