Stillwater Mining (SWC) DEFA14A Additional proxy soliciting materials

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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Securities Exchange Act of 1934

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Stillwater Mining Company

(Name of Registrant as Specified In Its Charter)

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Investor

Presentation

Follow-Up

April 12, 2013

Disclaimer

Forward-Looking Statements

•SOME STATEMENTS CONTAINED IN THIS PRESENTATION ARE FORWARD-LOOKING WITHIN THE MEANING OF SECTION

27A OF THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE U.S. SECURITIES EXCHANGE ACT OF 1934,

AS AMENDED, AND, THEREFORE, INVOLVE UNCERTAINTIES OR RISKS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER

MATERIALLY.

ADDITIONAL

INFORMATION

REGARDING

FACTORS

WHICH

COULD

CAUSE

RESULTS

TO

DIFFER

MATERIALLY

IS

FOUND

IN

THE

SECTION

ENTITLED

“RISK

FACTORS”

IN

THE

COMPANY’S

ANNUAL

REPORT

ON

FORM

10K

FOR

THE

YEAR

ENDED DECEMBER 31, 2012 AND IN SUBSEQUENT FILINGS WITH THE SEC. THE COMPANY INTENDS THAT THE FORWARD-

LOOKING STATEMENTS CONTAINED HEREIN BE SUBJECT TO THE ABOVE-MENTIONED STATUTORY SAFE HARBORS.

INVESTORS ARE CAUTIONED NOT TO PUT UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS. THE COMPANY

DISCLAIMS ANY OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS.

•THIS

PRESENTATION

USES

THE

TERM

“RESOURCES”

TO

DESCRIBE

THOSE

QUANTITIES

OF

PLATINUM-GROUP

METALS,

COPPER, GOLD AND OTHER METALS THAT ARE POTENTIALLY RECOVERABLE FROM ACCUMULATIONS YET TO BE

DISCOVERED.

BECAUSE

OF

THE

UNCERTAINTY

OF

COMMERCIALITY

AND

LACK

OF

SUFFICIENT

EXPLORATION

DRILLING,

THE RESOURCES CANNOT BE CLASSIFIED AS RESERVES. INVESTORS ARE ADVISED THAT THE SECURITIES AND EXCHANGE

COMMISSION

("SEC")

DOES

NOT

RECOGNIZE

RESOURCES.

ONLY

PROVEN

AND

PROBABLE

RESERVES

MAY

BE

DISCLOSED

TO

INVESTORS IN AN SEC FILING. RESOURCES HAVE A GREAT AMOUNT OF UNCERTAINTY AS TO THEIR EXISTENCE. THERE IS

NO CERTAINTY THAT ANY PORTION OF THE RESOURCES WILL BE DISCOVERED AND, IF DISCOVERED, WHETHER THEY

COULD BE DEVELOPED ECONOMICALLY. THEREFORE, INVESTORS ARE CAUTIONED NOT TO ASSUME THAT ALL OR ANY

PART OF OUR RESOURCES EXIST, OR THAT THEY CAN BE DEVELOPED ECONOMICALLY. ACCORDINGLY, INFORMATION

CONCERNING DESCRIPTIONS OF RESOURCES CONTAINED IN THIS PRESENTATION IS NOT COMPARABLE TO INFORMATION

INCLUDED IN SEC FILINGS.

•THIS

PRESENTATION

CONTAINS

FINANCIAL

MEASURES

THAT

HAVE

NOT

BEEN

PREPARED

IN

ACCORDANCE

WITH

U.S.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“NON-GAAP FINANCIAL MEASURES”) INCLUDING EBITDA, ADJUSTED

EBITDA AND CASH COSTS. THE NON-GAAP FINANCIAL MEASURES SHOULD NOT BE CONSIDERED A SUBSTITUTE FOR

FINANCIAL MEASURES PREPARED IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“GAAP”). 

2

The Clinton Group’s Attacks on Stillwater are Not

Credible

3

The Clinton Group has put forth a highly unqualified slate to implement an unknown plan

The

Clinton

Group

has

presented

no

detailed

alternative

plan

for

our

Company,

just

a

random

array

of

“ideas”

which

they

clearly

have

not

adequately analyzed

Clinton did not perform appropriate diligence on their proposed slate of Directors, as evidenced by John DeMichiei’s withdrawal as a nominee

Dr.

Engles’s

tenure

as

CEO

ended

with

his

abrupt

resignation;

we

continue

to

invite

him

to

disclose

fully

to

shareholders

the

circumstances

of

his

departure

The Clinton Group does not understand our business

Share price highly correlated to palladium cycle

Frank McAllister’s tenure began shortly after palladium’s all-time high was reached; evaluating our share price without due consideration

to the palladium cycle is misplaced

Furthermore, we have been a long-term outperformer of palladium; since the palladium trough in 2003 our share price is up 450% vs.

palladium, which is up 427%

Our Company also has an exceptional cost containment record

We have contained costs significantly better than our PGM peers and other North American hard rock miners

We

have

maintained

a

consistent

level

of

G&A

in

our

core

Montana

business

while

continuing

to

improve

safety

and

preparing

our

operations for growth

The Clinton Group continues to mislead investors

The Shareholder’s Agreement dated June 23, 2003 and each proxy statement since then have clearly stated that the Norilsk relationship was at

arm’s-length and Norilsk had no operational control

Bulge Bracket analysts are bullish on the prospects for Stillwater

Only one Institutional Investor-ranked analyst (Barclays) covers the Company and they have an Overweight rating on our stock

(1)

Based

on

run-rate

PGM

production

projections.

Assumes

palladium

to

platinum

production

ratio

of

3.4:1

and

current

palladium

and

platinum

spot

prices

of

$720

and

$1,529

per

ounce

respectively as of April 9, 2013.

We have committed to highly strategic and attractive PGM projects in Montana that have the potential to generate 100,000 additional ounces annually of

palladium and platinum. At recent PGM prices, and with cash costs per ounce benefiting from the higher production, this new production

could

add

about

$40

million

per

year

to

the

Company's

EBITDA,

as

well

as

offset

declines

due

to

normal

reserve

depletion

in

other

mine

areas

(1)

The Clinton Group’s Disjointed and Mutually

Inconsistent Ideas are Not a Solid Business Plan

4

The Clinton Group has proposed imposing pricing collars, which would take away the full PGM price upside from

our investors

Our shareholders want commodity exposure and can hedge it individually

The Clinton Group has proposed immediately tendering for the convert, which would be expensive and would

leave the Company poorly capitalized in the midst of its Montana

growth efforts

Similarly, the Clinton Group’s suggestions of issuing dividends or repurchasing shares would also preclude

investments in PGM growth without increasing leverage

The Clinton Group has proposed converting to an MLP, which would

be an unattractive option given the volatility

and capital requirements of our business

No precious metals mining MLPs exist

The Clinton Group has proposed proceeding immediately with all the potential Montana growth opportunities we

had analyzed back in 2010. This type of undisciplined approach:

Ignores the lack of available and experienced manpower

Ignores mine logistics and planning

Ignores the quality of ore reserves

Ignores

the

fact

that

some

of

the

projects

will

require

years

of

permitting

after

careful

work

with

our

neighbors

and

regulators

Shows that the Clinton team has no appreciation for the complex engineering requirements of mine development 

The Clinton Group’s Careless Nominee Vetting Process

Nominee

Causes for Concern

John DeMichiei

Stillwater called attention to inconsistencies in academic record and poor safety and labor relations at Signal Peak

Clinton pulled DeMichiei from its slate of director nominees mid-solicitation

Charles R. Engles

Clinton mischaracterizes Engles’s tenure as Stillwater CEO, saying he adopted a growth strategy that continues today

In fact, the Company was struggling under his leadership with no

clear strategy

Engles left abruptly after 2.5 years with no explanation

Stillwater has called on him to explain this departure in a transparent and forthright manner

Seth E. Gardner

Only public company board experience consists of nine weeks on Scottish Re Group’s board before it was delisted

from NYSE

Despite Clinton’s assertions, he has no substantive public company board experience

Michael “Mick”

McMullen

Contrary

to

Clinton’s

claims

that

McMullen

understands

the

operations

and

financials

of

nearly

every

PGM

company,

he has no record of PGM experience

The mining companies he has worked with are not PGM miners

Michael McNamara

No public company board or management experience

Financial analyst at a small financial advisory boutique

Only 10 years of work experience

Brian Schweitzer

Was a staunch supporter of Stillwater while he was in office

No public company board or management experience and limited management experience outside of politics

Patrice Merrin

Tenure on the Council on Canadian-American Relations does not count as U.S. public company board experience

Despite

Clinton’s

implying

otherwise,

her

ban

from

the

U.S.

for

involvement

with

a

company

that

worked

with

the

Cuban

government is not inconsequential

Gregory P. Taxin

Questionable investment history in mining companies, none in PGM

Investments have significantly underperformed for public shareholders

5

Clinton Has Proposed Questionable Nominees With Checkered Pasts

With No Plan and No Experience, They Are Not Suited To Run Stillwater

6

Stillwater Share Price Performance

Palladium Price ($ / ounce)

Source: Bloomberg, Capital IQ

(1)

Pro forma for refinancing of credit facilities in February 2001

(2)

EBITDA defined as operating income plus depreciation and amortization (FY 2000)

(3)

Palladium price bottomed on 4/16/2003

Note: PGM Basket calculated based on .77 palladium and .23 platinum; market data as of 4/9/2013

Frank McAllister’s Tenure Began During a Time of

Artificially Inflated Prices

Frank McAllister started as CEO on February 12, 2001

when the palladium price was $980 / ounce

The Company’s balance sheet was over-levered, and ill-

equipped to handle the impending price correction

$200 million of bank debt

(1)

2.1x Debt / EBITDA

(2)

Covenants restricted maximum leverage to 3.0x

declining to 2.0x by the end of 2002

Norilsk provided the Company with an infusion of capital

and helped the Company avoid defaulting

Since the palladium price bottomed in 2003, Stillwater

shares are up 450%, while palladium is up 427%

(3)

$0

$200

$400

$600

$800

$1,000

$1,200

1994

1998

2002

2005

2009

2013

$0

$10

$20

$30

$40

$50

1994

1998

2002

2005

2009

2013

McAllister’s

Arrival

Norilsk

Investment

Norilsk

Investment

McAllister’s

Arrival

Cash Cost Increases (2008 –

2012 Compound Annual Growth Rate)

Source: Company filings.

PGM Producer

Diversified Peers

7

Stillwater has a Better Track Record for Controlling 

Operating Costs Relative to Peers

In a challenging environment for the broader mining industry, Stillwater management has been able to contain costs more

effectively than its peers

Note: North American Base Metals, North American Silver, South African PGMs and North American Gold represent average change in cash costs for these groups between 2008 and 2012.

North American Base Metals: Inmet Mining, Capstone Mining, First Quantum Minerals; North American Silver: Pan American Silver, First Majestic Silver, Coeur d’Alene, Hecla Mining; South

African PGMs: Anglo American Platinum, Lonmin (FY2008 – FY2012), Aquarius Platinum, Impala Platinum (CY2012 results through 9-30-12); North American Gold: Newmont Mining, 

Barrick Gold, Goldcorp, Kinross, Agnico Eagle, Yamana, IAMGOLD, Eldorado. Cash costs as presented by each company.

5%

6%

8%

12%

14%

0%

3%

6%

9%

12%

15%

Stillwater

North American Silver

North American Base

Metals

South African PGMs

North American Gold

Clinton Group has incorporated several inappropriate measures, and excluded pertinent adjustments in its G&A

figures:

Non-U.S. attributable G&A

Transaction-related expenses

Other non-recurring items (restructuring, licensing fee adjustments)

The

increase

in

headcount

and

associated

G&A

spending

is

largely

due

to

implementation

of

an

even

more

rigorous

safety

program,

and

the

addition

of

workforce

and

infrastructure

to

support

growth

initiatives

in

Montana

Increased headcount at the Stillwater and East Boulder Mines accounted for 77% of the increase in total

headcount from 2009 to 2012

Clinton Group has not Utilized Appropriate G&A

Measures

($ in millions)

Note: Figures represent Montana G&A adjusted for non-recurring items.

Adjusted U.S. G&A (Montana Operations) has Been Largely Consistent Since 2009

8

$25 

$26 

$29 

$30 

–

$10 

$20 

$30 

$40 

2009

2010

2011

2012

9

Norilsk was a Passive Investor in Stillwater

Stillwater

has

Outperformed

PGM

Peers

Since

Norilsk’s

Exit

(1)

Norilsk’s passive role at Stillwater is made

abundantly clear in the publicly filed Stockholder’s

Agreement that governed the relationship

(3)

Norilsk had no control over the operations or budget

of the Company

Stockholder’s Agreement provided Norilsk with the

ability to appoint a majority of the Board of Directors

Norilsk Directors appointed were independent

of Norilsk

Importantly, three excellent independent directors

who were nominated by Norilsk continue to serve on

Stillwater’s Board

Source: Bloomberg, Capital IQ

(1)

Performance between 12/14/2010 and 4/9/2013

(2)

South African Peers include: Aquarius Platinum, Impala Platinum, Lonmin, and Anglo American Platinum

(3)

Norilsk Stockholder’s Agreement dated 6/23/2003

(2)

0

20

40

60

80

100

120

140

Dec-10

Jun-11

Nov-11

May-12

Oct-12

Apr-13

Share Price Performance

South African Peers

Stillwater

Analysts are Bullish on the Prospects for Stillwater

Source: Equity Research, Thomson One.

Note:

Permission to use quotes neither sought nor obtained.

(1) 3    ranked Institutional Investor Analyst in 2012

10

Broker

Date

Recommendation

Price Target

Commentary

JPMorgan

3/27/2013

Overweight

$19.00

"Stillwater is unique as one of only two PGM equities that don't have exposure to

labor unrest in South Africa."

CIBC World Markets

3/20/2013

Overweight

$18.00

"We believe Stillwater management will be successful in fighting off this challenge

and view the whole saga as a real waste of time and money."

RBC Capital Markets

3/4/2013

Sector Perform

$15.00

"Recent training and labour initiatives appear to have improved the ability to grow

the workforce and strong PGM prices could offset rising costs in existing operations."

Wells Fargo Securities

2/28/2013

Outperform

N/A

"We expect fundamentals to remain healthy through 2014, which keeps us positive

on Stillwater."

Barclays

(1)

2/27/2013

Overweight

$17.00

"While company-specific operating, project development, and capital

allocation risks remain, in our view these risks have dissipated."

Credit Suisse

2/27/2013

Neutral

$15.00

"Stillwater shares remain the best way to play a bullish palladium outlook."

rd

11

Appendix

2009

2010

2011

2012

GAAP Reported G&A

$25,080

$33,016

$42,072

$40,948

Non-U.S. Attributable G&A

–

(828)

(2,642)

(7,461)

Unadjusted U.S. G&A

$25,080

$32,188

$39,430

$33,487

One-Time Expenses

Norilsk-Related Expenses

–

($4,955)

–

–

Acquisition / Disposition Expenses

–

(1,616)

(4,969)

(942)

Financing Expenses

–

–

(5,187)

(958)

Other Adjustments

(8)

–

–

(1,465)

Adjusted U.S. G&A

$25,072

$25,617

$29,274

$30,122

Reconciliation of G&A Expenses

Source: Company filings.

(1)

Includes restructuring expense in 2009 and non-recurring expenses related to software licensing fees in 2012.

($ in thousands)

(1)

12