Exhibit 99.1
Stillwater Mining Reports Unaudited 2003 Fourth Quarter and Year-End Results
COLUMBUS, Mont., Feb. 27 /PRNewswire-FirstCall/ -- STILLWATER MINING
COMPANY (NYSE: SWC) announced today its unaudited results for the fourth
quarter and year ended December 31, 2003.
Highlights
* Asset impairment charge in the fourth quarter of $390.3 million
($234.3 million after tax) to reduce mining assets to estimated fair
value and a charge of $78.6 million to reduce deferred tax assets to
realizable value, both resulting from a reduction in ore reserves and
the continued low price for palladium. Charges are non-cash and not
expected to impact operations;
* Results, before effect of asset impairment and deferred tax asset
charges, for the fourth quarter of 2003, net income of $4.0 million,
or $0.04 per share, and for the year 2003 a net loss of $18.7 million,
or $0.28 per share;
* Contracts being finalized for sale of 877,169 ounce palladium
inventory, acquired in Norilsk Nickel transaction. Term of contracts,
two years; primary use, automobile catalytic converters;
* Gregory A. Wing appointed new Vice President and Chief Financial
Officer.
For the fourth quarter of 2003, the Company reported a net loss of
$308.9 million, or $3.44 per share*, on revenue of $60.5 million, compared to
a net loss of $0.6 million, or $0.01 per share, on revenue of $58.6 million
for the fourth quarter of 2002. The fourth quarter 2003 results include a
non-cash $390.3 million asset impairment charge ($234.3 million or $2.61 per
share* after tax), to reduce the carrying value of the Company's mining assets
to their estimated fair value and a non-cash charge of $78.6 million, or
$0.88 per share* to reduce the carrying value of deferred tax assets to
realizable value. *(reflects 89.8 million weighted average common shares
outstanding for the fourth quarter 2003)
Prior to the effect of the asset impairment and deferred tax asset
charges, net income for the fourth quarter of 2003 was $4.0 million or
$0.04 per share. The 2003 fourth quarter operating results reflect higher
revenues due to a 7% increase in metal sold partially offset by lower combined
realized PGM prices received by the Company, compared to the fourth quarter of
2002.
For the year 2003, the Company reported a net loss of $331.5 million, or
$4.89 per share*, on revenue of $240.2 million compared to net income of
$31.7 million, or $0.74 per share, on revenue of $275.6 million for the year
2002. The 2003 results include the non-cash $390.3 million asset impairment
charge ($234.3 million or $3.46 per share* after tax) and a non-cash charge of
$78.6 million or $1.16 per share* to reduce the carrying value of deferred tax
assets to realizable value. Prior to the effect of the asset impairment and
deferred tax asset charges, 2003 year-end results were a net loss of
$18.7 million or $0.28 per share*. Reported results for the year were also
impacted by charges related to the issuance of shares to MMC Norilsk Nickel
during the second quarter 2003. These items included a $16.7 million, or
$0.25 per share*, non-cash charge to income tax relating to a portion of the
Company's tax losses which will not be utilized because of the ownership
change, and $3.0 million ($1.8 million, or $0.03 per share*, net of tax) of
transaction related costs. *(reflects 67.8 million weighted average common
shares outstanding for the year 2003)
Results of operations for the year 2003 were affected by lower combined
realized PGM prices and lower production.
OPERATING RESULTS
During the fourth quarter of 2003, the Company produced a total of
147,000 ounces of palladium and platinum, which included 113,000 ounces of
palladium and 34,000 ounces of platinum, which was the same in as the fourth
quarter of 2002.
The Company's realized prices per ounce for the fourth quarter of 2003
were $351 for palladium, and $675 for platinum, compared to $412 and $529,
respectively, in the fourth quarter of 2002. The Company's average realized
combined price per ounce of palladium and platinum for the fourth quarter of
2003 was $424 or approximately 28% above the combined market price per ounce
of $330, but was approximately 4% lower than the $440 combined price realized
for the same period in 2002.
Total cash costs on a consolidated basis for the fourth quarter of 2003
decreased 8% to $287 per ounce compared to $312 per ounce for the same period
in 2002. The decrease in operating costs is primarily related to lower mining
costs per ounce on increased production rates at the East Boulder Mine. Total
consolidated production costs per ounce in the fourth quarter of 2003
decreased 5% to $358 from $376 as compared to the same period of 2002. The
decrease is due to the reduction in operating costs of $25 per ounce offset by
an increase in depreciation and amortization costs of $7 per ounce.
For the year 2003, the Company produced a total of 584,000 ounces of
palladium and platinum, which included 450,000 ounces of palladium and
134,000 ounces of platinum compared to 617,000 ounces for the year 2002, which
included 476,000 ounces of palladium and 141,000 ounces of platinum. The
Company's realized prices per ounce for 2003 were $352 for palladium and
$602 for platinum, compared to $436 and $511, respectively, for 2002. The
Company's average realized combined price per ounce of palladium and platinum
was $408 per ounce for 2003, or approximately 30% higher than the combined
market price of $315 per ounce, but was approximately 10% lower than the
$454 per ounce combined price realized in 2002.
Total consolidated cash costs per ounce for the year 2003 were
$283 compared to $287 for 2002. The lower consolidated cash costs were due to
a decrease in operating costs primarily related to lower mining costs at the
East Boulder Mine. Total consolidated production costs, however, increased to
$354 in 2003, compared to $351 in 2002 due to an increase in depreciation and
amortization costs of $7 per ounce.
ASSET IMPAIRMENT CHARGE
The calculation of ore reserves as at December 31, 2003 resulted in the
Company recording a reduction in its proven and probable ore reserves of 7% in
contained ounces, which includes a 16% reduction in the contained ounces at
the Stillwater Mine. As a result of the reduction in ore reserves at the
Stillwater Mine and in view of economic considerations, changes in the mine
plan and other factors, the Company assessed the recoverability of the
carrying value of its mining and related processing assets. Pursuant to
Statement of Financial Accounting Standards 144, the Company determined that
its investment in property, plant and equipment at the Stillwater and East
Boulder Mines and the related processing assets were impaired. Consequently,
the Company recorded a non-cash asset impairment charge of $390.3 million
($234.3 million after tax), thereby reducing the carrying value of these
assets to their estimated fair market values as determined by a third party
appraiser. The impairment charge reduced the carrying value of the Stillwater
Mine to approximately $250 million and the East Boulder Mine to approximately
$166 million, which includes their pro-rata share of the Company's processing
assets.
CHAIRMAN'S COMMENTS
Discussing the Company's 2003 results, Stillwater Chairman and Chief
Executive Officer, Francis R. McAllister said, "While PGM production for the
year was 584,000 ounces or 5% below that projected at the beginning of the
year, mine productivity improved in the fourth quarter resulting in production
of 147,000 ounces of PGMs, exceeding our expectations and proving to be our
best quarter in 2003. Cost controls for the year, even with the lower
production, reduced total consolidated cash costs to $283 per ounce, better
than the $290 per ounce expectation. Additionally, the Company successfully
ramped up East Boulder mine production to 1,250 ore tons per day during the
year 2003 and embarked on an expansion of its secondary metals business in the
fourth quarter of 2003 by signing a contract in October with Power Mount of
Kentucky.
He continued, "The asset impairment charge recorded on December 31, 2003
recognizes the economics of the Company's operations. We have previously
disclosed the possibility of an asset impairment writedown. Management and
the Board concluded, in consultation with its outside advisors, that it was
necessary to address the carrying value of our assets at this time in view of
the reduction in ore reserves and in accordance with the accounting
guidelines. The non-cash impairment charge is not expected to impact our
employees, mine operations, smelting and refining operations, delivery of PGMs
to our customers or our bank credit facility and mine life given the lower ore
reserve, remains in excess of 20 years at both mines at current production
rates.
Mr. McAllister further stated, "With respect to the 877,000 ounces of
palladium inventory received from MMC Norilsk Nickel when it acquired its
initial 51% interest in the Company, the Company has now entered into
contracts or has reached understandings under which all of the palladium is
expected to be sold, at close to market prices, over a period of two years,
primarily for use in automobile catalytic converters."
"For the year 2004 the Company expects PGM production between
610,000 ounces and 625,000 ounces with total consolidated cash costs of
approximately $275 to $290 per ounce. Production from the East Boulder Mine
will be increased and is expected to average approximately 1,500 tons per day,
while by year-end the rate of mining is expected to reach approximately
1,650 tons per day. The Company's capital expenditures for 2004 are expected
to be approximately $81 million and includes $6 million of capital
expenditures at the smelter and refinery. In the second quarter of 2004, the
Columbus smelter and refinery is expected to be idled for four to six weeks
for a periodic rebricking of the smelting furnace. Mine production during the
rebricking will be stockpiled and subsequently processed over the remainder of
the year," stated Mr. McAllister.
Lastly McAllister reported, "I am pleased to announce that our management
team will be further strengthened with the appointment of Mr. Gregory A. Wing
as Vice President and Chief Financial Officer. Greg joins Stillwater with
over 28 years of financial experience with natural resources companies."
ORE RESERVES
As of December 31, 2003, the Company's total proven and probable ore
reserves are 40.4 million tons at a grade of 0.58 ounce per ton containing
23.6 million ounces of palladium and platinum at an insitu 3.6 to 1 ratio, a
decrease of 7% in contained ounces from December 31, 2002. The decrease
reflects a net increase of 4% in contained ounces of ore reserves at the East
Boulder Mine due to favorable definition drilling and development activities
during 2003, offset by a 16% reduction in the contained ounces of ore reserves
at the Stillwater Mine. Decreases at the Stillwater Mine reflect adjustments
in probable estimation, mine planning and economic factors resulting in
reductions or reclassification of peripheral areas to mineralized material
coupled with a net reduction in mined production versus ore reserve additions
from drilling and development activities during 2003. Additional minor
reductions due to changes in reserve estimation techniques have also been
reflected.
STILLWATER MINE
At the Stillwater Mine, total palladium and platinum production was
106,000 ounces in the fourth quarter of 2003, compared to 111,000 ounces in
the fourth quarter of 2002 as a result of the lower throughput offset by
higher grades. During the quarter, a total of 205,000 tons were milled with a
combined mill head grade of 0.57 ounce per ton compared to 231,000 total tons
with a combined mill head grade of 0.54 ounce per ton in the fourth quarter of
2002. Total mill recovery for the fourth quarter was 91% the same as last
year. The mining rate during the fourth quarter averaged approximately
2,000 tons per day as the mine implemented a long-range operating plan, which
changes the mine plan from a production-driven to a cost-driven emphasis.
For the year 2003 the mine produced a total of 428,000 ounces of palladium
and platinum compared to 492,000 ounces for 2002. The lower production was
the result of a 9% planned decrease in production, as well as lower than
expected productivity in the mine as the operation implemented a long-range
operating plan, which changed the mine plan from production driven to a cost
driven emphasis.
Total cash costs per ounce for the fourth quarter of 2003 were
$273 compared with $297 for the same period in 2002 due to a $32 per ounce
decrease in operating costs offset by a $8 per ounce increase in property
taxes and insurance. Total production costs per ounce in the fourth quarter
2003 decreased $20, or 6%, to $334 from $354 as compared to the same period of
2002. The decrease is due to the reduction in total cash costs offset by an
increase in depreciation and amortization costs of $4 per ounce.
For the year 2003, total cash costs per ounce were $262, compared to
$263 for 2002. Total consolidated production costs per ounce produced
increased to $322 from $318 in 2003 as compared to 2002. The increase is due
to an increase in depreciation and amortization of $5 per ounce due to lower
overall production level.
During the fourth quarter of 2003 capital expenditures at the mine were
$10.6 million and total capital spending for the year was $42.1 million of
which $9.7 million and $38.8 million, respectively, were incurred in
connection with capitalized mine development.
At the Stillwater Mine, as of December 31, 2003, proven and probable ore
reserves total 17.5 million tons at a grade of 0.66 ounce per ton, containing
11.5 million ounces of palladium and platinum at an insitu ratio of 3.4 to 1.
The contained ounces of ore reserves reduced 16% from adjustments to probable
estimation factors and reclassification of several peripheral areas to
mineralized material due to economic factors, a net reduction in mined
production versus ore reserve additions and modifications to methods used in
estimating tons and grade.
For 2004, the Company expects the Stillwater Mine to produce approximately
430,000 ounces of palladium and platinum from mining ore at an average rate of
approximately 1,970 tons per day. Total cash costs are expected to be
approximately $265 per ounce, while capital expenditures are expected to be
approximately $52 million.
EAST BOULDER MINE
During the fourth quarter of 2003, the East Boulder Mine produced
41,000 ounces of palladium and platinum, a 14% increase compared to the
36,000 ounces produced in the fourth quarter of 2002. The mining rate
averaged 1,315 tons per day for the quarter. A total of 121,000 tons of ore
were milled with a mill head grade of 0.39 ounce per ton in the fourth quarter
of 2003 compared to 101,000 tons with a mill head grade of 0.41 ounce per ton
for the comparable quarter last year. Total mill recovery during the fourth
quarter 2003 increased to 89% from 88% a year ago.
For the year 2003 the mine produced 156,000 ounces of palladium and
platinum compared to 125,000 ounces for 2002. The increase in production is
the result of ramping up production 25% at the mine. The mine produced at an
average of 1,247 tons per day, compared to 1,000 tons per day in 2002.
Total cash costs per ounce in the fourth quarter of 2003 decreased 11%, to
$322 compared to $360 per ounce for the same period in 2002 due to the higher
production rates and lower operating costs per ounce. Total production costs
per ounce in the fourth quarter 2003 decreased $26 to $420 from $446 for the
same period of 2002. The decrease is due to the lower total cash costs per
ounce as a result of the higher production rate offset by an increase in
depreciation and amortization costs of $12 per ounce.
For the year 2003, total cash costs per ounce decreased 10%, to $343 from
$381 and total production costs per ounce decreased to $441 from $478 due to
lower operating costs as a result of the higher production rate.
Capital expenditures at the mine for fourth quarter were $3.5 million and
capital spending for the year was $13.0 million of which $3.0 million and
$10.0 million, respectively, were incurred in connection with capitalized mine
development.
At December 31, 2003, proven and probable ore reserves at the East Boulder
Mine increased approximately 4% to a total of 22.9 million tons at a grade of
0.53 ounce per ton, containing 12.1 million ounces of palladium and platinum
at an insitu ratio of 3.7 to 1. The proven and probable ore reserve increase
is due to the underground development and diamond drilling activities during
2003, which resulted in increasing the proven ore reserve tonnage while
lowering the average grade to 0.43 ounce per ton from 0.48 ounce per ton. The
majority of the increase was in the probable ore reserve category as both
tonnage and contained ounces increased.
At East Boulder for 2004, the mine is expected to operate at an average
rate of 1,500 tons per day, and produce about 190,000 ounces of PGMs at an
expected total cash cost of approximately $310 per ounce. Capital
expenditures for 2004 are expected to be approximately $22 million.
The 1,500-ton per day rate is expected to be realized as the Company
continues to ramp up the production rate at the East Boulder Mine through 2004
and by year-end the mining rate is expected to be at approximately 1,650 tons
per day. The Company is considering a further ramp up of production at the
East Boulder Mine over a period of time to eventually achieve its 2,000-ton
per day design rate.
FINANCES AND LIQUIDITY
Revenues were $60.5 million for the fourth quarter of 2003 compared with
$58.6 million for the fourth quarter of 2002, a 3% increase, which is the
result of a 7% increase in the quantity of metal sold, offset by a 4% decrease
in the Company's combined realized palladium and platinum prices. For the
year 2003 revenues were $240.2 million compared with $275.6 million for 2002,
a 13% decrease, which is the result of a 10% decrease in combined realized
palladium and platinum prices and a 4% decrease in the quantity of metal sold.
The Company recognized a non-cash charge of $78.6 million in the 2003
fourth quarter and year-end results to record a valuation allowance for the
amount of the deferred tax assets it believes will not be used.
Net cash provided by operations for the fourth quarter 2003, was
$10.5 million compared to $6.1 million for the comparable period of 2002. The
increase was primarily a result of an increase in net income of $4.6 million
excluding the effects of the non-cash impairment charge.
For the year ended December 31, 2003, net cash provided by operations was
$47.2 million compared to $52.1 million for 2002. Excluding the effects of
the non-cash asset impairment and deferred tax asset charges, the decrease was
primarily a result of a decrease in net income of $50.3 million, offset by
changes in net operating assets and liabilities of $26.3 million and an
increase of non-cash expenses of $16.3 million.
Capital expenditures totaled $14.3 million in the fourth quarter of 2003,
which includes $12.7 million incurred in connection with capitalized mine
development activities, compared to a total of $17.6 million, which included
$10.1 million incurred in connection with capitalized mine development
activities in the same period of 2002.
For the year 2003, capital expenditures totaled $55.3 million, which
includes $48.8 million incurred in connection with capitalized mine
development activities, compared to $57.2 million, which included
$43.9 million incurred in connection with capitalized mine development
activities in 2002.
On June 23, 2003, the Company and MMC Norilsk Nickel (Norilsk Nickel), a
Russian mining Company, completed a stock purchase transaction whereby the
Company issued 45,463,222 shares of its common stock to Norimet Limited
(Norimet), a wholly-owned subsidiary of Norilsk Nickel, representing 50.8% of
the Company's outstanding shares. The Company received consideration from
Norimet consisting of $100 million in cash and 877,169 ounces of palladium
valued at $148.2 million. The aggregate value of the consideration was
$248.2 million. The Company was required to use $50 million of the cash
consideration to pay down its lenders under its credit agreement.
Currently, the Company has $128.5 million outstanding under its Term B
loan facility bearing interest at 7.25%. The impairment and deferred tax
asset charges did not cause a breach of any covenants under the Company's bank
credit facility. Under its revolving credit facility, the Company has
$7.5 million outstanding as letters of credit bearing interest at 4.0%. The
Company anticipates it will refinance the bank credit facility during 2004.
At December 31, 2003, the Company continued to own the 877,169 ounces of
palladium inventory received June 23, 2003 in the Norilsk stock transaction.
The palladium inventory is carried on the balance sheet at $169 per ounce,
which results in a carrying value $148.2 million. At December 31, 2003 the
palladium market price was $195 per ounce. The Company has now entered into
contracts or has reached understandings under which all of the palladium will
be sold, at close to market prices, over the next two years. The Company is
required to offer 50% of the proceeds from the sale of the inventory to repay
loans under the Company's credit agreement. The lenders are not obligated to
accept the pre-payment amount.
The Company and Norilsk Nickel agreed to negotiate an agreement in the
period following the closing of the Norilsk Nickel stock transaction under
which the Company would purchase at least one million ounces of palladium
annually. Negotiations concerning this agreement have not occurred but the
Company anticipates discussing the subject with Norilsk Nickel during 2004.
At December 31, 2003, the Company had cash and cash equivalents of
$47.5 million, and $17.5 million was available to the Company under its
revolving credit facility. The Company's working capital at December 31, 2003
was $154.7 million, compared to $46.7 million at December 31, 2002. The ratio
of current assets to current liabilities was 2.4 at December 31, 2003, as
compared to 1.7 at December 31, 2002.
METALS MARKET
During the fourth quarter of 2003 palladium traded as high as $214 per
ounce and as low as $184 per ounce and the average market price was $199 per
ounce, while platinum traded as high as $840 per ounce and as low as $710 per
ounce and the average market price was $764 per ounce.
The combined average market price per ounce of palladium and platinum for
the fourth quarter of 2003 was $330 compared to $355 for the fourth quarter of
2002. The combined average market price for the two metals for the year 2003
was $315 per ounce compared to $384 per ounce for the same period in 2002.
MANAGEMENT APPOINTMENT
The Company announces the appointment of Mr. Gregory A. Wing, 54, as Vice
President and Chief Financial Officer. He will be based at the Company's
headquarters in Columbus, Montana commencing in March 2004. Mr. Wing, has
over 28 years financial experience with natural resource companies, comes to
Stillwater from Black Beauty Coal Company where he was Vice President Finance
and Chief Financial Officer. He has a M.B.A. in Accounting and Finance and a
Physics Degree from the University of California at Berkeley.
Stillwater Mining Company will host its fourth quarter 2003 results
conference call at 12 p.m. (noon) EST on February 27, 2004. The conference
call dial-in number is 888-276-0005 (U.S.) and 612-332-0335 (International).
The conference call will be simultaneously Web cast on the Internet via the
Company's Web site at www.stillwatermining.com. To access the conference call
on the Company's Web site go to the Investor Relations Section under
Management Presentations and click on the link to the conference call. A
replay of the conference call will be available on the Company's Web site or
by a telephone replay, dial-in number 800-475-6701 (US) and 320-365-3844
(International), access code 722723, through March 5, 2004.
Stillwater Mining Company is the only U.S. producer of palladium and
platinum and is the largest primary producer of platinum group metals outside
of South Africa. The Company's shares are traded on the New York Stock
Exchange under the symbol SWC. Information on Stillwater Mining Company can
be found at its Web site: www.stillwatermining.com.
This press release contains forward-looking information, which involves
expressions of management's current expectations. All forward-looking
information is subject to various risks and uncertainties that may be beyond
the Company's control and may cause results to differ materially from
management's current expectations. Information concerning factors that could
cause actual results to differ materially from management's current
expectations are set forth in the section entitled "Risk Factors" in the
Company's Annual Report on Form 10-K for the year ended December 31, 2002 and
may be discussed in subsequent filings with the SEC. The Company disclaims
any obligation to update forward-looking statements.
Stillwater Mining Company
Proven and Probable Ore Reserves*
December 31, 2003
Tons Oz/Ton Contained
(000) Pd + Pt Ounces
(000)
Stillwater Mine
Proven Reserves 2,052 0.68 1,387
Probable Reserves 15,428 0.65 10,073
Total Stillwater Mine 17,480 0.66 11,460
East Boulder Mine
Proven Reserves 660 0.43 285
Probable Reserves 22,248 0.53 11,854
Total East Boulder Mine 22,908 0.53 12,139
Total Proven and Probable 40,388 0.58 23,599
* In calculating ore reserves at December 31, 2003, the Company has
applied the trailing 12-quarter combined average PGM market price of
$428 which consists of a palladium price of $379 and platinum price of
$586.
Mineralized J-M Reef Material**
December 31, 2003
Tons Oz/Ton
(000) Pd + Pt
Stillwater Mine
Mineralized J-M Reef Material 68,100 0.53
East Boulder Mine
Mineralized J-M- Reef Material 63,300 0.49
Total Mineralized Material 131,400 0.51
** Mineralized material is defined as a mineralized body which has been
delineated by appropriately spaced drilling and/or underground
sampling to support a sufficient tonnage and average grade of metals.
Such a deposit does not qualify as a reserve until a comprehensive
evaluation based upon unit cost, grade, recoveries, and other
material factors conclude legal and economic feasibility.
Stillwater Mining Company
Key Factors (Unaudited)
Three months ended Twelve months ended
December 31, December 31,
2003 2002 2003 2002
OPERATING AND COST DATA
Consolidated:
Ounces produced (000)
Palladium 113 113 450 476
Platinum 34 34 134 141
Total 147 147 584 617
Tons milled (000) 305 292 1,185 1,257
Mill head grade
(ounce per ton) 0.52 0.55 0.53 0.54
Sub-grade tons milled (000) (1) 21 40 84 74
Sub-grade mill head grade
(ounce per ton) 0.23 0.15 0.20 0.17
Total tons milled (000) (1) 326 332 1,269 1,331
Combined mill head grade
(ounce per ton) 0.50 0.50 0.51 0.52
Total mill recovery (%) 91 90 91 90
Total operating costs per
ounce $250 $279 $249 $256
Total cash costs per
ounce (2), (3) $287 $312 $283 $287
Total production costs per
ounce (2), (3) $358 $376 $354 $351
Total operating costs per
ton milled $113 $124 $115 $119
Total cash costs per ton
milled (2), (3) $130 $139 $130 $133
Total production costs per
ton milled (2), (3) $162 $167 $163 $163
Stillwater Mine:
Ounces produced (000)
Palladium 81 85 328 379
Platinum 25 26 100 113
Total 106 111 428 492
Tons milled (000) 184 199 730 892
Mill head grade
(ounce per ton) 0.61 0.60 0.62 0.60
Sub-grade tons milled (000) (1) 21 32 84 55
Sub-grade mill head grade
(ounce per ton) 0.23 0.14 0.20 0.16
Total tons milled (000) (1) 205 231 814 947
Combined mill head grade
(ounce per ton) 0.57 0.54 0.58 0.58
Total mill recovery (%) 91 91 91 90
Total operating costs per
ounce $239 $271 $231 $235
Total cash costs per
ounce (2), (3) $273 $297 $262 $263
Total production costs per
ounce (2), (3) $334 $354 $322 $318
Total operating costs per
ton milled $124 $131 $121 $122
Total cash costs per ton
milled (2), (3) $141 $143 $138 $137
Total production costs per
ton milled (2), (3) $173 $171 $169 $165
Stillwater Mining Company
Key Factors (continued)
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
2003 2002 2003 2002
OPERATING AND COST DATA (Continued)
East Boulder Mine:
Ounces produced (000)
Palladium 32 28 122 97
Platinum 9 8 34 28
Total 41 36 156 125
Tons milled (000) 121 93 455 365
Mill head grade
(ounce per ton) 0.39 0.42 0.39 0.39
Sub-grade tons milled (000) (1) -- 8 -- 19
Sub-grade mill head grade
(ounce per ton) -- 0.22 -- 0.20
Total tons milled (000) (1) 121 101 455 384
Combined mill head grade
(ounce per ton) 0.39 0.41 0.39 0.38
Total mill recovery (%) 89 88 89 88
Total operating costs per
ounce $279 $303 $299 $335
Total cash costs per
ounce (2), (3) $322 $360 $343 $381
Total production costs per
ounce (2), (3) $420 $446 $441 $478
Total operating costs per
ton milled $95 $108 $103 $110
Total cash costs per ton
milled (2), (3) $110 $128 $118 $125
Total production costs per
ton milled (2), (3) $143 $159 $151 $156
(1) Sub-grade tons milled includes reef waste material only. Total tons
milled includes ore tons and sub-grade tons only. Prior period
amounts have been adjusted to conform to the current year
presentation.
(2) Total cash costs include costs of mining, processing and
administrative expenses at the mine site (including mine site
overhead, taxes other than income taxes, royalties and credits for
metals produced other than palladium and platinum.) Total
production costs include total cash costs plus depreciation and
amortization. Income taxes, corporate general and administrative
expenses and interest income and expense are not included in either
total cash costs or total production costs.
(3) Cash cost per ton and cash cost per ounce represent non-U.S.
Generally Accepted Accounting Principles (GAAP) measurements that
management uses to monitor and evaluate the performance of its
mining operations. Management believes cash costs per ounce and per
ton provide an indicator of profitability and efficiency at each
location and on a consolidated basis, as well as provide a
meaningful basis to compare our results with those of other mining
companies and other mining operating properties. See table
"Reconciliation of Non-GAAP measures to cost of revenues."
Stillwater Mining Company
Key Factors (continued)
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
2003 2002 2003 2002
SALES AND PRICE DATA
Ounces sold (000)
Palladium 111 102 459 469
Platinum 32 32 131 143
Total 143 134 590 612
Average realized price per
ounce (4)
Palladium $351 $412 $352 $436
Platinum $675 $529 $602 $511
Combined (5) $424 $440 $408 $454
Average market price per
ounce (4)
Palladium $199 $285 $201 $338
Platinum $764 $587 $691 $539
Combined (5) $330 $355 $315 $384
(4) The Company's average realized price represents revenues which
include the impact of contract floor and ceiling prices and hedging
gains and losses realized on commodity instruments and exclude
contract discounts, divided by ounces sold. The average market
price represents the average London PM Fix for the actual months of
the period.
(5) Stillwater Mining reports a combined average realized and market
price of palladium and platinum at the same ratio as ounces that are
produced from the refinery.
Stillwater Mining Company
Key Factors (continued)
(Unaudited)
Reconciliation of Non-GAAP measures to cost of revenues
Cash cost per ton and cash cost per ounce represent Non-GAAP measurements
that management uses to monitor and evaluate the performance of its
mining operations. Management believes cash costs per ounce and per ton
provide an indicator of profitability and efficiency at each location and
on a consolidated basis, as well as provide a meaningful basis to compare
our results with those of other mining companies and other mining
operating properties.
(in thousands, except cost per ounce and cost per ton data)
Three months ended Twelve months ended
December 31, December 31,
2003 2002 2003 2002
Consolidated:
Total operating costs $36,767 $41,058 $145,381 $157,649
Total cash costs $42,238 $46,044 $165,457 $177,175
Total production costs $52,716 $55,496 $206,758 $216,673
Divided by total ounces 147 147 584 617
Divided by total tons milled 326 332 1,269 1,331
Total operating cost per
ounce $250 $279 $249 $256
Total cash cost per ounce $287 $312 $283 $287
Total production cost per
ounce $358 $376 $354 $351
Total operating cost per
ton milled $113 $124 $115 $119
Total cash cost per ton milled $130 $139 $130 $133
Total production cost per
ton milled $162 $167 $163 $163
Reconciliation to cost of
revenues:
Total operating costs $36,767 $41,058 $145,381 $157,649
Royalties, taxes and other 5,471 4,986 20,076 19,526
Total cash costs $42,238 $46,044 $165,457 $177,175
Asset retirement costs 88 116 342 508
Depreciation and
Amortization 10,390 9,336 40,959 38,990
Total production costs $52,716 $55,496 $206,758 $216,673
Change in product inventory (2,716) (5,196) 7,115 (6,669)
(Gain) or loss on sale of
assets and other costs (11) 23 94 1
Total cost of revenues $49,989 $50,323 $213,967 $210,005
Stillwater Mine:
Total operating costs $25,251 $30,164 $98,669 $115,561
Total cash costs $28,914 $33,100 $111,885 $129,355
Total production costs $35,362 $39,449 $137,811 $156,592
Divided by total ounces 106 111 428 492
Divided by total tons milled 205 231 814 947
Total operating cost per
ounce $239 $271 $231 $235
Total cash cost per ounce $273 $297 $262 $263
Total production cost per
ounce $334 $354 $322 $318
Total operating cost per
ton milled $124 $131 $121 $122
Total cash cost per ton milled $141 $143 $138 $137
Total production cost per
ton milled $173 $171 $169 $165
Stillwater Mining Company
Key Factors (continued)
(Unaudited)
(in thousands, except cost per ounce and cost per ton data)
Three months ended Twelve months ended
December 31, December 31,
2003 2002 2003 2002
Reconciliation to cost of
revenues:
Total operating costs $25,251 $30,164 $98,669 $115,561
Royalties, taxes and other 3,663 2,936 13,216 13,794
Total cash costs $28,914 $33,100 $111,885 $129,355
Asset retirement costs 72 73 280 322
Depreciation and
Amortization 6,377 6,276 25,646 26,915
Total production costs $35,363 $39,449 $137,811 $156,592
Change in product inventory (2,564) (3,847) 6,155 (287)
(Gain) or loss on sale of
assets and other costs (5) 20 52 2
Total cost of revenues $32,794 $35,622 $144,018 $156,307
East Boulder Mine:
Total operating costs $11,516 $10,894 $46,712 $42,088
Total cash costs $13,324 $12,944 $53,572 $47,820
Total production costs $17,353 $16,047 $68,947 $60,081
Divided by total ounces 41 36 156 125
Divided by total tons milled 121 101 455 384
Total operating cost per
ounce $279 $303 $299 $335
Total cash cost per ounce $322 $360 $343 $381
Total production cost per
ounce $420 $446 $441 $478
Total operating cost per
ton milled $95 $108 $103 $110
Total cash cost per ton milled $110 $128 $118 $125
Total production cost per
ton milled $143 $159 $151 $156
Reconciliation to cost of
revenues:
Total operating costs $11,516 $10,894 $46,712 $42,088
Royalties, taxes and other 1,808 2,050 6,860 5,732
Total cash costs $13,324 $12,944 $53,572 $47,820
Asset retirement costs 16 43 62 186
Depreciation and
Amortization 4,013 3,060 15,313 12,075
Total production costs $17,353 $16,047 $68,947 $60,081
Change in product inventory (152) (1,349) 960 (6,382)
(Gain) or loss on sale of
assets and other costs (6) 3 42 (1)
Total cost of revenues $17,195 $14,701 $69,949 $53,698
Stillwater Mining Company
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share amounts)
December 31, December 31,
2003 2002
ASSETS
Current assets
Cash and cash equivalents $47,511 $25,913
Restricted cash equivalents 2,650 2,250
Inventories 202,485 52,058
Accounts receivable 3,777 18,647
Deferred income taxes 4,313 5,779
Other current assets 4,270 7,828
Total current assets 265,006 112,475
Property, plant and equipment, net 419,528 794,019
Other noncurrent assets 6,054 7,720
Total assets $690,588 $914,214
LIABILITIES and STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $9,781 $14,310
Accrued payroll and benefits 10,654 10,071
Property, production and franchise taxes
payable 8,504 10,998
Current portion of long-term debt and
capital lease obligations 1,935 21,461
Long-term debt secured by finished goods
inventory 74,106 --
Accrued restructuring costs 680 1,926
Other current liabilities 4,610 7,017
Total current liabilities 110,270 65,783
Long-term debt and capital lease obligations 85,445 198,866
Deferred income taxes 12,586 80,615
Other noncurrent liabilities 11,263 9,736
Total liabilities 219,564 355,000
Commitments and Contingencies
Stockholders' equity
Preferred stock, $0.01 par value,
1,000,000 shares authorized; none issued -- --
Common stock, $0.01 par value, 200,000,000 and
100,000,000 shares authorized; 89,849,239 and
43,587,107 shares issued and outstanding 899 436
Paid-in capital 592,974 351,605
Retained earnings (122,029) 209,504
Accumulated other comprehensive loss (820) (1,405)
Unearned compensation - restricted stock
awards -- (926)
Total stockholders' equity 471,024 559,214
Total liabilities and stockholders'
equity $690,588 $914,214
Stillwater Mining Company
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(in thousands, except per share amounts)
Three months ended Twelve months ended
December 31, December 31,
2003 2002 2003 2002
Revenues $60,478 $58,645 $240,229 $275,599
Costs and expenses
Cost of metals sold 39,599 40,987 173,008 171,015
Depreciation and
amortization 10,390 9,336 40,959 38,990
Total cost of revenues 49,989 50,323 213,967 210,005
General and administrative
expenses 4,315 3,627 14,513 14,205
Norilsk Nickel transaction
related expenses -- -- 3,043 --
Writedown of mining
properties 390,295 -- 390,295 --
Restructuring costs, net (966) -- (966) (5,938)
Total costs and expenses 443,633 53,950 620,852 218,272
Operating income (383,155) 4,695 (380,623) 57,327
Other income (expense) -- -- -- --
Interest income 112 159 427 903
Interest expense (3,979) (5,023) (17,595) (17,601)
Income (loss) before income
taxes and cumulative effect
of accounting change (387,022) (169) (397,791) 40,629
Income tax benefit
(provision) 158,218 (431) 161,921 (8,945)
Provision for valuation
allowance for deferred tax
assets (78,577) -- (78,577) --
Reduction of deferred tax
asset for net operating
loss
Carryforwards resulting
from ownership change (1,507) -- (16,678) --
Total income tax benefit
(provision) 78,134 (431) 66,666 (8,945)
Income (loss) before
cumulative effect of
accounting change (308,888) (600) (331,125) 31,684
Cumulative effect of
accounting change, net
of income tax benefit
of $264 -- -- (408) --
Net income (loss) (308,888) (600) (331,533) 31,684
Other comprehensive
income (loss), net of tax (157) (1,047) 585 (7,139)
Comprehensive income
(loss) $(309,045) $(1,647) $(330,948) $24,545
Basic earnings (loss)
per share
Income (loss) before
cumulative effect of
accounting change $(3.44) (0.01) $(4.88) $0.74
Cumulative effect of
accounting change -- -- (0.01) --
Net income (loss) $(3.44) $(0.01) $(4.89) $0.74
Diluted earnings (loss)
per share
Income (loss) before
cumulative effect of
accounting change $(3.44) $(0.01) $(4.88) $0.74
Cumulative effect of
accounting change -- -- (0.01) --
Net income (loss) $(3.44) $(0.01) $(4.89) $0.74
Weighted average common
shares outstanding
Basic 89,783 43,450 67,807 42,900
Diluted 89,783 43,484 67,807 43,004
Stillwater Mining Company
Consolidated Statements of Cash Flows (Unaudited)
(in thousands) Three months ended Twelve months ended
December 31, December 31,
2003 2002 2003 2002
Cash flows from operating
activities
Net income (loss) $(308,888) $(600) $(331,533) $31,684
Adjustments to reconcile
net income to net cash
Provided by operating
activities:
Depreciation and
amortization 10,390 9,336 40,959 38,990
Deferred income taxes (78,185) (25) (66,500) 4,453
Cumulative effect of
accounting change -- -- 672 --
Restructuring costs, net (966) -- (966) (5,938)
Cash paid on accrued
restructuring costs (3) (140) (280) (3,110)
Writedown of mining
properties 390,295 -- 390,295 --
Stock issued under employee
benefit plans 1,167 859 3,456 3,407
Amortization of debt
issuance costs 280 345 3,069 1,104
Amortization of restricted
stock compensation -- -- 670 464
Changes in operating assets
and liabilities:
Inventories (12,433) (5,560) (2,214) (9,114)
Accounts receivable 1,680 4,884 14,870 3,126
Accounts payable (90) 421 (4,529) (7,229)
Restricted Cash -- (2,250) (400) (2,250)
Other 7,205 (1,196) (354) (3,449)
Net cash provided by
operating activities 10,452 6,074 47,215 52,138
Cash flows used in
investing activities
Capital expenditures (14,280) (17,562) (55,256) (57,169)
Proceeds from sale/leaseback
transactions -- -- -- 1,282
Net cash used in investing
activities (14,280) (17,562) (55,256) (55,887)
Cash flows from financing
activities
Issuance of common stock
related to Norilsk Nickel
transaction, net of issue
costs (1) -- -- 90,284 --
Issuance of common stock,
net of issue costs 91 -- 152 56,047
Payments on long-term debt
and capital lease
obligations (563) (2,096) (59,191) (38,570)
Payments for debt issuance
costs -- (1,613) (1,606) (1,613)
Other -- (1,113) -- (1,113)
Net cash provided (used)
by financing activities (472) (4,822) 29,639 14,751
Cash and cash equivalents
Net increase (decrease) (4,300) (16,310) 21,598 11,002
Balance at beginning of
period 51,811 42,223 25,913 14,911
Balance at end of period $47,511 $25,913 $47,511 $25,913
(1) Non-cash financing
activities
Fair value of common
stock issued
(net of issue costs) $-- $-- $238,497 $--
Inventory received in
connection with the
Norilsk Nickel
transaction -- -- (148,213) --
Net cash received in
Norilsk Nickel
transaction $-- $-- $90,284 $--
SOURCE Stillwater Mining Company
-0- 02/27/2004
/CONTACT: John W. Pearson of Stillwater Mining Company, +1-406-322-8742/
/Web site: http://www.stillwatermining.com /
(SWC)
CO: Stillwater Mining Company; MMC Norilsk Nickel; Norimet Limited
ST: Montana
IN: MNG
SU: ERN CCA CON PER