Stillwater Reports $27.6 Million Net Cash Position Increase

BILLINGS, MT – Mick McMullen, Stillwater Mining Company President and Chief Executive Officer said, "I am very pleased to report another excellent quarter at Stillwater Mining Company. Earnings attributable to common stockholders of $17.9 million were a strong result that included a $5.6 million pre-tax charge for reorganization costs. We also benefited during the quarter from reprocessing and selling some PGM ounces from inventories that had accumulated over the past year. The drive to produce profitable ounces is evidenced by the $27.6 million increase in our net cash position, which is pleasing considering recycling gross working capital also increased by $9.8 million over the quarter.

"We continue to focus on controlling our capital and operating costs, recognizing that cost management is a profit driver we can control, irrespective of future metal price behavior, which we cannot. Efforts to control costs during the quarter included paring back our workforce through both voluntary and involuntary severance programs; completing a detailed assessment of the profit contribution of each mining area within the Stillwater Mine; carefully scrutinizing all proposed capital spending; and monitoring corporate overhead.

"The Company is also benefiting from strong underlying market fundamentals in our key products, palladium and platinum. Growth in automotive production worldwide and ever more stringent emission standards combine to ensure expanding demand for these metals, while supply remains constrained. Significant labor difficulties in South Africa during the first half of this year restricted global production and consumed much of the metal inventory on hand, and most analysts project significant supply deficits for palladium and platinum this year and well into the future. Limited reinvestment in existing PGM production facilities, particularly in South Africa, also suggests that future production from that region may decline.

"This year’s second quarter saw a modest decline in mine output over the previous quarter, all at the Stillwater Mine. The East Boulder Mine has continued its strong performance. I have stated publicly that our objective as a Company, rather than merely seeking to maximize production, is to maximize profitable ounces while operating in a safe manner and maintaining our social license. In furthering this objective we may reduce production for a time in order to bypass unprofitable stopes until we have the appropriate infrastructure in place to maximize profitability. Tonnages mined at the Stillwater Mine declined slightly in the quarter in part due to mining conditions, some preferential allocation of resources toward underground mine development and to operational changes being implemented to maximize profitability, not ounces produced.

"During the quarter we commenced stoping from the first stope in the Graham Creek area. Preparations are under way to add an additional shift at the East Boulder mill, which will increase production by approximately 2,000 PGM ounces per month. We expect to see the benefit of these changes over the coming quarters. In addition, in the second quarter we began to see benefits to our recycling volumes from our new agreement with Johnson Matthey. Based on these results and current forecasts we are updating our 2014 guidance for total mined production to a range of 510,000 – 525,000 palladium and platinum ounces and are improving our 2014 guidance for all-in sustaining costs (a non-GAAP measure) to a range of $780 – $830 per mined ounce. We are also decreasing our full-year 2014 capital expenditure guidance to a range of $125 to $135 million."