Mont. platinum miner says income rebounded in 2010
BILLINGS, Mont. (AP) -- Stillwater Mining Co. said Tuesday that 2010 was its best year in almost a decade, as the company benefited from strong platinum and palladium prices and renewed demand for the precious metals from the auto industry.
Billings-based Stillwater released year-end figures that showed a 2010 profit of $50.4 million -- rebounding from a loss of almost $9 million in 2009.
Revenue rose more than 40 percent for the year, to $555 million.
For the fourth quarter, the company had income of $16.5 million, or 16 cents per share, versus a loss of $5.8 million during the same period a year earlier. But that fell short of analysts' earnings expectations of 20 cents per share.
Stillwater shares fell almost 8 percent, or $1.85, to $22.54 Tuesday.
The company operates the only platinum and palladium mines in the U.S., in the Beartooth Mountains southwest of Billings.
Its year-end results follow the company's purchase of a large platinum and palladium reserve near Marathon, Ontario, the revival of a supply agreement with General Motors Co., and Russian mining giant Norilsk Nickel's sale of its majority stake in Stillwater.
Chief Financial Officer Greg Wing said there had been about $5.5 million in expenses associated with the Marathon and Norilsk transactions.
Stillwater suffered in 2008 and 2009 when precious metals prices plummeted and General Motors cancelled its supply contract for palladium used to make catalytic converters while the automaker was in bankruptcy protection.
But CEO Frank McAllister said in a Tuesday conference call with investors that he expects the conditions that allowed the company to rebound will hold steady -- unlike a short-lived palladium price spike seen a decade ago.
McAllister cited rising demand for automobiles from developing nations and the apparent depletion of a large stockpile of precious metals that had been held by the Russian government.
"Circumstances are fundamentally different today than they were a decade ago," he said. "Today, rather than merely unbridled speculation, the basic principles of supply and demand appear to be the operative dynamic."
The increase in revenue came despite a drop in production from Stillwater's mines near Nye and McLeod, by about 8.5 percent, to 485,100 ounces of platinum and palladium.
The average sales price increased from $549 an ounce to $721 an ounce. The company also saw an upswing in recycled platinum and palladium, from 251,000 ounces in 2009 to almost 400,000 ounces last year.