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Stillwater Mining Company Reports First Quarter 2016 Results

LITTLETON, Colo., May 06, 2016 (GLOBE NEWSWIRE) -- Stillwater Mining Company (NYSE:SWC) today reported financial results for the quarter ended March 31, 2016.

First Quarter 2016 Highlights:

  • All-in sustaining costs (AISC)* of $613 per mined ounce of palladium and platinum, down 19.7% from $763 per mined ounce for the first quarter of 2015
  • Cash and cash equivalents plus highly liquid investments of $452.4 million at quarter end
  • Mined palladium and platinum production of 137,300 ounces, an increase of 3.0% from the 133,300 ounces mined during the first quarter of 2015
  • Processed 154,200 ounces of recycled palladium, platinum and rhodium, an increase of 41.9% over 108,700 ounces recycled during the first quarter of 2015
  • Consolidated net loss attributable to common stockholders of $9.9 million or $0.08 per diluted share, reflecting the decrease in average sales price per mined ounce (palladium and platinum) to $612, a 29.7% decrease from $871 realized for the first quarter of 2015

Commenting on the first quarter results, Mick McMullen, the Company’s President and Chief Executive Officer stated, "From an operational perspective, the first quarter of 2016 was a very good start to the year. AISC* for the quarter of $613 per mined ounce was a great result that was slightly better than the lower end of our current annual guidance range of $615 to $665 per mined ounce. Further, this performance was consistent with our result for the fourth quarter of 2015 and demonstrates that we have achieved a new operating cost structure. Our mined production was a strong result and is showing the benefits of our productivity drive over the past two years.

"While the progress made to reduce costs has been notable, we believe that there are additional opportunities to further improve productivity and our team is working diligently to make added sustainable improvements. In addition, recycling volumes were ahead of plan for the first quarter of 2016 and we continue to pursue expansion of this business given our processing capacity.

"The Blitz project is a high priority for the Company and we have spent considerable time working on plans to accelerate this development. This effort is starting to deliver results, with advance rates increasing by 45% in the first quarter of 2016 compared to the 2015 average. Drilling of the J-M Reef from the underground development is being prioritized and results continue to be consistent with or slightly more favorable than typical off-shaft mineralization.

“As we have continued to make operational and cost improvements, the PGM price environment was challenging during the first two months of the quarter. Our average sales price for mined palladium and platinum totaled $531 and $919 per ounce respectively for the quarter, resulting in an average basket price of $612 per mined ounce. Fortunately, prices for both palladium and platinum increased throughout the quarter and have continued to increase subsequent to quarter end. We continue to believe the market fundamentals for palladium, our primary product, remain robust. Regardless of the near term fluctuations in PGM prices, our approach remains the same. We will continue our disciplined approach to capital deployment and focus on improving operational efficiencies. I believe this approach and our unique assets have positioned Stillwater in an industry-leading position for the benefit of our shareholders.” concluded Mr. McMullen.

2016 Full-Year Guidance:

Following a review of first quarter 2016 results and forecasts for the remainder of the year, guidance for the full-year 2016 remains unchanged and is detailed in the table below:

     
    2016 Guidance
Mined Production (palladium and platinum ounces)   515,000 - 535,000
Total Cash Costs per Mined Ounce (net of by-product and recycling credits)*   $445 - $485
All-In Sustaining Costs per Mined Ounce*   $615 - $665
General and Administrative (millions)   $30 - $40
Exploration (millions)(1)   $8 - $11
Sustaining Capital Expenditures (millions)   $50 - $60
Project Capital Expenditures (millions)(2)   $40 - $45
Total Capital Expenditures (millions)(2)   $90 - $105
     

(1) Exploration includes expenses for Marathon, Altar and Montana operations.
(2) Excludes project capitalized interest and capitalized depreciation.

First Quarter 2016 Results:

For the first quarter of 2016, the Company reported consolidated net loss attributable to common stockholders of $9.9 million, or $0.08 per diluted share, compared to consolidated net income attributable to common stockholders of $23.0 million, or $0.17 per diluted share for the first quarter of 2015. The decrease for the first quarter was impacted by significantly lower realized metal prices and lower sales volumes partially offset by lower costs.

Mine Production Comparison:

     
    Three Months Ended
    March 31,
(Produced ounces)   2016   2015
  Palladium   62,000   64,500
  Platinum   18,900   19,200
Stillwater Mine Total   80,900   83,700
         
  Palladium   44,000   38,700
  Platinum   12,400   10,900
East Boulder Mine Total   56,400   49,600
         
  Palladium   106,000   103,200
  Platinum   31,300   30,100
Total   137,300   133,300
         

Revenues from the Company’s Mine Production segment (including proceeds from the sale of by-products) totaled $85.8 million in the first quarter of 2016, down from $125.7 million for the first quarter of 2015. The combined average realized price for the sales of mined palladium and platinum decreased for the first quarter of 2016 to $612 per ounce, compared to $871 per ounce realized in the first quarter of 2015. The total quantity of mined palladium and platinum sold in the first quarter of 2016 was 132,000 ounces compared to 136,700 ounces sold in the first quarter of 2015.

Total costs of metals sold in the Mine Production segment decreased to $67.4 million in the first quarter of 2016 from $80.0 million in the first quarter of 2015.

Recycling Activity Comparison:

     
    Three Months Ended
    March 31,
    2016   2015
Average tons of catalyst fed per day   22.5     16.1  
Tons processed   2,048     1,448  
  Tons tolled   1,002     371  
  Tons purchased   1,046     1,077  
PGM ounces fed   154,200     108,700  
PGM ounces sold   63,400     74,600  
PGM tolled ounces returned   75,900     40,200  
             

Total recycle PGM ounces fed to the smelter were up 41.9% from the first quarter of 2015 to 154,200 ounces, with a large amount of the growth coming from tolled material as well as increased grades in the purchased material.

PGM Recycling revenues totaled $47.7 million for the 2016 first quarter, a decrease from $74.7 million in the same period of 2015. The Company's combined average realized price for sales of recycled palladium, platinum and rhodium was $700 per ounce in the first quarter of 2016 compared to $981 per ounce in the first quarter of 2015. Recycling sales volumes for the first quarter of 2016 decreased to 63,400 ounces from 74,600 ounces sold in the first quarter of 2015. In conjunction, tolled ounces returned to customers increased to 75,900 ounces for the first quarter of 2016 from 40,200 ounces in the first quarter of 2015. Only the treatment charges for tolled material are included in recycling revenues, hence the decrease in recycling revenues.

PGM Recycling costs of metals sold totaled $46.0 million in the first quarter of 2016, down from the $72.7 million in the first quarter of 2015. A majority of the cost of metals sold from recycling in each period is attributable to the acquisition cost of purchasing recyclable materials for the Company's own account; therefore, the aggregate cost of metals sold from the PGM Recycling segment is driven mostly by the volume and the value of the PGMs in the materials purchased by the Company.

General and administrative costs were $8.3 million in the first quarter of 2016, in line with the $8.3 million incurred during the same period of 2015.

All-In Sustaining Costs Per Mined Ounce:

AISC* per mined ounce totaled $613 for the first quarter of 2016, a decrease from $763 recorded for the same period of 2015. Reductions in cash costs and sustaining capital contributed to the lower AISC result.

     
    Three Months Ended
    March 31,
All-In Sustaining Costs Per Mined Ounce
Combined Montana Mining Operations
  2016   2015
Total combined cash costs per mined ounce, net of by-product and recycling credits*   $ 446     $ 537  
  PGM Recycling income credit per mined ounce   13     16  
  Corporate General & Administrative Costs (Before DD&A)   56     58  
  Capital Outlay to Sustain Production at the Montana Operating Mines   98     152  
All-In Sustaining Costs per mined ounce*   $ 613     $ 763  
                 

Cash Costs Per Mined Ounce:

Total combined cash costs per mined ounce (net of by-product and recycling credits)* totaled $446 per ounce for the first quarter of 2016, compared to $537 per ounce for the first quarter of 2015.

The table below illustrates the effect of by-product and recycling credits on the total combined cash costs per mined ounce, net of credits, for the Montana mining operations.

     
    Three Months Ended
    March 31,
Cash Costs Per Mined Ounce
Combined Montana Mining Operations
  2016   2015
Total combined cash costs per mined ounce, net of by-product and recycling credits*   $ 446     $ 537  
  By-product revenue credit per mined ounce   37     51  
  PGM Recycling income credit per mined ounce   13     16  
Total combined cash costs per mined ounce, before by-product and recycling credits*   $ 496     $ 604  
                 

*These are non-GAAP financial measures. For a full description and reconciliation of these and other non-GAAP financial measures to GAAP financial measures, see Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures below.

Cash Flow and Liquidity:

At March 31, 2016, the Company’s cash and cash equivalents balance was $171.7 million, compared to $147.3 million at December 31, 2015. The Company’s cash and cash equivalents plus highly liquid investments totaled $452.4 million at March 31, 2016 (including $18.5 million of investments which have been reserved as collateral on letters of credit), compared to $463.8 million at December 31, 2015. Net working capital decreased to $520.8 million at March 31, 2016, compared to $523.0 million at the end of 2015.

Net cash provided by operating activities (which includes changes in working capital) totaled $8.1 million for the quarter ended March 31, 2016, compared to $38.3 million of cash provided by operating activities for the same period in 2015. Cash capital expenditures were $18.8 million for the quarter ended March 31, 2016, compared to $27.9 million in the same period in 2015.

Outstanding total balance sheet debt reported at March 31, 2016, was approximately $259.7 million, an increase from $255.8 million at December 31, 2015. The Company’s debt balance at March 31, 2016, included approximately $259.1 million of 1.75% convertible debentures (net of unamortized discount of approximately $72.4 million and $3.6 million of deferred debt issuance costs), $0.5 million of 1.875% convertible debentures and less than $0.1 million for a capital lease. The change in debt balance is a result of the accretion of the discount on the Company's outstanding 1.75% convertible debentures.

2016 First Quarter Results Webcast and Conference Call:

Stillwater Mining Company will conduct a conference call to discuss first quarter 2016 results at 12:00 noon Eastern Daylight Time on Friday, May 6, 2016.

Dial-In Numbers:        United States:       (877) 407-8037
                                   International:        (201) 689-8037

A simultaneous webcast and presentation to accompany the conference call will be available through the Investor Relations section of the Company's website at: www.stillwatermining.com

A telephone replay of the call will be available for one week following the event. The replay dial-in numbers are (877) 660-6853 (U.S.) and (201) 612-7415 (International), access code 13631282. In addition, the call transcript will be archived in the Investor Relations section of the Company's website.

About Stillwater Mining Company

Stillwater Mining Company is the only U.S. miner of platinum group metals (PGMs) and the largest primary producer of PGMs outside of South Africa and the Russian Federation. PGMs are rare precious metals used in a wide variety of applications, including automobile catalysts, fuel cells, hydrogen purification, electronics, jewelry, dentistry, medicine and coinage. The Company is engaged in the development, extraction and processing of PGMs from a geological formation in south-central Montana recognized as the J-M Reef. The J-M Reef is the only known significant source of PGMs in the U.S. and the highest-grade PGM resource known in the world. The Company also recycles PGMs from spent catalytic converters and other industrial sources. The Company owns the Marathon PGM-copper deposit in Ontario, Canada, and the Altar porphyry copper-gold deposit located in the San Juan province of Argentina. The Company’s shares are traded on the New York Stock Exchange under the symbol SWC. Information about the Company can be found at its website: www.stillwatermining.com.

Cautionary Note Concerning Forward-Looking Statements

Some statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and, therefore, involve uncertainties or risks that could cause actual results to differ materially from management's expectations. These statements may contain words such as “believes,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “predicts,” “should,” “will,” “may” or similar expressions. Such statements also include, but are not limited to, comments regarding a new operating cost structure; further opportunities to improve productivity and making further sustainable improvements; pursing expansion of the recycling business; plans to accelerate the Blitz project; robust market fundamentals for palladium; disciplined approach to capital deployment and improving operational efficiencies;  Stillwater possessing a leading industry position for the benefit of shareholders; estimated 2016 production, cash costs per mined ounce, AISC, exploration expense, general and administrative costs and capital expenditures; and the usefulness of non-GAAP financial measures. The forward-looking statements in this release are based on assumptions and analyses made by management in light of experience and perception of historical trends, current conditions, expected future developments, and other factors that are deemed appropriate. These statements are not guarantees of the Company’s future performance and are subject to risks, uncertainties and other important factors that could cause its actual performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Additional information regarding factors that could cause results to differ materially from management's expectations is found in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K. The Company intends that the forward-looking statements contained herein be subject to the above-mentioned statutory safe harbors. Investors are cautioned not to rely on forward-looking statements. The forward-looking statements herein speak only as of the date of this release. The Company disclaims any obligation to update forward-looking statements.

 
Stillwater Mining Company
Consolidated Statements of Comprehensive (Loss) Income
(Unaudited)
 
    Three Months Ended
    March 31,
(In thousands, except per share data)   2016   2015
REVENUES        
Mine Production   $ 85,802     $ 125,738  
PGM Recycling   47,736     74,682  
Other   100     100  
Total revenues   133,638     200,520  
COSTS AND EXPENSES        
Costs of metals sold        
Mine Production   67,443     80,041  
PGM Recycling   46,044     72,705  
Total costs of metals sold (excludes depletion, depreciation and amortization)   113,487     152,746  
Depletion, depreciation and amortization        
Mine Production   17,069     16,869  
PGM Recycling   191     252  
Total depletion, depreciation and amortization   17,260     17,121  
Total costs of revenues   130,747     169,867  
(Gain) loss on disposal of property, plant and equipment   (1 )   3  
Loss on long-term investments       55  
Exploration   2,848     1,080  
General and administrative   8,297     8,345  
Total costs and expenses   141,891     179,350  
OPERATING (LOSS) INCOME   (8,253 )   21,170  
OTHER (EXPENSE) INCOME        
Other   42     884  
Interest income   710     703  
Interest expense   (4,182 )   (5,304 )
Foreign currency transaction gain (loss) , net   1,192     (608 )
(LOSS) INCOME BEFORE INCOME TAX BENEFIT (PROVISION)   (10,491 )   16,845  
Income tax benefit   561     6,043  
NET (LOSS) INCOME   $ (9,930 )   $ 22,888  
Net loss attributable to noncontrolling interest       (115 )
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS   $ (9,930 )   $ 23,003  
Other comprehensive income, net of tax        
Net unrealized gain on investments available-for-sale and deferred compensation   347     136  
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS   $ (9,583 )   $ 23,139  
Comprehensive loss attributable to noncontrolling interest       (115 )
TOTAL COMPREHENSIVE (LOSS) INCOME   $ (9,583 )   $ 23,024  
Weighted average common shares outstanding        
Basic   121,071     120,521  
Diluted   121,071     156,807  
Basic (loss) earnings per share attributable to common stockholders   $ (0.08 )   $ 0.19  
Diluted (loss) earnings per share attributable to common stockholders   $ (0.08 )   $ 0.17  


Stillwater Mining Company
Consolidated Balance Sheets
(Unaudited)
 
    March 31,   December 31,
(In thousands, except per share data)   2016   2015
ASSETS        
Current assets        
Cash and cash equivalents   $ 171,724     $ 147,336  
Investments, at fair value   280,658     316,429  
Inventories   105,185     102,072  
Trade receivables   1,223     800  
Prepaid expenses   1,295     2,821  
Other current assets   26,617     21,628  
Total current assets   586,702     591,086  
Mineral properties   112,480     112,480  
Mine development, net   467,285     460,751  
Property, plant and equipment, net   104,630     109,957  
Other noncurrent assets   4,142     4,115  
Total assets   $ 1,275,239     $ 1,278,389  
LIABILITIES AND EQUITY        
Current liabilities        
Accounts payable   $ 17,779     $ 18,205  
Accrued compensation and benefits   28,646     30,046  
Property, production and franchise taxes payable   12,676     13,907  
Current portion of long-term debt and capital lease obligations   46     657  
Other current liabilities   6,768     5,286  
Total current liabilities   65,915     68,101  
Long-term debt and capital lease obligations   259,661     255,099  
Deferred income taxes   22,235     22,761  
Accrued workers compensation   6,347     6,070  
Asset retirement obligation   10,947     11,027  
Other noncurrent liabilities   9,826     6,102  
Total liabilities   374,931     369,160  
EQUITY        
Stockholders’ equity        
Preferred stock, $0.01 par value, 1,000,000 shares authorized; none issued        
Common stock, $0.01 par value, 200,000,000 shares authorized; 121,072,613 and 121,049,471 issued and outstanding at March  31, 2016 and December 31, 2015, respectively   1,211     1,210  
Paid-in capital   1,099,944     1,099,283  
Accumulated deficit   (200,997 )   (191,067 )
Accumulated other comprehensive income (loss)   150     (197 )
Total equity   900,308     909,229  
Total liabilities and equity   $ 1,275,239     $ 1,278,389  


Stillwater Mining Company
Consolidated Statements of Cash Flows
(Unaudited)
 
    Three Months Ended
    March 31,
(In thousands)   2016   2015
CASH FLOWS FROM OPERATING ACTIVITIES        
Net (loss) income   $ (9,930 )   $ 22,888  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:        
 Depletion, depreciation and amortization   17,260     17,121  
 Loss on long-term investments       55  
  Amortization/accretion of investment premium/discount   607     420  
 (Gain) loss on disposal of property, plant and equipment   (1 )   3  
 Foreign currency transaction (gain) loss, net   (1,192 )   608  
 Deferred income taxes   355     (12,409 )
 Accretion of asset retirement obligation   208     191  
 Amortization of deferred debt issuance costs   217     303  
 Accretion of convertible debenture debt discount   4,345     4,525  
 Share based compensation and other benefits   732     3,438  
 Non-cash capitalized interest   (1,292 )   (866 )
Changes in operating assets and liabilities:        
 Inventories   (2,057 )   5,997  
 Trade receivables   (423 )   125  
 Prepaid expenses   1,526     1,183  
 Accounts payable   (83 )   (2,043 )
 Accrued compensation and benefits   (1,400 )   (2,152 )
 Property, production and franchise taxes payable   2,494     794  
 Accrued workers compensation   277     (146 )
 Other operating assets   (4,879 )   (1,879 )
 Other operating liabilities   1,357     156  
NET CASH PROVIDED BY OPERATING ACTIVITIES   8,121     38,312  
CASH FLOWS FROM INVESTING ACTIVITIES        
 Capital expenditures   (18,842 )   (27,902 )
 Proceeds from disposal of property, plant and equipment   1      
 Purchases of investments   (75,531 )   (57,371 )
 Proceeds from maturities and sales of investments   111,250     29,839  
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES   16,878     (55,434 )
CASH FLOWS FROM FINANCING ACTIVITIES        
 Payments on debt and capital lease obligations   (612 )   (584 )
 Proceeds from issuance of common stock   1     28  
NET CASH USED IN FINANCING ACTIVITIES   (611 )   (556 )
CASH AND CASH EQUIVALENTS        
  Net decrease   24,388     (17,678 )
  Balance at beginning of period   147,336     280,286  
BALANCE AT END OF PERIOD   $ 171,724     $ 262,608  


Stillwater Mining Company
Key Operating Factors
(Unaudited)
 
    Three Months  Ended
    March 31,
(In thousands, except where noted)   2016   2015
OPERATING AND COST DATA FOR MINE PRODUCTION        
Consolidated:        
Ounces produced        
Palladium   106     103  
Platinum   31     30  
Total   137     133  
Tons milled   313     308  
Mill head grade (ounce per ton)   0.47     0.46  
Sub-grade tons milled (1)   20     28  
Sub-grade tons mill head grade (ounce per ton)   0.17     0.16  
Total tons milled(1)   333     336  
Combined mill head grade (ounce per ton)   0.45     0.44  
Total mill recovery (%)   93     92  
Total mine concentrate shipped (tons) (3)   7,872     8,456  
Platinum grade in concentrate (ounce per ton) (3)   4.20     3.74  
Palladium grade in concentrate (ounce per ton) (3)   13.81     12.58  
Total combined cash costs per ounce - net of credits (Non-GAAP) (2)   $ 446     $ 537  
Total combined cash costs per ton milled - net of credits (Non-GAAP) (2)   $ 184     $ 213  
Stillwater Mine:        
Ounces produced        
Palladium   62     64  
Platinum   19     19  
Total   81     83  
Tons milled   162     172  
Mill head grade (ounce per ton)   0.53     0.51  
Sub-grade tons milled (1)   8     18  
Sub-grade tons mill head grade (ounce per ton)   0.27     0.19  
Total tons milled (1)   170     190  
Combined mill head grade (ounce per ton)   0.51     0.48  
Total mill recovery (%)   93     93  
Total mine concentrate shipped (tons) (3)   4,055     4,650  
Platinum grade in concentrate (ounce per ton) (3)   5.05     4.44  
Palladium grade in concentrate (ounce per ton) (3)   15.89     14.48  
Total cash costs per mined ounce - net of credits (Non-GAAP) (2)   $ 446     $ 531  
Total cash costs per ton milled - net of credits (Non-GAAP) (2)   $ 212     $ 234  


Stillwater Mining Company
Key Operating Factors (Continued)
(Unaudited)
 
    Three Months  Ended
    March 31,
(In thousands, except where noted)   2016   2015
OPERATING AND COST DATA FOR MINE PRODUCTION (Continued)        
East Boulder Mine:        
Ounces produced        
Palladium   44     39  
Platinum   12     11  
Total   56     50  
Tons milled   151     136  
Mill head grade (ounce per ton)   0.40     0.40  
Sub-grade tons milled (1)   12     10  
Sub-grade tons mill head grade (ounce per ton)   0.10     0.10
Total tons milled (1)   163     146  
Combined mill head grade (ounce per ton)   0.38     0.38
Total mill recovery (%)   91     91  
Total mine concentrate shipped (tons) (3)   3,817     3,806  
Platinum grade in concentrate (ounce per ton) (3)   3.29     2.89  
Palladium grade in concentrate (ounce per ton) (3)   11.60     10.25  
Total cash costs per mined ounce - net of credits (Non-GAAP) (2)   $ 446     $ 547  
Total cash costs per ton milled - net of credits (Non-GAAP) (2)   $ 154     $ 186  
                 

(1) Sub-grade tons milled includes reef waste material only. Reef waste material is PGM-bearing mined material below the cutoff grade for proven and probable reserves but with sufficient economic value to justify processing it through the concentrator along with the mined ore. Total tons milled includes ore tons and sub-grade tons only. See “Proven and Probable Ore Reserves – Discussion” in the Company’s 2015 Annual Report on Form 10-K for further information.
(2) Total cash costs include total operating costs plus royalties, insurance and taxes other than income taxes. Total cash costs per mined ounce, net of credits is a non-GAAP financial measure that management uses to monitor and evaluate the efficiency of its mining operations. This measure of cost is not defined under U.S. Generally Accepted Accounting Principles (GAAP). Please see Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures and the accompanying discussion for additional detail.
(3) The concentrate tonnage and grade values are inclusive of periodic re-processing of smelter slag and internal furnace brick PGM bearing materials.

 
 
Stillwater Mining Company
Key Operating Factors (Continued)
(Unaudited)
 
    Three Months Ended
    March 31,
(In thousands, except for average prices)   2016   2015
SALES AND PRICE DATA        
Ounces sold        
Mine Production:        
Palladium (oz.)   105     107  
Platinum (oz.)   27     30  
Total   132     137  
PGM Recycling: (1)        
Palladium (oz.)   37     44  
Platinum (oz.)   21     25  
Rhodium (oz.)   5     6  
Total   63     75  
By-products from Mine Production: (2)        
Rhodium (oz.)   1     1  
Gold (oz.)   3     3  
Silver (oz.)   1     1  
Copper (lb.)   257     260  
Nickel (lb.)   390     398  
Average realized price per ounce (3)        
Mine Production:        
Palladium ($/oz.)   $ 531     $ 784  
Platinum ($/oz.)   $ 919     $ 1,189  
Combined ($/oz.)(4)   $ 612     $ 871  
PGM Recycling: (1)        
Palladium ($/oz.)   $ 574     $ 797  
Platinum ($/oz.)   $ 912     $ 1,250  
Rhodium ($/oz.)   $ 719     $ 1,220  
Combined ($/oz.)(4)   $ 700     $ 981  
By-products from Mine Production: (2)        
Rhodium ($/oz.)   $ 690     $ 1,166  
Gold ($/oz.)   $ 1,192     $ 1,222  
Silver ($/oz.)   $ 15     $ 17  
Copper ($/lb.)   $ 1.91     $ 2.46  
Nickel ($/lb.)   $ 2.75     $ 4.97  
Average market price per ounce (3)        
Palladium ($/oz.)   $ 525     $ 786  
Platinum ($/oz.)   $ 915     $ 1,192  
Combined ($/oz.)(4)   $ 605     $ 873  
                 

(1) Ounces sold and average realized price per ounce from PGM Recycling relate to ounces produced from processing of spent catalyst from catalytic converters and other industrial sources.
(2) By-product metals sold reflect contained metal. Realized prices reflect net values (discounted due to product form and transportation and marketing charges) per unit received.
(3) The Company’s average realized price represents revenues, hedging gains and losses realized on commodity instruments and agreement discounts, divided by ounces sold. The average market price represents the average London market for the actual months of the period.
(4) The Company reports a combined average realized and market price of palladium and platinum at the same ratio as ounces that are produced from the base metal refinery.

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

The Company utilizes certain non-GAAP financial measures as indicators in assessing the performance of its mining and processing operations during any period. Because of the processing time required to complete the extraction of finished PGM products, there are typically lags of one to three months between ore production and sale of the finished product. Sales in any period include some portion of material mined and processed from prior periods as the revenue recognition process is completed. Consequently, while costs of revenues (a GAAP financial measure included in the Company’s Consolidated Statements of Comprehensive (Loss) Income) appropriately reflects the expense associated with the materials sold in any period, the Company has developed certain non-GAAP financial measures to assess the costs associated with its producing and processing activities in a particular period and to compare those costs between periods.

While the Company believes that these non-GAAP financial measures may also be of value to outside readers, both as general indicators of the Company’s mining efficiency from period to period and as insight into how the Company internally measures its operating performance, these non-GAAP financial measures are not standardized across the mining industry and in most cases will not be directly comparable to similar measures that may be provided by other companies. These non-GAAP financial measures are only useful as indicators of relative operational performance in any period, and because they do not take into account the inventory timing differences that are included in costs of revenues, they cannot meaningfully be used to develop measures of earnings or profitability. A reconciliation of these measures to costs of revenues, the most directly comparable GAAP financial measure, for each period shown is provided as part of the following tables, and a description of each non-GAAP financial measure is provided below.

Total Consolidated Costs of Revenues: For the Company as a whole, this measure is equal to total costs of revenues, as reported in the Company's Consolidated Statements of Comprehensive (Loss) Income. For the Stillwater Mine, the East Boulder Mine, and PGM Recycling and Other, the Company segregates the expenses within total costs of revenues that are directly associated with each of these activities and then allocates the remaining facility costs included in total cost of revenues in proportion to the monthly volumes from each activity. The resulting total costs of revenues measures for the Stillwater Mine, the East Boulder Mine and PGM Recycling and Other are equal in the aggregate, to total consolidated costs of revenues as reported in the Company’s Consolidated Statements of Comprehensive (Loss) Income.

Total Cash Costs (Non-GAAP): These non-GAAP financial measures are calculated as total costs of revenues adjusted to exclude costs of metals sold from PGM Recycling and Other, depletion and depreciation and amortization for Mine Production and PGM Recycling and Other, asset retirement costs, and timing differences resulting from changes in product inventories to arrive at Total Cash Costs before by-product and recycling credits. From this calculation, the Company deducts by-product and recycling income credits to arrive at Total Cash Costs, net of by-product and recycling credits. Total Cash Costs is a measure of extraction efficiency. The Company uses this measure as a comparative indication of the cash costs related to production and processing in its mining operations in any period.

When divided by the total recoverable PGM ounces from production in the respective period, Total Cash Costs per Mined Ounce (Non-GAAP), measured for each mine or combined, provides an indication of the level of cash costs incurred per PGM ounce produced in that period. Recoverable PGM ounces from production are an indication of the amount of PGM product extracted through mining in any period. Because ultimately extracting PGM material is the objective of mining, the cash cost per mined ounce of extracting and processing PGM ounces in a period is a useful measure for comparing extraction efficiency between periods and between the Company’s mines. Consequently, Total Cash Costs per Mined Ounce (Non-GAAP) in any period is a general measure of extraction efficiency, and is affected by the level of Total Cash Costs (Non-GAAP), by the grade of the ore produced and by the volume of ore produced in the period.

When divided by the total tons milled in the respective period, Total Cash Costs per Ore Ton Milled (Non-GAAP), measured for each mine or combined, provides an indication of the level of cash costs incurred per ore ton milled in that period. Because of variability of ore grade in the Company’s mining operations, mine production efficiency underground is frequently measured against ore tons produced rather than contained PGM ounces. Because ore tons are first weighed as they are fed into the mill, mill feed is the first point at which mine production tons are measured precisely. Consequently, Total Cash Costs per Ore Ton Milled (Non-GAAP) is a general measure of production efficiency, and is affected both by the level of Total Cash Costs (Non-GAAP) and by the volume of tons produced and fed to the mill.

With respect to 2016 guidance regarding Total Cash Costs per Mined Ounce (net of by-product and recycling credits) and AISC per Mined Ounce, the Company cannot provide a quantitative reconciliation to the most directly comparable GAAP measure without unreasonable effort. However, the Company would expect to calculate these non-GAAP measures in the same manner they were calculated in the reconciliations included in this press release.

 
Stillwater Mining Company
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(Unaudited)
 
    Three Months Ended
    March 31,
(In thousands, except per ounce and per ton data)   2016   2015
Consolidated:        
Reconciliation from costs of revenues:        
Total costs of revenues   $ 130,747     $ 169,867  
Costs of metals sold        
  PGM Recycling   (46,044 )   (72,705 )
Depletion, depreciation and amortization        
  Mine Production   (17,069 )   (16,869 )
  PGM Recycling   (191 )   (252 )
Depletion, depreciation and amortization (in inventory)   (1,055 )   937  
Change in product inventories   1,942     (354 )
Asset retirement costs   (208 )   (191 )
Total combined cash costs, before by-product and recycling credits  (Non-GAAP)   $ 68,122     $ 80,433  
By-product credit   (5,115 )   (6,745 )
Recycling income credit   (1,777 )   (2,127 )
Total combined cash costs, net of by-product and recycling credits  (Non-GAAP)   $ 61,230     $ 71,561  
         
Mined ounces produced   137     133  
         
Total combined cash costs per mined ounce, before by-product and recycling credits  (Non-GAAP)   $ 496     $ 604  
By-product credit per mined ounce   (37 )   (51 )
Recycling income credit per mined ounce   (13 )   (16 )
Total combined cash costs per mined ounce, net of by-product and recycling credits  (Non-GAAP)   $ 446     $ 537  
         
Ore tons milled   333     336  
         
Total combined cash costs per ore ton milled, before by-product and recycling credits  (Non-GAAP)   $ 204     $ 239  
By-product credit per ore ton milled   (15 )   (20 )
Recycling income credit per ore ton milled   (5 )   (6 )
Total combined cash costs per ore ton milled, net of by-product and recycling credits  (Non-GAAP)   $ 184     $ 213  


Stillwater Mining Company
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Continued)
(Unaudited)
 
    Three Months Ended
    March 31,
(In thousands, except per ounce and per ton data)   2016   2015
Stillwater Mine:        
Reconciliation from costs of revenues:        
Total costs of revenues   $ 51,476     $ 62,355  
Depletion, depreciation and amortization        
  Mine Production   (11,891 )   (12,095 )
Depletion, depreciation and amortization (in inventory)   (392 )   716  
Change in product inventories   688     (1,259 )
Asset retirement costs   (194 )   (183 )
Total cash costs, before by-product and recycling credits (Non-GAAP)   $ 39,687     $ 49,534  
By-product credit   (2,574 )   (3,805 )
Recycling income credit   (1,034 )   (1,335 )
Total cash costs, net of by-product and recycling credits (Non-GAAP)   $ 36,079     $ 44,394  
         
Mined ounces produced   81     84  
         
Total cash costs per mined ounce, before by-product and recycling credits  (Non-GAAP)   $ 491     $ 592  
By-product credit per mined ounce   (32 )   (45 )
Recycling income credit per mined ounce   (13 )   (16 )
Total cash costs per mined ounce, net of by-product and recycling credits  (Non-GAAP)   $ 446     $ 531  
         
Ore tons milled   170     190  
         
Total cash costs per ore ton milled, before by-product and recycling credits  (Non-GAAP)   $ 233     $ 261  
By-product credit per ore ton milled   (15 )   (20 )
Recycling income credit per ore ton milled   (6 )   (7 )
Total cash costs per ore ton milled, net of by-product and recycling credits  (Non-GAAP)   $ 212     $ 234  


Stillwater Mining Company
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Continued)
(Unaudited)
 
    Three Months Ended
    March 31,
(In thousands, except per ounce and per ton data)   2016   2015
East Boulder Mine:        
Reconciliation from costs of revenues:        
Total costs of revenues   $ 33,036     $ 34,555  
Depletion, depreciation and amortization        
  Mine Production   (5,178 )   (4,774 )
Depletion, depreciation and amortization (in inventory)   (663 )   221  
Change in product inventories   1,254     905  
Asset retirement costs   (14 )   (8 )
Total cash costs, before by-product and recycling credits  (Non-GAAP)   $ 28,435     $ 30,899  
By-product credit   (2,541 )   (2,940 )
Recycling income credit   (743 )   (792 )
Total cash costs, net of by-product and recycling credits  (Non-GAAP)   $ 25,151     $ 27,167  
         
Mined ounces produced   56     50  
         
Total cash costs per mined ounce, before by-product and recycling credits  (Non-GAAP)   $ 504     $ 622  
By-product credit per mined ounce   (45 )   (59 )
Recycling income credit per mined ounce   (13 )   (16 )
Total cash cost, per mined ounce, net of by-product and recycling credits  (Non-GAAP)   $ 446     $ 547  
         
Ore tons milled   163     146  
         
Total cash costs per ore ton milled, before by-product and recycling credits  (Non-GAAP)   $ 175     $ 211  
By-product credit per ore ton milled   (16 )   (20 )
Recycling income credit per ore ton milled   (5 )   (5 )
Total cash costs per ore ton milled, net of by-product and recycling credits  (Non-GAAP)   $ 154     $ 186  
         
PGM Recycling:        
Cost of metals sold        
  PGM Recycling   $ (46,044 )   $ (72,705 )
Depletion, depreciation and amortization        
  PGM Recycling   (191 )   (252 )
Total costs of revenues   $ (46,235 )   $ (72,957 )
                 

Stillwater Mining Company
All-In Sustaining Costs (a Non-GAAP Financial Measure)
(Unaudited)

All-In Sustaining Costs (Non-GAAP): This non-GAAP financial measure is used as an indicator from period to period of the level of total cash required by the Company to maintain and operate the existing mines, including corporate administrative costs and replacement capital. The measure is calculated beginning with total combined cash costs (another non-GAAP financial measure, described above), and adding to it the recycling income credit, domestic corporate overhead and marketing costs (excluding any depreciation, research and development, and reorganization costs included in corporate overhead costs) and that portion of total capital expenditures associated with sustaining the current level of mining operations. (Capital expenditures for Blitz, Graham Creek (prior to 2015) and certain other one-time projects are not included in the calculation.)

When divided by the total recoverable PGM ounces in the respective period, All-In Sustaining Costs per Mined Ounce (Non-GAAP) provides an indication of the level of total cash required to maintain and operate the mines per PGM ounce produced in the period. Recoverable PGM ounces from production are an indication of the amount of PGM product extracted through mining in any period. Because the objective of PGM mining activity is to extract PGM material, the all-in cash costs per mined ounce to produce PGM material, administer the business and sustain the operating capacity of the mines is a useful measure for comparing overall extraction efficiency between periods. This measure is affected by the total level of spending in the period and by the grade and volume of mined ore produced.

     
    Three Months Ended
    March 31,
(In thousands, except $/oz.)   2016   2015
All-In Sustaining Costs        
Total combined cash costs, net of by-product and recycling credits  (Non-GAAP)   $ 61,230     $ 71,561  
Recycling income credit   1,777     2,127  
    $ 63,007     $ 73,688  
         
Consolidated Corporate General & Administrative costs   $ 8,297     $ 8,345  
Corporate depreciation included in Consolidated Corporate General & Administrative costs   (111 )   (132 )
General & Administrative Costs - Foreign Subsidiaries   (444 )   (417 )
Total General & Administrative costs   $ 7,742     $ 7,796  
         
Total capitalized costs   $ 21,266     $ 28,375  
Capital associated with expansion   (7,804 )   (8,121 )
Total Capital incurred to sustain existing operations   $ 13,462     $ 20,254  
         
All-In Sustaining Costs  (Non-GAAP)   $ 84,211     $ 101,738  
         
Mined ounces produced   137.3     133.3  
         
All-In Sustaining Costs per Mined Ounce ($/oz.)  (Non-GAAP)   $ 613     $ 763  

 

INVESTOR CONTACT:
Mike Beckstead
(720) 502-7671
investor-relations@stillwatermining.com

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Stillwater Mining Company

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Stillwater Mining Company's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.