Stillwater Mining Company reported net income for the 2012 first quarter of $2.4 million, or $0.02 per diluted share. Total revenues for the first quarter were $203.1 million. This compares to the same quarter last year of $36.2 million, or $0.34 per diluted share, on revenues of $170.1 million.
The difference is attributable to first quarter exploration expenses of $10.1 million; a $2.8 million write-off for a mineral exploration property; a $2.9 million foreign currency transaction gain; lower PGM prices; and higher consolidated total cash costs.
The 2012 first quarter earnings per share also reflect an additional 12.0 million shares which were issued in October 2011 as part of the Altar acquisition.
The Company's mines produced 120,800 ounces of palladium and platinum during the first quarter of 2012, a 7.9% decrease from the 131,200 ounce production in the first quarter of 2011, and a 6% increase from the 114,000 ounces produced during the fourth quarter of 2011. Most of the variability in production is the normal result of changes in mining conditions, the allocation of manpower and associated differences in mining productivities.
First quarter 2012 revenues from sales of mined production (including by-products) totaled $116.7 million, down from $122.0 million in the same period last year. Combined sales realizations decreased during the first quarter of 2012 for mined palladium and platinum ounces, averaging $875 per ounce, a 7.3% decrease from the $944 per ounce realized in the first quarter of 2011. The total quantity of mined palladium and platinum sold increased to 123,000 ounces in the first quarter of 2012, compared to 115,100 ounces sold during the same period in 2011, a 6.9% increase. Income in the first quarter of 2012 consisted of $28.3 million from mining operations and $2.4 million from recycling activities. For the first quarter of 2011, income from mining operations and recycling activities were $45.9 million and $2.9 million, respectively.
Total cash costs per mined ounce (a non-GAAP measure defined below) averaged $514 in the first quarter of 2012, compared to total cash costs of $437 per ounce for the first quarter of 2011. The increase in cash costs is primarily attributable to added labor in the miner training program, higher contractual wage and benefit rates, general inflation in supply costs and lower mine production. Taking these factors into account, costs for the 2012 first quarter were essentially on plan, so the Company is maintaining its total cash costs guidance of $500 per mined ounce for the full period of 2012.
During the first quarter of 2012, the Company processed recycling material containing 107,300 ounces of palladium, platinum and rhodium through the smelter and refinery, down slightly from the 115,600 ounces recycled during the first quarter of 2011. Recycling sales volumes, however, increased to 82,400 ounces in the first quarter of 2012, compared to 42,800 ounces in the first quarter of 2011, reflecting a higher proportion of recycling ounces purchased rather than tolled so far this year. Revenues from sales of purchased recycling materials totaled $85.7 million in the 2012 first quarter, up from $46.7 million in the same period last year. Tolling revenues declined to $0.7 million in this year's first quarter, compared to $1.4 million in the 2011 first quarter. The Company's recycling segment had net income for the first quarter of 2012 of $2.4 million (including financing income), compared to net income of $2.9 million reported for the first quarter of 2011. The Company's combined average realized price for sales of recycled platinum, palladium and rhodium declined to $1,039 per ounce in first quarter 2012 from $1,094 per ounce in the first quarter of 2011.
Francis R. McAllister, Stillwater's Chairman and CEO, commented, "Overall, I am satisfied with the Company's performance during the first quarter. Mine output fell off early in the quarter but recovered as the quarter progressed and ended essentially on plan. On average, PGM prices were softer during the quarter than in the same period last year, but palladium and platinum prices did improve during the quarter over their lows at the end of 2011. As expected and as previously forecast, exploration expenses, primarily related to the Altar project, had a significant effect on our first quarter 2012 results. In addition, mined production was down from the exceptionally strong first quarter we experienced last year. I would like to point out that, although our first quarter 2012 operating performance was down in most respects from our performance in last year's first quarter, for the most part it was in-line with our internal expectations. Consequently, we are not adjusting our 2012 annual production guidance of 500,000 ounces or our guidance for total cash costs. Looking forward, I continue to believe that the supply and demand dynamics for PGMs — and particularly for palladium — are robust, and that our business will benefit from these fundamentals going forward.
The Big Sky Business Journal
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