The Montana mining company, Stillwater Mining, lost a huge account in General Motors, but they are have been able to stay afloat thanks to increased palladium prices and production in the third quarter. After losing Gm, he company has had little difficulty finding new purchasers for their palladium. For more on this, see the following article from Commodity Online.
Stillwater Mining, which lost the contract to provide palladium to the General Motors, however managed to stave off the loss by increased PGM (platinum group metals) production and stronger metals prices.
Higher PGM prices have helped Montana’s Stillwater Mining weather the cancellation of its contract with General Motors during the first nine months of this year.
For the nine months ended September 30, Stillwater Mining reported total production of 300,900 ounces of palladium and 86,100 ounces of platinum, an overall combined increase of 16.4% compared to the same period of last year.
As of September 30 Stillwater has achieved 79% of its 2009 production goal of 496,000 palladium and platinum ounces, which Stillwater officials say indicates that full year results should exceed the earlier guidance.
For the third quarter of this year, Stillwater reported combined platinum and palladium of 129,100 ounces, a 9.1% increase over the third-quarter 2008.
Meanwhile, platinum and palladium prices continued to strengthen during the third quarter of this year, although they remain well below their average levels achieved in 2008.
The effect on the company of losing its supply agreement with General Motors in early July has been almost entirely offset by the increase in PGM prices and, as expected, the company has had no difficulty finding buyers for the displaced metal under that contract.
The company’s original guidance for this year anticipated average total cash costs of $399 per ounce. Actual combined total cash costs average $357/oz during the third quarter and $363/oz year to date. Stillwater now expects to outperform its earlier cash cost guidance for the full year 2009.
Meanwhile the company saw its total amount of cash and investment on hand increase to $180 million at the end of last year. However, due to improving PGM prices and continued good mining productivity, Stillwater saw that balance increase in the third quarter to just over $200 million.
This article has been republished from Commodity Online. You can also view this article at Commodity Online, a commodity news and analysis site.