Stillwater Mining Company (SWC, Financial) filed Quarterly Report for the period ended 2010-09-30.
Stillwater Mining Company has a market cap of $1.64 billion; its shares were traded at around $17.22 with a P/E ratio of 52.2 and P/S ratio of 4.1. SWC is in the portfolios of Steven Cohen of SAC Capital Advisors, John Hussman of Hussman Economtrics Advisors, Inc..
Companys total available liquidity, expressed as cash plus short-term investments, continued to increase during the quarter, and at September 30, 2010, was $259.0 million, up from $228.1 million at June 30, 2010, and $201.2 million at the end of 2009. Net working capital (including cash and investments) also increased over the quarter to $334.9 million at September 30, 2010, up from $316.9 million at the end of second quarter 2010 and $269.5 million at year end 2009.
The Companys operating objectives for the full year of 2010 initially included targeted mine production of 515,000 combined ounces of palladium and platinum, which was lowered in the second quarter of 2010 to 490,000 combined ounces of palladium and platinum at a total consolidated cash cost per ounce of $385, and capital expenditures of about $57 million. These forecasts are being updated directionally to reflect continuing production challenges at both mines. The new guidance is a full year production objective of between 480,000 to 490,000 ounces at a total consolidated cash cost of between $395 and $400 per ounce. (Total consolidated cash cost per ounce is a non-GAAP measure of extraction efficiency please see Reconciliation of non-GAAP measures to Costs of Sales below for a discussion of how this measure is derived). Capital expenditure guidance remains targeted at $57 million. After a strong start this year, mine production declined somewhat during the second and third quarters, largely as a result of operational challenges at the Stillwater Mine. During the third quarter of 2010, the Companys two operating mines produced 122,400 ounces of palladium and platinum at a total consolidated cash cost of $402 per ounce up from $357 per ounce in the third quarter of 2009. Year to date in 2010, combined mine output of palladium and platinum has totaled 364,000 ounces at an average total cash cost per ounce of $386; that compares to 391,600 ounces through nine months of 2009 at a total cash cost of $363 per ounce. The higher total cash costs per ounce experienced this year reflects in part the effect on royalties and taxes of higher PGM prices, but mostly are the result of lower overall realized ore grades at the Stillwater Mine. Capital spending in the third quarter of 2010 was $10.9 million, bringing year-to-date 2010 spending to $35.5 million. Capital to date is lagging the planned level of spending, mainly reflecting the under-budget final cost of constructing the Companys new recycle crushing and sampling facility in Columbus.
Stillwater Mines total cash costs of $374 per ounce for the third quarter of 2010 were higher than originally planned and above the $344 per ounce for the third quarter of 2009, driven by increased royalties and taxes resulting from higher prices, and by the lower mine production. However, looking instead at total cash cost per ton (another non-GAAP measure), for the 2010 third quarter Stillwater Mine incurred $170 per ore ton milled, compared to $167 per ore ton milled in the same period last year. Likewise, year to date in 2010 Stillwater Mine total cash costs per ton have been $168, a little lower than the $175 per ore ton for the first nine months of 2009.
Recognizing the challenges facing the Stillwater Mine in particular during 2010, the Company is updating directionally its production guidance for the full year of 2010 from 490,000 ounces of mined palladium and platinum to be in the range of between 480,000 to 490,000 combined ounces. As a result, average combined total cash costs for the full year 2010 are now projected to increase to between $395 and $400 per ounce from the $385 per ounce guidance. Capital spending for the full year of 2010 remains targeted at $57 million, consistent with our earlier guidance of $50 million, reflecting additional infrastructure development and some tactical opportunities to strengthen operations modestly in 2011 and 2012.
Along with its mine concentrates, the Company also processes spent catalyst material through its smelting and refining facilities in Columbus, Montana, ultimately recovering palladium, platinum and rhodium from these materials. For the third quarter of 2010, the Company earned $3.1 million from recycling operations on revenues of $54.7 million, reflecting a combined average realization (including rhodium) of $1,099 per sold ounce. By comparison, in the third quarter of 2009 the Companys net income from recycling operations was $1.7 million on revenues of $26.2 million, a combined average realization of $686 per sold ounce. Total tons of recycling material processed during the third quarter of 2010, including tolled material, averaged 13.8 tons per day, up from 9.6 tons per day in the third quarter of 2009. Higher PGM prices have created a stronger incentive for suppliers to collect material, and this year the Company has been able to enter into new sourcing arrangements for catalyst material with several suppliers. Total ounces recycled in the third quarter of 2010, including toll ounces processed, was 78,500 ounces compared to 60,800 ounces in the third quarter of 2009. Total ounces recycled in the first nine months of 2010, including toll ounces, was 297,000 ounces compared to 160,100 in the first nine months of 2009.
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Stillwater Mining Company has a market cap of $1.64 billion; its shares were traded at around $17.22 with a P/E ratio of 52.2 and P/S ratio of 4.1. SWC is in the portfolios of Steven Cohen of SAC Capital Advisors, John Hussman of Hussman Economtrics Advisors, Inc..
Highlight of Business Operations:
For the third quarter of 2010, the Company reported net income of $5.9 million, or $0.06 per share, higher than the $4.2 million, or $0.04 per share, reported in the third quarter 2009. Stronger realized prices in the 2010 third quarter for the Companys primary products, palladium and platinum, more than offset lower ounce production compared to the third quarter of 2009. The Companys combined average realized price for each metal differs from equivalent average market prices as the result of various contractual provisions, which include ceiling prices that apply to a portion of the Companys mined platinum, floor prices that during the third quarter of 2009 benefited most of the Companys mined palladium, small contractual discounts on those volumes not subject to floors or ceilings, and selling prices based on monthly averages which generally lag the market price by one month. The Companys average realized price on sales of mined palladium and platinum was $687 per ounce in the third quarter of 2010, lower than the $725 per ounce realized in the second quarter of 2010 but higher than the $574 per ounce realized in the third quarter of 2009.Companys total available liquidity, expressed as cash plus short-term investments, continued to increase during the quarter, and at September 30, 2010, was $259.0 million, up from $228.1 million at June 30, 2010, and $201.2 million at the end of 2009. Net working capital (including cash and investments) also increased over the quarter to $334.9 million at September 30, 2010, up from $316.9 million at the end of second quarter 2010 and $269.5 million at year end 2009.
The Companys operating objectives for the full year of 2010 initially included targeted mine production of 515,000 combined ounces of palladium and platinum, which was lowered in the second quarter of 2010 to 490,000 combined ounces of palladium and platinum at a total consolidated cash cost per ounce of $385, and capital expenditures of about $57 million. These forecasts are being updated directionally to reflect continuing production challenges at both mines. The new guidance is a full year production objective of between 480,000 to 490,000 ounces at a total consolidated cash cost of between $395 and $400 per ounce. (Total consolidated cash cost per ounce is a non-GAAP measure of extraction efficiency please see Reconciliation of non-GAAP measures to Costs of Sales below for a discussion of how this measure is derived). Capital expenditure guidance remains targeted at $57 million. After a strong start this year, mine production declined somewhat during the second and third quarters, largely as a result of operational challenges at the Stillwater Mine. During the third quarter of 2010, the Companys two operating mines produced 122,400 ounces of palladium and platinum at a total consolidated cash cost of $402 per ounce up from $357 per ounce in the third quarter of 2009. Year to date in 2010, combined mine output of palladium and platinum has totaled 364,000 ounces at an average total cash cost per ounce of $386; that compares to 391,600 ounces through nine months of 2009 at a total cash cost of $363 per ounce. The higher total cash costs per ounce experienced this year reflects in part the effect on royalties and taxes of higher PGM prices, but mostly are the result of lower overall realized ore grades at the Stillwater Mine. Capital spending in the third quarter of 2010 was $10.9 million, bringing year-to-date 2010 spending to $35.5 million. Capital to date is lagging the planned level of spending, mainly reflecting the under-budget final cost of constructing the Companys new recycle crushing and sampling facility in Columbus.
Stillwater Mines total cash costs of $374 per ounce for the third quarter of 2010 were higher than originally planned and above the $344 per ounce for the third quarter of 2009, driven by increased royalties and taxes resulting from higher prices, and by the lower mine production. However, looking instead at total cash cost per ton (another non-GAAP measure), for the 2010 third quarter Stillwater Mine incurred $170 per ore ton milled, compared to $167 per ore ton milled in the same period last year. Likewise, year to date in 2010 Stillwater Mine total cash costs per ton have been $168, a little lower than the $175 per ore ton for the first nine months of 2009.
Recognizing the challenges facing the Stillwater Mine in particular during 2010, the Company is updating directionally its production guidance for the full year of 2010 from 490,000 ounces of mined palladium and platinum to be in the range of between 480,000 to 490,000 combined ounces. As a result, average combined total cash costs for the full year 2010 are now projected to increase to between $395 and $400 per ounce from the $385 per ounce guidance. Capital spending for the full year of 2010 remains targeted at $57 million, consistent with our earlier guidance of $50 million, reflecting additional infrastructure development and some tactical opportunities to strengthen operations modestly in 2011 and 2012.
Along with its mine concentrates, the Company also processes spent catalyst material through its smelting and refining facilities in Columbus, Montana, ultimately recovering palladium, platinum and rhodium from these materials. For the third quarter of 2010, the Company earned $3.1 million from recycling operations on revenues of $54.7 million, reflecting a combined average realization (including rhodium) of $1,099 per sold ounce. By comparison, in the third quarter of 2009 the Companys net income from recycling operations was $1.7 million on revenues of $26.2 million, a combined average realization of $686 per sold ounce. Total tons of recycling material processed during the third quarter of 2010, including tolled material, averaged 13.8 tons per day, up from 9.6 tons per day in the third quarter of 2009. Higher PGM prices have created a stronger incentive for suppliers to collect material, and this year the Company has been able to enter into new sourcing arrangements for catalyst material with several suppliers. Total ounces recycled in the third quarter of 2010, including toll ounces processed, was 78,500 ounces compared to 60,800 ounces in the third quarter of 2009. Total ounces recycled in the first nine months of 2010, including toll ounces, was 297,000 ounces compared to 160,100 in the first nine months of 2009.
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