Wednesday June 21, 3:14 pm Eastern Time
Stillwater Q2 output trailing Q1 about 15 pct
DENVER, June 21 (Reuters) - Stillwater Mining Co.'s (AMEX:SWC - news) second quarter palladium and platinum production is expected to be up to 15 percent below the first quarter's total of 112,000 ounces, the company said Wednesday.
Production is expected to be ``comparable'' to the 98,000 ounces produced during the second quarter of 1999, spokeswoman Gina Wilson said. Stillwater is the only U.S. producer of palladium and platinum and the only significant primary producer of platinum group metals outside of South Africa.
At the Stillwater Mine near Nye, Mont., the company is making progress on eliminating bottlenecks that have arisen due to an emphasis on development of additional capacity ``and the resulting tremendous number of tons that are being generated,'' Chief Executive Officer Bill Nettles said.
Changes in the blasting schedule to alleviate ventilation issues, along with the previously announced bottlenecks, are expected to reduce second quarter production by up to 15 percent compared to the first quarter of this year.
``As more development is being completed and as contract mining continues, cash costs of production are expected to be higher,'' he added without providing any specifics.
The company also said its East Boulder expansion project near Big Timber, Mont., has intercepted the J-M Reef on the west end of the 28 mile long deposit.
``After 22 months of tunnel boring toward the J-M Reef, we are pleased that we've intercepted it and that the geology is as we expected,'' said Nettles.
``Once we complete the initial drilling programme and subsequent test mining sequence, we'll have more information regarding mining methods, metallurgical recoveries, cost structure and other key components that will allow us to put together a comprehensive plan for East Boulder.''
Last week, the company said it was proceeding with a $30 million offering of Exempt Facility Revenue Bonds, Series 2000 through the State of Montana Board of Investments.
The bonds are being issued by the State of Montana Board of Investments to finance a portion of the costs of constructing sewage and solid waste disposal facilities at the Stillwater Mine and the East Boulder Project. The proceeds will provide long term financing without use of Stillwater's bank facility.
In addition, the company said, the banking syndicate for its $175 million facility has extended the waiver for production covenants to Sept. 30 and has granted consent to completion of the bond financing.
In trading Wednesday, Stillwater shares were down 1-7/8 to 27-7/8.
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