Thursday August 8, 2013 1:54 PM
(Kitco News) - Stillwater Mining Co.'s (TSX: SWC.U)(
) second-quarter net loss of $5.3 million, or 4 cents per share,
was due to "unusual expenses during the second quarter," according
to the company's interim chief executive officer.
Terry Ackerman, interim CEO of Stillwater, said in an afternoon
conference call that a few one-time charges were responsible for
the company's loss in the quarter.
"There was some noise in our results in the second quarter. We
had significant unplanned expenses, including a one-time non-cash
charge of $9.1 million for accelerated vesting of essentially all
outstanding incentive shares and stocked options," Ackerman said.
"This accelerated vesting was a result of a change in control
provisions and our equities incentive plans that were triggered
during the quarter.
"We also recognized additional expenses of $1.5 million during
the quarter for legal and advisory services related to the recent
proxy contest," Ackerman said. "Also unique to the quarter were
one-time compensation expenses associated with the retirement of
our former CEO. These costs are included in the general and
administrative lines in our financials.
"If these unusual expenses were excluded, our results for the
second quarter of 2013 were respectable," he added.
The company posted a slight decline in output of platinum group
metals, producing 131,500 PGM ounces in the second quarter, lower
than the 133,000 produced in last year's second quarter. Production
for the first half of 2013 totaled 259,000 PGM ounces, compared to
254,000 in the first half of 2012.
"These changes in production from period to period are primarily
in result of normal variations in mining conditions in stopes
available to mine at any point in time," Ackerman said.
Stillwater reiterated its guidance of 500,000 PGM ounces in
The company experienced grade challenges at its Stillwater mine
with delivering ore grades to the mill.
"Normal grade challenges we experienced during the quarter
(were) compounded by several infrastructure issues, including the
loss of a key mud pass," Ackerman said. "With the loss of this
pass, an adjacent pass was used for both ore and waste for part of
the quarter, which is not optimal for operations which created
logistical challenges and dilution. Our teams are working
diligently to resolve this issue."
Ackerman said that if the issue is solved quickly, production at
the mine could exceed company expectations.
The company also pointed to an increase in PGM recycling,
recording a quarterly recycling volume record of 175,000 ounces.
PGM recycling revenues for the second quarter of 2013 were $153.7
million, and increase of almost 60% from the same quarter last
year, the company said.
Stillwater's averaged realized price for PGMs came in lower,
compared to the first quarter of 2013.
"Our average combined realized price for mined palladium and
platinum sales during the quarter was $865 per ounce, up slightly
from the second quarter last year, but down from the $926 per ounce
we realized in the first quarter," Ackerman said. "Despite the dip
in market prices, PGMs, in particular palladium, have continued to
benefit from strong automotive demand in North America and China,
offset in part by the lack of recovery in the European auto
Despite lower palladium and platinum prices in the second
quarter, Ackerman noted the decline wasn't as bad as gold, with
industrial applications playing a large part in prices.
"The supply and demand fundamentals for our primary product,
palladium, continue to be very strong," said Ackerman. "We did
experience a dip in PGM prices during the second quarter as market
prices for palladium and platinum broadly tracked the downward turn
in the price of gold; however, the negative impact on palladium and
platinum prices was not as severe as for gold, reflecting the dual
character of our PGMs as precious metals with significant
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By Alex Létourneau of Kitco News firstname.lastname@example.org