Stillwater Mining Company (NYSE:SWC) today
reported financial results for the quarter ended June 30, 2016.
Second Quarter 2016 Highlights:
- Notable safety performance improvement, with a reportable
incidence rate decrease of 61.4% compared to the second quarter of
2015, resulting in the lowest quarterly rate on record (earliest
statistics available from January 1, 2000)
- Mined palladium and platinum sales of 150,900 ounces, an
increase of 13.5% from 133,000 ounces sold during the second
quarter of 2015
- Costs of metals sold of $501 per PGM mined ounce, down 17.3%
from $606 per PGM mined ounce for the second quarter of 2015
- Mined palladium and platinum production of 137,100 ounces, an
increase of 8.0% from 127,000 ounces mined during the second
quarter of 2015
- All-in sustaining costs (AISC)* of $594 per mined ounce of
palladium and platinum, down 24.3% from $785 per PGM mined ounce
for the second quarter of 2015 and the lowest since 2010
- Cash and cash equivalents plus highly liquid investments of
$442.2 million at quarter end, after funding a $20.5 million
increase of recycling working capital and all capital during the
second quarter of 2016
- Processed 169,900 ounces of recycled palladium, platinum and
rhodium, an increase of 12.1% over 151,600 ounces recycled during
the second quarter of 2015 and is the second highest total on
record
- East Boulder Mine set several new records in the second
quarter, including highest monthly tons milled (June), highest
monthly ounces per employee (June) and the first half of 2016 was
the highest number of ounces produced for any half-year period
- Accelerated Blitz project on the 56 East development drive,
with first production now expected in late 2017 or early 2018
- Forecasting $155 million to $175 million capital expenditures
for the Blitz project to first production
- Consolidated net income attributable to common stockholders of
$0.8 million or $0.01 per diluted share, reflecting the decrease
sales price per mined ounce (palladium and platinum) of $665, a
21.0% decrease from $842 realized for the second quarter of
2015
Commenting on the second quarter results, Mick
McMullen, the Company’s President and Chief Executive Officer
stated, “We are pleased to report not only strong operational
performance this quarter, but also a notable 61.4% year-over-year
reduction in our total company reportable incident rate, reflecting
our team’s diligence in prioritizing safety while delivering
improvement across the organization.
“We delivered quarterly costs of metals sold of
$501 per PGM mined ounce and AISC* within our new medium-term
mid-to-high $500's target range. Our momentum continued throughout
the quarter, with June delivering the highest monthly ounces since
April 2015, a significant decrease in costs of metals sold and the
lowest AISC* since 2010. We exit the first half of the year on
track to exceed several of the original targets set for 2016, and
thus today are announcing new guidance for the full-year. Our
progress in results and safety represents an important milestone
for the Company. I am confident that we now have the culture in
place to continue safely increasing production while maintaining
cost discipline.
“The Company’s liquidity position remains
strong, with cash and cash equivalents plus highly liquid
investments of $442.2 million at the end of the second quarter. The
increase in purchased material in the recycling business during the
second quarter, coupled with increasing metal prices, drove a $20.5
million build in working capital in the PGM Recycling segment. This
shift was a significant factor in the overall reduction in cash and
equivalents of $10.2 million from the first quarter of 2016. We
continue to make solid progress in growing the recycling business,
processing 169,900 PGM ounces during the quarter and achieving the
second best quarter on record. In addition, we continue to invest
in our mines through sustaining capital activities at a development
rate above the schedule under our current mine plan.
“Work on the Blitz project continues to
progress. Advance rates in the construction of the 56 East
development heading, a critical path item for first production,
continue to improve. Our focus on accelerating the project timeline
has enabled us to bring forward plans for first production, which
we now anticipate to occur in late 2017 or early 2018. Project
spend on Blitz up to first production is now expected to be in the
range of $155 million to $175 million. We anticipate Blitz will
provide growth in our production profile and the Company’s lowest
cost mined ounces, given the grades shown by the drilling to date,
as well as the logistical set up of the Blitz project.
“Even as realized PGM prices saw a significant
decline over the prior year period, recent improvements are
encouraging. During the first half of 2016, platinum reversed its
previous downward trend to reach $999 per ounce at the mid-year
mark, and palladium rose from a low of $470 per ounce in the first
quarter to $589 per mined ounce at the mid-year mark. At July 28,
2016, platinum traded at $1,143 per ounce and palladium had
strengthened to $702 per ounce.
Mr. McMullen concluded, “Overall, our solid
second quarter performance and strong momentum in June reflect the
diligent focus of our team in continuing to drive costs lower and
elevate safety across the organization. The fundamentals of
palladium, our primary product, remain strong, and we are confident
that our disciplined approach to capital deployment and focus on
operational efficiencies position Stillwater to benefit across all
stages of the commodity cycle.”
2016 Full-Year Guidance:
Following a review of second quarter 2016 results and forecasts
for the remainder of the year, guidance for the full-year 2016 has
been updated and is detailed in the table below.
|
|
Current 2016 Guidance |
|
Previous 2016 Guidance |
Sales of Mined Ounces
(palladium and platinum) |
|
545,000 - 555,000 |
|
n/a |
Total Costs of Metals
Sold per PGM Mined Ounce(1) |
|
$495 -
$520 |
|
n/a |
Mined Production
(palladium and platinum ounces) |
|
535,000 - 545,000 |
|
515,000 - 535,000 |
Total Cash Costs per
PGM Mined Ounce (net of by-product and recycling credits)* |
|
$430 -
$455 |
|
$445 -
$485 |
All-In Sustaining Costs
per PGM Mined Ounce* |
|
$595 -
$635 |
|
$615 -
$665 |
General and
Administrative (millions) |
|
$30 -
$40 |
|
$30 -
$40 |
Exploration
(millions)(2) |
|
$8 -
$11 |
|
$8 -
$11 |
Sustaining Capital
Expenditures (millions) |
|
$50 -
$60 |
|
$50 -
$60 |
Project Capital
Expenditures (millions)(3) |
|
$40 -
$45 |
|
$40 -
$45 |
Total Capital
Expenditures (millions)(3) |
|
$90 -
$105 |
|
$90 -
$105 |
|
(1) Total
costs of metals sold from mine production divided by PGM mined
ounces sold. |
(2)
Exploration includes expenses for Marathon, Altar and Montana
operations. |
(3)
Excludes project capitalized interest and project capitalized
depreciation. |
Second Quarter 2016 Results:
For the second quarter of 2016, the Company
reported consolidated net income attributable to common
stockholders of $0.8 million, or $0.01 per diluted share, compared
to consolidated net loss attributable to common stockholders of
$27.5 million, or $0.23 per diluted share for the second quarter of
2015. The second quarter was impacted by significantly lower
realized metal prices, partially offset by a reduction in unit
costs. The second quarter of 2015 included an impairment charge of
$46.8 million (before-tax).
PGM Mine Production Comparison:
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(Produced
ounces) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Palladium |
|
63,600 |
|
59,200 |
|
125,600 |
|
123,700 |
Platinum |
|
19,500 |
|
17,600 |
|
38,400 |
|
36,800 |
Stillwater Mine
Total |
|
83,100 |
|
76,800 |
|
164,000 |
|
160,500 |
|
|
|
|
|
|
|
|
|
Palladium |
|
41,900 |
|
39,100 |
|
85,900 |
|
77,800 |
Platinum |
|
12,100 |
|
11,100 |
|
24,500 |
|
22,000 |
East Boulder Mine
Total |
|
54,000 |
|
50,200 |
|
110,400 |
|
99,800 |
|
|
|
|
|
|
|
|
|
Palladium |
|
105,500 |
|
98,300 |
|
211,500 |
|
|
201,500 |
|
Platinum |
|
31,600 |
|
28,700 |
|
62,900 |
|
|
58,800 |
|
Total |
|
137,100 |
|
127,000 |
|
274,400 |
|
|
260,300 |
|
Mine Production revenues (including proceeds
from the sale of by-products) totaled $106.4 million in the second
quarter of 2016, down from $119.0 million for the second quarter of
2015. The combined average realized price for the sales of mined
palladium and platinum decreased for the second quarter of 2016 to
$665 per ounce, compared to $842 per ounce realized in the second
quarter of 2015. The total quantity of mined palladium and platinum
sold in the second quarter of 2016 was 150,900 ounces compared to
133,000 ounces sold in the second quarter of 2015.
Mine Production total costs of metals sold
decreased to $75.6 million in the second quarter of 2016 from $80.6
million in the second quarter of 2015.
Recycling Activity Comparison:
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Average tons of
catalyst fed per day |
|
26.4 |
|
|
26.9 |
|
|
24.6 |
|
|
21.5 |
|
Tons processed |
|
2,404 |
|
|
2,452 |
|
|
4,452 |
|
|
3,900 |
|
Tons tolled |
|
693 |
|
1,255 |
|
1,695 |
|
1,626 |
Tons
purchased |
|
1,711 |
|
1,197 |
|
2,757 |
|
2,274 |
PGM ounces fed |
|
169,900 |
|
|
151,600 |
|
|
324,100 |
|
|
260,300 |
|
PGM ounces sold |
|
85,300 |
|
|
68,100 |
|
|
148,700 |
|
|
142,700 |
|
PGM tolled ounces
returned |
|
70,700 |
|
|
37,400 |
|
|
146,600 |
|
|
77,600 |
|
Total recycled PGM ounces fed to the smelter were up 12.1% from
the second quarter of 2015 to 169,900 ounces. The recycling
business segment experienced a shift from tolled to purchased
material in the second quarter of 2016.
PGM Recycling revenues totaled $59.2 million for
the 2016 second quarter, a decrease from $66.3 million in the same
period of 2015. The Company's combined average realized price for
sales of recycled palladium, platinum and rhodium was $666 per
ounce in the second quarter of 2016 compared to $954 per ounce in
the second quarter of 2015. Recycling sales volumes for the second
quarter of 2016 increased to 85,300 ounces from 68,100 ounces sold
in the second quarter of 2015. In conjunction, tolled ounces
returned to customers increased to 70,700 ounces for the second
quarter of 2016 from 37,400 ounces in the second quarter of 2015.
Only the treatment charges for tolled material are included in
recycling revenues, hence the decrease in recycling revenues.
PGM Recycling costs of metals sold totaled $56.5
million in the second quarter of 2016, down from the $64.4 million
in the second quarter of 2015. A majority of the costs of metals
sold from recycling in each period is attributable to the
acquisition cost of purchasing recyclable materials for the
Company's own account; therefore, the aggregate costs of metals
sold from the PGM Recycling segment is driven mostly by the volume
and the value of the PGMs in the materials purchased by the
Company.
General and administrative costs were $8.3
million in the second quarter of 2016, a 20.2% decrease from the
$10.4 million incurred during the same period of 2015.
Costs of Metals Sold Per PGM Mined Ounce:
Costs of metals sold per PGM mined ounce totaled
$501 for the second quarter of 2016, a decrease from $606 recorded
for the second quarter of 2015. Cost improvement initiatives at
both mines and reduced labor costs contributed to the lower costs
of metals sold per mined ounce result.
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
Costs of Metals Sold Per PGM Mined Ounce Combined Montana
Mining Operations |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Costs of metals sold
per PGM mined ounce |
|
$ |
501 |
|
|
$ |
606 |
|
|
$ |
506 |
|
|
$ |
596 |
|
All-In Sustaining Costs Per PGM Mined Ounce:
AISC* per PGM mined ounce totaled $594 for the
second quarter of 2016, a decrease from $785 recorded for the same
period of 2015. Reductions in cash costs and sustaining capital
contributed to the lower AISC result.
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
All-In Sustaining Costs Per PGM Mined Ounce Combined
Montana Mining Operations |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Total combined cash
costs per PGM mined ounce, net of by-product and recycling
credits* |
|
$ |
420 |
|
|
$ |
530 |
|
|
$ |
433 |
|
|
$ |
533 |
|
PGM Recycling
income credit per mined ounce |
|
22 |
|
|
16 |
|
|
17 |
|
|
16 |
|
Corporate
general and administrative costs (before DD&A) |
|
56 |
|
|
77 |
|
|
56 |
|
|
68 |
|
Capital outlay
to sustain production at the Montana operating mines |
|
96 |
|
|
162 |
|
|
98 |
|
|
156 |
|
All-In Sustaining Costs
per PGM mined ounce* |
|
$ |
594 |
|
|
$ |
785 |
|
|
$ |
604 |
|
|
$ |
773 |
|
Cash Costs Per PGM Mined Ounce:
Total combined cash costs per PGM mined ounce
(net of by-product and recycling credits)* totaled $420 per ounce
for the second quarter of 2016, a significant reduction from $530
per ounce for the second quarter of 2015.
The table below illustrates the effect of
applying the by-product and PGM Recycling segment credits to the
total cash costs per PGM mined ounce for the Montana mining
operations.
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
Combined Montana Mining Operations |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Total combined cash
costs per PGM mined ounce, before by-product and recycling
credits* |
|
$ |
487 |
|
|
$ |
600 |
|
|
$ |
491 |
|
|
$ |
601 |
|
Less: By-product
revenue credit per mined ounce |
|
45 |
|
|
54 |
|
|
41 |
|
|
52 |
|
Less: PGM
Recycling income credit per mined ounce |
|
22 |
|
|
16 |
|
|
17 |
|
|
16 |
|
Total combined cash
costs per PGM mined ounce, net of by-product and recycling
credits* |
|
$ |
420 |
|
|
$ |
530 |
|
|
$ |
433 |
|
|
$ |
533 |
|
*These are non-GAAP financial measures. For a
full description and reconciliation of these and other non-GAAP
financial measures to GAAP financial measures, see Reconciliation
of GAAP Financial Measures to Non-GAAP Financial Measures and
Reconciliation of Total Cash Costs Guidance and AISC Guidance
below.
Cash Flow and Liquidity:
At June 30, 2016, the Company’s cash and cash
equivalents balance was $130.1 million, compared to $147.3 million
at December 31, 2015. The Company’s cash and cash equivalents
plus highly liquid investments totaled $442.2 million at June 30,
2016 (including $18.5 million of investments which have been
reserved as collateral on letters of credit), compared to $463.8
million at December 31, 2015. Net working capital decreased to
$519.2 million at June 30, 2016, compared to $523.0 million at
December 31, 2015.
Net cash provided by operating activities (which
includes changes in working capital) totaled $16.9 million for the
six months ended June 30, 2016, compared to $59.6 million for the
same period in 2015. Cash capital expenditures were $38.4 million
for the six months ended June 30, 2016, compared to $58.2 million
in the same period in 2015.
Outstanding total balance sheet debt reported at
June 30, 2016, was approximately $264.3 million, an increase from
$255.8 million at December 31, 2015. The Company’s debt
balance at June 30, 2016, included approximately $263.8 million of
1.75% convertible debentures (net of unamortized discount of
approximately $68.0 million and $3.4 million of deferred debt
issuance costs) and $0.5 million of 1.875% convertible debentures.
The change in debt balance is a result of the accretion of the
discount on the Company's outstanding 1.75% convertible
debentures.
2016 Second Quarter Results Webcast and
Conference Call:
Stillwater Mining Company will conduct a conference call to
discuss second quarter 2016 results at 12:00 noon Eastern Daylight
Time on Friday, July 29, 2016.
Dial-In Numbers: |
United States: |
(877) 407-8037 |
|
International: |
(201) 689-8037 |
A simultaneous webcast of the conference call
and related presentation materials will be accessible in the
Investor Relations section of the Company's website at:
www.stillwatermining.com.
A telephone replay of the call will be available
for one week following the event. The replay dial-in numbers are
(877) 660-6853 (U.S.) and (201) 612-7415 (International), access
code 13631286. The call transcript will be archived in the Investor
Relations section of the Company's website.
About Stillwater Mining
Company
Stillwater Mining Company is the only U.S. miner of platinum
group metals (PGMs) and the largest primary producer of PGMs
outside of South Africa and the Russian Federation. PGMs are rare
precious metals used in a wide variety of applications, including
automobile catalysts, fuel cells, hydrogen purification,
electronics, jewelry, dentistry, medicine and coinage. The Company
is engaged in the development, extraction and processing of PGMs
from a geological formation in south-central Montana recognized as
the J-M Reef. The J-M Reef is the only known significant source of
PGMs in the U.S. and the highest-grade PGM resource known in the
world. The Company also recycles PGMs from spent catalytic
converters and other industrial sources. The Company owns the
Marathon PGM-copper deposit in Ontario, Canada, and the Altar
porphyry copper-gold deposit located in the San Juan province of
Argentina. The Company’s shares are traded on the New York Stock
Exchange under the symbol SWC. Information about the Company can be
found at its website: www.stillwatermining.com.
Cautionary Note Concerning
Forward-Looking Statements
Some statements contained in this press release are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended, and, therefore,
involve uncertainties or risks that could cause actual results to
differ materially from management's expectations. These statements
may contain words such as “believes,” “anticipates,” “plans,”
“expects,” “intends,” “estimates,” “predicts,” “should,” “will,”
“may” or similar expressions. Such statements also include, but are
not limited to, comments regarding delivering improvement across
the organization; exiting the first half of the year on track to
exceed several targets originally set for 2016; having the culture
in place to continue safely increasing production while maintaining
cost discipline; solid progress in growing the recycling business;
continuing to invest in the mines through sustaining capital
activities at a development rate above the schedule under the
current mine plan; advance rates of the 56 East development heading
continuing to improve; now anticipating first production from the
Blitz project in late 2017 or early 2018; expected spend on the
Blitz project to first production of $155 to $175 million;
anticipation that the Blitz project will provide production growth
and the Company’s lowest cost mined ounces; diligent focus of our
team in continuing to drive costs lower and elevate safety across
the organization; confidence that our disciplined approach to
capital deployment and focus on operational efficiencies position
Stillwater to benefit across all stages of the commodity cycle;
2016 estimates for sales of mined ounces, total costs of metals
sold per PGM mined ounce, mined production ounces, total cash costs
per PGM mined ounce (net of credits), all-in sustaining costs per
PGM mined ounce, exploration expense, general and administrative
costs and capital expenditures; and the usefulness of non-GAAP
financial measures. The forward-looking statements in this release
are based on assumptions and analyses made by management in light
of experience and perception of historical trends, current
conditions, expected future developments, and other factors that
are deemed appropriate. These statements are not guarantees of the
Company’s future performance and are subject to risks,
uncertainties and other important factors that could cause its
actual performance or achievements to differ materially from those
expressed or implied by these forward-looking statements.
Additional information regarding factors that could cause results
to differ materially from management's expectations is found in the
section entitled "Risk Factors" in the Company's Annual Report on
Form 10-K, which was filed with the Securities and Exchange
Commission on February 22, 2016. The Company intends that the
forward-looking statements contained herein be subject to the
above-mentioned statutory safe harbors. Investors are cautioned not
to rely on forward-looking statements. The forward-looking
statements herein speak only as of the date of this release. The
Company disclaims any obligation to update forward-looking
statements.
Stillwater Mining CompanyConsolidated
Statements of Comprehensive Income (Loss)
(Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(In thousands, except per share data) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
REVENUES |
|
|
|
|
|
|
|
|
Mine Production |
|
$ |
106,395 |
|
|
$ |
118,968 |
|
|
$ |
192,197 |
|
|
$ |
244,706 |
|
PGM Recycling |
|
59,188 |
|
|
66,316 |
|
|
106,924 |
|
|
140,998 |
|
Other |
|
100 |
|
|
100 |
|
|
200 |
|
|
200 |
|
Total revenues |
|
165,683 |
|
|
185,384 |
|
|
299,321 |
|
|
385,904 |
|
COSTS AND
EXPENSES |
|
|
|
|
|
|
|
|
Costs of metals sold |
|
|
|
|
|
|
|
|
Mine Production |
|
75,589 |
|
|
80,631 |
|
|
143,032 |
|
|
160,672 |
|
PGM Recycling |
|
56,490 |
|
|
64,441 |
|
|
102,534 |
|
|
137,146 |
|
Total costs of metals sold
(excludes depletion, depreciation and amortization) |
|
132,079 |
|
|
145,072 |
|
|
245,566 |
|
|
297,818 |
|
Depletion, depreciation and
amortization |
|
|
|
|
|
|
|
|
Mine Production |
|
20,517 |
|
|
16,942 |
|
|
37,586 |
|
|
33,811 |
|
PGM Recycling |
|
194 |
|
|
256 |
|
|
385 |
|
|
508 |
|
Total depletion, depreciation and
amortization |
|
20,711 |
|
|
17,198 |
|
|
37,971 |
|
|
34,319 |
|
Total costs of revenues |
|
152,790 |
|
|
162,270 |
|
|
283,537 |
|
|
332,137 |
|
Exploration |
|
1,587 |
|
|
760 |
|
|
4,435 |
|
|
1,840 |
|
General and administrative |
|
8,311 |
|
|
10,396 |
|
|
16,608 |
|
|
18,741 |
|
Gain on sale of long-term
investment |
|
(482 |
) |
|
— |
|
|
(482 |
) |
|
— |
|
(Gain) loss on long-term
investments |
|
— |
|
|
(2 |
) |
|
— |
|
|
53 |
|
Impairment of non-producing mineral
properties |
|
— |
|
|
46,772 |
|
|
— |
|
|
46,772 |
|
(Gain) loss on disposal of
property, plant and equipment |
|
(153 |
) |
|
— |
|
|
(154 |
) |
|
3 |
|
Total costs and expenses |
|
162,053 |
|
|
220,196 |
|
|
303,944 |
|
|
399,546 |
|
OPERATING
INCOME (LOSS) |
|
3,630 |
|
|
(34,812 |
) |
|
(4,623 |
) |
|
(13,642 |
) |
OTHER (EXPENSE)
INCOME |
|
|
|
|
|
|
|
|
Other |
|
44 |
|
|
17 |
|
|
86 |
|
|
901 |
|
Interest income |
|
960 |
|
|
724 |
|
|
1,670 |
|
|
1,426 |
|
Interest expense |
|
(4,067 |
) |
|
(5,312 |
) |
|
(8,249 |
) |
|
(10,616 |
) |
Net foreign currency transaction
gain |
|
2 |
|
|
745 |
|
|
1,194 |
|
|
137 |
|
INCOME (LOSS)
BEFORE INCOME TAX BENEFIT (PROVISION) |
|
569 |
|
|
(38,638 |
) |
|
(9,922 |
) |
|
(21,794 |
) |
Income tax benefit (provision) |
|
215 |
|
|
(380 |
) |
|
776 |
|
|
5,663 |
|
NET INCOME
(LOSS) |
|
$ |
784 |
|
|
$ |
(39,018 |
) |
|
$ |
(9,146 |
) |
|
$ |
(16,131 |
) |
Net loss attributable
to noncontrolling interest |
|
— |
|
|
(11,542 |
) |
|
— |
|
|
(11,657 |
) |
NET INCOME
(LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS |
|
$ |
784 |
|
|
$ |
(27,476 |
) |
|
$ |
(9,146 |
) |
|
$ |
(4,474 |
) |
Other comprehensive income, net of
tax |
|
|
|
|
|
|
|
|
Net unrealized gain on investments
available-for-sale and deferred compensation |
|
183 |
|
|
47 |
|
|
530 |
|
|
183 |
|
COMPREHENSIVE
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS |
|
$ |
967 |
|
|
$ |
(27,429 |
) |
|
$ |
(8,616 |
) |
|
$ |
(4,291 |
) |
Comprehensive loss
attributable to noncontrolling interest |
|
— |
|
|
(11,542 |
) |
|
— |
|
|
(11,657 |
) |
TOTAL
COMPREHENSIVE INCOME (LOSS) |
|
$ |
967 |
|
|
$ |
(38,971 |
) |
|
$ |
(8,616 |
) |
|
$ |
(15,948 |
) |
Weighted
average shares of common stock outstanding |
|
|
|
|
|
|
|
|
Basic |
|
121,074 |
|
|
120,751 |
|
|
121,065 |
|
|
120,637 |
|
Diluted |
|
121,380 |
|
|
120,751 |
|
|
121,065 |
|
|
120,637 |
|
Basic income
(loss) per share attributable to common stockholders |
|
$ |
0.01 |
|
|
$ |
(0.23 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
Diluted income
(loss) per share attributable to common stockholders |
|
$ |
0.01 |
|
|
$ |
(0.23 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
Stillwater Mining
Company Consolidated Balance
Sheets (Unaudited)
|
|
June 30, |
|
December 31, |
(In thousands, except per share data) |
|
2016 |
|
2015 |
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash
equivalents |
|
$ |
130,115 |
|
|
$ |
147,336 |
|
Investments, at fair
value |
|
312,037 |
|
|
316,429 |
|
Inventories |
|
113,892 |
|
|
102,072 |
|
Trade receivables |
|
890 |
|
|
800 |
|
Prepaid expenses |
|
5,660 |
|
|
2,821 |
|
Other current
assets |
|
25,505 |
|
|
21,628 |
|
Total current assets |
|
588,099 |
|
|
591,086 |
|
Mineral properties |
|
112,480 |
|
|
112,480 |
|
Mine development,
net |
|
473,383 |
|
|
460,751 |
|
Property, plant and
equipment, net |
|
102,337 |
|
|
109,957 |
|
Other noncurrent
assets |
|
4,932 |
|
|
4,115 |
|
Total assets |
|
$ |
1,281,231 |
|
|
$ |
1,278,389 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts payable |
|
$ |
22,304 |
|
|
$ |
18,205 |
|
Accrued compensation
and benefits |
|
28,195 |
|
|
30,046 |
|
Property, production
and franchise taxes payable |
|
13,617 |
|
|
13,907 |
|
Current portion of
long-term debt and capital lease obligations |
|
— |
|
|
657 |
|
Income taxes
payable |
|
373 |
|
|
— |
|
Other current
liabilities |
|
4,369 |
|
|
5,286 |
|
Total current liabilities |
|
68,858 |
|
|
68,101 |
|
Long-term debt |
|
264,301 |
|
|
255,099 |
|
Deferred income
taxes |
|
20,310 |
|
|
22,761 |
|
Accrued workers
compensation |
|
6,479 |
|
|
6,070 |
|
Asset retirement
obligation |
|
11,159 |
|
|
11,027 |
|
Other noncurrent
liabilities |
|
7,845 |
|
|
6,102 |
|
Total liabilities |
|
378,952 |
|
|
369,160 |
|
EQUITY |
|
|
|
|
Stockholders’
equity |
|
|
|
|
Preferred stock, $0.01
par value, 1,000,000 shares authorized; none issued |
|
— |
|
|
— |
|
Common stock, $0.01 par
value, 200,000,000 shares authorized; 121,074,473 and 121,049,471
issued and outstanding at June 30, 2016 and December 31, 2015,
respectively |
|
1,211 |
|
|
1,210 |
|
Paid-in capital |
|
1,100,949 |
|
|
1,099,283 |
|
Accumulated
deficit |
|
(200,213 |
) |
|
(191,067 |
) |
Accumulated other
comprehensive income (loss) |
|
332 |
|
|
(197 |
) |
Total equity |
|
902,279 |
|
|
909,229 |
|
Total liabilities and equity |
|
$ |
1,281,231 |
|
|
$ |
1,278,389 |
|
Stillwater Mining
Company Consolidated Statements of Cash
Flows (Unaudited)
|
|
Six Months Ended |
|
|
June 30, |
(In thousands) |
|
2016 |
|
2015 |
CASH FLOWS FROM
OPERATING ACTIVITIES |
|
|
|
|
Net loss |
|
$ |
(9,146 |
) |
|
$ |
(16,131 |
) |
Adjustments to
reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
Depletion, depreciation and
amortization |
|
37,971 |
|
|
34,319 |
|
Gain on sale of long-term
investment |
|
(482 |
) |
|
— |
|
Loss on long-term investments |
|
— |
|
|
53 |
|
Impairment of non-producing mineral
properties |
|
— |
|
|
46,772 |
|
Amortization / accretion of
investment premium / discount |
|
1,218 |
|
|
975 |
|
(Gain) loss on disposal of
property, plant and equipment |
|
(154 |
) |
|
3 |
|
Net foreign currency transaction
gain |
|
(1,194 |
) |
|
(137 |
) |
Deferred income taxes |
|
(1,526 |
) |
|
(12,592 |
) |
Accretion of asset retirement
obligation |
|
421 |
|
|
387 |
|
Amortization of deferred debt
issuance costs |
|
437 |
|
|
610 |
|
Accretion of convertible debenture
debt discount |
|
8,765 |
|
|
9,127 |
|
Share based compensation and other
benefits |
|
1,741 |
|
|
6,913 |
|
Non-cash capitalized interest |
|
(2,728 |
) |
|
(1,784 |
) |
Changes in operating
assets and liabilities: |
|
|
|
|
Inventories |
|
(12,435 |
) |
|
630 |
|
Trade receivables |
|
(90 |
) |
|
48 |
|
Prepaid expenses |
|
(2,839 |
) |
|
(3,285 |
) |
Accounts payable |
|
2,121 |
|
|
(117 |
) |
Accrued compensation and
benefits |
|
(1,850 |
) |
|
(411 |
) |
Property, production and franchise
taxes payable |
|
1,454 |
|
|
(6 |
) |
Income taxes payable |
|
373 |
|
|
— |
|
Accrued workers compensation |
|
409 |
|
|
(352 |
) |
Other operating assets |
|
(4,605 |
) |
|
(3,516 |
) |
Other operating liabilities |
|
(1,007 |
) |
|
(1,907 |
) |
NET CASH
PROVIDED BY OPERATING ACTIVITIES |
|
16,854 |
|
|
59,599 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES |
|
|
|
|
Capital expenditures |
|
(38,426 |
) |
|
(58,218 |
) |
Proceeds from sale of long-term
investment |
|
851 |
|
|
— |
|
Proceeds from disposal of property,
plant and equipment |
|
154 |
|
|
— |
|
Purchases of investments |
|
(165,742 |
) |
|
(184,660 |
) |
Proceeds from maturities and sales
of investments |
|
169,745 |
|
|
126,849 |
|
NET CASH USED
IN INVESTING ACTIVITIES |
|
(33,418 |
) |
|
(116,029 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES |
|
|
|
|
Payments on debt and capital lease
obligations |
|
(658 |
) |
|
(1,097 |
) |
Proceeds from issuance of common
stock |
|
1 |
|
|
49 |
|
NET CASH USED
IN FINANCING ACTIVITIES |
|
(657 |
) |
|
(1,048 |
) |
CASH AND CASH
EQUIVALENTS |
|
|
|
|
Net decrease |
|
(17,221 |
) |
|
(57,478 |
) |
Balance at beginning of period |
|
147,336 |
|
|
280,286 |
|
BALANCE AT END
OF PERIOD |
|
$ |
130,115 |
|
|
$ |
222,808 |
|
Stillwater Mining Company Key
Operating Factors (Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(In thousands, except where noted) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
OPERATING AND
COST DATA FOR PGM MINE PRODUCTION |
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
Ounces produced |
|
|
|
|
|
|
|
|
Palladium |
|
105.5 |
|
98.3 |
|
211.5 |
|
201.5 |
Platinum |
|
31.6 |
|
28.7 |
|
62.9 |
|
58.8 |
Total |
|
137.1 |
|
127.0 |
|
274.4 |
|
260.3 |
Tons milled |
|
328.0 |
|
299.4 |
|
641.1 |
|
607.2 |
Mill head grade (ounce
per ton) |
|
0.45 |
|
|
0.45 |
|
|
0.46 |
|
|
0.45 |
|
Sub-grade tons milled
(1) |
|
22.7 |
|
27.0 |
|
42.7 |
|
55.0 |
Sub-grade tons mill
head grade (ounce per ton) |
|
0.14 |
|
|
0.16 |
|
|
0.16 |
|
|
0.16 |
|
Total tons
milled(1) |
|
350.7 |
|
326.4 |
|
683.8 |
|
662.2 |
Combined mill head
grade (ounce per ton) |
|
0.43 |
|
|
0.42 |
|
|
0.44 |
|
|
0.43 |
|
Total mill recovery
(%) |
|
92 |
|
|
92 |
|
|
92 |
|
|
92 |
|
Total mine concentrate
shipped (tons) (3) |
|
8,190 |
|
|
7,566 |
|
|
16,062 |
|
|
16,021 |
|
Platinum grade in
concentrate (ounce per ton) (3) |
|
4.19 |
|
|
4.02 |
|
|
4.20 |
|
|
3.87 |
|
Palladium grade in
concentrate (ounce per ton) (3) |
|
13.39 |
|
|
13.43 |
|
|
13.60 |
|
|
12.98 |
|
Costs of metals sold
per PGM mined ounce |
|
$ |
501 |
|
|
$ |
606 |
|
|
$ |
506 |
|
|
$ |
596 |
|
Total combined cash
costs per ounce - net of credits (Non-GAAP) (2) |
|
$ |
420 |
|
|
$ |
530 |
|
|
$ |
433 |
|
|
$ |
533 |
|
Total combined cash
costs per ore ton milled - net of credits (Non-GAAP) (2) |
|
$ |
164 |
|
|
$ |
206 |
|
|
$ |
174 |
|
|
$ |
210 |
|
Stillwater
Mine: |
|
|
|
|
|
|
|
|
Ounces produced |
|
|
|
|
|
|
|
|
Palladium |
|
63.6 |
|
59.2 |
|
125.6 |
|
123.7 |
Platinum |
|
19.5 |
|
17.6 |
|
38.4 |
|
36.8 |
Total |
|
83.1 |
|
76.8 |
|
164.0 |
|
160.5 |
Tons milled |
|
180.1 |
|
167.7 |
|
341.9 |
|
339.9 |
Mill head grade (ounce
per ton) |
|
0.49 |
|
|
0.48 |
|
|
0.51 |
|
|
0.49 |
|
Sub-grade tons milled
(1) |
|
8.4 |
|
|
17.4 |
|
|
16.8 |
|
|
35.0 |
|
Sub-grade tons mill
head grade (ounce per ton) |
|
0.21 |
|
|
0.20 |
|
|
0.24 |
|
|
0.19 |
|
Total tons milled
(1) |
|
188.5 |
|
|
185.1 |
|
|
358.7 |
|
|
374.9 |
|
Combined mill head
grade (ounce per ton) |
|
0.47 |
|
|
0.45 |
|
|
0.49 |
|
|
0.47 |
|
Total mill recovery
(%) |
|
93 |
|
|
92 |
|
|
93 |
|
|
93 |
|
Total mine concentrate
shipped (tons) (3) |
|
4,397 |
|
|
4,054 |
|
|
8,452 |
|
|
8,704 |
|
Platinum grade in
concentrate (ounce per ton) (3) |
|
5.04 |
|
|
4.74 |
|
|
5.05 |
|
|
4.58 |
|
Palladium grade in
concentrate (ounce per ton) (3) |
|
15.34 |
|
|
15.34 |
|
|
15.60 |
|
|
14.88 |
|
Costs of metals sold
per PGM mined ounce |
|
$ |
478 |
|
|
$ |
590 |
|
|
$ |
483 |
|
|
$ |
578 |
|
Total cash costs per
PGM mined ounce - net of credits (Non-GAAP) (2) |
|
$ |
405 |
|
|
$ |
547 |
|
|
$ |
425 |
|
|
$ |
539 |
|
Total cash costs per
ore ton milled - net of credits (Non-GAAP) (2) |
|
$ |
178 |
|
|
$ |
227 |
|
|
$ |
194 |
|
|
$ |
230 |
|
Stillwater Mining CompanyKey Operating
Factors (Continued)(Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(In thousands, except where noted) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
OPERATING AND
COST DATA FOR PGM MINE PRODUCTION (Continued) |
|
|
|
|
|
|
|
|
East Boulder
Mine: |
|
|
|
|
|
|
|
|
Ounces produced |
|
|
|
|
|
|
|
|
Palladium |
|
41.9 |
|
|
39.1 |
|
|
85.9 |
|
|
77.8 |
|
Platinum |
|
12.1 |
|
|
11.1 |
|
|
24.5 |
|
|
22.0 |
|
Total |
|
54.0 |
|
|
50.2 |
|
|
110.4 |
|
|
99.8 |
|
Tons milled |
|
147.9 |
|
|
131.7 |
|
|
299.2 |
|
|
267.3 |
|
Mill head grade (ounce
per ton) |
|
0.40 |
|
|
0.41 |
|
|
0.40 |
|
|
0.41 |
|
Sub-grade tons milled
(1) |
|
14.3 |
|
|
9.6 |
|
|
25.9 |
|
|
20.0 |
|
Sub-grade tons mill
head grade (ounce per ton) |
|
0.10 |
|
|
0.09 |
|
0.10 |
|
|
0.10 |
Total tons milled
(1) |
|
162.2 |
|
141.3 |
|
325.1 |
|
287.3 |
Combined mill head
grade (ounce per ton) |
|
0.37 |
|
|
0.39 |
|
0.38 |
|
|
0.38 |
Total mill recovery
(%) |
|
90 |
|
|
91 |
|
|
91 |
|
|
91 |
|
Total mine concentrate
shipped (tons) (3) |
|
3,793 |
|
|
3,512 |
|
|
7,610 |
|
|
7,317 |
|
Platinum grade in
concentrate (ounce per ton) (3) |
|
3.21 |
|
|
3.18 |
|
|
3.25 |
|
|
3.03 |
|
Palladium grade in
concentrate (ounce per ton) (3) |
|
11.14 |
|
|
11.21 |
|
|
11.37 |
|
|
10.72 |
|
Costs of metals sold
per PGM mined ounce |
|
$ |
538 |
|
|
$ |
634 |
|
|
$ |
542 |
|
|
$ |
629 |
|
Total cash costs per
PGM mined ounce - net of credits (Non-GAAP) (2) |
|
$ |
444 |
|
|
$ |
504 |
|
|
$ |
445 |
|
|
$ |
525 |
|
Total cash costs per
ore ton milled - net of credits (Non-GAAP) (2) |
|
$ |
148 |
|
|
$ |
179 |
|
|
$ |
151 |
|
|
$ |
183 |
|
|
(1)
Sub-grade tons milled includes reef waste material only. Reef
waste material is PGM-bearing mined material below the cutoff grade
for proven and probable reserves but with sufficient economic value
to justify processing it through the concentrator along with the
mined ore. Total tons milled includes ore tons and sub-grade tons
only. See “Proven and Probable Ore Reserves – Discussion” in the
Company’s 2015 Annual Report on Form 10-K for further
information. |
(2)
Total cash costs include total operating costs plus
royalties, insurance and taxes other than income taxes. Total cash
costs per PGM mined ounce, net of credits is a non-GAAP financial
measure that management uses to monitor and evaluate the efficiency
of its mining operations. This measure of cost is not defined under
U.S. Generally Accepted Accounting Principles (GAAP). Please see
Reconciliation of GAAP Financial Measures to Non-GAAP Financial
Measures and the accompanying discussion for additional
detail. |
(3)
The concentrate tonnage and grade values are inclusive of
periodic re-processing of smelter slag and internal furnace brick
PGM bearing materials. |
Stillwater Mining Company Key
Operating Factors
(Continued) (Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(In thousands, except for average prices) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
SALES AND PRICE
DATA |
|
|
|
|
|
|
|
|
Ounces
sold |
|
|
|
|
|
|
|
|
PGM Mine
Production: |
|
|
|
|
|
|
|
|
Palladium (oz.) |
|
116.9 |
|
103.1 |
|
221.5 |
|
210.4 |
Platinum (oz.) |
|
34.0 |
|
29.9 |
|
61.3 |
|
59.2 |
Total |
|
150.9 |
|
133.0 |
|
282.8 |
|
269.6 |
PGM Recycling: (1) |
|
|
|
|
|
|
|
|
Palladium (oz.) |
|
54.3 |
|
39.8 |
|
91.2 |
|
83.7 |
Platinum (oz.) |
|
25.5 |
|
23.2 |
|
46.9 |
|
48.5 |
Rhodium (oz.) |
|
5.5 |
|
5.1 |
|
10.5 |
|
10.5 |
Total |
|
85.3 |
|
68.1 |
|
148.6 |
|
142.7 |
By-products from Mine
Production: (2) |
|
|
|
|
|
|
|
|
Rhodium (oz.) |
|
1.1 |
|
1.0 |
|
1.6 |
|
1.9 |
Gold (oz.) |
|
2.8 |
|
2.9 |
|
5.5 |
|
5.4 |
Silver (oz.) |
|
1.6 |
|
1.9 |
|
3.0 |
|
3.3 |
Copper (lb.) |
|
311.0 |
|
262.9 |
|
568.0 |
|
523.1 |
Nickel (lb.) |
|
406.7 |
|
390.7 |
|
797.1 |
|
788.5 |
Average
realized price per ounce (3) |
|
|
|
|
|
|
|
|
PGM Mine
Production: |
|
|
|
|
|
|
|
|
Palladium ($/oz.) |
|
$ |
566 |
|
|
$ |
760 |
|
|
$ |
549 |
|
|
$ |
772 |
|
Platinum ($/oz.) |
|
$ |
1,005 |
|
|
$ |
1,128 |
|
|
$ |
967 |
|
|
$ |
1,159 |
|
Combined ($/oz.)(4) |
|
$ |
665 |
|
|
$ |
842 |
|
|
$ |
640 |
|
|
$ |
857 |
|
PGM Recycling: (1) |
|
|
|
|
|
|
|
|
Palladium ($/oz.) |
|
$ |
543 |
|
|
$ |
787 |
|
|
$ |
556 |
|
|
$ |
792 |
|
Platinum ($/oz.) |
|
$ |
931 |
|
|
$ |
1,194 |
|
|
$ |
922 |
|
|
$ |
1,223 |
|
Rhodium ($/oz.) |
|
$ |
658 |
|
|
$ |
1,156 |
|
|
$ |
687 |
|
|
$ |
1,189 |
|
Combined ($/oz.)(4) |
|
$ |
666 |
|
|
$ |
954 |
|
|
$ |
681 |
|
|
$ |
968 |
|
By-products from Mine
Production: (2) |
|
|
|
|
|
|
|
|
Rhodium ($/oz.) |
|
$ |
676 |
|
|
$ |
1,053 |
|
|
$ |
680 |
|
|
$ |
1,107 |
|
Gold ($/oz.) |
|
$ |
1,264 |
|
|
$ |
1,186 |
|
|
$ |
1,229 |
|
|
$ |
1,203 |
|
Silver ($/oz.) |
|
$ |
17 |
|
|
$ |
16 |
|
|
$ |
16 |
|
|
$ |
17 |
|
Copper ($/lb.) |
|
$ |
1.93 |
|
|
$ |
2.57 |
|
|
$ |
1.92 |
|
|
$ |
2.52 |
|
Nickel ($/lb.) |
|
$ |
3.08 |
|
|
$ |
4.53 |
|
|
$ |
2.92 |
|
|
$ |
4.75 |
|
Average market
price per ounce (3) |
|
|
|
|
|
|
|
|
Palladium ($/oz.) |
|
$ |
568 |
|
|
$ |
758 |
|
|
$ |
546 |
|
|
$ |
772 |
|
Platinum ($/oz.) |
|
$ |
1,003 |
|
|
$ |
1,125 |
|
|
$ |
960 |
|
|
$ |
1,159 |
|
Combined ($/oz.)(4) |
|
$ |
666 |
|
|
$ |
841 |
|
|
$ |
636 |
|
|
$ |
857 |
|
|
(1) Ounces sold and
average realized price per ounce from PGM Recycling relate to
ounces produced from processing of spent catalyst from catalytic
converters and other industrial sources. |
(2) By-product
metals sold reflect net values of realized prices (discounted due
to product form) per unit sold. |
(3) The Company’s
average realized price represents revenues, hedging gains and
losses realized on commodity instruments and agreement discounts,
divided by ounces sold. The average market price represents the
average London market for the actual months of the period. |
(4) The Company
reports a combined average realized and market price of palladium
and platinum at the same ratio as ounces that are produced from the
base metal refinery. |
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP
FINANCIAL MEASURES
The Company utilizes certain non-GAAP financial measures as
indicators in assessing the performance of its mining and
processing operations during any period. Because of the processing
time required to complete the extraction of finished PGM products,
there are typically lags of one to three months between ore
production and sale of the finished product. Sales in any period
include some portion of material mined and processed from prior
periods as the revenue recognition process is completed.
Consequently, while costs of revenues (a GAAP financial measure
included in the Company’s Consolidated Statements of Comprehensive
Income (Loss)) appropriately reflects the expense associated with
the materials sold in any period, the Company has developed certain
non-GAAP financial measures to assess the costs associated with its
producing and processing activities in a particular period and to
compare those costs between periods.
While the Company believes that these non-GAAP financial
measures may also be of value to outside readers, both as general
indicators of the Company’s mining efficiency from period to period
and as insight into how the Company internally measures its
operating performance, these non-GAAP financial measures are not
standardized across the mining industry and in most cases will not
be directly comparable to similar measures that may be provided by
other companies. These non-GAAP financial measures are only useful
as indicators of relative operational performance in any period,
and because they do not take into account the inventory timing
differences that are included in costs of revenues, they cannot
meaningfully be used to develop measures of earnings or
profitability. A reconciliation of these measures to costs of
revenues, the most directly comparable GAAP financial measure, for
each period shown is provided as part of the following tables, and
a description of each non-GAAP financial measure is provided
below.
Total Consolidated Costs of Revenues: For the
Company as a whole, this measure is equal to total costs of
revenues, as reported in the Company's Consolidated Statements of
Comprehensive Income (Loss). For the Stillwater Mine, the East
Boulder Mine, and PGM Recycling, the Company segregates the
expenses within total costs of revenues that are directly
associated with each of these activities and then allocates the
remaining facility costs included in total cost of revenues in
proportion to the monthly volumes from each activity. The resulting
total costs of revenues measures for the Stillwater Mine, the East
Boulder Mine and PGM Recycling and Other are equal in the
aggregate, to total consolidated costs of revenues as reported in
the Company’s Consolidated Statements of Comprehensive Income
(Loss).
Total Cash Costs (Non-GAAP): These non-GAAP
financial measures are calculated as total costs of revenues
adjusted to exclude costs of metals sold from PGM Recycling,
depletion and depreciation and amortization for Mine Production and
PGM Recycling (including in inventory), asset retirement costs, and
timing differences resulting from changes in product inventories to
arrive at Total Cash Costs before by-product and recycling credits.
From this calculation, the Company deducts by-product and recycling
income credits to arrive at Total Cash Costs, net of by-product and
recycling credits. Total Cash Costs is a measure of extraction
efficiency. The Company uses this measure as a comparative
indication of the cash costs related to production and processing
in its mining operations in any period.
When divided by the total recoverable PGM ounces from production
in the respective period, Total Cash Costs per PGM Mined Ounce
(Non-GAAP), measured for each mine or combined, provides an
indication of the level of cash costs incurred per PGM mined ounce
produced in that period. Recoverable PGM ounces from production are
an indication of the amount of PGM product mined in any period.
Because ultimately extracting PGM material is the objective of
mining, the cash cost per PGM mined ounce of extracting and
processing PGM ounces in a period is a useful measure for comparing
extraction efficiency between periods and between the Company’s
mines. Consequently, Total Cash Costs per PGM Mined Ounce
(Non-GAAP) in any period is a general measure of extraction
efficiency, and is affected by the level of Total Cash Costs
(Non-GAAP), by the grade of the ore produced and by the volume of
ore produced in the period.
When divided by the total tons milled in the respective period,
Total Cash Costs per Ore Ton Milled, measured for each mine or
combined, provides an indication of the level of cash costs
incurred per ore ton milled in that period. Because of variability
of ore grade in the Company’s mining operations, mine production
efficiency underground is frequently measured against ore tons
produced rather than contained PGM ounces. Because ore tons are
first weighed as they are fed into the mill, mill feed is the first
point at which mine production tons are measured precisely.
Consequently, Total Cash Costs per Ore Ton Milled is a general
measure of production efficiency, and is affected both by the level
of Total Cash Costs (Non-GAAP) and by the volume of tons produced
and fed to the mill.
With respect to 2016 guidance regarding Total Cash Costs per PGM
Mined Ounce (net of by-product and recycling credits) and AISC per
PGM Mined Ounce, the Company cannot provide a quantitative
reconciliation to the most directly comparable GAAP measure without
unreasonable effort. However, the Company would expect to
calculate these non-GAAP measures in the same manner they were
calculated in the reconciliations included in this press
release.
Stillwater Mining CompanyReconciliation
of GAAP Financial Measures to Non-GAAP Financial
Measures(Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(In thousands, except per ounce and per ton
data) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of metals sold -
Mine Production |
|
$ |
75,589 |
|
|
$ |
80,631 |
|
|
$ |
143,032 |
|
|
$ |
160,672 |
|
Change in mined
inventories (palladium and platinum) |
|
(8,899 |
) |
|
(4,397 |
) |
|
(8,220 |
) |
|
(4,005 |
) |
Total combined cash
costs, before by-product and recycling credits
(Non-GAAP) |
|
$ |
66,690 |
|
|
$ |
76,234 |
|
|
$ |
134,812 |
|
|
$ |
156,667 |
|
By-product revenue
credit |
|
(6,147 |
) |
|
(6,914 |
) |
|
(11,262 |
) |
|
(13,659 |
) |
PGM Recycling income
credit |
|
(2,957 |
) |
|
(2,036 |
) |
|
(4,734 |
) |
|
(4,163 |
) |
Total combined cash
costs, net of by-product and recycling credits
(Non-GAAP) |
|
$ |
57,586 |
|
|
$ |
67,284 |
|
|
$ |
118,816 |
|
|
$ |
138,845 |
|
|
|
|
|
|
|
|
|
|
PGM mined ounces
sold |
|
150.9 |
|
133.0 |
|
282.8 |
|
269.6 |
Costs of metals sold
per PGM mined ounce |
|
$ |
501 |
|
|
$ |
606 |
|
|
$ |
506 |
|
|
$ |
596 |
|
|
|
|
|
|
|
|
|
|
PGM mined ounces
produced |
|
137.1 |
|
|
127.0 |
|
|
274.4 |
|
|
260.3 |
|
|
|
|
|
|
|
|
|
|
Total combined cash
costs per PGM mined ounce, before by-product and recycling
credits (Non-GAAP) |
|
$ |
487 |
|
|
$ |
600 |
|
|
$ |
491 |
|
|
$ |
601 |
|
By-product credit per
mined ounce |
|
(45 |
) |
|
(54 |
) |
|
(41 |
) |
|
(52 |
) |
Recycling income credit
per mined ounce |
|
(22 |
) |
|
(16 |
) |
|
(17 |
) |
|
(16 |
) |
Total combined cash
costs PGM per mined ounce, net of by-product and recycling
credits (Non-GAAP) |
|
$ |
420 |
|
|
$ |
530 |
|
|
$ |
433 |
|
|
$ |
533 |
|
|
|
|
|
|
|
|
|
|
Ore tons milled |
|
350.8 |
|
|
326.4 |
|
|
683.8 |
|
|
662.3 |
|
|
|
|
|
|
|
|
|
|
Total combined cash
costs per ore ton milled, before by-product and recycling credits
(Non-GAAP) |
|
$ |
190 |
|
|
$ |
233 |
|
|
$ |
197 |
|
|
$ |
237 |
|
By-product credit per
ore ton milled |
|
(18 |
) |
|
(21 |
) |
|
(16 |
) |
|
(21 |
) |
Recycling income credit
per ore ton milled |
|
(8 |
) |
|
(6 |
) |
|
(7 |
) |
|
(6 |
) |
Total combined cash
costs per ore ton milled, net of by-product and recycling credits
(Non-GAAP) |
|
$ |
164 |
|
|
$ |
206 |
|
|
$ |
174 |
|
|
$ |
210 |
|
Stillwater Mining CompanyReconciliation
of GAAP Financial Measures to Non-GAAP Financial Measures
(Continued)(Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(In thousands, except per ounce and per ton
data) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Stillwater
Mine: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of metals sold -
Mine Production |
|
$ |
44,474 |
|
|
$ |
49,502 |
|
|
$ |
84,059 |
|
|
$ |
99,763 |
|
Change in mined
inventories (palladium and platinum) |
|
(5,768 |
) |
|
(2,571 |
) |
|
(5,666 |
) |
|
(3,298 |
) |
Total cash costs,
before by-product and recycling credits (Non-GAAP) |
|
$ |
38,706 |
|
|
$ |
46,931 |
|
|
$ |
78,393 |
|
|
$ |
96,465 |
|
By-product revenue
credit |
|
(3,314 |
) |
|
(3,727 |
) |
|
(5,888 |
) |
|
(7,532 |
) |
PGM Recycling income
credit |
|
(1,784 |
) |
|
(1,205 |
) |
|
(2,818 |
) |
|
(2,540 |
) |
Total cash costs, net
of by-product and recycling credits (Non-GAAP) |
|
$ |
33,608 |
|
|
$ |
41,999 |
|
|
$ |
69,687 |
|
|
$ |
86,393 |
|
|
|
|
|
|
|
|
|
|
PGM mined ounces
sold |
|
93.1 |
|
83.9 |
|
173.1 |
|
172.7 |
Costs of metals sold
per PGM mined ounce |
|
$ |
478 |
|
|
$ |
590 |
|
|
$ |
483 |
|
|
$ |
578 |
|
|
|
|
|
|
|
|
|
|
PGM mined ounces
produced |
|
83.1 |
|
|
76.8 |
|
|
164.0 |
|
|
160.5 |
|
|
|
|
|
|
|
|
|
|
Total cash costs per
PGM mined ounce, before by-product and recycling credits
(Non-GAAP)
|
|
$ |
466 |
|
|
$ |
612 |
|
|
$ |
478 |
|
|
$ |
602 |
|
By-product credit per
mined ounce |
|
(40 |
) |
|
(49 |
) |
|
(36 |
) |
|
(47 |
) |
Recycling income credit
per mined ounce |
|
(21 |
) |
|
(16 |
) |
|
(17 |
) |
|
(16 |
) |
Total cash costs per
PGM mined ounce, net of by-product and recycling credits
(Non-GAAP) |
|
$ |
405 |
|
|
$ |
547 |
|
|
$ |
425 |
|
|
$ |
539 |
|
|
|
|
|
|
|
|
|
|
Ore tons milled |
|
188.5 |
|
|
185.1 |
|
|
358.7 |
|
|
374.9 |
|
|
|
|
|
|
|
|
|
|
Total cash costs per
ore ton milled, before by-product and recycling credits
(Non-GAAP) |
|
$ |
205 |
|
|
$ |
254 |
|
|
$ |
218 |
|
|
$ |
257 |
|
By-product credit per
ore ton milled |
|
(18 |
) |
|
(20 |
) |
|
(16 |
) |
|
(20 |
) |
Recycling income credit
per ore ton milled |
|
(9 |
) |
|
(7 |
) |
|
(8 |
) |
|
(7 |
) |
Total cash costs per
ore ton milled, net of by-product and recycling credits
(Non-GAAP) |
|
$ |
178 |
|
|
$ |
227 |
|
|
$ |
194 |
|
|
$ |
230 |
|
Stillwater Mining CompanyReconciliation
of GAAP Financial Measures to Non-GAAP Financial Measures
(Continued)(Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(In thousands, except per ounce and per ton
data) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
East Boulder
Mine: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of metals sold -
Mine Production |
|
$ |
31,115 |
|
|
$ |
31,129 |
|
|
$ |
58,973 |
|
|
$ |
60,909 |
|
Change in mined
inventories (palladium and platinum) |
|
(3,131 |
) |
|
(1,826 |
) |
|
(2,554 |
) |
|
(707 |
) |
Total cash costs,
before by-product and recycling credits (Non-GAAP) |
|
$ |
27,984 |
|
|
$ |
29,303 |
|
|
$ |
56,419 |
|
|
$ |
60,202 |
|
By-product revenue
credit |
|
(2,833 |
) |
|
(3,187 |
) |
|
(5,374 |
) |
|
(6,127 |
) |
PGM Recycling income
credit |
|
(1,173 |
) |
|
(831 |
) |
|
(1,916 |
) |
|
(1,623 |
) |
Total cash costs, net
of by-product and recycling credits (Non-GAAP) |
|
$ |
23,978 |
|
|
$ |
25,285 |
|
|
$ |
49,129 |
|
|
$ |
52,452 |
|
|
|
|
|
|
|
|
|
|
PGM mined ounces
sold |
|
57.8 |
|
49.1 |
|
108.9 |
|
96.9 |
Costs of metals sold
per PGM mined ounce |
|
$ |
538 |
|
|
$ |
634 |
|
|
$ |
542 |
|
|
$ |
629 |
|
|
|
|
|
|
|
|
|
|
PGM mined ounces
produced |
|
54.0 |
|
|
50.2 |
|
|
110.4 |
|
|
99.8 |
|
|
|
|
|
|
|
|
|
|
Total cash costs per
PGM mined ounce, before by-product and recycling credits
(Non-GAAP)
|
|
$ |
518 |
|
|
$ |
584 |
|
|
$ |
511 |
|
|
$ |
602 |
|
By-product credit per
mined ounce |
|
(52 |
) |
|
(63 |
) |
|
(49 |
) |
|
(61 |
) |
Recycling income credit
per mined ounce |
|
(22 |
) |
|
(17 |
) |
|
(17 |
) |
|
(16 |
) |
Total cash cost, per
PGM mined ounce, net of by-product and recycling credits
(Non-GAAP) |
|
$ |
444 |
|
|
$ |
504 |
|
|
$ |
445 |
|
|
$ |
525 |
|
|
|
|
|
|
|
|
|
|
Ore tons milled |
|
162.2 |
|
|
141.4 |
|
|
325.1 |
|
|
287.3 |
|
|
|
|
|
|
|
|
|
|
Total cash costs per
ore ton milled, before by-product and recycling credits
(Non-GAAP) |
|
$ |
172 |
|
|
$ |
208 |
|
|
$ |
174 |
|
|
$ |
210 |
|
By-product credit per
ore ton milled |
|
(17 |
) |
|
(23 |
) |
|
(17 |
) |
|
(21 |
) |
Recycling income credit
per ore ton milled |
|
(7 |
) |
|
(6 |
) |
|
(6 |
) |
|
|
(6 |
) |
Total cash costs per
ore ton milled, net of by-product and recycling credits
(Non-GAAP) |
|
$ |
148 |
|
|
$ |
179 |
|
|
$ |
151 |
|
|
$ |
183 |
|
Stillwater Mining CompanyAll-In
Sustaining Costs (a Non-GAAP Financial
Measure)(Unaudited)
All-In Sustaining Costs (Non-GAAP): This
non-GAAP financial measure is used as an indicator from period to
period of the level of total cash required by the Company to
maintain and operate the existing mines, including corporate
administrative costs and replacement capital. The measure is
calculated beginning with total combined cash costs, net of credits
(another non-GAAP financial measure, described above), and adding
to it the recycling income credit, domestic corporate general and
administrative costs (excluding any depreciation and general and
administrative costs of foreign subsidiaries) and that portion of
total capital expenditures associated with sustaining the current
level of mining operations. Capital expenditures, however, for
Blitz, Graham Creek (prior to 2015) and certain other one-time
projects are not included in the calculation.
When divided by the total recoverable PGM mined ounces produced
in the respective period, All-In Sustaining Costs per PGM
Mined Ounce (Non-GAAP) provides an indication of the level
of total cash required to maintain and operate the mines per PGM
ounce produced in the period. Recoverable PGM ounces from
production are an indication of the amount of PGM product extracted
through mining in any period. Because the objective of PGM mining
activity is to extract PGM material, the all-in cash costs per
PGM mined ounce to produce PGM material, administer the
business and sustain the operating capacity of the mines is a
useful measure for comparing overall extraction efficiency between
periods. This measure is affected by the total level of spending in
the period and by the grade and volume of mined ore produced.
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(In thousands, except $/oz.) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
All-In
Sustaining Costs |
|
|
|
|
|
|
|
|
Costs of metals sold -
Mine Production |
|
$ |
75,589 |
|
|
$ |
80,631 |
|
|
$ |
143,032 |
|
|
$ |
160,672 |
|
Change in mined
inventories (palladium and platinum) |
|
(8,899 |
) |
|
(4,397 |
) |
|
(8,220 |
) |
|
(4,005 |
) |
Total combined cash
costs, before by-product and recycling credits
(Non-GAAP) |
|
$ |
66,690 |
|
|
$ |
76,234 |
|
|
$ |
134,812 |
|
|
$ |
156,667 |
|
By-product revenue
credit |
|
(6,147 |
) |
|
(6,914 |
) |
|
(11,262 |
) |
|
(13,659 |
) |
PGM Recycling income
credit |
|
(2,957 |
) |
|
(2,036 |
) |
|
(4,734 |
) |
|
(4,163 |
) |
Total combined cash
costs, net of by-product and recycling credits
(Non-GAAP) |
|
$ |
57,586 |
|
|
$ |
67,284 |
|
|
$ |
118,816 |
|
|
$ |
138,845 |
|
PGM Recycling income
credit |
|
2,957 |
|
|
2,036 |
|
|
4,734 |
|
|
4,163 |
|
|
|
$ |
60,543 |
|
|
$ |
69,320 |
|
|
$ |
123,550 |
|
|
$ |
143,008 |
|
|
|
|
|
|
|
|
|
|
Consolidated corporate
general and administrative costs |
|
$ |
8,311 |
|
|
$ |
10,396 |
|
|
$ |
16,608 |
|
|
$ |
18,741 |
|
Corporate depreciation
included in consolidated corporate general and administrative
costs |
|
(99 |
) |
|
(120 |
) |
|
(210 |
) |
|
(252 |
) |
General and
administrative costs - foreign subsidiaries |
|
(578 |
) |
|
(452 |
) |
|
(1,022 |
) |
|
(869 |
) |
Total general and
administrative costs |
|
$ |
7,634 |
|
|
$ |
9,824 |
|
|
$ |
15,376 |
|
|
$ |
17,620 |
|
|
|
|
|
|
|
|
|
|
Total capitalized
costs |
|
$ |
25,367 |
|
|
$ |
32,803 |
|
|
$ |
46,633 |
|
|
$ |
61,178 |
|
Capital associated with
expansion |
|
(12,136 |
) |
|
(12,223 |
) |
|
(19,940 |
) |
|
(20,344 |
) |
Total Capital incurred
to sustain existing operations |
|
$ |
13,231 |
|
|
$ |
20,580 |
|
|
$ |
26,693 |
|
|
$ |
40,834 |
|
|
|
|
|
|
|
|
|
|
All-In Sustaining
Costs (Non-GAAP) |
|
$ |
81,408 |
|
|
$ |
99,724 |
|
|
$ |
165,619 |
|
|
$ |
201,462 |
|
|
|
|
|
|
|
|
|
|
PGM mined ounces
sold |
|
150.9 |
|
133.0 |
|
282.8 |
|
269.6 |
PGM mined ounces
produced |
|
137.1 |
|
|
127.0 |
|
|
274.4 |
|
|
260.3 |
|
|
|
|
|
|
|
|
|
|
Costs of metals sold
per PGM mined ounce |
|
$ |
501 |
|
|
$ |
606 |
|
|
$ |
506 |
|
|
$ |
596 |
|
All-In Sustaining Costs
per PGM Mined Ounce (Non-GAAP) |
|
$ |
594 |
|
|
$ |
785 |
|
|
$ |
604 |
|
|
$ |
774 |
|
For a full description and reconciliation of
this non-GAAP financial measure to a GAAP financial measure, see
Reconciliation of GAAP Financial Measures to Non-GAAP Financial
Measures section.
Stillwater Mining
Company Reconciliation of Total Cash Costs
Guidance and AISC Guidance (Non-GAAP
Financial Measures) (Unaudited)
A reconciliation of the 2016 Total Cash Costs Guidance and the
2016 AISC Guidance is provided below. The estimates in the table
below are considered "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and section 21E of the Securities Exchange Act of 1934, as amended,
which are intended to be covered by the safe harbor created by such
sections and other applicable laws. Please refer to: Cautionary
Note Concerning Forward-Looking Statements, for additional
information.
|
|
Reconciliation |
|
Revised Guidance Range |
Costs of metals sold -
Mined Production (000's) |
|
$ |
279,125 |
|
|
|
|
PGM mined ounces
sold |
|
550,000 |
|
|
545,000 |
|
555,000 |
|
Costs of metals sold
per PGM mined ounce |
|
$ |
508 |
|
|
$ |
495 |
|
$ |
520 |
|
|
|
|
|
|
|
Costs of metals sold -
Mined Production (000's) |
|
$ |
279,063 |
|
|
|
|
Inventory change
(000's) |
|
(10,000 |
) |
|
|
|
Total combined cash
costs, before by-product credits and recycling credits (000's) |
|
$ |
269,063 |
|
|
|
|
PGM mined ounces |
|
540,000 |
|
|
535,000 |
|
545,000 |
|
Total combined cash
costs per PGM mined ounce, before by-product credits and recycling
credits |
|
$ |
498 |
|
|
|
|
|
|
|
|
|
|
By-product revenue
credit (000's) |
|
$ |
24,000 |
|
|
|
|
PGM Recycling income
credit (000's) |
|
11,000 |
|
|
|
|
Total cash costs, net
of by-product and recycling credits (000's) |
|
$ |
234,063 |
|
|
|
|
|
|
|
|
|
|
Total cash costs per
PGM mined ounce, net of by-product and recycling credits |
|
$ |
433 |
|
|
$ |
430 |
|
$ |
455 |
|
|
|
|
|
|
|
Total cash costs, net
of by-product and recycling credits (000's) |
|
$ |
234,063 |
|
|
|
|
PGM Recycling income
credit (000's) |
|
11,000 |
|
|
|
|
General and
administrative (000's) |
|
35,000 |
|
|
30,000 |
|
40,000 |
|
Sustaining capital
expenditures (000's) |
|
55,000 |
|
|
50,000 |
|
60,000 |
|
All-in sustaining costs
(000's) |
|
$ |
335,063 |
|
|
|
|
All-in sustaining costs
per PGM mined ounce |
|
$ |
620 |
|
|
$ |
595 |
|
$ |
635 |
|
Stillwater Mining
Company Underlying Earnings
(Loss) (Non-GAAP Financial
Measure) (Unaudited)
Underlying Earnings (Loss) (Non-GAAP): This
non-GAAP financial measure is considered by the Company to be
reflective of the actual income / loss position. This non-GAAP
financial measure provides to investors and analysts the ability to
understand the results of the continuing operations of the Company
relating to the production, processing and sale of PGMs, by
excluding certain items that have a disproportionate impact on the
results for the reported periods. The measure is calculated
beginning with Net income (loss) attributable to common
stockholders and adding back impairment charges, one-time event
charges and charges infrequent to the Company's continuing
operations and the income tax effect of such adjustment. Net loss
attributable to noncontrolling interest has been adjusted for the
noncontrolling interest's ownership percentage of any applicable
impairment charges to which the noncontrolling interest has an
ownership. The Company's determination of the components of
Underlying earnings (loss) are evaluated periodically and based, in
part, on a review of non-GAAP financial measures used by mining
industry analysts.
Net income (loss) attributable to common stockholders is
reconciled to Adjusted net income (loss) attributable to common
stockholders and Underlying earnings (loss) as follows:
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
(In thousands) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net income (loss)
attributable to common stockholders |
|
$ |
784 |
|
|
$ |
(27,476 |
) |
|
$ |
(9,146 |
) |
|
$ |
(4,474 |
) |
Impairment of
property, plant and equipment and non-producing mineral
properties |
|
— |
|
|
(46,772 |
) |
|
— |
|
|
(46,772 |
) |
Income tax
effect of adjustment |
|
— |
|
|
997 |
|
|
— |
|
|
997 |
|
Adjusted net income
(loss) attributable to common stockholders |
|
$ |
784 |
|
|
$ |
18,299 |
|
|
$ |
(9,146 |
) |
|
$ |
41,301 |
|
Impairment loss
attributable to noncontrolling interest |
|
— |
|
|
(11,444 |
) |
|
— |
|
|
(11,444 |
) |
Underlying earnings
(loss) |
|
$ |
784 |
|
|
$ |
6,855 |
|
|
$ |
(9,146 |
) |
|
$ |
29,857 |
|
INVESTOR CONTACT:
Mike Beckstead
(720) 502-7671
investor-relations@stillwatermining.com
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