Stillwater Mining announced in mid-December 2010 that Norimet, a 100%-owned subsidiary of Russian nickel producer Norilsk Nickel, had sold its entire 49.8-million share interest in Stillwater. The sale represented about 51.3% of Stillwater’s outstanding shares. The bulk of the sale, 37 million shares, was to the public at an offering price of $19.50 per share. Underwriters exercised their over-allotment option to purchase an additional 3.8 million shares, and UBS Securities purchased 9 million shares. Stillwater did not receive any proceeds from the sale.
Norilsk acquired its controlling interest in Stillwater in June 2003.
Also in mid-December, Stillwater reported in an SEC filing it had entered into a three-year palladium sales agreement with General Motors, beginning January 1, 2011. Sales will be for contractually determined quantities at prices based on the London PM fix monthly average for palladium at the time of each sale. General Motors broke previous sales agreements with Stillwater when it filed for Chapter 11 bankruptcy protection in 2009.
Stillwater Mining produces platinum and palladium at its Stillwater and East Boulder mines in southern Montana. Its smelter and refinery are located at Columbus, Montana. On January 12, the company announced its full-year 2010 mined production of palladium and platinum totaled 485,000 oz. This was at the high end of the company’s most recent guidance (475,000 to 485,000 oz) and in particular reflected excellent performance for the year at the East Boulder mine. The Stillwater mine struggled with lower-than-planned ore grades and some intermittent operational challenges throughout much of 2010, especially in the off-shaft area of the mine, which historically has produced much higher ore grades, the company said.
Stillwater has two mine delineation and development projects currently in progress at the Montana mines that will have a combined cost of about $68 million over a period of five to six years (E&MJ, December 2010, p. 6).