SMC hits 2nd consecutive profit
m group metals recycling and increased production made for a strong third quarter for the Stillwater Mining Company.
The 175,000 ounces of platinum group metals (PGMs) processed during the third quarter was an 8.7 percent increase of 2015 third quarter and more importantly – a company record. PGM mined production was up 8.4 percent.
All-in sustaining costs (AISC) were down 7.8 percent from the 2015 third quarter while safety performance continued to improve with a 13.2 percent decreased reportable incident rate.
“Even more impressive, our safety incidence rate through the first nine months of 2016 is less than the record low rate achieved last year,” said SMC President/CEO Mick McMullen.
SMC’s primary growth project – Blitz – has also been accelerated and expanded.
“We’re pretty excited about the Blitz is at the moment,” said McMullen during an Oct. 28 webcast.
Calling it a “significantly expanded project scope with minimal cost increase” – the Blitz Project now includes Lower Blitz, which is an area between 3,500 and 5,000 feet, said SMC Investor Relations Mike Beckstead this week. Approximately 20,200 feet of ramp and infrastructure development are now in place and nearly all the Benbow service facilities are nearly complete.
Production is expected to begin at the end of 2017 or early 2018 and once “fully ramped up” production is forecast to be between 270,000 and 330,000 PGM ounces a year, according to SMC. That is up from the original estimate of between 150,000 and 250,000 ounces per year. Full “ramp up” will be hit in 2021.
The company also anticipates that once in full swing, the Blitz Project will drop SMC’s AISC to the low to mid $500 range. Through the third quarter, there has been $101 million spent on the project.
The following are produced ounces of palladium and platinum during the third quarter:
Palladium: 64,300 59,300
Platinum: 19,700 17,700
Stillwater Total: 84,000 77,000
Palladium: 42,600 39,700
Platinum: 12,200 11,400
East Boulder Total: 54,800 51,100
Total: 138,800 128,100
The 175,000 PGM ounces fed to the smelter during the third quarter marked a company record.
The quarter also continued to see a shift from tolled to purchased material. Tolled material comes from customers who want the metal processed and returned to them.
The numbers were as follows:
Average tons of catalyst fed per day 25.1 22.7
Tons processed 2,308 2,087
Tons tolled 546 794
Tons purchased 1,762 1,293
PGM ounces fed 175,000 161,000
PGM ounces sold 117,600 88,800
PGM tolled ounces returned 49,900 73,700
When asked about possibly needing to increase the workforce to meet the accelerated plans of Blitz and other projects, McMullen said “We have not exhausted our recall ranks” of people who were layed off last August.