TORONTO (miningweekly.com) - US platinum-group metals (PGM) producer Stillwater Mining increased its production in the third quarter to 129 100 oz, compared with 120 000 oz in the same period a year earlier, and expects to beat its full-year guidance of 496 000 oz for 2009.

The third-quarter 2009 figure comprises 29 900 oz of platinum and 99 200 oz of palladium.

Stillwater operates two mines – Stillwater and East Boulder – in the Beartooth Mountains of south-central Montana, in the US.

In November last year, the firm announced that it would scale down operations at its East Boulder mine, reduce capital expenditure and cut jobs across the group, in an attempt to stay profitable amid falling PGM prices.

At the Stillwater mine, production increased 13,5% in the third quarter compared with last year, to 95 100 oz. Output at East Boulder declined as expected, to 34 000 oz, compared with 36 200 oz in the September quarter of 2008.

However, the company pointed out that third-quarter PGM production at East Boulder was down by only about 6% from the same period last year, despite a nearly 50% reduction in the mine work force between the periods.

Third-quarter cash costs, excluding by-product and recycling credits, decreased to just $424/oz, compared with $558/oz in the same quarter of 2008.

“Higher productivities at both mines, coupled with lower materials costs and reduced reliance on contractors, have contributed to this strong improvement during 2009,” the firm said.

Including by-products and recycling credits, the company's cash costs for the quarter were $357/oz, compared with $349/oz a year earlier.

Although prices for platinum and palladium remain well below their average levels during 2008, prices continued to rise in the third quarter, Stillwater commented.

The firm realised an average platinum price of $1 174/oz, compared with $1 569/oz last year. The average realised palladium price was $360/oz, down from $409/oz last year.

The effect on the company of losing its supply agreement with General Motors earlier this year was almost entirely offset by the increase in PGM market prices, Stillwater said.

“And, as expected, the company has had no difficulty finding buyers for the displaced metal under that contract.”

GM cancelled its supply contract with Stillwater in July, as part of its government-backed bankruptcy restructuring.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.