Progress Continues on Stillwater Mine Transformation Efforts

BILLINGS, MT- Stillwater Mining Company mines palladium and platinum from two underground mines located in the Beartooth Mountains of south-central Montana. The Company's mines produced about 126,200 ounces of platinum and palladium during the second quarter of 2008, a little below the 133,100 ounces produced in the second quarter last year. Production at the Company's Stillwater Mine increased slightly to 88,100 ounces, compared to 84,500 ounces in second quarter 2007, while East Boulder Mine production dropped sharply to 38,100 ounces from 48,600 ounces in last year's second quarter. The lower East Boulder production was largely attributable to a shortage of manpower and appropriate skill sets associated with the challenges of changing to more selective mining methods.
  Francis R. McAllister, Stillwater Chairman and CEO, said; "Obviously, we are very pleased with the Company's strong earnings thus far in 2008, and particularly in the second quarter. Our reported earnings of $17.2 million for the quarter were the highest since the second quarter of 2001, when the palladium price was near a record-high level. As was the case in 2001, this quarter's performance was driven almost entirely by very robust PGM prices, which to a degree masked some ongoing operational challenges. We are continuing to work on those challenges, however, and believe we are gradually making progress.
  Regarding the Company's mine transformation efforts, McAllister reported, "Operationally, progress continues on our mine transformation efforts. Safety and environmental performance continued strong during the quarter; we have implemented recommendations from a third-party safety audit conducted during the first quarter that are intended to help drive our incident rates toward zero. Construction is now under way on the second smelter furnace in Columbus; it should be fully operational by the end of 2008 or early in 2009. We believe this furnace, once in operation, will increase our processing capacity and provide a strategically critical back-up facility during scheduled or unscheduled furnace outages. The Company's smelting and refining facilities in Columbus, Montana process mined concentrates and recycle catalyst materials received from third parties.
  Stillwater processed recycle material containing a total of 115,000 PGM ounces through the smelter and refinery during the second quarter 2008, up 23.5% from the 93,100 ounces recycled during the same period last year. Recycling activities contributed about $6.7 million to the Company's operating margin (before corporate overhead and financing charges) during the second quarter of 2008, compared to about $6.0 million in the second quarter of 2007. The improved performance is primarily attributable to higher realized prices for PGMs, partially offset by delays inherent in the timing of the inventory flows.
  Total production from selective mining methods at the Stillwater Mine was at 86% of the new mill feed while East Boulder averaged only 56%. At this time we do not expect any significant change in these levels due to the tight labor markets we are currently seeing in the mining industry. Along with these tight markets for seasoned miners we are renewing our focus on how we can improve and accelerate our existing miner training efforts."
  Net income for the first six months of 2008 was $20.4 million.This compares to the first six months of 2007, when the Company reported a net loss of $3.6 million The stronger 2008 results were mostly driven by significantly higher realized prices for platinum group metals (PGMs), the Company's primary products.
The company's address is 1321 Discovery Drive, Billings, MT 59102, (406) 373-8700, fax: (406) 373-8701, email: [email protected].