BILLINGS - Stillwater Mining Co., the nation's only producer of platinum and palladium, reported a net income of $600,000 for the first quarter of 2006, coming off a year in which the company lost nearly $14 million.
A company official on Thursday said the first-quarter results reflect higher overall market prices for the precious metals, but noted that the company's own forward sales lowered overall prices it received. Forward sales are those in which a company has a contract to sell a commodity at a future date. The company said those forward sales reduced earnings by about $5.4 million in the first quarter.
"Currently, the palladium market price is above the average floor prices in our long-term auto sales contracts, resulting in the company realizing higher palladium prices for sales of its mine production," Stillwater's chairman and CEO Francis McAllister said Thursday in a written statement.
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Palladium is used in the auto industry in the production of catalytic converters. The company said palladium is selling for about $332 per ounce, up over 80 percent in the past six months.
The company's $600,000 net income for the first quarter of the year compared to a loss of $2.9 million for the final quarter of 2005, and a $1.2 million loss for the first quarter of 2005.
The company attributed much of its 2005 loss to depreciation and expenses tied to further developing its operations, increased operating costs and a drop in income that it blamed on lower prices for stockpiled palladium it sold.
McAllister said development work at the company's mines near Nye and Big Timber remain on track and that the company has sold all of the palladium it received in the 2003 deal with MMC Norilsk Nickel that gave that Russian metals giant controlling interest in the Montana company.
"The funding received by Stillwater in liquidating the inventory has been used, among other things, to improve our financial structure, provide funding for increasing the developed state and supporting the transformation of our mines, and to market palladium, principally as a primary jewelry metal," McAllister said.