BILLINGS, Mont. – Stillwater Mining Co. reported a net loss of $201.5 million for the latest quarter after slashing the value of its copper reserve in Argentina, but company executives said Wednesday its underlying financial results are good.
The Billings-based company announced Tuesday that it had reduced the value of the Altar copper and gold project by $290 million to $102 million. The company in part cited economic and regulatory uncertainty in Argentina as a drag on its investment in the country.
“The business climate in Argentina has clouded the outlook,” Stillwater interim CEO Terrell Ackerman said in a conference call with investors Wednesday.
The precious metals mining company acquired the Altar reserve in 2011 as the centerpiece of a $487 million cash and stock purchase of Peregrine Metals Ltd.
Stillwater will continue to have a presence in Argentina, but it will take some time to determine its long-term direction with the project, which should be coming out early in 2014, Ackerman said.
Company executives noted the fundamentals for palladium are “robust,” with prices high due to increased automobile manufacturing in the U.S. and labour unrest in South Africa, where the metal also is mined.
“Financially, this year’s third quarter results are excellent without the writedown,” said Gregory Wing, Stillwater vice-president and chief financial officer.
Revenues for the quarter rose more than 54 per cent compared with last year, to $280 million. The increase mainly was due to the higher palladium prices and new suppliers that caused the company’s platinum group metals recycling business to increase 74 per cent from this time last year.
Employment in Stillwater’s Montana mining operations has grown nearly 7 per cent from last year, from 1,629 employees to 1,736, officials said.
Former Stillwater chairman and CEO Frank McCallister was ousted earlier this year in part due to investor discontent with his pursuit of Altar. That effort was joined by former Montana Gov. Brian Schweitzer, who replaced McCallister as chairman.
Ackerman had no update on the search for a new CEO, but said the search was a key focus of the new board of directors.
By midday, Stillwater stock rose 2.7 per cent to $11.22 a share on the New York Stock Exchange.