Mining firm Stillwater has announced a dip in production during the third quarter which has hit profits at the company.

Reporting a net loss of $9.1 million for the three months to September 30th, the firm stated that a slowdown in production at its Stillwater mine, together with marginally lower price realisations and an increase in depreciation and amortisation expenses were to blame for the losses.

Production at the Stilllwater mine remained higher during the third quarter compared to the same period in 2004, at producing 80,000 ounces of pgms, but dipped compared to the previous three months due in part to seasonally reduced manpower availability, which also affected its East Boulder mine.

Chairman and chief executive Francis R McAllister revealed that the company would be looking to increase its production in the coming months in a bid to stave off potential market downturns in the price of palladium.

While he explained that Stillwater's agreement with Norilsk has helped protect the firm from market fluctuations, Mr McAllister recognised that that deal will come to an end in 2006, at which point the Stillwater will be "exposed to market prices on sales of its metals".

He added: "We are concerned that if prices remain at or below current low levels at that time, the company's future revenues, profitability and cash flow would increasingly suffer."

Therefore, the firm is to introduce a number of initiatives designed to protect itself against such price changes, including ramping up production levels and furthering the developed state of its mines.


Ÿ Adfero Ltd