The US-based platinum and palladium producer, Stillwater Mining Co, has announced a return to profit, earning $15.8 million during the first quarter of 2004.

Announced at the firm's annual shareholders meeting in Billings, Montana, earlier in the week, the figure compares favourably with the $1.8 million loss recorded during the same period last year.

Combined average realized prices for mine production increased 18 per cent to $484 per ounce, compared with $411 a year ago. Consolidated PGM production totalled 148,000 ounces, the company said.

Francis McAllister, chairman and chief executive officer, attributed the return to profit to a number of factors.

"Stillwater's improved capital structure and operations combined with improved markets and metal prices returned the company to profitability in the first quarter," he explained.

The results also included the sale of 46,000 ounces of palladium out of the 877,000 ounces acquired through a deal with the Russian metals giant Norilsk Nickel last year.

There was also growth in "secondary" reprocessing with 27,000 ounces of pgms recovered from autocatalysts being sold, including 8,000 ounces of palladium, 17,000 ounces of platinum and 2,000 ounces of rhodium - all of which were sold at close to market prices.

Mr McAllister also outlined "important developments" occurring in the palladium markets, with demand increasing for the metal.

He stated: "With the significant price differential between palladium and platinum, as well as palladium and gold, customers have switched to palladium for autocatalysts, and for dental and jewellery alloys."