Stillwater - Montana
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5% NSR 413,000 oz (Pd) 124,000 oz (Pt) 21,167,000 oz¹ No resource classification allowed under SEC Stillwater Mining Company |
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The Stillwater Complex royalty is a 5% NSR payable on all commercially recoverable metals produced from 813 of the 995 claims that cover the Stillwater Complex. The amount of the royalty is reduced by permissible deductions, which on average equates to approximately 10-12% of revenue. The royalty is calculated and payable monthly. Franco-Nevada may also elect to receive the royalty in cash or in kind.
Based on management’s estimates, the Stillwater Complex royalty covers approximately 80-85% of the combined reserves and resources of the deposit. Historically, the percentage of ore mined from the royalty ground has been lower than the 80-85% reserve/resource estimate. However, in recent years the annual percentage of production on the royalty ground has increased, reaching approximately 86% in 2006. While the percentage of future production from the royalty lands will vary from year to year, management believes the cumulative rate to be approximately equal to the estimated percentage of reserves/resources covered by the royalty. Production began in 1987 at the Stillwater Mine and in 2002 at East Boulder Mine, which lies to the west of the Stillwater mining and milling operation.
Stillwater reported mine production of palladium and platinum for 2007 totaled 537,500 ounces, below the 600,600 ounces produced in 2006. The lower production was primarily the result of some challenges on the labor front during 2007, challenges faced by the mining industry in general, including higher attrition among skilled mineworkers as Stillwater implemented a new longer work schedule, but also including a seven-day strike at the Stillwater Mine in July. In August of 2008 Stillwater provided updated production guidance for 2008 of between 515,000 and 525,000 ounces from the mines.
¹ Expressed as palladium plus platinum in-situ ounces at a rate of approximately 3.56 parts palladium to 1 part platinum.