stillwater mine -...

Stillwater Mining Company

Stillwater Mine

East Boulder Mine

Forward Looking Statement

Some statements contained in this presentation are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, therefore, involve uncertainties or risks that could cause actual results to differ materially. Additional information regarding factors which could cause results to differ materially is found in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K.

The Company intends that the forward-looking statements contained herein be subjected to the above-mentioned statutory safe harbors. Investors are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any obligation to update forward-looking statements.

Agenda

• Thursday, September 29Orientation, Stillwater MineReview of 2005 Operational FocusUnderground TourTour of Smelter, Refinery

• Friday, September 30Overview, East Boulder OperationsUnderground and Surface Tour, East Boulder Mine

Operations Focus

Goal: Sustainable operations after the auto contracts

• Cost Reduction

• Increase Production Levels

• Introduce/Re-introduce Selective Mining

• Improve the Developed State

• Develop and Advance the Safety Systems

• Establish sound environmental system

Advance the Safety Systems

• G.E.T. Safe introduced in 2001

• “Safety first, production will follow”

Safety Record

MSHA Reportable Accident Frequency Rate

0.02.04.06.08.0

10.012.014.016.0

2000 Ap

01 Apr

2002 Ap

03 Apr

2004 Ap

05 Apr

Safety Record

0.02.04.06.08.0

10.012.014.016.0

2000 Ap

01 Apr

2002 Ap

03 Apr

2004 Ap

05 Apr

2004 Achievements

• MSHA recognition for “Most Improved Mine” in Rocky Mountain District

• OSHA award under SHARP for smelter, refinery

• 34% reduction in accident frequency rate compared to 2003

Safety Record

2000 Ap

01 Apr

2002 Ap

03 Apr

2004 Ap

05 Apr

2005 Update

• Laboratory recognized under SHARP by OSHA

• Further expansion of employee participation

• Implementation of internal audit processes

• A further reduction of 30% of injury frequency rate

Turning a historic operating weakness into a point of competitive strength

Operations Focus

• Cost Reduction

Improved Developed State

• Significant investment in 2005

• Improved infrastructure to support higher production

• Increased primary development to expand proven reserves

Infrastructure- Stillwater Mine

• Sand Plant for Upper West

• Rail haulage on 35W

• Continued development on B32

Infrastructure – East Boulder

• Added tailings capacity

• Tunnel re-hab/improvement

• Ventilation

• Long-term ore/waste passes

Infrastructure – East Boulder

• Two raises, each 1800-ft • Will double ventilation flow at mine• Initially schedule for completion of both raises in Q3

2005• Transferred second raise to different contractor• First raise to be completed near year-end, second raise

in H2 of 2006

Developed State - Proven Reserves

• Reef – Unique type of deposit

• Formation of the Stillwater Complex

• Accessing the deposit

• Proven, probable reserves

Primary Platinum Group Metal Sources

Stillwater Complex – Pre Beartooth Uplift

Stillwater Complex – Post Beartooth Uplift

28 miles long

+1 mile deep

5 feet thick

Stillwater Complex Hanging Wall Projection – Looking West

Location of the Stillwater Complex

CORPORATEHEADQUARTERS

Projection of the Stillwater Complex

Deposit Characteristics

- Large lateral extent

- Consistency in average over larger areas

- Local variability

- Limited surface access

Ore Reserves

- Proven ReservesBased primarily on diamond drilling results, typically on 50-foot spacing horizontally and vertically.

- Probable Reserve determinationProjection from known points up to a maximum of 1,000 ft. Estimation factors are based on proven reserve information (grade, reef thickness, % mineable, area, etc.)

- Economic analysis

- Reviewed and opined on by Behre Dolbear

Probable Conversion

• Typically, each year a portion of the area carried as probable reserve is accessed, drilled and placed into proven reserves

• Probable conversion rate is an indicator of past success in converting probable reserve tons to proven reserve tons

• Year to year there is considerable variability

• Stillwater’s probable estimation technique is based on cumulative geologic experience

Ore Reserves – Block Model

Block Area 8

Block-81997 to 2004 Reef Main Zone Composites

Block-81997 to 2004 Reef Undiluted Block Model

Block-81997 Reef Undiluted Block Model

Conversion rate – 1,160%

Conversion rate – 24%

Block-81997 to 2004 Reef Undiluted Block Model

Probable to proven conversion rate 1997-2004…. 84%

Historical – Overall Mine Conversion

Stillwater Mine East Boulder Mine1997 163%1998 150%1999 66%2000 111%2001 104% 88%2002 71% 91%2003 52% 86%2004 62% 125%

Overall Stillwater Mine 92% Overall East Boulder Mine 100%

Annual Conversion of Probable to Proven Tons

Drill Results – Off Shaft

Three Month Rolling Average

Jan-00 Jan-01 Jan-02 Jan-03 Jan-04

# Holes % Economic

Avg. ~ 36%

Drill Results – Off Shaft

• Off Shaft – Grade-Thickness 11.9 (oz x HT)

MonthlyThree-Month Average

Drill Results – Upper West

Three Month Rolling Average

# Holes % Economic

Avg. ~ 54%

Drill Results – Upper West

• Upper West Grade-Thickness 9.4 (oz x HT)

Monthly Three-Month Average

Actual vs Predicted

Percent of Holes with “economic” intercepts

JM RenduPredicted

SMC 2000-2004Actual

Off-Shaft Area 36-40% 36%

Upper West Area 54% 54%

Rendu used a threshold grade-thickness of 1.8 opt-ft

SMC uses a grade-thickness of 2.1

Grade Trends in Drill Results

Off-Shaft Upper West Linear (Off-Shaft) Linear (Upper West)

Probable Conversion

• One year results are highly variable

• Continual updating of key factors based on probable to proven results and geologic understanding

• Apparent conversion can be impacted by non-geologic factors– Metal price changes– Changes in mining methodology

Resource Development Sequence

14 to 23 MONTHS FROM FWL TO PRODUCTION; 17 MONTHS AVG

Proven Reserves

• Indicator short-term productive capacity– Number of working areas, levels available

• Targeting proven reserves of 3-4 years of production– More complete understanding of an area before development– More consistent mix of mining methods

• Development plans need to realistically reflect development sequence– Ramping up development creates a backlog of undrilled FWL,

etc– Secondary access, infrastructure needed before mining in new

reserves

East Boulder Proven Reserves

Year Proven ReserveTons

Target RateTPD

Proven ReserveMonths

2001 528,685 930 18.7

2002 647,882 1,270 16.8

2003 660,346 1,520 14.5

2004 1,225,490 1,375 29.3

A production rate of 2,000 tpd indicates a targeted proven reserve of 2.2-2.9 million tons.

Stillwater Proven Reserves

Year Proven ReserveTons

Target RateTPD

Proven ReserveMonths

2000 2,693,826 2,600 34.1

2001 2,778,550 3,000 30.5

2002 2,489,883 2,120 38.6

2003 2,052,112 2,000 33.7

2004 1,971,248 1,900 34.1

A production rate of 2,600-2,800 tpd indicates a targetedproven reserve of 2.8-4.0 million tons.

Increasing Proven Reserves

• Development of Proven Reserves dependent on:– Primary Development Footage

• Footwall lateral (FWL) advance– Diamond Drilling– Sound mining practice

• Historic yields of 70 tons per foot-FWL at Stillwater, 115 tons per foot-FWL at East Boulder

2005 Development Efforts

• Stillwater: – 34,700 feet of primary development, including 19,500 feet of

FWL– 465,000 feet of diamond drilling

• East Boulder: – 16,849 of primary development, including 11,500 feet of FWL– 165,000 feet of diamond drilling

• Capitalized Development cost of $62.3 million

Key Indicators – Developed State

• Primary Development Footage– Footwall Lateral Advance

• Diamond Drilling Footage

• Year-End Proven Reserves

• Conversion Rate

Year-to-Date Progress - Developed State

Goal Mid-Year Forecast

Stillwater Mine

Primary Development 34,700 Feet 36,000 Feet

Footwall Lateral 19,500 Feet 20,500 Feet

Diamond Drilling 465,000 Feet 485,000 Feet

East Boulder Mine

Primary Development 16,849 Feet 19,000 Feet

Footwall Lateral 11,500 Feet 12,500 Feet

Diamond Drilling 165,000 Feet 250,000 Feet

Long Term Development Rates

East Boulder Stillwater

Historic Yield, ton/ft-FWL 110-130 70

Long Term Production Target 2,000 tpd 2,600-2,800 tpd

Steady State –FWL Advance 6,100 ft/yr 14,100 ft/yr

2005 Forecast FWL 12,500 ft 20,500 ft

Operations Focus

• Cost Reduction

Selective Mining

• Benefits– Increased ounces produced– Increased mining recovery of deposit

• Narrower – access to marginal areas• Ability to mine smaller stopes

– Decreased secondary development requirements

• Opportunities– Adding ramp and fill mining to Upper West at Stillwater– Increased conventional (slusher) mining in Off-Shaft area at

Stillwater (including Alimak mining)– Increasing ramp and fill at East Boulder– Adding conventional mining at East Boulder

Selective Mining – Increased Recoveryof Deposit

Undiluted Grade

Bulk Mining Method

Selective Mining Methods

Selective Mining

Bulk Mining

Selective Mining – Reduced Secondary Development

29W6100 StopeMining Method Ramp and Fill Alimak/SlusherStope Tons 62,815 51,547Ore Tons to Mill 54,431 48,039Average Grade 0.84 0.94Contained Oz 46,566 46,566

Secondary DevelopmentFootage 2,360 840Tonnage 19,412 6,125

Total Tons Mined 82,227 57,672Tons per Recovered Oz 1.92 1.35

Selective Mining – Improved Grade

• Focus at East Boulder – Increase Grade

• Average Grade (2003-2005): 0.389 opt– 2,000 tpd at 0.39 not an acceptable outcome– Limited opportunity for significant change without modifying mining

method

• Ore body: 5.0 feet wideSills 8.0-8.5 feet wide

• Selective (slusher) mining aim is to narrow mining width to 6.0-6.5 feet

• Less secondary development required

Selective Mining – 2005 Efforts

• Sand Plant for Upper West scheduled for completion Q2 of 2006

• Contractor on site at Stillwater with initial Alimak units; first mining in Q2 of 2005

• Initial conventional stopes at East Boulder in 2005

Key Indicators – Selective Mining

• Completion of Sand Plant in 2006

• East Boulder– Tonnage from selective mining– Grade

• Stillwater– Tonnage by mining method

• Year-End Proven Reserves

• Conversion Rate

Operations Focus

• Cost Reduction

Production Increases

• Long range targets:– East Boulder 2,000 tpd– Stillwater 2,600-2,800 tpd

• Foundation needed in infrastructure, reserves and workforce to achieve and sustain

• Timing dependent on rate of success in development, but can begin in parallel with development

Operations Focus

• Cost Reduction

Cost Reduction

• Initial actions serve to reduce operating costs

• Capital expenditures currently driven by investment in reserves, infrastructure– Longer term gain expected from less mechanized mining

• Operating cost reduced through selective mining– Less secondary development– Reduced support per ounce

• Economy of scale

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