AMERICAS — New Stillwater mill should double output

A new mill is being constructed at the Stillwater mine in Montana, which should double its yearly output of platinum and palladium by 1997.

Owned by Stillwater Mining, which was originally a joint venture involving Lac Minerals, Manville and Chevron Resources, the mine started up in 1987. Lac pulled out the following year, leaving the two other companies as co-partners, with Chevron as operator.

Stillwater is the only primary producer of platinum and palladium in the U.S. Reserves are estimated at 1.2 million tons grading 0.8 oz. per ton, with a ratio of 3.5 parts palladium to one part platinum.

In 1993, production reached 290,000 oz. (platinum and palladium combined), compared with 270,000 oz. the previous year.

The new mill should double output, to about 600,000 oz. per year, by 1997, said Michael Sherratt, president of Stillwater.

Expansion was to have begun last year, but a local land developer complained that part of the mill expansion could be seen from his property. He consequently launched a lawsuit, arguing that the rise in daily production to 2,000 oz. from 1,000 oz. would affect his home sales.

“We made an agreement to make modifications to the part of the mine you can see, and the developer withdrew his suit in January of this year,” Sherratt told The Northern Miner.

The company expects development costs will be about US$50 million; financing should be concluded by mid-August.

Meanwhile, a base metal refinery is being constructed at a cost of US$10 million. The facility is intended to reduce operating costs; startup is expected in 1995.

While Stillwater executives look forward to increased output, the mine’s co-owners are hoping to sell their interests by the end of the year, Sherratt said.

“It will be either through a straight sale or a public offering,” he said. “Chevron is an oil company and wants to devote its interest to oil, whereas Manville is a company with an interest in building materials.” Meanwhile, in Canada, Inco (TSE) and Falconbridge (TSE), which produce platinum group metals as byproducts, project little change in output for this year.

In 1993, Inco produced 119,000 oz. platinum (compared with 114,000 oz. in 1992) and 155,000 oz. palladium (compared with 174,000 oz. in 1992). Robert Purcell, manager of corporate public relations, expects figures for 1994 to be roughly the same.

Falconbridge, however, may experience a slight increase in palladium figures; results to March of this year were almost half of last year’s figures, said Caroline Casselman, manager of corporate communications.

In 1993, the company turned out 42,357 oz. platinum, a substantial rise over the 30,586 oz. produced in the previous year. However, output of palladium fell between 1992 and 1993, from 84,984 oz. to 80,014 oz.

The newly operating Lac des Isles mine of North American Palladium (TSE), 60 miles northwest of Thunder Bay, Ont., is expected to produce 120,000 oz. palladium and 6,000 oz. platinum per year.

These Canadian figures only represent about 4% of world production of both metals. South Africa leads in platinum production, with 70% of total production, and Russia tops the list of palladium producers with 60% of the world total.