Stillwater & East Boulder

Overview

Stillwater is one of the world's leading producers of platinum group metals and the only significant primary producer of palladium in the Western Hemisphere. Properties covered here include the Stillwater and East Boulder Mines near Nye, Montana and the smelter and refinery complex at Columbus, Montana.

The Stillwater Mine began underground mining in 1986. The East Boulder underground mine, some 15 miles west of Stillwater, began commercial production in 2002. The mines are owned and operated by the Stillwater Mining Company.

Mining operations employ the sub-level stoping and the cut & fill mining methods to mine ore that is rich in palladium and has platinum as a by-product. Concentrating plants are located at both mines to upgrade ore to a concentrate. The Company operates a smelter, refinery and laboratory at Columbus, Montana to further upgrade the concentrate to a PGM-rich filter cake.

Stillwater Mining has two mine development projects in Montana, the Graham Creek at the East Boulder Mine and the Blitz at the Stillwater Mine.  The projects are to be developed in the years to come and have the potential to add up to 15.5 million tons of ore to the mines mineral reserves.

The mines produced a total combined 518,000 ounces of platinum equivalent ounces in 2011 at a total cash cost of $1,000 per ounce.

Location

The Stillwater mine is located near Nye, Montana.  The East Boulder mine is located in Sweet Grass County, Montana some 32 miles southeast of the town of Big Timber and is accessed by public road.

Montana is a state in the United States. The economy is primarily based on services, with ranching, wheat farming, oil and coal mining in the east, and lumber, tourism, and hard rock mining in the west.

The Stillwater Mine is located in the Beartooth Mountains in southern Montana, 85 miles SW of Billings. This is a prime recreational area, close to Yellowstone National Park. The area has excellent facilities for skiing, fly fishing, hiking and horseback riding. Stillwater and Sweet Grass Counties have a combined population of approximately 12,000. The area is accessible from Highway 90, west of Billings.

Stillwater County is located in south-central Montana. Its geographic features range from the Beartooth Mountains at the southern end of the county, to the Stillwater and Yellowstone River valleys in the central section, to the lake basins and coulees at the northern end. Elevations are from 3,400 feet above sea level near Park City, in the east-central part of the county, to over 12,000 feet above sea level near Granite Peak.

Average monthly temperatures range from over 60deg C in the summer to around 20deg C in the winter, depending upon location and elevation. The sun shines throughout the year and Fall has colorful foliage. Sweet Grass County reaches into the Crazy Mountains on the north and west. To the south lies the Absaroka Range. Granite Peak, located in the Absaroka Mountain Range, is the highest mountain in Montana at 12,799 ft. The Gallatin National Forest and Absoraka Beartooth Wilderness act as a boundary between the county and Yellowstone National Park.

Geology & Mineralization

The Stillwater Complex, which hosts the J-M Reef ore deposit, is located in the Beartooth Mountains in south-central Montana.

Geologically, the Stillwater Layered Igneous Complex is composed of a succession of ultramafic to mafic rocks derived from a large complex magma body emplaced deep in the Earth’s crust an estimated 2.7 billion years ago. Because of the gravity heavier mafic minerals settled to the base while lighter felsic minerals remained on top – this is the so-called layering of the mafic intrusion. The uniquely PGM-enriched J-M Reef and its characteristic host rock package represent one such layered sequence.

The J-M Reef package has been traced at its predictable geologic position and with unusual overall uniformity over considerable distances within the Stillwater Complex. The surface outcrops of the reef have been examined, mapped and sampled for approximately 28 miles along its east-southeasterly course and over a known expression of over 8,200 feet vertically. That predictability of the J-M Reef has been further confirmed in subsurface mine workings of the Stillwater and East Boulder Mines and by over 38,000 drill hole penetrations.

The PGMs in the J-M Reef consist primarily of palladium, platinum and a minor amount of rhodium. The reef also contains significant amounts of iron, copper and nickel, and trace amounts of gold and silver.

As of December 31, 2011, reserves were estimated at 38,231,100 tonnes ore grading 16 g/t palladium (Pd) + platinum (Pt) ounces for a total of 19,980,000 Pd+Pt ounces.

Mining & Operation

The Stillwater Mine accesses and has developed a 5.9-mile-long underground segment of the J-M Reef, on various levels between 2,000 and 7,300 feet above sea level. Access to the ore at the Stillwater Mine is accomplished by means of a 1,950-foot vertical shaft and by a system of horizontal adits and drifts driven parallel to the strike of the J-M Reef at vertical intervals of between 150 feet and 300 feet. Seven main adits have been driven from surface portals on the west and east slopes of the Stillwater Valley at various elevations between 5,000 and 5,900 feet above sea level. Several additional principal levels have been developed below the 5,000-foot level down to the 3,200-foot elevation, accessed from the vertical shaft and the associated shaft ramp system. Ore from this region of the mine is hauled by truck and/or rail to the shaft, where it is crushed and hoisted out of the mine. Below the 3,200 elevation, the Company is continuing to develop a decline system and additional principal mining levels to access and develop deeper areas in the central part of the mine below those currently serviced by the existing shaft. At the end of 2011, this decline system extended down to the 2,000 foot level. 

From the surface facilities at the East Boulder mine, the J-M Reef is accessed by two 18,500-foot long, 15-foot diameter horizontal adits driven into the mountain. These adits are equipped with rail haulage and intersect the ore body at an elevation 6,450 feet above sea level. The ore body is accessed vertically by ramp systems tying together the footwall laterals and driven approximately every 2,500 feet along the length of the deposit.

The Graham Creek Project, located immediately to the west of the Company’s East Boulder Mine, and the Blitz Project, expanding to the east from the Company’s Stillwater Mine, both moved ahead during 2011. Each of these projects lies within the boundaries of existing claim blocks, and each will be serviced from existing mine infrastructure. 

The Graham Creek project potentially could develop over time up to six million additional tons of resource grading on the order of 0.4 in-situ ounces per ton. The Blitz project has the potential over time to define up to 9.5 million additional tons of resource grading on the order of 0.7 ounces per ton. Initial development would cost $8 million for Graham and $180 million for Blitz over the next five years. 

In 2011, Stillwater Mine produced 297,000 oz palladium and 90,000 oz platinum, while the East Boulder Mine produced 102,000 oz palladium and 29,000 oz platinum.

Processing

The company processes ore from the Stillwater Mine through a surface concentrator facility (mill) adjacent to the Stillwater Mine shaft. The mill has a permitted design capacity of 3,000 tons per day. During 2011, an average of 2,018 tons of ore and 157 tons of sub-grade material were processed through the mill per calendar day. In addition, on average the mill processed 139 tons per calendar day of smelter slag. Crushed ore is fed into the concentrator, mixed with water and ground to slurry in the concentrator’s mill circuits to liberate the PGM-bearing sulfide minerals from the rock matrix. Various reagents are added to the slurry, which then is agitated in a froth flotation circuit to separate the valuable sulfides from the waste rock. In this circuit, the sulfide minerals are successively floated, recycled, reground and refloated to produce a concentrate suitable for further processing. 

The flotation concentrate, which represents approximately 1.5% of the original ore weight, is filtered, placed in large bins and then transported by truck 46 miles to the Company’s metallurgical complex in Columbus, Montana. The smelter facility consists of two electric furnaces, two top blown rotary converters (TBRC’s), a matte granulator and gas handling and solution regeneration systems. 

In 2011, 53.7% of the tailings material from the mill was returned to the mine and used as fill material to provide support for additional mining activities. The balance was placed in permitted tailings containment areas on the surface. No additional steps are necessary to treat any tailings placed back into the mine or into the impoundments, as they are environmentally inert. Tailings are disposed of into the impoundment areas pursuant to the company’s operating permits. Mill recovery of PGMs from the ore is historically about 92%. 

The East Boulder mine also operates an onsite concentrator similar to the one at The Stillwater mine. 

Stillwater ores yield about 3.4 ounces of palladium for each ounce of platinum produced. 

For 2011, the company’s total cash cost was about $1,000 per platinum-equivalent ounce.

Environment & Community

In late October 2011 one of Stillwater Mine’s employees suffered a fatal accident while operating a loader underground in the mine. 

In 2011, Stillwater Mine’s environmental performance and partnership agreement with their neighbors and local NGOs remained exemplary. 

As a result of the company’s commitment to environmental excellence, they were able to enter into an agreement with Tiffany & Co. in 2010 and 2011 to supply a substantial share of their worldwide platinum requirements.