BILLINGS – A Russian mining giant announced Monday that it was selling its majority ownership stake in two Montana precious metals mines, but the mine operator said the move would not derail its major expansion plans.
MMC Norilsk Nickel said it was selling its 51 percent stake in the Stillwater Mining Company to focus on its “core operations” in the global mining and metals industry.
“The sales of our holdings in Stillwater Mining Company represent an important milestone in the fulfillment of our strategic objectives,” said Vladimir Strzhalkovsky, Norilsk Nickel’s general director.
Norilsk has long been described by Stillwater executives as a relatively hands-off owner. Directors of the Russian company said in April they were open to potential buyers for the two Montana mines — the only domestic source of platinum and palladium.
The announcement came as precious metals prices continue to recover from their crash two years ago. Platinum is now selling for about $1,640 an ounce — more than double its 2008 low, but well short of the pre-crash peak of $2,250 an ounce.
In 2003, Norilsk paid $100 million and 877,000 ounces of palladium for Stillwater — a deal the company said was worth $257 million. At Monday’s share price, Norilsk’s stake in the company was worth more than $950 million.
Stillwater shares fell 96 cents, or about 5 percent, to $19.05 on news of the Norilsk sale.
Stillwater spokesman Dan Gagnier said the news about Norilsk will not effect Stillwater’s plans to expand those mines and develop another in Ontario, adding that it was “business as usual at Stillwater.”
The company’s two mines in the Beartooth Mountains southwest of Billings produced 529,900 ounces of palladium and platinum last year.
In September, Stillwater launched a $118 million bid to gain control of the Canadian precious metals company Marathon PGM Corp. Stillwater plans to develop a $400 million pit mine near Marathon, Ontario over the next three years, tapping into a reserve estimated to hold more than 3 million ounces of palladium and platinum, or about 94 tons.
Earlier this month, Stillwater announced plans to spend $68 million on the expansion of its Montana mines, which are near the towns of Nye and McLeod.