Montana Mining Company Fights Takeover by Ex-Governor Schweitzer

BILLINGS – The chief executive of a Montana mining company urged shareholders on Wednesday to reject a takeover by a group that includes former Gov. Brian Schweitzer.

Stillwater Mining CEO Frank McAllister said a takeover could hurt the company’s growth at a time when it’s well-positioned to profit from anticipated increases in platinum and palladium prices.

The comments came as the state’s largest publicly traded mining company kicked off a six-week campaign to stall the takeover bid ahead of a May 2 annual shareholders meeting.

Schweitzer and the Clinton Group, a New York hedge fund, have criticized Stillwater’s expansions into Argentina and Canada as uncertain prospects that already have cost the company hundreds of millions of dollars.

They blame McAllister and want to oust him and install new directors, including Schweitzer.

Clinton Group, which owns just over 1 percent of Stillwater, also is seeking to capitalize on investor concerns over share prices that have dropped by about two-thirds since McAllister took over as CEO in 2001.

McAllister said in a Wednesday interview with The Associated Press that the dissident group does not understand the nature of mining. And he warned that a sale of the company’s Argentina copper reserves any time soon would eliminate its ability to use that project as a future hedge against low prices for platinum and palladium.

“Mining is a long-term proposition. You can’t do this on a short-term basis,” McAllister said.

He said the company already is pursuing one of the primary goals outlined by Schweitzer and the Clinton Group — the expansion of mines in the Beartooth Mountains in south-central Montana.

In the past two years, McAllister said, the company’s workforce increased more than 20 percent to 1,664 employees. It could increase even more as the expansions come on line, he said.

For 2013, about 87 percent of Stillwater’s $172 million in capital spending will be focused on its Montana mines. By contrast, the company expects to spend only about $13 million on its Altar project in Argentina, McAllister said.

“What we intend to do is flesh out exactly what’s there, without detracting from our spending on our palladium project,” he said.

McAllister declined to comment on Schweitzer’s participation in the takeover.

The former governor, who left office in January, has said he intervened due to concern that a major Montana employer was at risk if Stillwater continued to operate under current leadership. The Democrat also has blasted McAllister’s compensation, which topped $5 million each of the past two years.

In a letter sent to shareholders Wednesday, the company’s board credited McAllister with reviving the company from “the verge of extinction” after palladium prices collapsed between 2001 and 2003.