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Stillwater Mining Reports Highest Earnings in a Decade


February 22, 2011 - BILLINGS, MT

STILLWATER MINING COMPANY (NYSE: SWC)


-- Earnings of $50.4 million for 2010
-- PGM prices increased throughout 2010 as global auto demand built and new
ETFs sparked investor interest
-- Shares available for trading doubled as Norilsk Nickel, the Company's
former majority shareholder, exited via a secondary offering in December
-- Acquisition of the PGM assets of Marathon PGM Corporation was completed
in November
-- Recycling volumes rebounded in 2010 from their steep decline in 2009
-- Mine production at Stillwater Mine suffered from operational and ore
grade challenges

Stillwater Mining Company today reported 2010 net income of $50.4 million,or $0.51 per diluted share, on revenues of $555.9 million. Contributing tothe net income in 2010 were higher PGM prices and a recovery in recyclingvolumes, along with continued focus on productivity and controlling costs.

The 2010 net income compares to a full-year 2009 net loss of $8.7 million,or $0.09 per share, on revenues of $394.4 million. Factoring into the netloss in 2009 was an $8.1 million non-cash charge related to the issuanceduring the fourth quarter of approximately 1.8 million common shares toretire $15 million principal amount of the Company's outstanding 1.875%convertible debentures. Results for the year 2009 also reflectedsignificant operating losses incurred early in the year as production costsin the Company's mines for a time exceeded the Company's average salesrealizations. However, restructuring efforts and a gradual increase in PGMprices had reversed this trend by the end of the first quarter of 2010.

The Company's reported net income for the fourth quarter of 2010 was $16.5million, or $0.16 per diluted share, on revenues of $144.7 million. For thefourth quarter of 2009, the Company reported a net loss of $5.8 million, or$0.06 per share, on revenues of $101.8 million. The 2009 fourth quarterincluded the effect of the 2009 loss on the partial retirement of theconvertible debentures noted above.

Reflecting on 2010, Francis R. McAllister, Stillwater Chairman and CEO,commented, "This past year or so has been an extraordinary time forStillwater Mining Company. After going through the pain of the economicrecession and corporate restructuring in late 2008 and early 2009, it wasrefreshing to see the PGM markets gradually get back on their feet during2009 and then move ahead dramatically in 2010. We observed as we issuedour 2009 Annual Report in early 2010 that the economic stars seemed to bealigned in favor of the platinum-group metals, given the worldwide demandfor automobiles -- and therefore for catalytic converters -- rebounding,constrained production of these metals and the apparent winding down ofpalladium exports from the old Russian government stockpiles. Not only didPGM prices increase during 2010 as we had predicted, but the market priceof palladium, our principal product, doubled and converged upward towardthe market price of platinum -- advancing from 21% of the price of platinumat the bottom of the recession to 45% at the end of 2010. In view of theinterchangeability of the two metals in many applications, this convergencesimply makes economic sense.

"With the recovery of the PGM markets, we were able to refocus some of ourattention in 2010 on growth opportunities, allowing us to diversify ouroperations with the goal of building value for our shareholders. InNovember, we closed the acquisition of the PGM assets of Marathon PGMCorporation, a Canadian exploration company with an attractive PGM-copperproject situated near the town of Marathon, Ontario on the north shore ofLake Superior. The transaction was valued at US$173.4 million (whichincluded $36.0 million of deferred income tax liability assumed). TheMarathon project is currently in the permitting phase, with constructionhopefully to begin in 2013 and mining the following year. The feasibilitystudy on the project, based upon currently completed drilling, indicatesabout a 12-year mine life, with annual production of approximately 200,000palladium and platinum ounces, along with about 37 million pounds of copperper year. Construction cost is projected to fall between $400 million and$450 million, to be firmed up by a detailed engineering study to beconducted over the next 18 months or so.

"The Marathon project in our view not only brings us a financiallyattractive growth opportunity, but it also advances our diversificationefforts on several fronts. With most of the world's PGM production comingfrom Russia and South Africa, we view the acquisition of a Canadian PGMproperty as offering us operating and geographic diversity within anothervery stable political environment. While the Marathon project certainlyfalls within our core focus of palladium and platinum, it also offers usinvolvement in the copper market, which has strong fundamentals of its ownat this time and is an area where our management group has substantialexperience. The PGM cost structure of the Marathon project, with thepotential for copper credits, at recent metal prices would reduce ouraverage corporate PGM cash cost per ounce.

"Along with the Marathon project, the Company also acquired from MarathonPGM Corporation the Geordie Lake property, a promising, partially exploredPGM prospect about eight kilometers to the west of Marathon, and aninterest in an exploration property in Manitoba known as Bird River.Following the completion of the Marathon transaction, we announced ourintent to also acquire other exploration properties between Marathon andGeordie Lake from Benton Resources Corp. To facilitate exploration of allthese properties, we recently organized a dedicated exploration team,comprised of geologists from our own operations and from Marathon. Weexpect to spend between $4 and $5 million in 2011 on exploring theseCanadian properties and perhaps others. During 2010, the Company alsoexercised an option to purchase a 15% interest in Marathon GoldCorporation, successor to the non-PGM assets that Marathon PGM held priorto the acquisition which includes an attractive gold discovery inNewfoundland that they have announced.

"In mid-December we also announced that our former controlling shareholder,an affiliate of the large Russian mining company MMC Norilsk Nickel, hadcompleted a secondary offering, selling all their Stillwater common shares.In June of 2003, Norilsk Nickel acquired a 55% equity interest inStillwater paying $100 million in cash and about 877,000 ounces inpalladium metal, valued at that time at about $179 per ounce, as thebalance of their purchase price. The 2003 acquisition was a strategicmarketing investment by Norilsk Nickel to provide the U.S. auto industrywith assurance that there would be adequate supplies of palladium to meettheir catalytic converter requirements. By 2010 the objectives of theirmarketing strategy had been met and Norilsk Nickel determined that theywould dispose of their Stillwater interest along with certain other assetsin order to better focus on their core business. Although Stillwater didnot receive any of the proceeds of the Norilsk Nickel secondary offering,we do benefit by virtually doubling the number of our shares tradingwithout diluting any of our other shareholders. The oversubscribedoffering closed at $19.50 per share, a small discount to the share price atthe time of announcement."

Mine production decreased somewhat during 2010 at the Stillwater Mine andthe East Boulder Mine, which extract ore containing palladium and platinumfrom a deposit in the Beartooth Mountains of south-central Montana. The twomines produced a total of 485,100 ounces of palladium and platinum during2010, a decrease of 8.5% from the 529,900 ounces produced in 2009.Production at the Company's Stillwater Mine decreased to 351,700 ouncesfrom the 393,800 ounces during 2009, while East Boulder Mine productiondeclined to 133,400 ounces from 136,100 ounces in 2009. The decrease inproduction reflects lower-than-planned ore grades in the lower off-shaftarea at the Stillwater Mine and a limitation on available mining areas atthe East Boulder Mine that had been recognized in their 2010 mine plan.

Mining costs, on a per-ounce basis, also increased in 2010 compared to theyear earlier. Total cash costs per ounce, after by-product and recyclingcredits, averaged $397 in 2010, 10.3% above 2009 total cash costs per ounceof $360. By-product and recycling credits increased in 2010 as a result ofstronger PGM prices and recycling volumes. If total cash costs areconsidered before the benefit of by-product and recycling credits, 2010total cash costs as adjusted would be $480 per ounce, or 13.1% above thecomparable $417 per ounce for 2009. Stillwater Mine's total cash costs(with the benefit of credits) averaged $380 per ounce in 2010 or 10.5% morethan the $344 per ounce achieved in 2009. East Boulder mine costs (with thebenefit of credits) averaged $442 per ounce in 2010, 8.6% more than $407per ounce in 2009. Most of the increase in total cash costs per ounce wasattributable to the lower ounce production in 2010.

Combined sales realizations improved through the year 2010 for minedpalladium and platinum ounces and averaged $721 per ounce, up from $549 perounce realized in 2009. Average metal prices increased throughout 2010.Fourth quarter 2010 sales realizations strengthened to average $844 perounce, compared to $579 per ounce averaged during the fourth quarter of2009.

The Company's smelting and refining complex in Columbus, Montana processesmine concentrates and recycles spent catalyst materials received from thirdparties. A portion of the recycling material is purchased for the Company'sown account and the balance is toll processed on behalf of others for afee. Volumes of recycling materials available for processing had fallen offin late 2008 and in 2009, as the steep drop in PGM prices reduced theincentive to collect and recycle spent automotive catalysts and fewer carswere scrapped. However, the recycling market recovered substantially during2010. In total, the Company processed recycling material containing 399,400ounces of platinum, palladium and rhodium through the smelter and refineryduring 2010, up 59.1% from the 251,000 ounces recycled during 2009 andessentially equal to the 398,000 ounces processed in 2008. In the fourthquarter of 2010, the Company fed 102,400 recycling ounces to the smelter,compared to 90,900 ounces fed in the same period of 2009. The Company'srecycling business had net income for the year 2010 of $11.5 million(including associated financing income), compared to earnings of $5.9million in 2009.

Commenting on the performance of Stillwater's existing operations, Mr.McAllister observed, "Despite a few challenges with production at theStillwater Mine in 2010, overall we are extremely pleased with theCompany's performance for the year. Our 2010 reported net income of $50.4million makes 2010 the best year financially that we have had in almost adecade. Even after funding $63.6 million of the Marathon acquisition out ofinternal cash flow, our cash position remains stronger at the end of 2010than it was when the year started. Both mines continue to perform verywell, with excellent productivity and good cost control. The StillwaterMine problems in 2010 were almost entirely due to realizing a slightlylower grade than expected within certain stopes in the off-shaft area ofthe mine -- an issue we can plan around in the future -- and someunscheduled remediation work during the second quarter. East Boulder Mineis consistently performing on plan.

"Our recycling business recovered nicely during 2010 after the steep dropin processing volumes during 2009. The new crushing and sampling unit andautomated x-ray facility that will increase our ability to handle largevolumes of recycling material are now installed and coming on line. Most ofthe installation work was handled by our own employees, who took theconcept and ran with it. The original smelter furnace, which sits next tothe new furnace that was placed into service in May 2009, has now beenstripped of its old refractory brick and is ready to be reconfigured as aslag cleaning furnace during 2011. And we are currently evaluating severaladditional technological improvements that potentially could add to ouroperating and financial performance in the future.

"As we discussed last quarter, in early 2010 we assembled a team ofexperienced geologists and engineers to evaluate the potential of variousundeveloped areas along the J-M Reef. In its assessments, the teamconsidered such factors as prospective ore grades, cost to develop andmine, availability of infrastructure, and the likely timeline required.Nine separate projects were considered, and two projects quickly emerged asthe preferred options. The first, known as the Blitz project, extends theexisting Stillwater Mine development about 20,000 feet toward the easternextremity of the J-M Reef by driving two parallel drifts on the 5,000 and5,200 levels. The other, the Graham Creek project, will extend the existingEast Boulder Mine development about 8,200 feet toward the west using anexisting tunnel boring machine. Although these were both engineered asfive-year projects with no contribution to production until ventilationraises can be installed during the last year of development, we willevaluate opportunities to bring on production earlier if attractive areasare identified."

Turning to 2011 guidance for investors, Mr. McAllister added, "Aftercarefully reviewing our plans for 2011, we now feel comfortable in givingpublic guidance for this year. As we had indicated previously, we find thatour operations seem to function optimally with targeted mine production ofapproximately 500,000 palladium and platinum ounces per year. We havestructured our mine plans toward achieving that level of production in2011, assuming some continuation of the lower grades seen in the off-shaftat Stillwater last year, and resuming some production on the east side ofthe mine to offset that reduction. The east side was shut down in 2008when PGM prices dropped -- grades on the east side tend to be higher thanaverage, but mining efficiency there is hindered by poor ground conditions.At the current higher PGM prices, it makes sense to incur the higher costin order to benefit from the extra production. It appears that our averagecost per ounce across the two mines should average about $430 per ounce (anon-GAAP measure) in 2011. That is up about 8% over the $397 per ounceaveraged in 2010, but it actually is better than the average costs realizedin the second half of 2010. Capital expenditures are budgeted at $120million for the year, up from just $50.3 million in 2010. Of that total,about $10 million is attributable to the Marathon project, another $10million to the Blitz and Graham Creek efforts, and about $8 million is fora new slag cleaning circuit at our Columbus smelter operation. Theremaining funds will go for equipment replacement and toward an expandedmine development program.

"In summary," Mr. McAllister concluded, "during 2011 we will maintain ourfocus on the sustainability of our operations, investing in improvements todeveloped state and mining efficiency. We will also emphasize growing theCompany's recycling business. We are currently in the process of assemblinga project team for Marathon and will continue to advance the permittingprocess there. We will expand our corporate expenditures for explorationand for marketing palladium -- both programs that were sharply cut back in2009 -- and will continue research into new technological avenues. And solong as our cash flow remains strong, we will seek additional investmentopportunities to build value for our shareholders."

Cash Flow and Liquidity

At December 31, 2010, the Company's available balance of cash and cashequivalents and highly liquid short-term investments (excluding restrictedcash) was $208.4 million, up from $201.2 million at December 31, 2009, andit reported $196.0 million of debt outstanding. Available cash and cashequivalents at December 31, 2010, was $19.4 million, down from $166.7million at December 31, 2009. Late in 2010, the Company expended cash of$63.6 million (along with issuing 3.88 million common shares) in itsacquisition of the PGM assets of Marathon PGM Corporation. The Company alsorestructured its investment guidelines during 2010, so that a larger shareof available liquidity is now in short-term investments rather than in cashand cash equivalents. Working capital associated with the recyclingbusiness, constituting marketable inventories and related recyclingadvances, increased to $41.5 million at the end of 2010, from $28.6 millionat the end of 2009.

Net cash provided by operating activities (which includes changes inworking capital) totaled $28.6 million in the 2010 fourth quarter and$123.9 million for the full year. By comparison, $8.0 million of cash wasprovided from operations in the fourth quarter of 2009 and $59.7 millionfor the full year 2009. Cash generation strengthened in 2010 primarily as aresult of increased market prices for palladium and platinum, the Company'sprimary products.

Capital expenditures in 2010 totaled $50.3 million, of which $14.7 millionpertained to the 2010 fourth quarter. Capital spending in 2009 totaled$39.5 million, of which $7.3 million was spent during the fourth quarter of2009. The Company increased capital spending modestly in its 2010 budget inresponse to higher PGM prices and correspondingly higher projected cashavailability during 2010.

Outstanding debt at December 31, 2010, was $196.0 million, essentiallyunchanged from the end of 2009. The Company's total debt includes $166.5million outstanding in the form of convertible debentures due in 2028 and$29.5 million of Exempt Facility Revenue Bonds due in 2020.

Fourth Quarter Results -- Details

In the fourth quarter of 2010, the Company's mining operations produced121,100 ounces of palladium and platinum, including 86,600 ounces from theStillwater Mine and 34,500 ounces from East Boulder Mine. For thecomparable quarter of 2009, Stillwater Mine produced 102,800 ounces andEast Boulder Mine produced 35,500 ounces of palladium and platinum. The12.4% decrease in total output between 2010 and 2009 is mostly the resultof lower average realized ore grades at the Stillwater Mine.

In the 2010 fourth quarter, total cash costs, after by-product andrecycling credits, were $432 per ounce, a 22.7% increase over the fourthquarter 2009 average of $352 per ounce. Excluding the benefit ofby-product and recycling credits, total cash costs in the fourth quarter of2010 averaged $506 per ounce, up 20% compared to the $404 per ounceaveraged in the fourth quarter of 2009. Much of this increase in cost perounce is attributable to the lower ounce production in 2010.

Sales from mine production totaled 117,100 ounces in the fourth quarter of2010 at an overall average realization of $844 per ounce, compared to128,000 ounces at $579 per ounce in the fourth quarter of 2009. TheCompany's average realization on palladium sales from mine production was$619 per ounce in the 2010 fourth quarter, compared to $374 per ounce inthe same period of 2009. Palladium realizations during 2009 benefited fromthe floor prices in the auto contracts, and consequently were higher thanthe corresponding market prices. The comparable average realization onplatinum, reduced by the effect of contractual price caps on 14% ofproduction in both periods, was $1,557 per ounce in the fourth quarter of2010, up from $1,296 per ounce in the 2009 fourth quarter.

During the fourth quarter of 2010, the Company processed about 102,400ounces of PGMs from recycled catalytic materials. By comparison, in thefourth quarter of 2009, the Company processed about 90,900 ounces ofrecycled material. The Company processes both recycled material itpurchases from third parties and material it toll processes on behalf ofothers for a fee. Volumes of material available for recycling increased in2010 in response to higher PGM prices.

Revenues for the fourth quarter 2010 totaled $144.7 million, up 42.1% from$101.8 million realized in the fourth quarter of 2009. Proceeds from salesof mined PGMs totaled $105.1 million in the 2010 fourth quarter, up from$80.2 million in the same quarter of 2009, reflecting higher PGM pricesduring the fourth quarter 2010. Recycling revenues increased to $38.0million in the fourth quarter of 2010 from $21.6 million in the 2009 fourthquarter because of the higher sales volumes and realized prices in 2010.Resales of finished metal purchased in the open market generated $1.6million in revenue during the fourth quarter of 2010.

Costs of metals sold (before depletion, depreciation and amortizationexpense) increased to $96.1 million in the 2010 fourth quarter from $72.7million in the fourth quarter of 2009. Mining costs included in costs ofmetals sold increased to $58.9 million in the 2010 fourth quarter from$52.4 million in the 2009 fourth quarter, reflecting some cost inflationand increased royalties and taxes on the higher sales revenues. Recyclingcosts, largely comprised of the cost to purchase spent catalytic materialsfor processing, totaled $35.4 million in the fourth quarter of 2010,compared to $20.3 million in the fourth quarter of 2009, reflecting boththe greater volume of material recycled and higher metal values in thefourth quarter 2010. The cost to purchase 3,000 ounces of palladium forresale added $1.8 million to fourth quarter 2010 costs.

Depletion, depreciation and amortization expense increased to $18.4 millionin the 2010 fourth quarter from $17.6 million in the same period of 2009.The increase is attributable to the capital placed into service during thefourth quarter 2010, offset in part by lower mine production.

General and administrative ("G&A") costs increased to $12.7 million in thefourth quarter of 2010 from $8.0 million in the 2009 fourth quarter, mostlyreflecting one-time expenses in 2010 associated with the Marathonacquisition of approximately $1.5 million and contractual support for theNorilsk Nickel secondary offering of Stillwater shares of approximately$5.0 million.

Consolidated net income of $16.5 million recorded for the fourth quarter of2010 included, by business segment, $27.9 million of income from miningoperations and $2.7 million income from recycling activities (includingassociated financing income), less corporate costs including $12.7 millionof G&A expense and about $1.3 million of unallocated net interest expense.

The net loss of $5.8 million recorded for the fourth quarter 2009 included,by business segment, $10.2 million of income from mining operations and$1.5 million income from recycling activities (including associatedfinancing income), less corporate costs including $7.9 million of G&Aexpense and about $1.5 million of unallocated net interest expense. Therewas also a non-cash inducement loss of $8.1 million recorded in fourthquarter 2009, reflecting the value of excess shares issued in a transactionthat exchanged equity for $15.0 million of outstanding debentures duringthe 2009 fourth quarter.

Year End Results -- Details

For the full year 2010, Stillwater Mining Company produced 485,100 ouncesof palladium and platinum from its mining operations, including 351,700ounces from the Stillwater Mine and 133,400 ounces from the East BoulderMine. In 2009, the Company's mines produced 529,900 ounces -- 393,800ounces at Stillwater and 136,100 ounces at East Boulder. The lowerproduction during 2010 reflected lower ore grades realized in the off-shaftarea at the Stillwater Mine, as well as diversion of some production effortinto unscheduled remediation during the second quarter of 2010.

Palladium and platinum sold from mine production during 2010 totaled489,400 ounces at an overall average realization of $721 per ounce,compared to 515,700 ounces sold during 2009 at a combined averagerealization of $549 per ounce. Broken out by metal, total sales from mineproduction in 2010 included 377,600 ounces of palladium at an averagerealization of $495 per ounce and platinum sales of 111,800 ounces at anaverage realization, net of the contractual price ceiling on 14% of mineproduction, of $1,488 per ounce. In 2009, sales of mined palladium totaled392,800 ounces at an average realized price, including the benefit of floorprices, of $365 per ounce and platinum sales totaled 122,900 ounces at anaverage price, net of the price ceiling, of $1,137 per ounce in 2009.

The level of recycling activity increased during 2010, with a total of399,400 ounces of spent catalytic material processed, up from 251,000ounces processed in 2009. The Company processes both recycling materialpurchased from third parties and material tolled on behalf of third partiesfor a fee. The higher volumes processed in 2010 reflected increased PGMprices that incentivized more catalyst recycling worldwide.

Total Company revenues for 2010 equaled $555.9 million, up substantiallyfrom $394.4 million of revenue in the previous year, as higher PGM pricesand higher recycling volumes prevailed in 2010. Sales of mined PGM ouncescontributed $381.0 million to 2010's total revenue and $306.9 million to2009's revenue, with the difference driven by price. Recycling revenuesmore than doubled to $168.6 million in 2010 from $81.8 million in 2009, asthe volume of recycled materials processed increased, coupled with higherPGM market prices. Other sales, mostly of metal purchased to meet resaleobligations, contributed $6.2 million to 2010 revenue, up from $5.8 millionin 2009.

Costs of metals sold, excluding depletion, depreciation and amortizationexpense, increased by 35.6% to $393.7 million for 2010 from $290.8 millionin 2009, driven mostly by the growth in recycling activity. The costs ofmining operations included here increased by 10.0% to $230.0 million in2010 from $209.1 million in 2009, reflecting 2010 increases in labor andmaterials costs, along with higher royalties and taxes on the increasedrevenue. Recycling costs of metals sold increased by 107.3% to $157.3million in 2010 from $75.9 million in 2009, mirroring the higher salesvolumes. Most of the costs of recycling represent costs to purchase thespent catalyst material itself, as the actual processing is a relativelysmall portion of the total cost. Costs of other miscellaneous metalspurchased for resale totaled $6.4 million in 2010, up from $5.7 million theyear before.

Depletion, depreciation and amortization expense increased to $71.6 millionin 2010 from $70.4 million in 2009. The increase reflects the additionalcapital placed into service in 2010, offset in part by lower mineproduction.

Marketing -- The Company limited its market development efforts forpalladium to some extent during 2010. The Company spent $2.4 million insupport of marketing programs during 2010, up slightly from $2.0 million in2009.

General and administrative -- Executive marketing expenses discussed above,general and administrative costs were $33.0 million in 2010, compared to$25.1 million in 2009, a 31.5% increase, due to approximately $1.5 millionin acquisition expenses and approximately $5.0 million in contractualsupport of the Norilsk Nickel secondary offering, a write-down of $0.6million in advances for inventory purchases and increased share-basedcompensation expense. The Company also recorded valuation allowancestotaling $1.2 million in early 2009, including adjustments to tradereceivables, long-term investments and advances, and inventories. TheCompany also recorded an $8.1 million inducement loss in 2009 for sharesissued in a transaction exchanging equity for $15.0 million of outstandingdebentures.

The Company's consolidated net income for the full year 2010 was $50.4million. Broken out by business segment, mining operations contributed$80.0 million and recycling contributed $11.5 million of earnings(including associated financing income). At the corporate level, G&Aexpense totaled $35.5 million and unallocated net interest expense equaled$5.6 million.

The Company's net loss for the full year 2009 was $8.7 million. Breakingthis out by business segment, mining operations contributed $26.9 millionand recycling contributed $6.4 million of earnings (including associatedfinancing income). At the corporate level, G&A expense totaled $28.2million for the year and unallocated net interest expense equaled $5.7million. An $8.1 million inducement loss for shares issued to retire debtwas also recorded as a corporate item.

_______________________________

Stillwater Mining Company will host its 2010 year-end results conferencecall at 12:00 noon Eastern Standard Time on February 22, 2011. Theconference call dial-in numbers are 800-230-1951 (U.S.) and 612-332-0632(International). The conference call will simultaneously be webcast on theInternet via the Company's website at www.stillwatermining.com. To accessthe conference call on the Company's website, go to the Investor Relationssection under Presentations and click on the link to the conference call.A replay of the conference call will be available on the Company's websiteor by a telephone replay, numbers (800) 475-6701 (U.S.) and (320) 365-3844(International), access code 192919, through March 1, 2011, ending at 11:59p.m. Eastern Standard Time.

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Stillwater Mining Company is the only U.S. producer of palladium andplatinum and is the largest primary producer of platinum group metalsoutside of South Africa and the Russian Federation. The Company's sharesare traded on the New York Stock Exchange under the symbol SWC. Informationon Stillwater Mining can be found at its Website: www.stillwatermining.com.

Some statements contained in this news release are forward-lookingstatements within the meaning of Section 27A of the Securities Act of 1933,as amended, and Section 21E of the Securities Exchange Act of 1934, asamended, and, therefore, involve uncertainties or risks that could causeactual results to differ materially. These statements may contain wordssuch as "desires," "believes," "anticipates," "plans," "expects,""intends," "estimates" or similar expressions. These statements are notguarantees of the Company's future performance and are subject to risks,uncertainties and other important factors that could cause its actualperformance or achievements to differ materially from those expressed orimplied by these forward-looking statements. Such statements include, butare not limited to, comments regarding the economic environment, the timingand cost of the Marathon development, the outlook for the Company'soperations, the expectation of future automotive PGM supply agreements,expansion and development plans, the status of research efforts,projections of mining costs, ore grades, production and recovery rates,permitting, labor matters, financing needs and the terms of future creditfacilities, capital expenditures, changes in processing capacity, costreduction measures, safety, timing for engineering studies andenvironmental permitting and compliance, future surety requirements,outstanding litigation and views on the palladium and platinum market.Additional information regarding factors that could cause results to differmaterially from management's expectations is found in the section entitled"Risk Factors" in the Company's 2010 Annual Report on Form 10-K. TheCompany intends that the forward-looking statements contained herein besubject to the above-mentioned statutory safe harbors. Investors arecautioned not to rely on forward-looking statements. The Company disclaimsany obligation to update forward-looking statements.

 Consolidated Financial Statements, Ore Reserves and Key Factors Tables Stillwater Mining CompanyConsolidated Statements of Operations and Comprehensive Income (Loss)(Unaudited)(In thousands, except per share data) Three months ended Twelve months ended December 31, December 31, -------------------- -------------------- 2010 2009 2010 2009 --------- --------- --------- ---------REVENUES Mine production $ 105,053 $ 80,201 $ 381,044 $ 306,892 PGM recycling 38,021 21,622 168,612 81,788 Other 1,600 - 6,222 5,752 --------- --------- --------- --------- Total revenues 144,674 101,823 555,878 394,432 COSTS AND EXPENSES Costs of metals sold Mine production 58,940 52,386 229,986 209,140 PGM recycling 35,373 20,312 157,310 75,920 Other 1,757 - 6,379 5,741 --------- --------- --------- --------- Total costs of metals sold 96,070 72,698 393,675 290,801 Depletion, depreciation and amortization Mine production 18,124 17,572 71,121 70,239 PGM recycling 260 44 472 178 --------- --------- --------- --------- Total depletion, depreciation and amortization 18,384 17,616 71,593 70,417 --------- --------- --------- --------- Total costs of revenues 114,454 90,314 465,268 361,218 Marketing 736 385 2,415 1,987 General and administrative 11,302 7,480 33,016 25,080 Impairment of long-term investments - - - 119 Losses on trade receivables and advances for inventory purchases 595 - 595 1,051 (Gain)/loss on disposal of property, plant and equipment 51 87 (128) 689 --------- --------- --------- --------- Total costs and expenses 127,138 98,266 501,166 390,144 OPERATING INCOME (LOSS) 17,536 3,557 54,712 4,288 OTHER INCOME (EXPENSE) Other 5 3 (6) 79 Interest income 575 375 2,144 1,846 Interest expense (1,634) (1,619) (6,536) (6,801) Foreign currency transaction gain 51 - 51 - Induced conversion loss - (8,097) - (8,097) --------- --------- --------- ---------INCOME (LOSS) BEFORE INCOME TAX BENEFIT (PROVISION) 16,533 (5,781) 50,365 (8,685) Income tax benefit (provision) - 30 - 30 --------- --------- --------- ---------NET INCOME (LOSS) $ 16,533 $ (5,751) $ 50,365 $ (8,655) --------- --------- --------- ---------Other comprehensive income (loss), net of tax (384) (69) (762) 70 --------- --------- --------- ---------COMPREHENSIVE INCOME (LOSS) $ 16,149 $ (5,820) $ 49,603 $ (8,585) ========= ========= ========= ========= Weighted average common shares outstanding Basic 99,260 96,617 97,967 94,852 Diluted 107,861 96,617 99,209 94,852 Basic income (loss) per share --------- --------- --------- --------- Net income (loss) $ 0.17 $ (0.06) $ 0.51 $ (0.09) ========= ========= ========= ========= Diluted income (loss) per share --------- --------- --------- --------- Net income (loss) $ 0.16 $ (0.06) $ 0.51 $ (0.09) ========= ========= ========= ========= Stillwater Mining CompanyConsolidated Balance Sheets(Unaudited)(In thousands, except share and per share data) December 31, December 31, 2010 2009 ------------ ------------ASSETS Current assets Cash and cash equivalents $ 19,363 $ 166,656 Investments, at fair market value 188,988 34,515 Inventories 101,806 88,967 Trade receivables 7,380 2,073 Deferred income taxes 17,890 18,130 Other current assets 13,940 8,680 ------------ ------------ Total current assets 349,367 319,021Property, plant and equipment, net 509,787 358,866Restricted cash 38,070 38,045Other noncurrent assets 12,246 9,263 ------------ ------------ Total assets $ 909,470 $ 725,195 ============ ============LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 19,405 $ 8,901 Accrued compensation and benefits 24,746 26,481 Property, production and franchise taxes payable 10,999 10,405 Other current liabilities 3,052 3,689 ------------ ------------ Total current liabilities 58,202 49,476Long-term debt 196,010 195,977Deferred income taxes 53,859 18,130Accrued workers compensation 7,155 4,737Asset retirement obligation 6,747 6,209Other noncurrent liabilities 4,425 3,855 ------------ ------------ Total liabilities $ 326,398 $ 278,384 ------------ ------------ Stockholders' equity Preferred stock, $0.01 par value, 1,000,000 shares authorized; none issued - - Common stock, $0.01 par value, 200,000,000 shares authorized; 101,881,816 and 96,732,185 shares issued and outstanding 1,019 967 Paid-in capital 761,475 674,869 Accumulated deficit (178,570) (228,935) Accumulated other comprehensive loss (852) (90) ------------ ------------ Total stockholders' equity 583,072 446,811 ------------ ------------ Total liabilities and stockholders' equity $ 909,470 $ 725,195 ============ ============ Stillwater Mining CompanyConsolidated Statements of Cash Flows(Unaudited)(In thousands) Three months ended Twelve months ended December 31, December 31, -------------------- -------------------- 2010 2009 2010 2009 --------- --------- --------- ---------Cash flows from operating activities Net income (loss) $ 16,533 $ (5,751) $ 50,365 $ (8,655) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depletion, depreciation and amortization 18,384 17,616 71,593 70,417 Foreign currency transaction gain (51) - (51) - Lower of cost or market inventory adjustments - 13 - 6,626 Induced conversion loss - 8,097 - 8,097 Restructuring costs - - - - Impairment of long-term investments and property, plant and equipment - - - 119 Losses on trade receivables and inventory purchases 595 - 595 1,051 (Gain)/loss on disposal of property, plant and equipment 51 87 (128) 689 Accretion of asset retirement obligation 139 156 538 606 Amortization of debt issuance costs 245 243 979 1,036 Share based compensation and other benefits 2,803 2,959 12,366 11,441 Changes in operating assets and liabilities Inventories (6,049) (13,104) (12,474) (22,793) Trade receivables (1,364) 84 (5,307) 296 Accrued compensation and benefits (303) 1,285 (1,735) 2,379 Accounts payable 3,671 (884) 10,202 (5,761) Property, production and franchise taxes payable (167) (2,007) 1,164 (937) Workers compensation (205) - 2,418 (2,024) Restricted cash - (2,100) (25) (2,450) Other (5,702) 1,297 (6,603) (465) --------- --------- --------- ---------Net cash provided by operating activities 28,580 7,991 123,897 59,672 --------- --------- --------- ---------Cash flows from investing activities Capital expenditures (14,741) (7,252) (50,263) (39,534) Purchase of Marathon PGM assets (61,224) - (63,649) - Purchases of long-term investments (3,342) - (3,858) - Proceeds from disposal of property, plant and equipment 13 408 470 603 Purchases of investments (55,950) (26,604) (243,693) (47,551) Proceeds from maturities of investments 68,997 10,978 88,959 31,759 --------- --------- --------- ---------Net cash used in investing activities (66,247) (22,470) (272,034) (54,723) --------- --------- --------- ---------Cash flows from financing activities Principal payments on debt - - - (97) Issuance of common stock 338 9 844 9 --------- --------- --------- --------- Net cash provided by (used in) financing activities 338 9 844 (88) --------- --------- --------- --------- Cash and cash equivalents Net increase (decrease) (37,329) (14,470) (147,293) 4,861Balance at beginning of period 56,692 181,126 166,656 161,795 --------- --------- --------- ---------Balance at end of period $ 19,363 $ 166,656 $ 19,363 $ 166,656 ========= ========= ========= ========= Proven and Probable Ore Reserves*December 31, 2010 % % Change Change Average in in Grade Contained Tons Ounces Tons (Oz/Ton) Ounces from from (000's) Pd + Pt (000's) 2009 2009 ------- -------- --------- ------ ------Stillwater Mine Proven Reserves 2,559 0.64 1,648 -1.80% -3.74% Probable Reserves 13,116 0.62 8,176 -4.60% -5.89%Total Stillwater Mine 15,675 0.63 9,824 -4.15% -5.54% East Boulder Mine Proven Reserves 2,059 0.41 848 1.13% -2.19% Probable Reserves 23,064 0.40 9,199 2.02% -1.58%Total East Boulder Mine 25,123 0.40 10,047 1.95% -1.64% Total Proven Reserves 4,618 0.54 2,496 -0.52% -3.22%Total Probable Reserves 36,180 0.49 17,375 -0.48% -3.66%Total Proven and Probable Reserves 40,798 0.49 19,871 -0.49% -3.60% * In determining ore reserves at December 31, 2010, the Company applied thetrailing 12-quarter combined average PGM market price of $624 per ounce,based upon the 12-quarter average palladium price of $381 per ounce and the12-quarter average platinum price of $1,464. Stillwater Mining CompanyKey Factors Three months ended Twelve months ended(Unaudited) December 31, December 31, -------------------- --------------------(In thousands, where noted) 2010 2009 2010 2009 --------- --------- --------- ---------OPERATING AND COST DATA FOR MINE PRODUCTIONConsolidated:Ounces produced (000)Palladium 93 106 374 407Platinum 28 32 111 123 --------- --------- --------- ---------Total 121 138 485 530 ========= ========= ========= =========Tons milled (000) 282 275 1,095 1,086Mill head grade (ounce per ton) 0.47 0.53 0.48 0.52Sub-grade tons milled (000) (1) 22 29 86 98Sub-grade tons mill head grade (ounce per ton) 0.18 0.21 0.17 0.20Total tons milled (000) (1) 304 304 1,181 1,184Combined mill head grade (ounce per ton) 0.45 0.50 0.46 0.50Total mill recovery (%) 90 91 91 91Total operating costs per ounce (Non-GAAP) (2) $ 361 $ 306 $ 331 $ 310Total cash costs per ounce (Non-GAAP) (2) $ 432 $ 352 $ 397 $ 360Total production costs per ounce (Non-GAAP) (2) $ 585 $ 485 $ 546 $ 495Total operating costs per ton milled (Non-GAAP) (2) $ 144 $ 139 $ 136 $ 139Total cash costs per ton milled (Non-GAAP) (2) $ 172 $ 160 $ 163 $ 161Total production costs per ton milled (Non-GAAP) (2) $ 233 $ 220 $ 224 $ 222Stillwater Mine:Ounces produced (000)Palladium 66 79 271 302Platinum 20 24 81 92 --------- --------- --------- ---------Total 86 103 352 394 ========= ========= ========= =========Tons milled (000) 185 182 713 727Mill head grade (ounce per ton) 0.50 0.60 0.53 0.58Sub-grade tons milled (000) (1) 18 16 68 50Sub-grade tons mill head grade (ounce per ton) 0.20 0.21 0.18 0.20Total tons milled (000) (1) 203 198 781 777Combined mill head grade (ounce per ton) 0.48 0.57 0.50 0.56Total mill recovery (%) 91 92 92 92Total operating costs per ounce (Non-GAAP) (2) $ 359 $ 285 $ 317 $ 297Total cash costs per ounce (Non-GAAP) (2) $ 427 $ 328 $ 380 $ 344Total production costs per ounce (Non-GAAP) (2) $ 583 $ 454 $ 524 $ 469Total operating costs per ton milled (Non-GAAP) (2) $ 153 $ 148 $ 143 $ 150Total cash costs per ton milled (Non-GAAP) (2) $ 182 $ 171 $ 171 $ 174Total production costs per ton milled (Non-GAAP) (2) $ 248 $ 236 $ 236 $ 238East Boulder Mine:Ounces produced (000)Palladium 27 27 103 105Platinum 8 8 30 31 --------- --------- --------- ---------Total 35 35 133 136 ========= ========= ========= =========Tons milled (000) 97 93 382 359Mill head grade (ounce per ton) 0.40 0.40 0.39 0.40Sub-grade tons milled (000) (1) 4 13 18 48Sub-grade tons mill head grade (ounce per ton) 0.10 0.20 0.15 0.20Total tons milled (000) (1) 101 107 400 407Combined mill head grade (ounce per ton) 0.39 0.38 0.37 0.38Total mill recovery (%) 89 89 89 89Total operating costs per ounce (Non-GAAP) (2) $ 367 $ 369 $ 368 $ 347Total cash costs per ounce (Non-GAAP) (2) $ 444 $ 420 $ 442 $ 407Total production costs per ounce (Non-GAAP) (2) $ 592 $ 577 $ 604 $ 572Total operating costs per ton milled (Non-GAAP) (2) $ 126 $ 121 $ 123 $ 116Total cash costs per ton milled (Non-GAAP) (2) $ 152 $ 137 $ 147 $ 136Total production costs per ton milled (Non-GAAP) (2) $ 203 $ 189 $ 201 $ 191 Stillwater Mining Company Three Months ended Twelve months ended(Unaudited) December 31, December 31, -------------------- --------------------(In thousands, where noted) 2010 2009 2010 2009 --------- --------- --------- ---------SALES AND PRICE DATA Ounces sold (000) Mine production: Palladium (oz.) 89 100 377 393 Platinum (oz.) 28 28 112 123 --------- --------- --------- --------- Total 117 128 489 516 --------- --------- --------- --------- PGM recycling: (5) Palladium (oz.) 18 14 81 53 Platinum (oz.) 13 11 62 40 Rhodium (oz.) 3 2 13 9 --------- --------- --------- --------- Total 34 27 156 102 --------- --------- --------- --------- Other: (6) Palladium (oz.) 3 - 13 12 Platinum (oz.) - - - 3 Rhodium (oz.) - - - - --------- --------- --------- --------- Total 3 - 13 15 --------- --------- --------- --------- By-products from mining: (7) Rhodium (oz.) - 1 2 4 Gold (oz.) 2 2 9 9 Silver (oz.) 1 1 5 6 Copper (lb.) 215 172 824 776 Nickel (lb.) 263 187 1,157 856 Average realized price per ounce (3) Mine production: Palladium ($/oz.) $ 619 $ 374 $ 495 $ 365 Platinum ($/oz.) $ 1,557 $ 1,296 $ 1,488 $ 1,137 Combined ($/oz.)(4) $ 844 $ 579 $ 721 $ 549 PGM recycling: (5) Palladium ($/oz.) $ 514 $ 288 $ 456 $ 282 Platinum ($/oz.) $ 1,557 $ 1,240 $ 1,539 $ 1,143 Rhodium ($/oz.) $ 2,262 $ 1,513 $ 2,354 $ 2,088 Other: (6) Palladium ($/oz.) $ 533 $ - $ 479 $ 213 Platinum ($/oz.) $ - $ - $ - $ 1,041 Rhodium ($/oz.) $ - $ - $ - $ - By-products from mining:(7) Rhodium ($/oz.) $ - $ 2,293 $ 2,503 $ 1,543 Gold ($/oz.) $ 1,366 $ 1,116 $ 1,223 $ 983 Silver ($/oz.) $ 27 $ 18 $ 19 $ 15 Copper ($/lb.) $ 3.74 $ 2.83 $ 3.24 $ 2.14 Nickel ($/lb.) $ 9.10 $ 7.75 $ 8.74 $ 7.48 Average market price per ounce (4) Palladium ($/oz.) $ 673 $ 347 $ 525 $ 263 Platinum ($/oz.) $ 1,696 $ 1,389 $ 1,609 $ 1,204 Combined ($/oz.)(4) $ 919 $ 579 $ 773 $ 487 (1) Sub-grade tons milled includes reef waste material only. Total tons milled includes ore tons and sub-grade tons only. (2) Total operating costs include costs of mining, processing and administrative expenses at the mine site (including mine site overhead and credits for metals produced other than palladium and platinum from mine production). Total cash costs include total operating costs plus royalties, insurance and taxes other than income taxes. Total production costs include total cash costs plus asset retirement costs and depletion, depreciation and amortization. Income taxes, corporate general and administrative expenses, asset impairment write-downs, gain or loss on disposal of property, plant and equipment, restructuring costs, interest income and expense are not included in total operating costs, total cash costs or total production costs. Operating costs per ton, operating costs per ounce, cash costs per ton, cash costs per ounce, production costs per ton and production costs per ounce are non-GAAP measurements that management uses to monitor and evaluate the efficiency of its mining operations. These measures of cost are not defined under U.S. Generally Accepted Accounting Principles (GAAP). Please see "Reconciliation of Non-GAAP Measures to Costs of Revenues" and the accompanying discussion for additional detail. (3) The Company's average realized price represents revenues, which include the effect of any applicable agreement floor and ceiling prices, hedging gains and losses realized on commodity instruments and agreement discounts, divided by ounces sold. The average market price represents the average London Bullion Market Association afternoon postings for the actual months of the period. (4) The Company reports a combined average realized and market price of palladium and platinum at the same ratio as ounces that are produced from the base metal refinery. (5) Ounces sold and average realized price per ounce from PGM recycling relate to ounces produced from processing of catalyst materials. (6) Ounces sold and average realized price per ounce from other relate to ounces purchased in the open market for resale. (7) By-product metals sold reflect contained metal. Realized prices reflect net values (discounted due to product form and transportation and marketing charges) per unit received.

Reconciliation of Non-GAAP measures to costs of revenues

The Company utilizes certain non-GAAP measures as indicators in assessingthe performance of its mining and processing operations during any period.Because of the processing time required to complete the extraction offinished PGM products, there are typically lags from one to three monthsbetween ore production and sale of the finished product. Sales in anyperiod include some portion of material mined and processed from priorperiods as the revenue recognition process is completed. Consequently,while costs of revenues (a GAAP measure included in the Company's Statementof Operations and Comprehensive Income/(Loss)) appropriately reflects theexpense associated with the materials sold in any period, the Company hasdeveloped certain non-GAAP measures to assess the costs associated with itsproducing and processing activities in a particular period and to comparethose costs between periods.

While the Company believes that these non-GAAP measures may also be ofvalue to outside readers, both as general indicators of the Company'smining efficiency from period to period and as insight into how the Companyinternally measures its operating performance, these non-GAAP measures arenot standardized across the mining industry and in most cases will not bedirectly comparable to similar measures that may be provided by othercompanies. These non-GAAP measures are only useful as indicators ofrelative operational performance in any period, and because they do nottake into account the inventory timing differences that are included incosts of revenues, they cannot meaningfully be used to develop measures ofprofitability. A reconciliation of these measures to costs of revenues foreach period shown is provided as part of the following tables, and adescription of each non-GAAP measure is provided below.

Total Costs of Revenues: For the Company on a consolidated basis, thismeasure is equal to consolidated costs of revenues, as reported in theStatement of Operations and Comprehensive Income/(Loss). For the StillwaterMine, East Boulder Mine, and other PGM activities, the Company segregatesthe expenses within costs of revenues that are directly associated witheach of these activities and then allocates the remaining facility costsincluded in consolidated costs of revenues in proportion to the monthlyvolumes from each activity. The resulting total costs of revenues measuresfor Stillwater Mine, East Boulder Mine and other PGM activities are equalin total to consolidated costs of revenues as reported in the Company'sStatement of Operations and Comprehensive Income/(Loss).

Total Production Costs (Non-GAAP): Calculated as total costs of revenues(for each mine or consolidated) adjusted to exclude gains or losses onasset dispositions, costs and profit from secondary recycling, and changesin product inventories. This non-GAAP measure provides an indication of thetotal costs incurred in association with production and processing in aperiod, before taking into account the timing differences resulting frominventory changes and before any effect of asset dispositions or secondaryrecycling activities. The Company uses it as a comparative measure of thelevel of total production and processing activities in a period, and may becompared to prior periods or between the Company's mines. As noted above,because this measure does not take into account the inventory timingdifferences that are included in costs of revenues, it cannot be used todevelop meaningful measures of earnings or profitability.

When divided by the total tons milled in the respective period, TotalProduction Cost per Ton Milled (Non-GAAP) -- measured for each mine orconsolidated -- provides an indication of the cost per ton milled in thatperiod. Because of variability of ore grade in the Company's miningoperations, production efficiency underground is frequently measuredagainst ore tons produced rather than contained PGM ounces. And because oretons are first actually weighed as they are fed into the mill, mill feed isthe first point at which production tons are measured precisely.Consequently, Total Production Cost per Ton Milled (Non-GAAP) is a generalmeasure of production efficiency, and is affected both by the level ofTotal Production Costs (Non-GAAP) and by the volume of tons produced andfed to the mill.

When divided by the total recoverable PGM ounces from production in therespective period, Total Production Cost per Ounce (Non-GAAP) -- measuredfor each mine or consolidated -- provides an indication of the cost perounce produced in that period. Recoverable PGM ounces from production arean indication of the amount of PGM product extracted through mining in anyperiod. Because extracting PGM material is ultimately the objective ofmining, the cost per ounce of extracting and processing PGM ounces in aperiod is a useful measure for comparing extraction efficiency betweenperiods and between the Company's mines. Consequently, Total ProductionCost per Ounce (Non-GAAP) in any period is a general measure of extractionefficiency, and is affected by the level of Total Production Costs(Non-GAAP), by the grade of the ore produced and by the volume of oreproduced in the period.

Total Cash Costs (Non-GAAP): This non-GAAP measure is calculated (for eachmine or consolidated) as total costs of revenues adjusted to exclude gainsor losses on asset dispositions, costs and profit from recyclingactivities, depletion, depreciation and amortization and asset retirementcosts and changes in product inventories. The Company uses this measure asa comparative indication of the cash costs related to production andprocessing in any period. As noted above, because this measure does nottake into account the inventory timing differences that are included incosts of revenues, it cannot be used to develop meaningful measures ofearnings or profitability.

When divided by the total tons milled in the respective period, Total CashCost per Ton Milled (Non-GAAP) -- measured for each mine or consolidated --provides an indication of the level of cash costs incurred per ton milledin that period. Because of variability of ore grade in the Company's miningoperations, production efficiency underground is frequently measuredagainst ore tons produced rather than contained PGM ounces. And because oretons are first weighed as they are fed into the mill, mill feed is thefirst point at which production tons are measured precisely. Consequently,Total Cash Cost per Ton Milled (Non-GAAP) is a general measure ofproduction efficiency, and is affected both by the level of Total CashCosts (Non-GAAP) and by the volume of tons produced and fed to the mill.

When divided by the total recoverable PGM ounces from production in therespective period, Total Cash Cost per Ounce (Non-GAAP) -- measured foreach mine or consolidated -- provides an indication of the level of cashcosts incurred per PGM ounce produced in that period. Recoverable PGMounces from production are an indication of the amount of PGM productextracted through mining in any period. Because ultimately extracting PGMmaterial is the objective of mining, the cost per ounce of extracting andprocessing PGM ounces in a period is a useful measure for comparingextraction efficiency between periods and between the Company's mines.Consequently, Total Cash Cost per Ounce (Non-GAAP) in any period is ageneral measure of extraction efficiency, and is affected by the level ofTotal Cash Costs (Non-GAAP), by the grade of the ore produced and by thevolume of ore produced in the period.

Total Operating Costs (Non-GAAP): This non-GAAP measure is derived fromTotal Cash Costs (Non-GAAP) for each mine or consolidated by excludingroyalty, tax and insurance expenses from Total Cash Costs (Non-GAAP).Royalties, taxes and insurance costs are contractual or governmentalobligations outside of the control of the Company's mining operations, andin the case of royalties and most taxes, are driven more by the level ofsales realizations rather than by operating efficiency. Consequently, TotalOperating Costs (Non-GAAP) is a useful indicator of the level of productionand processing costs incurred in a period that are under the control ofmining operations. As noted above, because this measure does not take intoaccount the inventory timing differences that are included in costs ofrevenues, it cannot be used to develop meaningful measures of earnings orprofitability.

When divided by the total tons milled in the respective period, TotalOperating Cost per Ton Milled (Non-GAAP) -- measured for each mine orconsolidated -- provides an indication of the level of controllable cashcosts incurred per ton milled in that period. Because of variability of oregrade in the Company's mining operations, production efficiency undergroundis frequently measured against ore tons produced rather than contained PGMounces. And because ore tons are first actually weighed as they are fedinto the mill, mill feed is the first point at which production tons aremeasured precisely. Consequently, Total Operating Cost per Ton Milled(Non-GAAP) is a general measure of production efficiency, and is affectedboth by the level of Total Operating Costs (Non-GAAP) and by the volume oftons produced and fed to the mill.

When divided by the total recoverable PGM ounces from production in therespective period, Total Operating Cost per Ounce (Non-GAAP) -- measuredfor each mine or consolidated -- provides an indication of the level ofcontrollable cash costs incurred per PGM ounce produced in that period.Recoverable PGM ounces from production are an indication of the amount ofPGM product extracted through mining in any period. Because ultimatelyextracting PGM material is the objective of mining, the cost per ounce ofextracting and processing PGM ounces in a period is a useful measure forcomparing extraction efficiency between periods and between the Company'smines. Consequently, Total Operating Cost per Ounce (Non-GAAP) in anyperiod is a general measure of extraction efficiency, and is affected bythe level of Total Operating Costs (Non-GAAP), by the grade of the oreproduced and by the volume of ore produced in the period.

Stillwater Mining CompanyReconciliation of Non-GAAP Measures to Costs of Revenues (unaudited) (In thousands, Three Months ended Twelve months ended except per ounce and per ton December 31, December 31, costs) --------- --------- --------- --------- 2010 2009 2010 2009 --------- --------- --------- ---------Consolidated:Reconciliation to consolidated costs of revenues:Total operating costs (Non-GAAP) $ 43,730 $ 42,293 $ 160,738 $ 164,142 Royalties, taxes and other 8,566 6,233 32,047 26,615 --------- --------- --------- ---------Total cash costs (Non-GAAP) $ 52,296 $ 48,526 $ 192,785 $ 190,757 Asset retirement costs 139 157 538 606 Depreciation and amortization 18,124 17,572 71,121 70,239 Depreciation and amortization (in inventory) 301 740 365 762 --------- --------- --------- ---------Total production costs (Non-GAAP) $ 70,860 $ 66,995 $ 264,809 $ 262,364 Change in product inventories (984) (4,271) 2,627 (6,797) Costs PGM recycling 35,373 20,312 157,310 75,920 PGM recycling - depreciation 260 44 472 178 Add: Profit from PGM recycling 2,656 1,100 12,070 5,908 --------- --------- --------- ---------Total consolidated costs of revenues: (2) $ 108,165 $ 84,180 $ 437,288 $ 337,573 ========= ========= ========= ========= Stillwater Mine: Reconciliation to costs of revenues:Total operating costs (Non-GAAP) $ 31,089 $ 29,390 $ 111,659 $ 116,913 Royalties, taxes and other 5,888 4,444 22,131 18,440 --------- --------- --------- ---------Total cash costs (Non-GAAP) $ 36,977 $ 33,834 $ 133,790 $ 135,353 Asset retirement costs 129 131 498 507 Depreciation and amortization 12,774 12,221 49,309 47,527 Depreciation and amortization (in inventory) 562 620 629 1,227 --------- --------- --------- ---------Total production costs (Non-GAAP) $ 50,442 $ 46,806 $ 184,226 $ 184,614 Change in product inventories (2,761) (2,678) (2,887) (7,393) Add: Profit from PGM recycling 1,893 815 8,733 4,395 --------- --------- --------- ---------Total costs of revenues $ 49,574 $ 44,943 $ 190,072 $ 181,616 ========= ========= ========= ========= East Boulder Mine: Reconciliation to costs of revenues:Total operating costs (Non-GAAP) $ 12,641 $ 12,903 $ 49,079 $ 47,229 Royalties, taxes and other 2,678 1,789 9,916 8,175 --------- --------- --------- ---------Total cash costs (Non-GAAP) $ 15,319 $ 14,692 $ 58,995 $ 55,404 Asset retirement costs 11 26 40 99 Depreciation and amortization 5,350 5,351 21,812 22,712 Depreciation and amortization (in inventory) (261) 120 (264) (465) --------- --------- --------- ---------Total production costs (Non-GAAP) $ 20,419 $ 20,189 $ 80,583 $ 77,750 Change in product inventories 20 (1,593) (865) (5,145) Add: Profit from PGM recycling 762 285 3,337 1,513 --------- --------- --------- ---------Total costs of revenues $ 21,201 $ 18,881 $ 83,055 $ 74,118 ========= ========= ========= ========= PGM recycling and Other: (1) Reconciliation to costs of revenues: Cost of open market purchases $ 1,757 $ - $ 6,379 $ 5,741 PGM recycling - depreciation 260 44 472 178 Costs of PGM recycling 35,373 20,312 157,310 75,920 --------- --------- --------- ---------Total costs of revenues $ 37,390 $ 20,356 $ 164,161 $ 81,839 ========= ========= ========= ========= (1) PGM recycling and Other include PGM recycling and metal purchased on the open market for re-sale. (2) Revenue from the sale of mined by-products is credited against gross production costs for Non-GAAP presentation. Revenue from the sale of mined by-products is reported on the Company's financial statements as mined revenue and is included in consolidated costs of revenues. Total costs of revenues in the above table have been reduced by approximately $6.3 million and $6.1 million for the fourth quarter of 2010 and 2009, respectively, and $28.0 million and $23.6 million for the years 2010 and 2009, respectively.

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