HELENA — A Montana precious metals mining company targeted for takeover by a group that includes former Gov. Brian Schweitzer reported Wednesday that its profits dropped almost 62 percent in 2012.
Stillwater Mining Company's year-end results showed the company had $55 million in net income, down from $144 million in 2011. Revenues for the Billings-based platinum and palladium miner fell 12 percent, to $800 million, as prices for the metals dropped through much of last year.
Schweitzer and a New York-based hedge fund, the Clinton Group, announced this week their intentions to oust Stillwater's board. They want to seat a new slate of directors, including the former governor, who's been mentioned by pundits as a possible candidate for the 2016 Democratic presidential nomination.
The former governor criticized the company's pursuit of a copper mine in Argentina and a copper and palladium project in Canada, and called for an overhaul of company management.
But Stillwater Chairman and Chief Executive Officer Frank McAllister said during a Wednesday conference call with investors and analysts that the company's primary focus remains on its Montana operations — two mines in southern Montana's Beartooth Mountains and a metals recycling plant.
The metals are sold primarily for use in catalytic converters used to reduce automobile pollution.
McAllister said growing auto industry demand means platinum and palladium prices are poised to increase, boosting the company's future prospects.
"We're excited about where we are positioned. The palladium market's outlook and growth are very, very good," McAllister said.
Stillwater shares on the New York Stock Exchange closed Wednesday at $13.29, up 41 cents or about 3.2 percent.
The company employs more than 1,500 people — more than any other mining company in Montana — and is seeking to boost production during the next several years with expansions under way at its mines in the Beartooths.
Schweitzer and the Clinton Group must convince other shareholders to go along with their takeover for it to succeed. They said they were motivated to intervene in part by a sharp decline in the company's share price over the last decade.
The Clinton Group owns a 1 percent stake in Stillwater. Schweitzer, who left office last month, has since bought 25,000 shares in the company worth about $335,000 based on Wednesday's price.
They said investors bought into the company for its proven palladium and platinum reserves in Montana, and not for the company to branch out into other metals such as copper. They want the company to sell its Altar copper reserves in the Andes of Argentina that were bought in 2011.
In response to Wednesday's year-end earnings report, Clinton Group Managing Director Gregory Taxin said there was little offered by the company to reassure wary investor.
"There's still a question of their judgment and can we trust them to have the checkbook and their hands on the steering wheel after the decisions they've made in the last few years," he said.
McAllister said that the company has been "cautious" in its pursuit of projects outside Montana. He noted that exploration spending on Altar for 2012 was $17 million, versus $25 million under its original plans. Spending this year is expected to drop to $13 million.
"It would be unwise to make a definitive statement about its future at this time or otherwise terminate the project," McAllister said.