Stillwater Mining Company has an extensive history with roots that can be traced back to the late 19th century.
Early exploration along the Stillwater Complex in south-central Montana focused on copper, nickel and chromium. Later, the focus shifted to platinum group metals (PGMs) and the discovery of the J-M Reef, which is the world’s richest known deposit of PGMs. Today, Stillwater operates two underground mines along the J-M Reef.
Palladium and platinum were discovered in the J-M Reef by Johns-Manville Corporation (“Manville”) geologists in the early 1970s. In 1979, a Manville subsidiary entered into a partnership agreement with Chevron U.S.A. Inc. (“Chevron”) to develop PGMs discovered in the J-M Reef. Manville and Chevron explored and developed the Stillwater property and commenced underground mining in 1986.
Stillwater Mining Company was incorporated in 1992 and, on October 1, 1993, Chevron and Manville transferred substantially all assets, liabilities and operations at the Stillwater property to the Company, with Chevron and Manville each receiving a 50 percent ownership interest in the Company’s stock. In September 1994, the Company redeemed Chevron’s entire 50 percent ownership. The Company completed an initial public offering in December 1994, and Manville sold a portion of its shares through the offering reducing its ownership percentage to approximately 27 percent.
In August 1995, Manville sold its remaining ownership interest in the Company to institutional investors. On June 23, 2003, the Company completed a stock purchase transaction with MMC Norilsk Nickel (“Norilsk Nickel”), whereby a subsidiary of Norilsk Nickel became a majority stockholder of the Company. On that date, the parties entered into a Stockholders' Agreement governing the terms of Norilsk Nickel’s investment in the Company. In December 2010, Norilsk Nickel disposed of its entire ownership interest in the Company through a secondary offering of Stillwater shares in the public market.
The Company’s common stock is publicly traded on the New York Stock Exchange (NYSE) under the symbol SWC and on the Toronto Stock Exchange (TSX) under the symbol SWC.U.
Mining in the Stillwater Complex began not with the platinum group metals, but with chromite and copper nickel. Since the late 1800s, the Stillwater Complex and adjacent rocks were known to contain copper, nickel and chromium.
Sulfide-rich rocks were discovered within the Basal series, the metasedimentary rocks immediately below the complex, in 1883. Jack Nye and brothers Jimmy and Jonas Hedges found the sulfide-rich rocks in Mountain View, Benbow and Initial Creek areas. Nye traveled to Minneapolis and submitted his findings. On the basis of those findings, the original Stillwater Mining Company was formed in the summer of 1884, and a mining project commenced in 1885.
On September 10, 1885, Nye sold to the Stillwater Mining Company his quartz claims in the Benbow and Initial Creek areas and a placer claim in the Stillwater River Valley. On October 2, 1885, he sold quartz claims in the Verdigris Creek area and additional placer claims to Stillwater. Two weeks later, Stillwater sold these claims to the Minneapolis Mining and Smelting Company. After the transaction, construction of Nye City began.
Nye City was located just west of the American Chrome Company hospital building. By 1887, a small smelter had been assembled and the town grew to a peak population of 300 to 400 people, and counted, at one time, six saloons, a store, a commissary, a boarding house and an assay office.
A fly in the ointment of success brought things to an abrupt end. A government survey of the Stillwater basin revealed that Nye City was not part of the Federal domain included in Gallatin County, but was actually on Crow Indian Reservation lands. Because government laws prohibited such exploitation of tribal lands, the mining operation had to be dismantled and removed. The last official record of Nye City was a March 28, 1889 judgment deed for $12,255. In 1890, the Crow Indians ceded the land, which reopened the Stillwater basin to mining and claim staking.
In 1904, a group of prospectors banded together for a trial shipment of ore. A six-ton shipment representing 500-to 1,000-pound units from individual claims was sent to Omaha, Nebraska, for smelting. Unfortunately, recovery was substantially less than the assays indicated, and the value of the ore did not warrant production. Interest in the patented claims vanished.
Little more was done on the claims until William M. “Bill” Mouat, a nephew of the president of the Minneapolis Mining and Smelting Company, became interested sometime around World War I. He hired Otto W. Miller, a Columbus, Montana, resident with some mining experience, to redeem the claims. This started a new episode of development.
The Mouat property was brought to the attention of the Anaconda Minerals Company in the early 1920s. In a 1925 report by Vincent D. Perry, later president of the Anaconda Minerals Company, preliminary sampling results included the first geologic maps of the property. On the basis of the assay results, further work was recommended. In 1937, 11 holes were drilled totaling 6,432 feet and adits in the Verdigris Creek area were assayed. The results showed lower grades than indicated by Perry’s sampling and determined that the massive ore stores had only limited continuity. In 1940 and 1941, the U.S. Bureau of Mines conducted exploration with 5,981 feet of drilling in eight holes, then sampling and metallurgic testing of the results. This provided data for the considerable mapping work that was conducted throughout the 1940s, which was eventually published in 1954 as a geologic outcrop map of the Mountain View area. This plane-tabled map, at a scale of 1:1,200, covered the Verdigris Creek-Mouat nickel mine area and served as the fundamental source of information for this area for many years.
In 1966, the Anaconda Minerals Company began new evaluation reconnaissance of the low-grade, high-tonnage, copper-nickel resource in the lower margin of the Stillwater Complex. Full-scale project work began in 1967, including drilling in September.
The project focused on areas of known mineralization, i.e., Initial Creek, Mountain View, Nye Basin and Benbow. Geochemical analysis for copper and nickel and a number of other techniques were used to define anomalies and drilling targets. Anomalies were most favorable in Mountain View, Nye Basin and Benbow areas. From 1967 to 1970, a total of 92,041 feet of core from 95 holes were drilled in the Mouat Ni-Cu prospect in the Mountain View area, 9,626 feet from 15 holes in the Nye Basin and 5,564 feet from 9 holes in the Benbow area. Two adits were collared and driven during this period: the Mouat tunnel was begun in September 1970, and advanced 1,547 feet before work was stopped in July 1971; the Nye Basin adit was begun in October 1970, but only advanced 206 feet before stopping in January 1971.
Geochemical and geophysical surveys also suggested that significant anomalies existed in the Cathedral Creek-Bluebird Ridge area west of Initial Creek, in the Crescent Creek area and in the Gish Mine area. By 1970, four drill holes with a combined footage of 1,693 feet had been drilled in the Crescent Creek area.
Although this work indicated a moderate to large reserve containing 0.25 weight percent Cu and 0.25 weight percent Ni in the east third of complex, a combination of findings and events brought the project to a near standstill. Metallurgic problems with the ore were found and environmental concern over the area increased. In Chile, the newly elected Allende government expropriated Anaconda’s holdings there. As a result, work on the Stillwater Complex was withdrawn to assessment work and very limited drilling.
Finally, in 1977, Anaconda initiated a re-evaluation of their properties. Geological mapping, compilation, evaluation and metallurgic testing were resumed. Additional holes were drilled and geophysical surveys were used to delineate and define anomalies. A helicopter-borne precision proton-magnetometer survey was completed over the entire Stillwater Complex in June 1978.
Other companies were exploring the area for copper-nickel in the 1960s and 1970s as well. Under the authority of the Freeport Exploration Company, in 1965, a search for mineralizations of copper-nickel sulphide of economic concentrations was conducted. This geophysical survey delineated seven conductive zones, three of which coincided with known copper-nickel occurrences within the Basal series and a fourth with a major fault structure and post mineral diabase dike. Three geophysical anomalies were singled out for further study because they showed a potential association with as-yet-unrecognized copper-nickel mineralization. After further investigation, all three were secured with unpatented lode claims in 1966.
After that discovery, prospectors further explored the lower part of the Stillwater Complex, among them Bill Mouat and scientists from the Anaconda Minerals Company, Amax Exploration, Amoco Minerals Company, Cyprus Mines Corporation, Lindgren Exploration Company, Princeton University, University of California at Berkeley, the U.S. Geological Survey and the U.S. Bureau of Mines. Little of this early activity was recorded, but sulfide occurrences at Benbow, Mountain View, Crescent Creek, Placer Basin and the Boulder River were well known.
Sulfide-bearing samples, collected by Art Howland and J.W. Peoples during the early 1930s, were analyzed for PGEs by INCO, and the results were reported by Howland and others in 1936. In one of the samples from layered gabbro of the Banded series, they reported the presence of sperrylite and a mineral they called stibiopalladinite. They compared this part of the complex to the Merensky Reef of the Bushveld Complex. These important observations did little to encourage the PGE exploration until the early 1960s, when at least two independent groups began to examine the PGE potential of the Stillwater Complex. In 1967, Page and Jackson found platinum-group minerals in samples of chromite that had been collected over the previous years. They submitted many rocks from the complex for PGE analysis. However, except for samples from the lower chromitites, the results were not encouraging.
In 1961, H. K. Conn of the Johns-Manville Corporation attended the Commonwealth Mining Congress in South Africa and visited the Rustenburg platinum mines on one of his tours. This visit sparked his imagination that there might be a zone similar to the Merensky Reef in the Stillwater Complex because he was already familiar with the complex and the work of Howland and others regarding PGEs in the complex. Nothing was done until 1967, when E.L. Mann and S. G. Ellingwood visited the Stillwater Complex and initiated a modest program of soil sampling and reconnaissance mapping. Results were generally disappointing, and Johns-Manville might well have walked away from the area after the first summer, were it not for one set of samples displaying weak Pt, Pd, Cu, and Ni values. Field exploration continued each year, with only minimal encouragement until 1973, when Johns-Manville geologists discovered the major Stillwater PGE zone, commonly referred to now as the J-M Reef.
After trenching and drilling confirmed the lateral continuity and character of the mineralization, claim staking accelerated. By the summer of 1975, the Johns-Manville Corporation held claims over all but about 1.5 miles of the 28-mile strike length of the J-M Reef.
Other areas distinct from the J-M Reef were also found to have satisfactory recoveries. In 1974, the Janet 50 zone and outcrops on the West Fork of the Stillwater River were found to contain PGEs. On August 22, 1974, 3,600 feet of strike length ore-grade material was delineated on the West Fork, and on December 15, an exploration adit was begun. The exploration successfully defined the tabular nature of the deposit, but water flow from an intersected fault zone forced the drift to be cemented. By 1977, exploration had confirmed the presence of a zone 3.4 miles long by 6.9 feet wide, which averaged 22.3 grams of platinum and palladium per ton, in a ratio of 1/3.5. Metallurgical tests provided recoveries of 85 percent of the platinum and palladium, 69 percent of the nickel and 75 percent of the copper from test samples.
Exploration continued, and in 1979 the Chevron Resources Company joined the Johns-Manville Corporation to form the joint-venture company Stillwater PGM Resources. By autumn 1982, extensive additional exploration and testing again confirmed the broadly tabular continuity of the ore package with encouraging ore grades. Furthermore, a test stope showed that shrinkage stoping would be an acceptable mining method.
During this aggressive exploration period by Johns-Manville, The Anaconda Minerals Company was in 1977 recovering from its losses in Chile, and reviewed the company’s land ownership in the Stillwater Complex. Regional mapping led to their discovery of the PGE-bearing reef on the GAY claim group, and drilling and testing was initiated. In the spring of 1982, the Anaconda Minerals Company and Stillwater PGM Resources began negotiations to form a joint venture on a land package centered on Anaconda’s claims on the J-M Reef on the Stillwater River Valley. Stillwater PGM Resources agreed to add flanking claims to those held by Anaconda, thus extending the land package to a 6-mile strike length.
Agreement was reached to form the Stillwater Mining Company, a Chevron-Manville-Anaconda partnership, with Chevron Resources Company as the managing partner. A program to prove reserves and determine grade was initiated. Detailed field mapping was continued, augmented by a surface drilling program. Through various financial transactions and additional exploration and development, the Chevron-Manville-Anaconda partnership eventually become the publicly traded Stillwater Mining Company that exists today.