Ladies and Gentlemen, thank you for standing by and welcome to the Stillwater Mining Reports third quarter 2007 results conference call. At this time all participants are in listen only mode. Later we will conduct a question-and-answer session. (Operator Instructions) As a reminder this conference is being recorded. I would now like to turn the conference over to our host Mr. Frank McAllister. Please go ahead.

Thank you. Welcome everyone. We appreciate you joining us for the Stillwater Company’s 2007 third quarter results conference call. I’m Frank McAllister as the moderator has indicated, the Chairman and Chief Executive Officer of Stillwater Mining Company. On the telephone with me here today are Steve Lang who’s our executive Vice President and Chief Operating Officer, Greg Wing, our Vice President and Chief Financial Officer and Jon Stark our Vice President of Human Resources, Secretary and Corporate Counsel, Terry Ackerman our Vice President of Planning and Process Operations and Rhonda Ihde our Corporate Controller. Also included here with us today is Dawn McCurtain our Investor Relations specialist. First I’d like to remind everyone that some statements in this conference call are forward-looking and therefore involve uncertainties or risks that could cause actual results to differ materially from projected results. We discuss these in more detail in the company’s filings with the Securities and Exchange Commission including the risks factors discussed in the Company’s 2006 annual report on form 10-K. Now, for the third quarter 2007, the company yesterday reported a net loss of $11.1 million or $0.12 per diluted share on revenues of $163.1 million. The loss was largely driven by manpower issues including a strike at the Stillwater Mine in July which reduced production during the quarter. The Union local representing employees at the Stillwater Mine Processing Facilities in Columbus had rejected a contract offer and went out on strike the evening of July 10th. They returned to work on the evening of July 17th after approving the new contract. So the strike itself cost the company about seven days of production during the quarter. The company’s mines together produced about 128,600 ounces of returnable PGM material in the third quarter of 2007, a sharp 15% drop from the…

As Frank asked, I will comment briefly on the third quarter operating results and will provide an update on our mining strategic initiatives and our 2007 goals. Mine production for the third quarter came in at 128,600 ounces at a cash cost of $326 per ounce. Frank has already reviewed the effects of the strike and the increased employee attrition on production. A lower production also was the primary cause of a higher cash cost per ounce in the quarter as our operating cost was spread over significantly fewer ounces produced. The dislocations that came with the schedule changes at the Stillwater Mine have been painful but we continue to believe that the new schedule is vital for the longer term success of the mine. It has allowed us to drop from four operating crews to three, better utilize our existing workforce, as well as spread our rising costs of employee benefits over more hours worked and reducing our reliance on outside mining contractors that have proved prohibitively expensive. Our most recent production guidance for 2007 was for total mine PGM output of between 555,000 and 585,000 ounces. Unless productivity strengthens substantially during the fourth quarter, it now appears that production will be about 550,000 PGM ounces. This lower guidance reflects both the third quarter and strike related losses plus somewhat lower forecasted productivity during the fourth quarter. At East Boulder the third quarter grade of the mill declined despite the mining changes. This mine has grown significantly over the past four years and we are now positively emphasizing mining quality issues for a time rather than pushing further volume growth there. During the third quarter of 2007 we completed about 9,000 feet of primary development and about 116,000 feet of diamond drilling; Year-to-date that puts us in at just…

Thanks Steve. I would like to offer a bit more detail regarding our financial performance and perhaps a few closing strategic thoughts on the markets as well. First Earnings, I commented as we began, the company reported $11.1 million loss to the third quarter of this year, compared to net income of $6.9 million reported for the third quarter of 2006. Breaking this down by segment our mining operations showed an operating loss of about $10.6 million in this year's third quarter compared to positive earnings of $5.6 million in last years third quarter. As I mentioned earlier, recycling income is about $7.9 million for the recent quarter including financing income, while for the same period last year, recycling earned $10.7 million. Offsetting the operational contributions though was $6.8 million in the third quarter of 2007 and corporate charges for office expenses, marketing and exploration and $8.3 million for the same items in the same period last year as well as $2.9 million of unallocated net interest expense from the third quarter of 2007 compared to $3 million in the third quarter of 2006. As I've already discussed this results reflect much weaker mine production and continued strong recycling volumes in 2007. For the first nine months of 2007 we reported a cumulative loss of $14.6 million compared to last year's first nine months net income of $5.1 million. Again, breaking this up by segment, in the first nine months of 2007 mining operations suffered a loss of $8.2 million compared to earnings of $6.3 million in the first nine months of 2006. Recycling earned $21 million in this year's first nine months and $17.4 million in the same period last year. The first nine months of 2006 included earnings of $6.9 million from the final sales out of the…

You make a very good point. I'm going to let Steve address it. Steve Lang: I think John, all we tried to do there, in particular looking at the different mining methods, is to track our progress in those methods by ton per day but you’re right in that, in particular, I think we have seen that as a difficulty in East Boulder where as if we just talk tons per day it is probably a misleading number.

It’s probably more in ounces per man or something like that.

And what we typically track, for instance, in Stillwater tends to be ore tons per man hour by mining method. And it also can be differentiated between the off shaft area and the upper west area. So a lot of different metrics there, and just trying to pick the easiest one to at least get a general sense of it.

You say that you have got up to date, more or less, with your reserves. So Cap-Ex is going to go flat for, could you give us an indication as to what you think is going to happen to Cap-Ex. And is there any Cap-Ex in the recycling?

You know part of the smelter refinery upgrade has been to deal with higher volumes in the recycling and to make that two things: One, is more efficient; secondly is to give us more opportunity for growth and recycling in the future and I think if we just look at our budget this year of $108million, the mine expenditure would have been down slightly versus last year. But it is offset by this kind of one-off two year investment that we made in that improvement in the Columbus processing facility. The development is really the bigger piece; and most of that development has been around increasing the proven ore reserves at both mines; and that will be more of a gradual change over the next several years. The other piece of primary development in particular at East Boulder has been work on some [live] mine passes. The initial mine passes that we had in place had deteriorated a bit and were one of the sources of some dilution going to the plant. At Stillwater a good part of the capital program there has been a major truck college ramp that accesses the lower off shaft going down well below the 3,200 level.

So what is a good maintenance Cap-Ex number that we should use for you?

In terms of development, John, is that what you are referring to?

I am thinking the mines and maintaining reserves.

While Steve is thinking about that a minute, let me come back and expand just a little bit more on the recycling capital spending. It’s really quite modest aside from the furnace that Steve has commented on and the furnace is obviously solving two issues: growth in our mine production, as well as growth in our recycling. And obviously the need to make sure that we don’t have a furnace that is down and not operating during the period of maintenance, so that we basically have to curtail operation. But aside from that it’s basically crushing sampling facilities. Terry has indicated that we have spent probably about $1.2 million in that area. It’s not a big expenditure, it’s obviously important that we are able to handle these materials as they are received, and process them and get them into the furnace. And so it’s been a modest capital spending. I’d have to say though, years ago there was some additional capital spending, some storage facilities and handling facilities that were put in place; but on an ongoing basis it’s fairly modest. Steve?

Yeah John, I don’t have the report directly in front of me but I can tell you I remember roughly the numbers that we gave two or three years ago. I believe that presentation was the one immediately following the Denver gold show. It is still up on the web site. We kind of outlined the long term steady state primary development requirement. This goes beyond just the [fault wall lateral] with all of the primary development and I think at that point we described the sustaining rate for primary development at about $50 an ounce. I would tell you it has probably crept up since then but still year-on-year probably varies between $50 and $70 an ounce. There is some depreciable capital but it’s a relatively minor component. And there’s also a piece at the Columbus process facility that is just part of normal sustaining capital as well. Again those are relatively minor compared to the primary development. I don’t think our view of that sustaining primary development rate for the long term on a steady state has changed significantly.

Okay, that’s helpful. And just finally, on the recycling, the amount of toll refining, which seems to carry a lower margin, could you give us an indications as to how you see that moving, going forwards?

Whether it will grow or not?

Yeah.

Let me have John talk about that, just a second.

You know it will depend on the circumstances. On a percentage basis it probably won’t and on a volume basis it probably will as the opportunity arises.

Okay; well thanks very much for the production and recycling guidance and I just wonder whether you could include the percentage of toll treating in that pre-release. That might be helpful for us, to get a better fix on your numbers.

I think to the extent that we can we will. Part of the problem, just for everybody’s information, is that those numbers become a bit commercially sensitive in the marketplace and so we are always trying to make sure that we give as much guidance as we can without hurting the business. And that’s basically one of the sensitivity issues here. So we kind of give it on an annual basis but have not necessarily given it as closely on a quarterly basis, John.

Well I’m just thinking if you just report what happened what happened the previous quarter it will give us a better fix on the historical pieces.

Understood, we will do that to the extent that we can.

Thanks Frank.

You bet, thank you John.

Thank you. The next question comes from the line of Rehan Chaudhri with Altrinsic Global Advisors. Please go ahead.

Hello Steve, Greg. Thanks for your time. Just had a couple of questions regarding the quarter, and a couple of more long term questions. It seems like the shortfall with the seven-day strike was roughly about 12,000 ounces; but the shortfall against the year before seems almost like, roughly about 22,000 ounces. Are those numbers roughly correct for us to try and get more of a run-rate number for you?

I think that roughly, we are about 22,000 ounces versus the prior year. I would tell you that the impact of the strike isn’t just the seven-day duration of the strike. It was a pretty rough run up through all of June. The week in July prior to the actual work stoppage, and then the return to work following.

It might be important to comment too Ray, that the activity in June of production fall off in June, because of the way things flow, would affect third quarter earnings…… the lower performance there did impact July particularly.

Yeah in terms of the workforce issues it seems like the contract is now signed for roughly three to four years?

Four years.

It would be quite unusual for the workers to strike again at this point, or are they relatively satisfied with the agreement that they have received?

Let me have John comment on that.

Yeah the workforce at the Stillwater mine and processing facilities in Columbus have a four year labor agreement and would not be able to strike until the conclusion of that, should they not have a good contract that’s acceptable to their workforce. We do enter into negotiations with the East Boulder workforce in May of next year, same expiration date of July 1st. That’s kind of what’s in front of us in the immediate future.

Okay, it sounds good. And in terms of if we look at the firm and look at the amount of Cap-Ex you are spending right now, it is a fair amount. What type of volume gains would you expect three of four years out if we build some long term models for the company?

Let me give you a couple pieces of guidance to the extent I can and then I’m going to have Steve comment more directly about it. What we have is an operation that typically right now at the developed state would be in the production area of 600,000 ounces. That is what we produced in the year 2006, obviously we are off 50,000 ounces in 2007 and we have discussed that. The growth potential for the mines, as we’ve put in our annual report and have talked about in the past; is up to in excess of 800,000 ounces over time. The question then for your model is, “how is that going to run out over time?” Given the change in our work force, and given the need now to develop our own work force here, what we are seeing is that that time frame has probably been extended some, because simply to find an experienced miner today is very difficult. We used to essentially borrow them or steal them from other people, or other operations; I don’t mean to say it that way, but basically we would go to other mining operations and try to hire people that we could attract to Montana. Today that’s very difficult with the price of gold, the price of silver, and the price of copper where it is; and underground miners being a scarce commodity. So what we have been doing, as we had mentioned earlier in the call, is growing our own. As you grow your own the productivity comes up, but also growing them, 100 people a year and with the attrition rates continuing because they find it attractive to go to other places as well. So it really has lengthened out that period of time over which we are going to be able to achieve the 800,000 plus level of production. Let me have Steve comment directly to you with respect to how we see it rolling out in the next few years.

I think if you just take our current guidance for the year you can see that we are projecting a fourth quarter haul around 140,000 to 145,000 ounces or thereabouts which is pretty consistent with the level Frank talked about last year of 600,000 ounces. Going forward will depend really on two matters; one would obviously be the productivity of the workers. That can be up or down perhaps, 5% or 10% might be a reasonable range of fluctuation; on that. The bigger one will be our ability to both recruit and retain our workers. We have talked about the attrition we saw early in the year. That continued during the third quarter up until September, where it was exceptionally low, not just by this year’s standards but any year’s standard for us. Now that is one month, is the issue I guess, but depending on how that trend would continue would make the difference on the rate at which we would project further growth. I think one of the things we are trying to emphasize now is we have really pushed a lot of new employees into the system here in the last year or so and at some point it’s probably worth our while to catch our breath on that push, and try and emphasize the quality of the work and the cost containment rather than the growth.

Yeah and there’s safety issues as well. In terms of your total workforce, what is the annualized attrition; what’s the total number of miners you have and how much are leaving roughly? Or how much do you anticipate to leave for the next year?

I think the total number of miner classifications which covers, if you will, the production, rock breakers, primary development, secondary development, and some of the diamond drilling as well. Typically companywide right now is about 450. If we looked at the last few years, the range of attrition typically has been in the 15-20% range, some years a little bit lower, this year probably closer to 30-35% in that workgroup, particularly in the middle portion of the year, right after the scheduled change and then around the work stoppage. Going forward it is kind of tough to predict. I think part of this has been the change in mining methods we made is more physically demanding; and I think then we see some of the experienced folks opt out. I would think that, realistically, we would look at a return probably to that historic rate. We are in a position where we can replace the attrition through the training program. With perhaps a little bit of upside potential, and we also do better recruiting of experienced people. Probably not one that we push just because we prefer the ones trained and from the area; we think we have a better opportunity of retaining them.

And you made a comment, I think, Steve had with regard to PGM catalysts in gas versus diesel in Europe. Can you give us a rough idea how much ounces are used for vehicles in gas versus diesel engines?

Sure let me comment broadly and then narrowly, first of all we were a little bit, startled as I looked at the numbers over in Europe as to the platinum demand for catalytic converters and the growth in that over the last seven or eight years. If we look back to the year 2000, the amount of platinum going into diesel or catalytic converters in total was roughly 600,000 ounces. Currently it’s well over 2 million ounces on an annual basis. So what’s happened is as they have moved from a gasoline driven, essentially build on their cars, to the diesel cars, what they’ve done is increase the amount of platinum going into the catalytic converters because of the transition to diesel. What’s happening is about, probably, four and a half grams per gasoline car of platinum, palladium, and rhodium, and what we look at that is about three grams of palladium in the gasoline car, one gram of platinum and about half a gram of rhodium, and that’s kind of conventional wisdom that people talk about generally, with some automobile manufacturers having not engineered their engines as closely as others and so there may be higher loadings in some cars and lower loadings in other cars. It also depends upon obviously the power of the engine, but on average that’s about what it is. When you get to the diesel, what you’re talking about is roughly twice that much with the majority of that being caused by, the majority of the growth being caused by the particulate filter, the DPM filter that is put on to the diesel catalytic converter as well. So you’ve got two elements to the diesel emission control, one is the catalytic converter, the other one is the soot trap or the DPM filter. What…

So the 25% palladium platinum catalyst is in operation right now?

It is, in fact Volkswagen’s, all of their diesel catalytic converters at this point in time use about 25% palladium.

Okay well thank you very much for your time. I appreciate the insight.

Thank you

And our next question comes from the line of Victor Flores of HSBC. Victor Flores – HSBC Securities: Good afternoon. I have a couple of questions. First of all, with respect to Cap-Ex, on the one hand you’ve indicated that Cap-Ex should start to come down, as the levels of development reach your target, but I think I heard you mention that one of the amendments to the debt facility was to approve an increase in capital. Could you explain what that means?

Of course. Let me have Greg speak to that directly.

Well I can speak to the amendment directly. I don’t know if we disclosed previously or not, but the limit on capital expenditures in 2007, 2008, and 2009 in each of those years under our debt covenant was $81 million. We looked very hard at staying very hard within that $81 million envelope if you will, and in doing that concluded, and I’ll let Steve amplify on this, but staying within it probably in the end would be damaging to our operations. So we did go in and ask for an amendment to the bank facility which was finalized or approved yesterday by the required banks which increases that spending to $95 million per year. Some of that is just reflecting the inflation that has occurred over the last three or four years in capital requirements. I might add that we also talked about adding the second furnace and we did carve that out separately in the covenants as a stand alone project. Steve, maybe you want to comment on the specifics.

Well, I think that’s one of the things that we try and differentiate here as particularly around the smelter in the refinery. We do have a one time investment that will be making a little bit this year, but primarily in ’08 and a little in ’09. That’s just associated with that upgrade, and if you look at the mines separately the overall development profile is now trending down. That one time expenditure around that smelter refinery kind of masked that for a year, so I think it’s important that you view that as almost a separate capital budget itself. As Greg mentioned, certainly there’s some inflationary pressures. I think they tend to be a little bit less for us because a lot of this Cap. development as we’ve moved that away from contractors, it’s really related to our own labor cost increases which I think on a percentage basis has been relatively small compared to contractor rates. Victor Flores – HSBC Securities: Ok great. Thanks. Second question goes to the issue of grades; the whole purpose of moving to selective mining is to get those grades back up. And you pointed out that East Boulder you are achieving, and throughout the operations, you are achieving better rates of selective mining. But we’re still not seeing the grades move up and I guess I ask you this question every quarter, but why do you think that is and when do you expect to see grades go up?

I think it’s still, a larger part of this is as we move the mine more and more relative to the off shaft area which tends to be a lower grade. The average doesn’t change as much, although more to the upper west more comes from that lower grade portion of the mine. The average doesn’t change as much, although we may improve the grade realized out of [Ball Terry’s] it’s the proportion that has, East Boulder’s probably more of a concern. So let me talk a little but about East Boulder. First off, you remember back in the first quarter, we were able to do a number of dedicated runs of the captive cut and fill and we haven’t been able to do any sense, couple of reasons for that. One is we need to get these new life of mine passes completed. The current ones, the material handling that we have in terms of pulling down completely an ore pass and then restocking it in these ore passes are just not that robust. And secondly, they had pretty significant impact on the ventilation, so we won’t be back to that program probably until late in the quarter of next year. In the meantime, given the growth that we had in East Boulder, I would tell you just a lot of quality issues that we needed to stop this push on higher tonnage and just address the quality issues. What we identified there was really starting with design and some of the stopes to strengthen that technical involvement up front in getting a better stope in design. Improving our grade control, one of the difficulties we’ve had at East Boulder, given the dip there of the ore body is following the profile of the reef. In a fairly shallow…

Again, I think we have talked about the mines separately if you look at East Boulder, the tonnage is flat year-on-year, or within four tons per day out of 15 hundred tons per day, and the struggle there has really been on that following the reef if you will and getting that quality of excavation. I think if we put the emphasis there and really stop trying to grow the work force at the rate we have, we’ll get the grade improvements over time. At Stillwater I think a lot of the productivity issues have really been around the labor disruption that we had midyear. I think generally the grades that we see by stope at Stillwater have really met our expectations.

Victor, have we answered your question? Victor Flores – HSBC Securities: Yeah, absolutely. I was just going to say that I guess unfortunately the labor issues that you’ve had earlier in the year have sort of muddied the water so it’s hard to follow the numbers quarter by quarter, but no. Thank you very much.

I think, again, given the outlook for the fourth quarter, if we’re able to deliver what we expected at Stillwater, it should be pretty well back on track and producing at a rate that’s not significantly less than four quarters ago but with substantially fewer people.

(Operator instructions) We have one more question sir. John Bridges of JP Morgan, please go ahead. John Bridges – JP Morgan: Hi Frank. Not so much a question, an observation. I didn’t realize that the turnover was at the level Steve was saying. Under those circumstances I think that the operation has performed quite well and I’m encouraged for next year.

John, we do too. And quite frankly while it’s been a difficult season, if you will, we made the right choice at the beginning of the year in making the schedule change. The schedule change was something that we had to do in maturing the property so that we were attracting people from the local area as opposed to continually trying to draw people in from other areas. In the process of doing that what we’ve got is a more mature local workforce and these guys are realizing now they are going to work longer hours, they are going to make more money. My sense is that actually the attrition rates are likely to diminish somewhat over the next little while and we will as we come out of this have a much better operation. Steve wanted to comment.

I think frank mentioned, one of the real changes of the work force compared to a year ago, it’s a much higher percentage that’s locally based and I think that’s very positive on the long term. John Bridges – JP Morgan: Okay thanks guys. Good luck.

Good thank you. We’ve gone an hour, in fact we’ve gone over the hour that we typically try to hold this to, if there are any other questions we’ll take them, or in fact we’re here at the offices and you can get a hold of us. Operator, unless you’ve got somebody on the line we can probably bring this to an end.

No we do not sir.

Well thank you everybody for joining us today.

Ladies and gentleman, this conference will be available for replay after 3:30PM today through midnight on November 13. (Operator instructions)