Clinton Group Responds to Misleading Statements by Stillwater Mining

     Clinton Group Responds to Misleading Statements by Stillwater Mining

PR Newswire

NEW YORK, April 18, 2013

NEW YORK, April 18, 2013 /PRNewswire/ -- Clinton Group, Inc. ("Clinton"), a
stockholder of Stillwater Mining Company (NYSE: SWC), is seeking to replace
the Board of Directors of the Company with independent professionals.

"We are extremely disappointed that Stillwater's Board would release a highly
misleading letter to stockholders," said Gregory P. Taxin, Managing Director
of Clinton. "We expect a Board to be transparent and forthright with
stockholders, especially in the middle of a proxy fight, and to tell the truth
and admit mistakes. This Board appears unwilling to do so."

Clinton highlighted the following misleading comments:

  oThe Board claims it has "transformed Stillwater into a low cost, high
    volume palladium producer." This is misleading. Cash costs of production
    were $264 per ounce in 2001 (when the current CEO's tenure began) and $484
    in 2012.The Company produced 405,000 ounces of palladium in 2001 and
    396,000 ounces in 2012. The Company has seen its cash production costs
    nearly double while production has declined. To claim the Company has been
    "transformed" into a "low cost" and "high volume" producer is misleading.
  oThe Board claims it has an "unrelenting focus" on growing its production
    in Montana and is "staunchly committed to Montana", which is the "engine
    for future growth". This is misleading. Under this Board's direction, 71%
    of expansion capital in the lastnine quarters has been spent outside of
    Montana. Just six months ago, the Company said it continued to look
    "around the world" for "opportunities to establish a broader operating
    base."
  oThe Board congratulates themselves for matching the PGM basket price
    growth during a custom time period it selects, but in the process lets
    slip that prior to their chosen period the Company "struggled
    tremendously... because it had no clear operating plan or strategy" under
    the current CEO's watch for more than two years. The Board also fails to
    tell stockholders that if instead of its hand-picked time period one
    analyzed the performance during all of the CEO's tenure, the stock has
    significantly under-performed the PGM basket price (-71% compared to -6%).
    In fact, if one considered the relative performance of the stock and PGM
    prices starting for each day of the CEO's tenure through yesterday, in 89%
    of those measurement periods the stock under performs. But the Board did
    not pick every day, or the start of the CEO's tenure or, apparently, a
    random day to start its analysis. Instead, it misleadingly chose one of
    the most favorable dates it could identify.
  oThe Board claims Clinton has a "disjointed" set of ideas. To so conclude,
    the Board misrepresents Clinton's views and disclosures. Clinton, for
    example, has never said it would "immediately tender" or "immediately
    issue dividends" or "convert[] Stillwater to an MLP" or "proceed[]
    immediately with eight different Montana growth projects." These are straw
    men. Clinton has said it expects that the new Board would "evaluate" and
    "consider" various capital structure and capital allocation alternatives
    objectively from top to bottom. Clinton has never said the nominees would
    proceed "immediately" with these alternatives or that it would expect the
    new Board to execute any or all of them.The Board's effort to knock down
    a straw man is misleading.
  oThe Board claims that the convertible bond deal it approved last year was
    "advantageous" because a high-yield deal would have had "restrictive
    covenants." But it is extremely rare, if not total unheard of, for a high
    yield deal to have "restrictive covenants". Such deals frequently limit
    the amount of additional debt that a Company can incur, but they almost
    never restrict the Company from operating as it sees fit.No, the
    convertible bond was a bad piece of financing for the Company; it offered
    the buyer a 30% return in 4 months and the Company's common stock owners
    have suffered for it. It is misleading for the Board to say the
    alternative would have had "restrictive covenants" when there would not
    have been any restrictions on the Company's operations or use of capital.
  oThe Board's commentary on its own members and false statements about the
    Clinton nominees is highly skewed and misleading. For example, the Company
    claims that two of its board members, a life-long elections lawyer from
    California and lobbyist from Washington D.C., have "direct experience with
    PGM mining" but that a Clinton nominee, Mr. McMullen, who has served as
    the CEO and Executive Chairman of multiple mining companies and ran a
    consultancy that provided extensive operational and financial advice on
    nearly every PGM company in South Africa, has "no record of PGM
    experience." Simply misleading.

Clinton noted that the Board has failed to justify its value-destructive
decision to purchase two public companies at premiums exceeding 250%.
Stillwater did this extraordinary feat twice – once in buying Marathon PGM and
once in buying Peregrine Metals. Both deals have turned out to be bad ones for
the Company, with management now admitting it made serious diligence mistakes
on the first and would not do the second again, if given the choice. Yet, of
3900 acquisitions of public companies by U.S. public companies in the last ten
years, only four transactions had premiums over 250%. And Stillwater did two
of those four deals. Clinton noted that the Board has not apologized or
justified this extraordinary waste of stockholder capital.

"We are discouraged that the Board cannot muster a comment on its two biggest
decisions of the last ten quarters: buying Marathon and Peregrine," said Mr.
Taxin. "The Board is either speechless, as were many stockholders when the
deals were announced, or is hoping that by remaining silent on this topic, in
their otherwise voluminous letters and presentations, stockholders might
forget about these deals. We doubt $525 million will be so easily forgotten."

Clinton also provided the following statements from executives who served with
Dr. Engles when he was the Chief Executive Officer of Stillwater:

  "As an officer and the Corporate Secretary for Stillwater Mining from 1994
  to 2002, I attended every meeting of the Board of Directors of the
  corporation during the tenure of Dr. Engles and his successor," said Michael
  Shea. "I can say categorically that there was never an assertion by the
  Board of Directors (and certainly no finding or serious concerns raised) of
  misconduct, neglect, inadequate performance or lack of integrity on the part
  of Dr. Engles.To the contrary, in my experience, Dr. Engles is a man of
  high character and integrity. I am aware of some personalitydifferences and
  strategic disagreements among board members and between some of the board
  members and Dr. Engles. This is of course common among boards, which are
  charged with exploring alternatives and options.I believe Dr. Engles ran
  the company on a very conscientious and economic basis."

  "I worked with Charles Engles at Stillwater and served as the Controller and
  Chief Accounting Officer from November 1994 to August 1995," said Alex
  Morrison. "I have nothing but positive things to say about Charles' passion
  for Stillwater, his integrity, caring for the people of the company and his
  focus on corporate governance best practices. To my mind, Charles' major
  contribution to the company was his strategic vision and his ability to
  implement that vision with a high degree of focus."

  "I worked with Charles Engles and two of his successors at Stillwater Mining
  as Director of Investor Relations and then as Vice President of Investor
  Relations," Gina Wilson, former Vice President, Investor Relations,
  Stillwater Mining Company said. "Charles was intelligent, very approachable,
  receptive to advice and counsel and an individual of the utmost integrity. I
  have nothing but the highest regard for him and the manner in which he
  conducted himself at Stillwater Mining. I was aware that Charles, along
  with a number of Stillwater Mining's large investors, was in disagreement
  with certain members of the Board over the direction of the Company and
  ultimately the shutdown of the East Boulder expansion. It is a matter of
  public record that upon hearing of Charles' resignation, stockholders
  mounted an initiative that resulted in the resignation of three Board
  members. The East Boulder expansion was then reinstituted with the new
  Board."

The Stillwater annual meeting is scheduled to be held on May 2, 2013. Clinton
urges its fellow stockholders to use the GREEN proxy card when voting at this
year's annual meeting and to vote for the Clinton nominees. Additional
information for Stillwater Mining stockholders can be found at
www.TapStillwater.com.

About Clinton Group, Inc.

Clinton Group, Inc. is a Registered Investment Advisor based inNew York City.
The firm has been investing in global markets since its inception in 1991 with
expertise that spans a wide range of investment styles and asset classes.

CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P., CLINTON MAGNOLIA MASTER
FUND, LTD., CLINTON SPOTLIGHT MASTER FUND, L.P., CLINTON RETAIL OPPORTUNITY
PARTNERSHIP, L.P., CLINTON RELATIONAL OPPORTUNITY, LLC, CLINTON GROUP, INC.
AND GEORGE E. HALL (COLLECTIVELY, "CLINTON") AND CHARLES R. ENGLES, SETH E.
GARDNER, MICHAEL MCMULLEN, MICHAEL MCNAMARA, PATRICE E. MERRIN, BRIAN
SCHWEITZER AND GREGORY P. TAXIN (TOGETHER WITH CLINTON, THE "PARTICIPANTS")
HAVE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") A
DEFINITIVE PROXY STATEMENT AND ACCOMPANYING FORM OF PROXY CARD TO BE USED IN
CONNECTION WITH THE PARTICIPANTS' SOLICITATION OF PROXIES FROM THE
STOCKHOLDERS OF STILLWATER MINING COMPANY (THE "COMPANY") FOR USE AT THE
COMPANY'S 2013 ANNUAL MEETING OF STOCKHOLDERS (THE "PROXY SOLICITATION"). ALL
STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT
AND OTHER DOCUMENTS RELATED TO THE PROXY SOLICITATION BY THE PARTICIPANTS
BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION
RELATED TO THE PARTICIPANTS. THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING
PROXY CARD HAVE BEEN FURNISHED TO SOME OR ALL OF THE COMPANY'S STOCKHOLDERS
AND ARE, ALONG WITH OTHER RELEVANT DOCUMENTS, AVAILABLE AT NO CHARGE ON THE
SEC'S WEB SITE AT HTTP://WWW.SEC.GOV/. IN ADDITION, OKAPI PARTNERS LLC,
CLINTON'S PROXY SOLICITOR, WILL PROVIDE COPIES OF THE DEFINITIVE PROXY
STATEMENT AND ACCOMPANYING PROXY CARD WITHOUT CHARGE UPON REQUEST BY CALLING
(212) 297-0720 OR TOLL-FREE AT (855) 305-0857.

INFORMATION ABOUT THE PARTICIPANTS AND A DESCRIPTION OF THEIR DIRECT OR
INDIRECT INTERESTS BY SECURITY HOLDINGS IS CONTAINED IN THE DEFINITIVE PROXY
STATEMENT ON SCHEDULE 14A FILED BY CLINTON WITH THE SEC ON MARCH 26, 2013.
THIS DOCUMENT CAN BE OBTAINED FREE OF CHARGE FROM THE SOURCES INDICATED ABOVE.

SOURCE Clinton Group, Inc.

Contact: Connie Laux, +1-212-825-0400
 
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