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Stillwater Slips on Hedge Fund Board Battle

"It is disappointing that a hedge fund, the Clinton Group, is waging a battle for control of your company even though it only acquired just 1.2% of our outstanding shares and has no relevant experience investing in platinum mining companies."

Stillwater added that according to filings, Clinton's "average holding period for past mining investments is only one-and-a-half quarters, suggesting a significant short-term bias."

Stillwater's own nominees for the eight-person board include board chairman and current CEO Francis R. McAllister, Craig L. Fuller, a former assistant to President Reagan for cabinet affairs from 1981 to 1989, and Steven S. Lucas, a partner at government-focused law firm Nielsen Merksamer Parrinello Gross & Leoni LLP, as well as other mining executives. The hedge fund announced Feb. 25 that it joined forces with former governor Schweitzer to bring change to Stillwater, which has seen its stock price dip nearly 20% over the past five years.

Schweitzer, who served two terms as governor, told the Associated Press when he agreed to join the hedge fund's slate that his main concern is the company's 1,500 employees in Montana. While governor, Schweitzer, a Democrat, lobbied to keep Montana businesses such as Stillwater operating locally.

Taxin said the governor was highly popular while in office and was very familiar with labor unions, regulators and other groups associated with Stillwater's operations in the region.

"He noticed our letter when we wrote it in December," Taxin said. "Stillwater is the largest public company in Montana and one of the largest employers in the state," Taxin said, adding Schweitzer was brought on board after leaving office last year after he hit term limits.

Platinum and palladium are both considered rare metals and are used in neurosurgical and dental devices, drugs for cancer treatment, and computer and automotive equipment.

Stillwater Mining declined Wednesday to comment further on the proxy contest.

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