Commenting on this announcement, the Company's Chairman and CEO, Francis R. McAllister, noted, "Obviously, we are extremely disappointed that GM has chosen to reject our supply agreement outright in bankruptcy. The Company has been negotiating in good faith with GM for nearly nine months regarding the terms of this agreement and had already implemented two interim contract modifications at GM's request.

"The Company's PGM supply agreements with GM and Ford include provisions that guarantee a minimum purchase price for palladium and platinum when prices fall below stipulated levels. These provisions are currently very beneficial to us in view of today's relatively low PGM prices. In the absence of these agreements, the Company will still be able to sell its production into the market, but would lose the benefit of these pricing floors. Because (1) the GM contract is the smaller of the two automotive supply agreements, (2) the Company's cash position is strong, and (3) our employees are fully committed to our effort to be a low-cost operator, I believe the Company will be able to absorb the $5 to $10 million annual financial impact (at recent PGM prices) of losing the GM contract, particularly if PGM prices remain at or above their second-quarter levels. However, PGM prices have declined in recent days, suggesting the loss of the GM floor prices may become much more critical to the Company going forward. We expect to meet with our employees and union representatives shortly to discuss the urgency of this situation with them.

"We certainly recognize that the current economic downturn has decimated the automotive industry, forcing GM and others to make some difficult choices. At the same time it seems disingenuous to me, during a period when preserving American jobs is such a high domestic priority, that GM, while receiving immense financial support from the U.S. government, would elect, as I understand it, to continue its supply agreements with foreign palladium suppliers while seeking to terminate an agreement with the sole U.S. miner of palladium. While I believe the Company, absent any sustained decline in PGM prices, will be able handle the loss of the GM agreement, the message GM is sending to American taxpayers is disconcerting.