INVENTORIES

For purposes of inventory accounting, the market value of inventory is generally deemed equal to the Company’s current cost of replacing the inventory, provided that: (1) the market value of the inventory may not exceed the estimated selling price of such inventory in the ordinary course of business less reasonably predictable costs of completion and disposal, and (2) the market value may not be less than net realizable value reduced by an allowance for a normal profit margin. No adjustments were made to the inventory value in the first six months of 2012 or at December 31, 2011.

The costs of mined PGM inventories as of any date are determined based on combined production costs per ounce and include all inventoriable production costs, including direct labor, direct materials, depreciation and amortization and other overhead costs relating to mining and processing activities incurred as of such date.

The costs of recycled PGM inventories as of any date are determined based on the acquisition cost of the recycled material and include all inventoriable processing costs, including direct labor, direct materials and third party refining costs which relate to the processing activities incurred as of such date.

Inventories reflected in the accompanying balance sheets consisted of the following:



(in thousands)	June 30, 2012		December 31, 2011
Metals inventory
Raw ore	$	1,820	$	1,179
Concentrate and in-process	46,901		43,379
Finished goods	49,918		66,194
	98,639		110,752
Materials and supplies	22,939		21,104
Total inventory	$	121,578	$	131,856

The Company holds in its possession, materials it processes on a toll basis for customers until the tolled material is transported to a third party refiner.