Bli medlem
Bli medlem

Du är här



Base case

* 36 % IRR, € 50 million NPV (@ 5 %) (calculated with a consensus silver
price of $14,9-20,0/Oz Ag)
* LOM CAPEX 40 M€ inclusive ore-sorting and capacity increase during year 3
and ore-sorter
* Payback: less than 3 years from start of production
* Expected Life-of-Mine according to today’s reserves: 6 years
* 6 years’s EBITDA: € 95 million

Alternative silver prices

* 85 % IRR, € 124 million NPV (@ 5 %) (silver price of $28/Oz Ag)
* 11 % IRR, € 9 million NPV (@ 5 %) (silver price of $12.7/Oz Ag)

Management view estimate

* 40 % IRR, € 103 million NPV (@ 5 %) (calculated with a consensus silver
price of $ 14,9-20,0/Oz Ag)
* LOM CAPEX € 44 million inclusive underground ore-sorting and capacity
increase during year 3 with ore-sorter
* Payback: 3 years from start of production
* Estimated Life-of-Mine: 11 years (mineral reserves + 5 years from
Exploration Potential)
* 11 year’s EBITDA: € 194 million

Alternative silver prices

* 86 % IRR, € 223 million NPV (@ 5 %) (silver price of $ 28/Oz Ag)
* 15 % IRR, € 22 million NPV (@ 5 %) (silver price of $ 12.7/Oz Ag)

Base case

According to cash flow forecast, which is based on an average silver price of
$ 14,9 – 20,0 / Oz between the years 2016-2022, the Mine´s IRR is estimated
to 36% and NPV to € 50 million (@ 5%). Payback period from start of
production is estimated to be less than 3 years.

Table below: Estimated economic results according different metal price
estimates; 6 year’s production time. (CTS Engtec, 2016)

If the silver price 28 $/Oz is used, the estimated IRR is 85 % and NPV is €
124 million (@ 5%). With silver price 12.7 $/Oz, the estimated IRR is 11% and
NPV is € 9 million € (@ 5%).


The mineral reserves were estimated for each stope in conjunction with the
mine planning and the economic factors that was used showed a profitable
production. A summary of the mineral reserves are shown in the table below.

Mineral reserves (ore) in the category of Proven and Probable are 2.76 million
tonnes with a silver grade of 124 g/t Ag. The calculation follows the
Austral-asian JORC Code (2012).

Figure below: The mineral reserves, Exploration Potential and mining-plan.

From these reserves mill-feed are 2.443 million tonnes and 312 tonnes remains
in stockpile as safety stock. The silver-content during the first two planned
production years will be about 143 g/t and the gold- content will be about
0.4 g/t. During the third production year capacity will be increased from
350,000 to 450,000 tonnes per annum in conjunction with the updated
environment permit.

Compared to previous estimate of the mineral reserves the silver grades have
increased with 22%. The amount of tonnage has decreased with 17 %, which
decreases the treatment costs per produced silver-ounce and makes the project
more robust against silver price variations.

Estimates are done with a “net smelter return cut-off” of 30 €/t for
underground-mining and 60 € /t for ore-feed. Ore- recovery in mining is
estimated to be 90 %. A side--rock dilution of 15 % in underground and 10 %
in open-pit mining have been applied.

Management´s view and guesstimation

The Management´s case is based on the expectations of the Exploration
Potential below the current reserves. This guesstimation is based on
geological and geophysical information. However, it also includes a large
amount of uncertainties and can only be seen as an uncertain projection of
the future.

The Exploration Potential presented in the above picture has been modelled
from results of an electromagnetic SAMPO geophysical survey down to 1 000
meters. Existing diamond-drillings with high metal-contents on 500 and 550
meter levels support this Exploration Potential, which has been estimated to
be 10.3 million tonnes at 71.5 g/t Ag. Tentative grade-estimate and the
mining-plan have been created by using existing drill-hole data. A rough
estimate is that from this Exploration Potential area amount of mill feed
could totally be 2.25 million tonnes with a grade of 144 g/t Ag. This would
add another five production years into the mining-plan, on top of existing
mineral reserves.

According to cash flow forecast, which is based on an average silver price of
$ 14.9 – 20.0 / Oz between the years 2016-2022, the Mine’s project IRR is
estimated to 40% and NPV to € 103 million (@ 5%). Payback-period from the
start of production is estimated to be 3 years.

Table below: Estimated economic results according different metal price
estimates; 11 year’s production time. (CTS Engtec, 2016)

If the silver price 28 $/Oz is used, the estimated IRR is 86 % and NPV is €
223 million (@ 5%). With silver price 12,7 $/Oz, the estimated IRR is 15 %
and NPV is € 22 million (@ 5%).

The updated economic figures have been prepared, compiled, evaluated and
approved by the independent consulting company, CTS Engtec Oy.

Jouni Kankkunen MSc (Mining), MAusIMM, and Ilkka Tuokko, MSc (Geology),
MAusIMM have compiled and reviewed the plans and estimated the figures for
the Management´s view. Ilkka Tuokko is one of the Management team and is not
an independent consultant.

"During the last two years we have been active and implemented measures to
respond to requirements that the new silver price level sets for the Silver
Mine project. I am pleased to be able to present updated economic figures
based on mineral reserves along with the Management´s estimate for the
project. The figures show the increase the project’s resistance in periods of
low silver prices.

The report also shows the Management’s view about the future for the Silver
Mine´s project after Proven and Probable mineral reserves have been mined
during the first six production years.

The Management look positively towards the future of Silver Mine and I am
confident that we can achieve the plans that have been set for us”
, says Timo Lindborg, CEO.

Stockholm 3th March 2013

Sotkamo Silver AB (publ)

Timo Lindborg, CEO

About Sotkamo Silver AB:

Sotkamo Silver AB´s business concept is to exploit mineral deposits in the
Nordic countries with regards to human society and environment. Sotkamo
Silver owns, through its subsidiary mineral deposits, which contains silver
and gold in Finland. The Company’s main development project is the Silver
Mine project in the municipality of Sotkamo.

Sotkamo Silver applies SveMin’s&FinnMin’s respective rules of reporting for
public mining&exploration companies. Sotkamo Silver has chosen to report
mineral resources and mineral reserves according to the internationally
accepted JORC or NI 43-101-code. The company applies International Financial
Reporting Standards (IFRS) as approved by the European Union.

The ticker symbol is SOSI in NGM and SOSI1 in NASDAQ OMX Helsinki.

ISIN-code for Sotkamo Silver shares is SE0001057910.

Read more about Sotkamo Silver on or

For further information: Timo Lindborg, CEO, tel. +358 40 508 3 507

The official Stock Exchange Release is given in Swedish and there may be
slight differences in the translated versions.

Important information

Publication or distribution of press releases in certain jurisdictions may be
restricted by law and persons in those jurisdictions where this press release
is published, or distributed should inform themselves about and observe such

This press release may not be released, published or distributed, directly or
indirectly, in or into Australia, Canada, Hong Kong, Japan, New Zealand,
Singapore, South Africa or the United States or any other country where such
action is wholly or partially subject to legal restrictions. The information
in this press release may not be forwarded, reproduced, or disclosed in ways
that conflict with such restrictions. Omission to follow this instruction may
result in violation of the United States Securities Act of 1933 ("Securities
Act"), as amended, or applicable laws of other jurisdictions.

Statements in this press release, which are not purely historical facts,
including without limitation statements regarding future estimates, plans,
objectives, assumptions or expectations of future performance are “forward -
looking statements.

Please note that such forward - looking statements involve known and unknown
risks and uncertainties that could cause actual results and future events to
differ materially from those anticipated in such statements. Such risks and
uncertainties include fluctuations in metal prices, unpredictable results of
exploration activities, uncertainties inherent in the estimation of mineral
reserves and resources, fluctuations in the costs of goods and services,
problems associated with exploration and mining operations, changes in legal,
social or political conditions in Finland, Sweden and Norway and lack of
appropriate funding, all of which could among other things, prevent any of
the forward looking statements in this presentation from coming to fruition
or lead to a delay in the development of mining operations .

Författare NGN

Tala om vad ni tycker

Tala om vad ni tycker

Ni är just nu inne på en betaversion av nya aktiespararna. Lämna gärna feedback på vad ni tycker i formuläret nedan.