SUMMARY OF INTERIM REPORT JANUARY - JUNE 2015


* Net profit was KSEK -6,205 (-2,573) and earnings per share to SEK
  -0.30 (-0.15).
* The Group sale was KSEK 442 (528).
* Cash and cash equivalents was KSEK 12,581 (21,339) at June 30th 2015.
* Investments were during period KSEK 3,464 (3,662).
* Equity was 130,108 kSEK (136,561) at June 30th 2015.

 

* High silver- and goldvalues were encountered in drilling at the deep
  extension of the Silver Mine deposit.
* Excellent exploration targets in Mo i Rana in Norway.
* The Annual General Meeting was held on Monday 23 March 2015.

 


THE CURRENT PERIOD (3 months, April - June)

* Net profit was -1,624 KSEK (-356) and earnings per share -0.08 SEK
  (-0.02).
* Group sale was 433 KSEK (99).
* Investments during the period April – June were 1,981 KSEK (1,855).
* The Company signs an option agreement to purchase the concentration
  plant from the Blaiken mine

 

SUMMARY OF SIGNIFICANT EVENTS AFTER THE BALANCE

* Sotkamo Silver has purchased The Blaiken Concentration Plant.
* A 9.4 M€ financing offered from TEKES as a development loan

The comparative numbers relates to the corresponding period of the
previous year\'s income statement and cash flow items and December 31st
2014 for Balance Sheet items.

 

MESSAGE FROM THE CEO

Metal prices are cyclical and I believe that prices are approaching a
cyclical bottom. Both metal prices and the valuations of mining
companies are low to-day and the situation begins to look like it was
2008, when stock markets in the US and Sweden still went relatively
well, before valuations began to decline.

When metal prices are turning it is usually the precious metals, which
turns first. The price of silver and gold was not particularly high in
2008, but increased significantly in 2009 and continued so until 2012.
At the same time increased the willingness to invest in mining and
several new mining projects started worldwide.

Silver prices have declined since the Q1 report, and that complicates
the investment climate. However, we can still see that our project is
positive and gives good yield, even with today\'s silver prices. For us
it is important what the silver price is within two or three years from
now, when we plan to be in production, while today\'s prices often only
determines the attractiveness of investors, who often act without
longer-term objectives. If the silver price will be higher than today,
the project is very profitable, but the Company is doing financially
well even with today\'s lower prices.

The perception that loaned money is available in abundance with low
interest is false. There are very favourable borrowing opportunities for
households and real estate investments, but not for industry
investments, especially not for investments with price risk in
commodities, currencies, etc. It\'s like two different worlds.

Time has been difficult for industrial investment in recent years,
especially within the EU, due to the established risk and capital
management requirements such as Basel Rules established for banks. Banks
are reluctant to finance industrial projects. Money must instead be
obtained from the market, either as equity, bond or other complex
financing instruments. Therefore, we work actively with a total
financing package, which consist of several parts, to reach a good
solution for our shareholders.

Financing and Supply Agreement regarding the design and turnkey delivery
of electrification, automation and instrumentation with ABB Oy Finland
is extended until the end of 2015. The agreement covers engineering,
design, delivery and supply of electrification, automation and
instrumentation for the Silver Mine. The value of the delivery is about
5 million euro.

The Company has acquired the concentrator at Blaiken. The complete
concentrator for base metals is to be moved to Sotkamo Silver\'s Silver
mining project in Finland. The acquisition is expected to reduce the
Silver Mine´s capital requirements with EUR 7 million, which corresponds
to approximately SEK 65 million and improve the project´s profitability
further.

TEKES - the Finnish Funding Agency for Innovation, has granted Sotkamo
Silver a possibility to additional financing with a development loan of
EUR 9,4 million, corresponding to approximately SEK 85 million.

TEKES loan will be used to improve the profitability of the Silver Mine.
The project also entails costs, but I believe that the loan will
strengthen the Company\'s ability to finance the Silver Mining Project.
Even an ore-sorter will improve the project\'s profitability
significantly, when it will be introduced in the production after the
ramp-up period.

Efforts to navigate to a total financing solution is priority one for
management and the board. The silver price trend during the next months
are very important, but by the actions taken and assumed results of the
project, we have improved the economic  sustainability of the project
against current silver prices.

Dr. Timo Lindborg, CEO

 

Reporting Dates

* Interim report Q3 - November 13th 2015.
* Year End Report 2015 - February 12th 2016.
* Annual General Meeting – March 17th 2016.

 

Share data

The share capital amounted to SEK 141,596,341.47. Number of shares and
votes are 20 643 198. Quota value was SEK 6.86.

A complete Year End Report in Swedish can be downloaded from:
http://www.silver.fi/sivu/se/delarsrapporter/

Sotkamo Silver AB discloses the information provided herein pursuant to
the Swedish Securities Markets Act and/or the Swedish Financial
Instruments Trading Act

The official Stock Exchange Releases are given in Swedish and there may
be slight differences in the translated versions

 

Stockholm, 12th Augusty 2015

Sotkamo Silver AB

Timo Lindborg, CEO

 

The Company\'s press releases and financial reports are distributed via
NGM and are available on www.silver.fi   For further information please
contact Timo Lindborg, CEO on +46-8-304920.

 

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 ore 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 Equity in Stockholm and SOSI1 in NASDAQ
OMX Helsinki. ISIN-code for Sotkamo Silver shares is SE0001057910.

Read more about Sotkamo Silver on www.sotkamosilver.com or www.silver.fi

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

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

 

Attachments

150812_SOSI_Q2_2015_1efe3.pdf 150812_PM_Q2_SOSI_ENG_fbee6.pdf