Sotkamo Silver AB | Stock Exchange Release | July 31, 2025 at 09:00:00 EEST
HIGHLIGHTS
April - June
- Net sales decreased by 25% to 79 MSEK (105 MSEK*). Lower average silver grade and lower mill feed, led to lower silver production. Net sales increased by 15% compared to Q1 2025
- EBITDA fell by 92% to 2 MSEK (19), EBITDA margin weakened to 2% (18), but EBITDA increased by 9 MSEK compared to Q1 2025
- EBIT decreased to -16 MSEK (0), however EBIT increased by 8 MSEK compared to Q1 2025
- The profitability decreased mainly due to continued mining challenges, which led to lower mill feed volume and reduced ore quality. As a result, silver production declined, reducing net sales and profitability.
- Cash and cash equivalents amounted to 1 MSEK (30). The Company has a credit facility of 2 MEUR (22 MSEK) and is negotiating the refinancing of its Senior and Convertible Loans and additional financing of 1 MEUR (11 MSEK)
- CAPEX went up to 16 MSEK (12)
- The production amounted to approximately 187,000 ounces of silver (274,000), 417 ounces of gold (590), 144 tonnes of lead (167), and 370 tonnes of zinc (359) in concentrates
January - June
- Net sales decreased by 22% to 148 MSEK (190 MSEK). Lower average silver grade and lower mill feed led to lower silver production
- EBITDA weakened to -6 MSEK (36), EBITDA margin fell to negative (19)
- EBIT decreased to -40 MSEK (-1)
- Continued mining challenges and lower silver production led to decreased profitability
- Cash and cash equivalents decreased to 1 MSEK (30)
- CAPEX increased by 1% to 28 MSEK (29)
- The production was approximately 356,000 ounces of silver (583,000), 782 ounces of gold (1,307), 281 tonnes of lead (364), and 679 tonnes of zinc (697) in concentrates
*Comparative figures refer to the corresponding period of the previous year.
In case of discrepancies, the official Swedish version of this report prevails.
OUTLOOK
The Company announced 12 June 2025 that its silver production is expected to fall slightly below the lower end of the previously estimated production range. As a result, the EBITDA margin and the net debt relative to EBITDA are also expected to fall slightly short of the targets. In addition, the Company stated, that it will provide more detailed full-year estimates in its Q2 interim report.
The new, updated guidance (given 31.7.2025) for 2025:
- The Company expects to produce 1.0 -1.2 million ounces of silver
- Annual EBITDA margin to be at least 22%
- Net debt-to-EBITDA to be below 2.5 at year-end
In the previous guidance for year 2025 (given on 14 February 2025) the Company stated:
- The Company expects to produce 1.2-1.4 million ounces of silver
- Annual EBITDA margin to be at least 30%
- Net debt-to-EBITDA to be below 1.5 at year-end
The Company's profitability is significantly affected by external factors, such as metal prices and exchange rates and internal factors like uncertainties related to ore volumes and metal grades. The achievement of the guidance assumes that metal prices and EUR/USD rate stay approximately at the current level of the time when the guidance was published (31 July 2025).
Medium-term targets
Medium-term targets until the end of the year 2027 will be updated during the second half of the year 2025.
CEO REVIEW
Towards a Stronger Second Half
Mining challenges persisted in the early part of the second quarter. However, we successfully transitioned production to new mining areas during the period. Although mining volumes increased from the previous quarter, they still fell short of our target levels. Additionally, due to lower-than-expected grades, silver production remained significantly below our goals. Ensuring adequate capacity in the underground mine remains primary focus for the rest of the year.
On June 12, we announced that we would not reach the previously published production and EBITDA margin guidance. According to our updated forecasts, we now expect to produce 1.0-1,2 million ounces of silver and achieve an EBITDA margin of 22 percent in 2025. Furthermore, the price of silver has increased over 30 percent since the beginning of the year, which has had a significant positive impact on the Company's revenue and, consequently, on EBITDA. We have every reason to expect a clearly stronger financial performance in the second half of the year.
On June 3, we announced promising results from exploration drilling aimed at extending mine life until 2035. The first analyzed samples confirmed our view that mineralization continues in a similar manner in the deeper parts of the mine. We will publish updated mineral resource and ore reserve estimates at the end of the year, once the final results are available.
We also conducted exploration drilling west of the current ore body. The analyzed drill holes support the potential for profitable mining operations in the area, and we will carry out further exploration based on the results of the completed drilling.
A new mining contractor will start when the current agreement expires at the beginning of 2026. The new contractor, Tapojärvi Oy, has a solid experience and a strong track record in underground mining, including previous contracting work at Sotkamo Silver's mine. We believe Tapojärvi Oy will provide us with the necessary resources and expertise for the long-term development of our operations. To improve operational reliability, we are also focusing on opening new alternative mining areas during the remainder of the year.
We have made good progress in refinancing negotiations aimed at securing our ability to execute our growth strategy. The Extraordinary General Meeting on July 23, 2025, approved the Board's proposal for a share issue to enable implementation of the planned offer to the holders of the Company's convertible loans to exchange their existing convertibles for either new shares or new convertibles in the Company. We have also received a conditional commitment from our Senior Loan holders on new terms for the Senior Loan.
The beginning of the year was challenging, but the mining situation is improving, we have good progress with refinancing and agreement with an experienced new contractor. Additionally, promising results from the exploration drilling support the future development. We have strong reasons to be optimistic about the second half of 2025 and the years ahead.
KEY FIGURES
| Q2/25 | Q2/24 | Change, % | H1/25 | H1/24 | Change, % | 2024 | |
| Net sales, MSEK | 79 | 105 | -25 | 148 | 190 | -22.1 | 412 |
| EBITDA, MSEK* | 1 | 19 | -92 | -6 | 36 | 109 | |
| EBITDA margin % | 1.9 | 18.1 | -90 | -4,1 | 19.0 | -122 | 34 |
| EBIT, MSEK | -16 | 0 | -40 | -1 | 32 | ||
| EBIT margin % | -20.4 | -0.1 | -27.1 | -0,7 | 7.9 | ||
| Equity ratio %* | 38 | 40 | -4 | 38 | 40 | -4 | 41 |
| Cash liquidity %* | 18 | 48 | -63 | 18 | 48 | -63 | 75 |
| Net debt-to-EBITDA ratio* | 3.4 | 2.1 | 62 | 3.4 | 2.1 | 62 | 1.6 |
| Personnel at the end of the period | 52 | 55 | -5 | 52 | 55 | -5 | 51 |
| Silver production, koz* | 187 | 274 | -32 | 356 | 583 | -39 | 1,166 |
| Mill feed, kt* | 109 | 127 | -14 | 201 | 251 | -20 | 497 |
| Average silver grade, g/tonne* | 65 | 83 | -21 | 67 | 87 | -23 | 89 |
Alternative key performance measures are marked with asterisk. For more detailed definitions, please see the full report.
EVENTS AFTER THE REPORTING PERIOD
At the Extraordinary General Meeting on 23 July, the Board was authorized to issue new shares, warrants, and/or convertibles. Board resolutions under this authorization may result in a maximum dilution of 35% of the total number of shares outstanding in the Company.
The purpose of the authorization is to enable implementation of the previously announced planned offer to the holders of the Company's outstanding 6.3 MEUR (71 MSEK) convertible loans to exchange their existing convertibles for either new shares or new convertibles in the Company.
The holders of the Senior Loan gave a conditional commitment to amend the terms, including the following changes:
- The loan maturity will be extended by at least two years (previously maturing in 2026)
- The loan amount will be increased by one million euros (11 MSEK)
The decision is conditional upon the success of the Company's planned convertible loan arrangement.
FINANCIAL CALENDAR
- Q3/2025: 23 October 2025
- Q4/2025: 20 February 2025
WEBINAR
The result webinar will be held today on 31 July at 1:00 p.m. Finnish time (EET). You can participate in the event through the link: https://player.videosync.fi/sotkamosilver/2025-q2
The webinar will be conducted in Finnish, with the material presented in English. During the event, you can ask questions using the chat function. The presentation from the webinar will be made available on the company's website at: https://www.silver.fi/en/investors/presentations
Stockholm, 31 July 2025
Sotkamo Silver AB's Board of Directors and CEO
CONTACT INFORMATION
Mikko Jalasto,
CEO of Sotkamo Silver AB
mikko.jalasto@silver.fi
+358 50 482 1689
Tommi Talasterä,
CFO of Sotkamo Silver AB
tommi.talastera@silver.fi
+358 40 712 6970
Sotkamo Silver in brief
Sotkamo Silver is a mining and ore prospecting company that develops and utilises mineral deposits in the Kainuu region in Finland. Sotkamo Silver supports the global development towards green transition technologies and produces the metals needed responsibly and by taking local stakeholders into account. Sotkamo Silver's main project is a silver mine located in Sotkamo, Finland. In addition to silver, the mine produces gold, zinc and lead. The company also has mining and ore prospecting rights for mineral deposits in the vicinity of the silver mine in Kainuu. Sotkamo Silver Group consists of the parent company Sotkamo Silver AB and its wholly owned Finnish subsidiary (Sotkamo Silver Oy). Sotkamo Silver AB is listed at NGM Main Regulated in Stockholm (SOSI), Nasdaq Helsinki (SOSI1), and Börse Berlin.
Read more about Sotkamo Silver at www.silver.fi/en/
This information is information that Sotkamo Silver AB is obliged to make public pursuant to the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 2025-07-31 09:00 EEST.
