SOTKAMO SILVER FOUND AN ERROR IN BANKABLE FEASIBILITY STUDY
Sotkamo Silver has found an error in the independent consultancy group Wardell Armstrong International (WAI) Ltd’s calculations in the financial analysis of the Bankable Feasibility Study. The error was in the calculation formula for zinc revenue and has an impact on the revenue of the mine.
Subsequently, KPMG Oy Ab had used Wardell Armstrong International (WAI) Ltd’s spreadsheet to prepare a revised financial analysis, based on an updated mine plan reviewed by independent engineers from Outotec (Finland) Oy. Following the correction of the error, the net result is that the revenue forecast in the KPMG financial analysis decreases from 254 M€ to 235 M€ and the IRR estimate decreases from 72% to 62%, at an average silver-price of 33.9 USD/oz from 2014 to 2022 (consensus pricing).
At a silver-price of $ 28/oz (conservative pricing), KPMG’s revenue estimate decreases from 211 M€ to 186 M€ and IRR from 43% to 28.7%.
There are no changes in the previously announced Mineral Resource and Reserve estimates.
A statement from Wardell Armstrong International Ltd (WAI), Director of Mining Minerals, Phil Newall, BSc (ARSM), PhD (ACSM), CEng, FIMMM, Director of Minerals: “WAI would like to apologise unreservedly for this error and any inconvenience this may have caused the Company. Furthermore, WAI believes that the negative impact that the error has on the financial analysis does not detract from the overall economic viability of the project”.
Stockholm, 22th May 2012 Timo Lindborg, CEO
You can find an updated summary of KPMG´s report on the Company's website, www.silver.fi.
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 Taivaljärvi Silver Mine.
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 shares are traded at the Burgundy market place and NGM Equity in Stockholm.
The ticker symbol is SOSI. 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