SUMMARY OF THE YEAR-END REPORT 2016

THE FOURTH QUARTER

  • Net result was – 5 972 KSEK (-5 160) and earnings per share -0.06 SEK (-0.25).
  • Group sale was 50 KSEK (177).
  • Investments during the period were 6 713 KSEK (963).
  • Sotkamo Silver Oy was offered 2 MEUR as a state investment grant; to be paid during 2017 against verified expenses.
  • EuroMin, a subsidiary of Mining Associates acquired 1 398 572 shares in a directed issue at an amount of 4,9MSEK. The issue was registered at Swedish Companies Registration Office on January 2nd, 2017.
  • The financing- and delivery agreements with Tekes and ABB Oy were extended until June 30 2017

  THE FISCAL YEAR

  • Net result of the year was -10 028 kSEK (-11 660) and result per share was -0,17 SEK (-0,56).
  • Other income amounted to 52 kSEK (623).
  • As of December 31, 2016, Cash and cash equivalents amounted to 156 477 kSEK (12 741).
  • As of year-end 2016 the Equity amounted to 287 923 kSEK (124 757), 2,79 SEK (6,04) per share.
  • The investments during the year amounted to 13 217 kSEK (15 589).
  • The silver-content of the ore-reserves increased with 22%.
  • The feasibility-study was completed and economic figures for the Silver mine project was up-dated.
  • The power-line at the Silver-mine was sold, at an amount of 1,3 MEUR, to the local grid company, Loiste.
  • The fully subscribed rights issue raised about 186 MSEK before issue-cost.
  • The Company repaid the convertible loan to Taaleri Oy, 15,5 MSEK including interest.

SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD  

  • Kainuun Osuuspankki made a loan offer of 2,75 million euro.
  • EuroMin subscribed for another 1 351 533 shares and thereby increased cash with approx. 4,7 MSEK.
  • The Company made an agreement with Traxys to continue to discuss a market- and finance agreement.

  
THE CEO LETTER

I am very pleased with the updated feasibility study that was compiled, assessed and approved by the independent consulting firm, CTS Engtec Oy. It shows healthy estimates for the planned mining operation's profitability, even with metal prices lower than current prices.

The study's economic figures and assumptions were also reviewed by Mining Associates, a well-known independent international mining focused consulting- and financing firm. They conducted a technical due diligence and a comprehensive independent audit of the economic model in the Silver Mine project and the feasibility study. Mining Associates´ due diligence showed that the assumptions of the feasibility study and the economic model of Sotkamo´s Silver Mine are correct and confirm the strength of the project.

After the implemented share issue 2016, the Company has focused on activities at the mine area. Preparatory work at the Silver Mine has commenced. The work includes planning and construction of the concentrator- and underground mine´s infrastructure. The mine is prepared for mining, by improving the ventilation and pumping stations. Earthworks are also made for the area's roads and for the founding of the ponds.

By starting these works already now the Company can plan and implement them effectively. In addition, the main contracts for the construction can be carried out faster and smoother. The ambition is that all building- and construction works should be completed so that full production is reached during the first half of 2018. The upcoming start of construction will be a significant event in Sotkamo Silver's mining history.

The Company dispose ore reserves, as to the Company's judgment initially will last for six years’ production. This time is necessary to defend the resolution of start the mining operations with good profitability. In addition, the Company has mineral resources and exploration potential with good potential to be upgraded to mineral reserves.

As a result of the completed drilling program and geophysics we have been able to show that in the extension of the silver-, gold-, zinc and lead carrying zones there are further potential down to 1 500-2 000 meters with corresponding geology and grades in the Silver Mine. We also know that in connection with the Tipas green stone belt, there are several interesting silver- and gold deposits. The Silver mine's concentrator will in the future serve as the center of operations. All this together, we have high hopes of continued mining production for many years.

Timo Lindborg

Reporting Dates:

The Annual Report will be published in February 25th 2017.
Annual General Meeting - March 23th 2017 at 10 a.m., at Jernkontoret, Kungsträdgårdsgatan 10, Stockholm, Nybrokajen 9 Stockholm.
Interim report Q1 - May 10th 2017.
Interim report Q2 - August 23th 2017.
Interim report Q3 - November 15th 2017.
Year End Report 2015 - February 21st 2018.
Annual General Meeting – March 15th 2018.

Share data

The share capital amounted to SEK 141 596 341,47. Number of shares and votes are 103,215,990. Quota value was SEK 1.37.

On the last trading date, December 30 2016, Sotkamo’s shares were traded at SEK 4.25. Market capitalisation was 438,668 kSEK at closing-date.

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

ISIN-code for Sotkamo Silver shares is SE0001057910.

ISIN- code for share warrants series 2016/2017 are SE0008373880

Legal Entity Identifier (LEI): 213800R2TQW1OZGYDX93

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

The Company’s press releases and financial reports are distributed through Cision and may be found on the Company’s website www.silver.fi . .

Stockholm, February 15th 2017

Timo Lindborg, CEO

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 differences in the translated versions.

 
About Sotkamo Silver AB:

Sotkamo Silver AB´s business concept is to exploit mineral deposits in the Nordic countries with positive social and environmental benefits. Sotkamo Silver owns mineral deposits, which contain silver and gold in Finland as well as zinc and gold in Norway. 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.

Number of shares and votes are 103,215,990 before the registration of this issue at the Swedish Companies Registration Office. Number of shares and votes after the registration of this issue is 113,527,267.

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

ISIN-code for Sotkamo Silver shares is SE0001057910.

ISIN- code for share warrants series 2016/2017 are SE0008373880

Legal Entity Identifier (LEI): 213800R2TQW1OZGYDX93

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

Read more about Mining Associates on www.mining associates.com

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