NOTICE ANNUAL GENERAL MEETING IN SOTKAMO SILVER AB (PUBL)

Tue, Feb 18, 2014 09:50 CET

The shareholders of Sotkamo Silver Aktiebolag (publ) are hereby invited to attend the Annual General Meeting (AGM) to be held on Friday, March 21st, 2014, at 10.00 a.m. at Jernkontoret, Kungsträdgårdsgatan 10 Stockholm, Sweden. Registration will open at 9.30 a.m.

Attendance

A shareholder who wishes to attend the AGM must be registered as shareholder in the shareholders register maintained by Euroclear Sweden AB on Saturday, March 15, 2014, which in practice means that the shareholder must be registered as shareholder in the shareholders register on Friday, March 14, 2014.

Notice of intention to attend the AGM can be made to the company no later than Monday, March 17, 2014, in writing to Sotkamo Silver Aktiebolag, AGM, Hovslagargatan 5 B, 111 48 Stockholm, Sweden; by phone + 46 708-666 799; or by e-mail to agnetha.pernerklint@silver.fi. The notification shall include name, date of birth or corporate registration number and day-time telephone number.

Nominee registered shares

Shareholders whose shares are registered in the name of nominee must, in order to be entitled to attend the AGM, request that their nominee re-register their shares in their own name so that the shareholder is registered in the shareholders register maintained by Euroclear Sweden AB on Friday, March 14, 2014. Shareholders who wish to register their shares in their own name must inform its nominee well in advance of Friday, March 14, 2014, when such registration at the latest must be executed.

Shareholders whose shares are registered in the name of nominee at Euroclear Finland Ab must, in order to be entitled to attend the AGM, request to be temporarily registered into the temporary shareholders’ register held by Euroclear Finland Ab. Shareholders who wish to be temporarily registered into the temporary shareholders’ register must inform its nominee of this well in advance of Friday, March 14, 2014 10.00 a.m. Finnish time, when such registration at the latest must be executed.

Representatives etc.

Shareholders who are represented by proxy shall issue a dated proxy in writing for the representative. The proxy is valid one year from the issuing, unless a longer validity period (not exceeding five years) is stated in the proxy. If the proxy is issued by a company or other legal entity, it must be accompanied with a qualifying certificate such as registration certificate or similar document of authorisation. The original proxy and any documents of authority should well in advance of the AGM be sent to Sotkamo Silver Aktiebolag, AGM, Hovslagargatan 5 B, 111 48 Stockholm, Sweden. Proxy forms are available on the company website, www.sotkamosilver.com and will be sent to shareholders upon request.

Attachment: summons to Annual General Meeting

Stockholm February 18th 2014 SOTKAMO SILVER AB (publ)

Timo Lindborg, CEO

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

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

About Sotkamo Silver AB (publ)

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 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 www.sotkamosilver.com or www.silver.fi

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

NOTICE OF ANNUAL GENERAL MEETING IN SOTKAMO SILVER AKTIEBOLAG (PUBL)

The shareholders of Sotkamo Silver Aktiebolag (publ) are hereby invited to attend the Annual General Meeting (AGM) to be held on Friday, March 21, 2014, at 10.00 a.m. at Jernkontoret, Kungsträdgårdsgatan 10, in Stockholm, Sweden. Registration will open at 9.30 a.m.

Attendance

Notice of intention to attend the AGM can be made to the company no later than on Monday, March 17, 2014, in writing to Sotkamo Silver Aktiebolag (publ), AGM, Hovslagargatan 5 B, 111 48 Stockholm, Sweden; by phone + 46 708-666 799; or by e-mail to agnetha.pernerklint@silver.fi. The notification must include name, date of birth or corporate registration number and day-time telephone number.

Nominee registered shares

Representatives etc.

Shareholders who are represented by proxy must issue a dated proxy in writing for the representative. The proxy is valid one year from the issuing, unless a longer validity period (not exceeding five years) is stated in the proxy. If the proxy is issued by a company or other legal entity, it must be accompanied with a qualifying certificate such as registration certificate or similar document of authorisation. The original proxy and any documents of authority should well in advance of the AGM be sent to Sotkamo Silver Aktiebolag, AGM, Hovslagargatan 5 B, 111 48 Stockholm, Sweden. Proxy forms are available on the company website, www.sotkamosilver.com and will be sent to shareholders upon request.

Proposed Agenda

Opening of the AGM.
Election of chairman of the AGM.
Preparation and approval of voting list.
Approval of the agenda.
Election of one or two persons to approve the minutes.
Determination whether the AGM has been duly convened.
Presentation of the annual report and the audit report, the consolidated annual report and the consolidated audit report.
Managing director´s address.
Resolution regarding adoption of the income statement and the balance sheet and the consolidated income statement and the consolidated balance sheet.
Resolution regarding allocation of earnings according to the adopted balance sheet.
Resolution regarding discharge from liability of the directors and the managing director.
Presentation of the nominating committees’ proposals regarding item 13-16 below.
Resolution regarding the number of directors and the number of deputies.
Resolution regarding fees to the directors and the auditors.
Election of directors, chairman of the board and deputies.
Election of auditors.
Establishment of guidelines for the nominating process.
Establishment of guidelines for remuneration to management.

19.a) Resolution regarding adoption of new articles of association.

19.b) Resolution regarding reduction of the share capital without redemption of shares.

20.a) Approval of the board of directors resolution to issue shares.

20.b) Resolution regarding bonus issue.

20.c) Resolution regarding reduction of the share capital without redemption of shares.

21. Resolution to authorize the Board to issue new shares, issue of warrants and/or convertibles.

22. Closing of the AGM.

Proposals by the nominating committee (items 2 and 13-16)

In accordance with the guidelines adopted by the 2013 annual general meeting, a nominating committee has been appointed. The nominating committee, which consists of Kimmo Viertola, chairman, Kari Itälahti and Matti Rusanen, proposes:

That Bertil Brinck is elected chairman of the AGM.
That the board of directors shall comprise of four members without deputies.
Unchanged fees to the directors totalling SEK 450,000, of which SEK 150,000 to the chairman and SEK 100,000 to each of the other non-executive directors. No separate fees are paid for committee work. Further, it is proposed that following a separate agreement with the company, a director may invoice its fee as a board member, together with statutory social security contributions and value added tax according to law, through a company owned by the director in the country where the director resides, subject to the condition that such payment is cost neutral to the company.
Auditors’ fees payable on account.
Re-election of directors Teuvo Jurvansuu, Mauri Visuri and Jarmo J. Vesanto. Election of Katja Keitaanniemi as director.
Re-election of Mauri Visuri as chairman of the board of directors.
Election of the registered auditing company PWC AB as the auditor of the company until the end of the annual general meeting held in 2015, with the auditor Anna Rosendal as person in charge until further notice.

Proposals by the board of directors (items 10 and 17-21)

Item 10 - Allocation of earnings

The board of directors and managing director propose that the accumulated losses are carried forward. The board of directors proposes that no dividend will be paid for 2013.

Item 17 – Nominating committee Board of directors proposes that the AGM adopt the following guidelines for the nominating process. The owner, based on statistics from Euroclear, which holds the largest number of shares and voting rights on August 31, 2014 will, after consultation with the three next biggest shareholders, appoint a nominating committee of three persons. The composition will be published at the latest in the Interim Report for the third quarter of 2014. The nominating committee’s task is to present proposals to the annual general meeting regarding the number of the directors and deputies, the composition of the board and the fees payable to the directors and special fees payable for committee assignments, if any. Further, the nominating committee will present proposals for the chairman of the board and the chairman to preside over the annual general meeting and, where applicable, on auditors and their fees. The chairman of nominating committee is appointed by the nominating committee. The nominating committee’s mandate period lasts until a new nominating committee has been appointed. If a member of the nominating committee leaves the nominating committee before its task has been completed or if a material change occurs in the ownership structure after the appointment of the nominating committee, the nominating committee’s composition will be changed in accordance with the above principles. Changes in the composition of the nominating committee will be published on the company’s website. The nominating committee’s proposals will be publicly announced in connection with the publication of the notice of the annual general meeting. In connection with its assignment, the nominating committee will fulfil the duties, which, according to the Swedish Code of Corporate Governance, are incumbent upon the company’s nominating process, and at the request of the committee, Sotkamo Silver will provide personnel resources, such as a secretarial function for the nominating committee, to facilitate the nominating committee’s work. Where needed, Sotkamo Silver will also bear reasonable costs for external consultants which are deemed by the nominating committee to be necessary for the committee to fulfil its assignment. Item 18 - Guidelines for compensation to management Board of directors proposes principles for remuneration and other employment terms consistent with the guidelines adopted at the 2013 annual general meeting. The proposal mainly involves that the company will offer its executives market-based remuneration which will enable the group to recruit and retain qualified employees. With senior management and senior executives are meant the managing director and other members of management. The remuneration may consist of the following components (i) fixed base salary, (ii) variable compensation, (iii) pension benefits, (iv) other customary benefits. The variable remuneration will be paid based on performance goals achieved by the company as a whole and performance targets for the individual employee. The variable salary will be maximized to 25 percent of the fixed salary. Pension benefits should be premium-based and may reach 20 percent of base salary.

Item 19.a) - Resolution regarding adoption of new articles of association

As a consequence of the proposed reduction of share capital under item 19.b) below, the board of directors proposes that the shareholders’ meeting resolves upon adopting new articles of association pursuant to which the share capital limits set out in § 4 in the articles of association are changed to not less than SEK 80,000,000 and not more than SEK 320,000,000. The decision is conditioned by the shareholders’ decision to reduce the share capital as set out in item 19.b) below.

Item 19.b) - Resolution regarding reduction of the share capital without redemption of shares

The board of directors proposes that the shareholders’ meeting resolves upon reducing the company’s share capital with SEK 56,638,537.47 by allocation to a non-restricted reserve to be used in accordance with the shareholders’ decision. The reduction of the share capital will be made without redemption of shares by changing the share quota value from approximately SEK 10 to SEK 6 per share.

The reduction of share capital by changing the quota value is made in order to resolve on the rights issue suggested to be approved in item 20.a) below. After the reduction, the share capital will amount to 84,957,804 allocated on 14,159,634 shares (prior to the rights issue), each share with a quota value of SEK 6. The decision to reduce the share capital is conditioned on that the rights issue under item 20.a) and that the bonus issue under item 20.b), entailing an increase of the share capital with at least as much as the reduction amount, are registered at the Swedish Companies Registration Office and that the reduction of the share capital, the rights issue and the bonus issue together do not result in a decrease in the company’s share capital.

The decision to reduce the share capital is conditioned by a change of the articles of association as set out in item 19.a) above.

Item 20.a) – Approval of the board of directors resolution to issue shares

The board of directors proposes, conditioned by the shareholders’ decisions to change the articles of association as set out in item 19.a) and to reduce the share capital as set out in item 19.b), that the shareholders’ meeting resolves to approve the board of directors resolution to increase the company’s share capital with a maximum of SEK 42,478,902 (based on a quota value of SEK 6 per share) through issuing a maximum of 7,079,817 shares.

Shareholders of the Company registered in the share register kept by Euroclear on March 26th 2014 shall have pre-emptive right to subscribe for the new shares in relation to the number of shares they own. The shareholders will for every share they own in the company receive one subscription right. Two subscription rights will entitle to subscribe for one new share in the company. The new shares will be issued at a subscription price of SEK 6 per share.

Subscription for new shares shall be made during the period from March 31st 2014 to April 14th 2014. Subscription for new shares with subscription rights shall be made by simultaneous cash payments. Subscription for shares without subscription rights shall made be on a separate subscription list. Payment for shares subscribed for without subscription rights shall be made in cash at the latest three (3) banking days after notification of the allocation of new shares has been sent to the subscriber. The board of directors shall have the right to prolong the subscription period and the time for payment.

Should not all shares be subscribed for with subscription rights, the board of directors will decide on allocation of shares subscribed for without subscription rights. Allocation will then be made firstly to those who have subscribed with subscription rights, regardless whether the subscriber was a shareholder on the record day or not, and, in case of over-subscription, in relation to the number of subscription rights used for subscription and, if this is not possible, by drawing of lots. Secondly, allocation will be made to others who have subscribed for shares without subscription rights and, if they cannot receive full allocation, in relation to the number of shares notified for subscription by each one of them, and, if this is not possible, by drawing of lots. Lastly, any remaining shares shall be allocated to the underwriters who have undertaken to subscribe for shares Allocation shall in such case be made in accordance with such underwriting agreements.

The new shares shall entitle to dividends for the first time on the record day for dividends which occurs nearest after registration of the shares by the Swedish Companies Registration Office.

The motive for the rights issue is to secure financing for the continued exploration of the company’s silver mine in Sotkamo. The rights issue is up to 80 per cent guaranteed by subscription commitments from the company’s shareholders’ Teknoventure Oy, Finnish Industry Investment Ltd and Ilmarinen Mutual Pension Insurance Company and by underwriting commitments. The rights issue is expected to raise approximately SEK 42.5 M before costs.

Item 20.b) - Resolution regarding bonus issue

The board of directors proposes that the shareholders decide to carry out a bonus issue thereby increasing the share capital with SEK 22,655,415.87 by making use of the company’s non-restricted equity. The bonus issue is carried out without issuing new shares.

The decision is conditioned by the shareholders’ meeting resolving on the proposals set out in item 19 and 20.a) above.

Item 20.c) - Resolution regarding reduction of the share capital without redemption of shares

The board of directors proposes that the shareholders’ meeting resolves upon reducing the company’s share capital with a maximum amount of SEK 8,495,780.43. The reduction of the share capital shall correspond to an amount in SEK that is equal to the increase in share capital through the rights issue and the bonus issue resolved under item 20.a-b) minus the reduction amount resolved under item 19.b), by allocation to a non-restricted reserve to be used in accordance with the shareholders’ decision. The reduction of the share capital will be made without redemption of shares by changing the share quota value.

The reduction of share capital by changing the quota value is made in order to ensure that the resolution to reduce the share capital in item 19.b), the resolution on a rights issue in item 20.a) and the resolution on a bonus issue in item 20.b) together do not result in a change in the company’s share capital.

The decision to reduce the share capital is conditioned by the shareholders’ meeting resolving on the proposals set out in item 19 and 20.a-b) above.

Miscellaneous

The managing director, or the person he may appoint, will be authorised to make the minor changes in the decisions under items 19-20 on the agenda and which may prove necessary in connection with registration of the decisions with the Swedish Companies Registration Office and Euroclear Sweden AB.

Item 21 – Authorization for the board to issue new shares, issue of warrants and/or convertibles The board proposes that the shareholders’ meeting decides to authorize the board, during the period until the next annual general meeting, on one or more occasions, with or without preferential rights for shareholders, to issue new shares, issue of warrants and/or convertibles. Board resolutions under this authorization may result in a maximum dilution of ten (10) percent of the total number of shares outstanding at the time of the first board resolution in accordance with this authorization. The decision may provide for that the newly issued shares, warrants or convertible bonds could be paid in assets contributed in kind, by set-off or otherwise characterized by conditions pursuant to Chapter 13. Section 5, first subparagraph 6, Chapter 14. Section 5, first subparagraph 6 or Chapter 15. Section 5 first subparagraph 4 of the Companies Act. The board is authorized to decide additional terms and conditions for the new issue or issue.

Other

The total number of shares and votes in Sotkamo Silver is on the day for this the notice 14,159,634.

The nominating committee’s proposal, its motivated statement with information about the persons proposed to be elected as directors are available on Sotkamo Silver´s website: www.sotkamosilver.com at latest on Friday, February 28, 2014 and will be sent to shareholders upon request.

The annual report, the auditor’s report, the auditor’s statement on application of guidelines for compensation, the board of directors’ complete proposals concerning items 17-21 on the agenda and proxy forms will be held available at Sotkamo Silver´s head offices at Hovslagargatan 5 B in Stockholm, Sweden, and on its website: www.sotkamosilver.com at latest on Friday, February 28, 2014. Copies of these documents will also be sent to shareholders upon request.

All of the documents referred to above will also be held available at the AGM.

Decisions regarding item 19-21 on the agenda must be supported by shareholders representing at least two thirds of both the cast votes and the shares represented at the shareholders’ meeting.

The shareholders are informed of their right under the Swedish Companies Act to request information at the annual general meeting regarding the circumstances that may affect the assessment of an item on the agenda and conditions that may affect the assessment of the company's financial situation.

Stockholm in February 2014

The board of directors

SOTKAMO SILVER AKTIEBOLAG (publ)

This is a translation of the Swedish version of the notice. In case of any discrepancies, the Swedish version shall prevail.

NOTICE ANNUAL GENERAL MEETING IN SOTKAMO SILVER AB (PUBL)

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