SOTKAMO SILVER AB: UPDATED MINERAL RESOURCE AND ORE RESERVE ESTIMATES INDICATE A SUBSTANTIAL INCREASE TO THE LIFE OF MINE

Press release: Stockholm, June 27, 2022, 12:00 CET

Sotkamo Silver AB is pleased to announce the update of the Mineral Resource and Ore Reserve estimates of the Silver Mine.

Mineral Resource Estimate (“MRE”) totals to 9,242 million tons (Measured, Indicated and Inferred) at average grades of 54 g/t silver, 0,20 g/t gold, 0,23 % lead and 0,56 % zinc or 93 g/t as silver equivalent.

• The detailed breakdown of the Mineral Resource classification is given in the appendix 1 of this release.
• MRE is prepared by Afry Finland Oy in accordance with the JORC 2012 code.
• Historic drilling data (prior to 2011) has been excluded from the dataset as it doesn’t comply with the requirements of the JORC 2012 due to the lack of reliable survey and quality assurance/quality control practices of the time.
• Drilling conducted in 2020-2021, ca. 5,6 km, has been included in the estimation.
• MRE includes mineralization down to 550 to 700 meters.

Ore Reserve Estimate (“ORE”) totals to 1,909 million tons (Proven, Probable and Non-JORC) at average grades of 104 g/t silver, 0,29 g/t gold, 0,22 % lead and 0,52 % zinc or 129 g/t as silver equivalent.

• The detailed breakdown of the Ore Reserve classification is given in the appendix 2 of this release.
• ORE represents the portion of the MRE where the data has been sufficient to support the mine planning and the assessment reasonably justifies the eventual extraction.

• ORE has been prepared internally and the data from the historic drilling (prior to 2011) and the production stage sludge drilling has been used. Due to this, it can not be regarded as JORC 2012 compliant, but the management concludes that the prepared ORE gives a reliable estimate of the currently known mineable part of the Silver Mine.
• ORE includes to mineralization down to 450 meters (JORC-compatible) and includes stopes to 500-600 meters (Non-JORC).

Exploration potential and new drilling in 2022

• The Silver Mine remains open at the depth and further exploration targets have been identified also in the already drilled depths.
• Until now, we have drilled ca. 6 km of new drill core in 2022 both from the surface and underground and the full year target is ca. 12 km, which is significant increase to earlier.
• Drilling in 2022 has been directed to a) to further define and confirm the reserve between 350 to 500 meters, i.e., the development and production area during the next few years, and b) to confirm the continuity of the ore between 600 to 700 meters and create targets for further drilling.

Management view

• The Management and the Board of Directors see that the substantial part of the current Mineral Resource, which is not included in the Ore Reserve, could be upgraded, and included to the Ore Reserve in the future by continued drilling.
• In view of the above, the current Ore Reserve and, the portion of the Mineral Resource which have reasonable prospects for economic extraction, are estimated to give the Life of Mine of 7-8 years with potential to increase further.

CEO Erkki Kuronen comments: “Our Ore Reserve was 2,75 million tons when we started the production in 2019. Since that we have mined ca. 1,8 million tons of ore. Given this, our current Ore Reserve of ca. 1,9 million tons demonstrates, that by continuous drilling the Mineral Resources can be upgraded into the Ore Reserves. Our strategic target is to prolong the Life of Silver Mine by P700 project. To achieve this, we’ll increase the Ore Reserve base gradually as the P700 project advances. The released update is a result of the hard and dedicated work of the entire team which deserves a praise.  Furthermore, the unpublished assay results of the 2022 drilling are encouraging and strengthen our view that the Silver Mine has potential, and we are on the right track on the implementation of our strategy.”

Stockholm June 27, 2022

Sotkamo Silver AB

Erkki Kuronen, CEO

Appendix 1: Mineral Resource Estimate of the Silver Mine

Table 1: The Silver Mine Mineral Resource estimate

Mineral Resource notes and assumptions:

(1) The Mineral Resource estimate has an effective date of June 2X, 2022. (2) Mineral resources do not have demonstrated economic viability. (3) The estimate has been prepared and reported in accordance with the recommendations of the 2012 Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC 2012).  (4) Exchange rate used: USD/EUR 1.214. (5) Base case cut-off grade for the estimate of the Mineral Resources is 40 g/t AgEq. (6) AgEq = silver equivalent g/t. AgEq grade calculated using (USD prices of) silver US $25,6 $/oz, gold US$ 1 760 $/oz, lead 2 000 $/t and zinc US$ 2 820 $/t. No metallurgical or recovery factors have been assumed. (6) AgEq grade calculation = Ag ppm +(Au ppm * [AgEq Au in situ])+(Pb ppm *[AgEq Pb in situ])+(Zn ppm * [AgEq Zn In situ]), where AgEq Au in situ = ([Au $/oz]/[1 Eur in US$])/([Ag $/oz]/[1 Eur in US$]), AgEq Pb in situ = ((([Pb $/t] / [1 Eur in US$])/1000000)) / (([Ag $/oz]/[1 Eur in US$]) / ([Troy oz. in grams]/1000000)/1000000)), and AgEq Zn in situ= ((([Zn $/t] / [1 Eur in US$])/1000000)) / (([Ag $/oz]/[1 Eur in US$]) / ([Troy oz. in grams]/1000000)/1000000). (7) It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated or Measured Mineral Resources with continued exploration. (8) Sotkamo Silver is not aware of any legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resources. (9) Depending on the amount of the data within the domain either the Ordinary Kriging method (“OK”) or Inverse Distance Squared (“ID2”) algorithms for grade interpolation was used for the Silver Mine Mineral Resource using an experimental variogram models created for the elements Ag, Au, Pb and Zn. Estimation of Domains using the Inverse Distance Squared method (“ID2”) algorithm using an individual search ellipsoid oriented to the average strike, plunge and dip of the mineralised zone.

Samples within the wireframes were composited to 1 m intervals. The estimate is based on a block size of 5 m (X) by 10 m (Y) by 10m (Z), with sub-blocks of 1m by 1m by 1m. A bulk density value of 2.82t/m³ was assigned to all materials (ore and waste).

Competent Person's Statement

The Information in this release that relates to Mineral Resources is based on information compiled by Mr Ville-Matti Seppä and Mr Ove Klavér, both are Competent Persons with EurGeol qualifications. Seppä and Klavér are full-time employees of AFRY Finland Oy. Mr Klavér has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources, and Ore Reserves”. The Competent Persons Seppä and Klavér have reviewed, verified, and approved the contents of this news release as they relate to the Mineral Resource estimate. Mr Seppä or Mr Klavér do not own shares in Sotkamo Silver AB.

Appendix 2: Ore Reserve Estimate of the Silver Mine

Table 2: The Silver Mine Ore Reserve estimate

Ore Reserve Notes and assumptions:

(1) Ore Reserve estimate is based on the above-mentioned Mineral Resource estimate (JORC-compatible) and additional resources supported by the old data and sludge drilling samples (Non-JORC). (2) Mine design has been done for the portion of the Mineral Resource where sufficient information has been available to support the mine designing. The design parameters and principles are adopted from the current mining operations and have been proved suitable for the ore type. (3) Cut-off grade of the NSR has been 45 Euros/ton, NSR has been derived from AgEq (Ag equivalent) applying metallurgical recoveries and same Ag price and USD/EUR rate as in the Mineral Resource estimate – estimated freight costs of 6,5 EUR/t.  (4) Mass and grade estimates include both anticipated ore loss of 10% and dilution of 15% (open pit) and 20% (underground mine). Diluting material is estimated to be barren, i.e. zero values for all metals. (5) Sotkamo Silver is not aware of any legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resources into Ore Reserves. 

Appendix 3:

Schematic long section illustration of the classification and the management view LOM. A) Mined out indicates the area, where mining has been mostly completed, however, scattered stopes still exist. B) JORC Compliant Reserve indicates the area, where the amount and quality of the data has been sufficient for measured/indicated resource classification. C) Non-JORC Compliant Reserve indicates the area, where resource is based on inferred resource and has been supported by the old drilling. D) Management view LOM extension indicates the part of the mineral resource which can be upgraded to Ore Reserve by additional drilling.

Contact person

Erkki Kuronen, CEO, tel. +358 50 599 3539

This information is such information that Sotkamo Silver AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above on June 27, 2022, at 12:00 CET.

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

About Sotkamo Silver AB

Sotkamo Silver´s business concept is to develop mineral deposits with regards to human society and environment. The Company owns the Silver Mine in Sotkamo which started production in March 2019. In addition, the Company holds mining and exploration rights to precious and base metal deposits in Finland.

Sotkamo Silver applies SveMin's & FinnMin's own rules of reporting for public mining & exploration companies. Sotkamo Silver has chosen to publish 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 on NGM Main Regulated Equity in Stockholm and SOSI1 on Nasdaq Helsinki.

ISIN-code for Sotkamo Silver shares is SE0001057910.

Legal Entity Identifier (LEI): 213800R2TQW1OZGYDX93

Read more about Sotkamo Silver on www.silver.fi

The Company's press releases, and financial reports are distributed via Cision Sverige and are available on www.silver.fi

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