SOTKAMO SILVER AB PUBLISHES FINANCIAL INFORMATION FOR THE PERIOD JANUARY-NOVEMBER 2022
Press release December 20, 2022, Stockholm, 17:45 CET
Sotkamo Silver is planning new share issues of up to EUR 20 million to strengthen its financial position. The intended final terms of the issues, including the subscription price and the number of shares intended to be issued, will be published on or about 23 December 2022. As part of the rights issue, the Company will publish a prospectus in which the Company presents key financial information for the period January-November 2022. This release contains the financial information presented in the prospectus.
Highlights of October – November 2022
- Net sales amounted to 66 MSEK. Two-month net sales was equal to net sales for the entire prior quarter
- EBITDA amounted to 19 MSEK
- EBIT amounted to 3 MSEK. Profitability improved significantly compared to the previous quarter
- Cash and cash equivalents amounted to 1 MSEK. The Company has a credit limit of 1.5 MSEK. The Company plans a new share issue and directed share issue to strengthen its financial position
- Investments amounted to 11 MSEK
- Production amounted to approximately 199,000 ounces silver, 606 ounces gold, 272 tons of lead, and 594 tons of zinc in concentrate
Highlights of January – November 2022
- Net sales amounted to 337 MSEK
- EBITDA amounted to 53 MSEK
- EBIT amounted to -30 MSEK
- Investments amounted to 59 MSEK
- Production totalled about 1,074,000 ounces of silver, 3,062 ounces of gold, 1,406 tons of lead, and 3,055 tons of zinc, in concentrates
- Operating cash flow amounted to 20 MSEK
CEO Word
During October-November, Sotkamo Silver's net sales and profitability improved after a weak third quarter. The increase in the price of silver and several weeks of lower electricity prices improved profitability over the two-month period. Additionally, the increase in the silver content of the feed during November, had a positive effect on production.
The measures we have taken during the autumn are the right ones and will help us move forward in these challenging times. The improved performance during the reporting period strengthen confidence in the continuation of the positive development. At the same time, it must be said that the work has to continue, and the current results are not sufficient. Improving profitability by increasing production volumes and improving cost-effectiveness will be at the core of our focus over the next year.
In November, we mined the first ores from the new lower levels and the average silver content was roughly 15% higher than the average for the past year. Based on the current mining plan, during 2023, the average silver content will rise to the level of 90–110 g/t, enabling a significantly better profitability level than this year.
The current winter period will be challenging, the price of electricity is predicted to be at a particularly high level, and the possible periodically adjusted production of the concentration plant may limit the produced silver volume. The increase in the price of silver will help the company in the coming months, however, the immediate need to strengthen the working capital remains a priority. The planned share issues are targeted to strengthen the working capital situation and ensure the investment capability for the mine development. For example, investments in research and production drilling programs are necessary to improve the operating time and cost-effectiveness of a mine.
Condensed Income Statement
The Company's condensed income statement during the period 1 January – 30 November 2022 and 1 October – 30 November is presented in the table below.
|
MSEK1) |
1 January – 30 November 2022 |
1 October – 30 November |
|
Net Sales |
336.6 |
65.7 |
|
Change of finished goods |
0.2 |
-2.5 |
|
Other income |
10.1 |
6.1 |
|
Supplies |
-192.3 |
-31.5 |
|
Other expenses |
-63.0 |
-11.7 |
|
Employee expenses |
-39.0 |
-7.6 |
|
EBITDA |
52.6 |
18.6 |
|
Debreciation and amortization |
-82.7 |
-15.7 |
|
EBIT |
-30.1 |
2.9 |
|
Financial income2) |
32.5 |
1.0 |
|
Financial expenses |
-23.9 |
-2.0 |
|
Interest expenses on lease payments |
-1.1 |
-0.2 |
|
Financial net |
7.6 |
-1.2 |
|
RESULT AFTER FINANCIAL ITEMS |
-22.5 |
1.7 |
|
Taxes |
0.0 |
0.0 |
|
RESULT FOR THE PERIOD |
-22.5 |
1.7 |
1) Average rate EUR/SEK 10.5999
2) Financial income consists of fair value gains on debt instruments at fair value via P&L.
The Company's condensed income statement above has been prepared in accordance with the same principles as the Company prepares its financial statements.
Capitalization
The Company's capitalization as of November 30, 2022, is presented in the table below.
|
MSEK1) |
Per den 30 november 2022 |
|
Current liabilities |
|
|
Guaranteed |
0.0 |
|
Secured |
16.4 |
|
Unsecured |
97.4 |
|
Total current liabilities |
113.8 |
|
Non-current interest-bearing liabilities |
|
|
Guaranteed |
0.0 |
|
Secured |
143.1 |
|
Unguaranteed/Unsecured |
103.5 |
|
Total non-current liabilities |
246.6 |
|
Equity |
|
|
Share capital |
274.9 |
|
Reserve fund(s) |
- |
|
Other reserves2) |
-29.1 |
|
Total equity |
245.8 |
1)Exchange rate as of November 30, 2022: EUR/SEK 10.9266.
2)Other reserves correspond to balance sheet items "Other contributed capital", "Retained earnings" and "Result of a period" in Sotkamo Silver's balance sheet.
Net Indebtedness
The Company's net debt as of November 30, 2022, is presented in the table below. The table includes Sotkamo Silver's interest-bearing and non-interest-bearing liabilities.
|
MSEK1) |
Per den 30 november 2022 |
|
(A) Cash and bank |
0.5 |
|
(B) Other cash equivalents |
- |
|
(C) Other financial assets2) |
- |
|
(D) Liquidity (A)+(B)+(C) |
0.5 |
|
(E) Current financial liabilities (including debt instruments, but excluding the current portion of non-current financial liabilities)3) |
21.9 |
|
(F) Current portion of non-current financial liabilities4) |
6.0 |
|
(G) Current financial indebtedness (E)+(F) |
27.9 |
|
(H) Current financial indebtedness net (G)-(D) |
27.4 |
|
(I) Non-current financial liabilities (excluding current portion and debt instruments)5) |
8.2 |
|
(J) Debt instruments6) |
238.4 |
|
(K) Non-current accounts payables and other liabilities |
- |
|
(L) Non-current financial indebtedness (I)+(J)+(K) |
246.6 |
|
(M) Total financial indebtedness (H)+(L) |
274.0 |
1) Exchange rate as of November 30, 2022: EUR/SEK 10.9266.
2) Other financial asset does not include restricted funds.
3) Includes interest liabilities of convertible of series 2022/2026.
4) Current portion of non-current financial liabilities corresponds to "Current lease liabilities" in Sotkamo Silver's balance sheet.
5) Non-current financial liabilities corresponds to "Non-current lease liabilities" in Sotkamo Silver's balance sheet.
6) Debt instrument corresponds to "Non-current borrowings" and "Non-current derivative liabilities" in Sotkamo Silver's balance sheet.
Indirect indebtedness and contingent liabilities
As of November 30, 2022, Sotkamo Silver had no indirect liabilities and the Company's contingent liabilities amounted to 33.4 MSEK. Contingent liabilities relate to provisions for future costs related to silver mine closure activities. These obligations are expected to be settled at the end of the mine's life, although 2.0 MSEK are expected to be settled within the next 12 months.
Investments
From the end of 2021 until 30 November 2022, the Company has made investments of 59.0 MSEK, which mainly concern environmental investments and maintenance and extension investments with the aim of extending the life of the Silver Mine.
The Company has not made any firm commitments regarding investments since December 31, 2021.
Financial Calendar
The Q4 2022 report will be published on February 28, 2023.
The financial information in this release has not been audited or reviewed by the Company's auditor.
Stockholm, December 20, 2022
Sotkamo Silver AB
Mikko Jalasto, CEO
Contact person
Mikko Jalasto, CEO, tel. +358 50 482 1689
This information is 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 December 20, 2022, at 17:45 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.
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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