Sotkamo Silver AB | Stock Exchange Release | October 25, 2024 at 09:00:00 EEST
Sotkamo Silver AB, Q3/2024 Interim Report, 25 October 2024 at 9.00 (EEST) / 08.00 (CEST)
HIGHLIGHTS
July – September (Q3)
January – September
Comparative figures refer to the corresponding period of the previous year. In case of discrepancies, the official Swedish version of this report prevails.
OUTLOOK
Guidance for 2024 (unchanged)
The Company has given (28 August 2024) the following guidance for 2024:
The Company's profitability is significantly affected by external factors, such as metal prices, exchange rates and inflation. The achievement of the guidance assumes that metal prices and EUR/USD rate stay approximately at the current level of the time when the guidance was published (28 August 2024).
CEO REVIEW
Profitability and silver content improved
The price of Profitability was better than last year and the EBITDA margin for the quarter was 44%. Good profitability was supported by the strong price of silver and the silver grade in the ore fed to the concentration plant having increased from the beginning of the year. Operating cash flow was SEK 66 million positive and the Company's cash and cash equivalents increased to SEK 76 million. The cash security of EUR 3.5 million released from the environmental collateral had a positive effect on cash and cash equivalents.
We successfully opened new mining levels at a depth of 460–480 metres, through which the average silver content was higher, as expected. The average silver content increased towards the end of the third quarter and was in line with the target levels for the full quarter. The measures taken to increase underground mining have progressed, which means that the progress of drifting and quarrying was at the planned level at the end of the third quarter.
The price of silver was USD 31.1 per ounce at the end of the review period, compared to a low of USD 26.9 per ounce in August. Investors’ interest in silver has increased during the year due to lower interest rates, the weakening of the dollar and continued strong industrial demand for silver, among other reasons. The weakening of the dollar from EUR 1.07 to EUR 1.12, on the other hand, reduced the returns received in euros from silver.
In July, the authorities approved our mine waste and closure plan, which removed the temporarily lower annual limits for mining. In September, the Kainuu ELY Centre also issued a reasoned conclusion on the environmental impact assessment report for Sotkamo Silver. Based on this conclusion, we have now started preparing the permit application for the expansion of the tailings dam.
Work on the areas of the Towards Sustainable Mining responsibility system has also progressed well, and we are aiming for level A in all areas. During the past quarter, we continued training the personnel and organised, among other things, a dam accident exercise related to the management of tailings.
During the third quarter, we also started drilling in the deep extension aimed at extending the life of the mine, as well as exploration drilling for potential mineralisation on the side of the current ore body. We will tell more about the extending the life of the mine at the end of the year 2025 after all the drillings results are completed. Similarly, we will tell you more about the potential on the west side of the current orebody in early 2025.
We expect that the demand for silver and the general market situation will continue to be favourable, and in order to respond to this, we will further develop production together with the mining contractor.
KEY FIGURES
Q3/24 | Q3/23 | Change, % | Q1-Q3/24 | Q1-Q3/23 | Change, % | 2023 | |
Net sales, MSEK | 114 | 110 | 4 % | 304 | 297 | 2 % | 407 |
EBITDA, MSEK | 50 | 37 | 34 % | 86 | 96 | -11 % | 140 |
EBITDA margin % | 43.6 | 33.7 | 29 % | 28.2 | 32.4 | -13 % | 34.4 |
EBIT, MSEK | 30 | 17 | 75 % | 29 | 41 | -30 % | 67 |
EBIT margin % | 26.7 | 15.8 | 69 % | 9.6 | 13.9 | -31 % | 16 |
Equity ratio % | 42.8 | 42.5 | 1 % | 42.8 | 42.5 | 1 % | 43 |
Cash liquidity % | 86.6 | 93.0 | -7 % | 86.6 | 93.0 | -7 % | 105 |
Net debt-to-EBITDA ratio | 1.4 | 2.0 | -30 % | 1.4 | 2.0 | -30 % | 1.5 |
Personnel at the end of the period | 50 | 47 | 6 % | 50 | 47 | 6 % | 47 |
Silver production, koz | 312 | 412 | -24 % | 895 | 1,002 | -11 % | 1,411 |
Mill feed, kt | 123 | 133 | -8 % | 374 | 367 | 2 % | 478 |
Average silver grade, g/tonne | 97 | 110 | -12 % | 90 | 99 | -9 % | 106 |
EVENTS AFTER THE REPORTING PERIOD
No significant events have materialized after the reporting period.
FINANCIAL CALENDAR
The Annual General Meeting is planned to be held on 24 April 2025 in Stockholm.
WEBINAR
The result webinar will be held today on October 25 at 1:00 p.m. Finnish time (EET). You can participate in the event through the link provided below:
The webinar will be conducted in Finnish, with the material presented in English. During the event, you can ask questions using the chat function. The presentation from the webinar will be made available on the company's website at: https://www.silver.fi/en/investors/reports-and-materials
Stockholm, 25 October 2024
Sotkamo Silver AB’s Board of Directors and CEO
CONTACT INFORMATION
Mikko Jalasto,
CEO of Sotkamo Silver AB
mikko.jalasto@silver.fi
+358 50 482 1689
Tommi Talasterä,
CFO of Sotkamo Silver AB
tommi.talastera@silver.fi
+358 40 712 6970
This is information that Sotkamo Silver AB is obliged to make public pursuant to the EU Market Abuse Regulation.
This is a summary of Sotkamo Silver's Q3/2024 report. The complete report is attached to this release and available at the Company webpage: https://www.silver.fi/en/investors
Sotkamo Silver in brief
Sotkamo Silver is a mining and ore prospecting company that develops and utilises mineral deposits in the Kainuu region in Finland. Sotkamo Silver supports the global development towards green transition technologies and produces the metals needed responsibly and by taking local stakeholders into account. Sotkamo Silver’s main project is a silver mine located in Sotkamo, Finland. In addition to silver, the mine produces gold, zinc and lead. The company also has mining and ore prospecting rights for mineral deposits in the vicinity of the silver mine in Kainuu. Sotkamo Silver Group consists of the parent company Sotkamo Silver AB and its wholly-owned Finnish subsidiary (Sotkamo Silver Oy). Sotkamo Silver AB is listed at NGM Main Regulated in Stockholm (SOSI), Nasdaq Helsinki (SOSI1), and Börse Berlin.
Read more about Sotkamo Silver on www.silver.fi/en/