Sotkamo Silver’s profitability clearly improved from the comparison period

Silver mining company Sotkamo Silver announced its interim report for July-September.

The company’s turnover increased to 114 million kroner in the review period from 110 million euros in the comparison period a year ago. According to the company, the increase in turnover is mainly due to the increase in the prices of silver, gold and zinc and the increase in zinc production.

EBITDA improved to 50 million kroner in July-September from 37 million kroner in the same period last year.

The operating result was 30 million kroner, while it was 17 million kroner a year earlier.

Earnings per share were 0.11 kroner. A year ago, the company reported earnings per share of SEK 0.04. Due to the weak start of the year, the earnings per share for January-September weakened to a loss of 0.05 kroner from a profit of 0.03 euros a year earlier.

Inderes, following the company, expected turnover of 113 million kroner, EBITDA of 38.9 million kroner and operating profit of 18.9 million kroner.

The company estimates that it will produce 1.2–1.4 million ounces of silver this year. The annual EBITDA percentage is estimated to be at least 28 percent and the ratio of net debt to EBITDA is estimated to be less than 2.0 at the end of the year. The outlook announced by the company is unchanged.

Managing director Mikko Jalasto says in the review that profitability in the review period was better than last year’s comparison period.

The silver contents of the targeted ore improved

“Good profitability was supported by the strong silver price and the improved silver content in the ore fed to the concentrator since the beginning of the year,” says Jalasto.

According to Jalasto, the operational cash flow was 66 million kroner positive and the company’s cash reserves grew to 76 million kroner. Cash assets were positively affected by the EUR 3.5 million cash security released from the environmental security.

“We successfully opened new quarry levels at a depth of 460-480 meters, through which average silver concentrations were higher than expected. The average silver content rose towards the end of the third quarter and was in line with the target levels for the entire quarter,” says Jalasto.

According to Jalasto, the measures taken to increase underground mining have progressed, thanks to which the progress of backtracking and mining was at the planned level at the end of the third quarter.

At the end of the review period, the price of silver was 31.1 dollars per ounce, while it was 26.9 dollars per ounce in August.

“Investors’ interest in silver has increased during the year, thanks to, among other things, the drop in interest rates, the weakening of the dollar and the strong industrial demand for silver,” says Jalasto.

The weakening of the dollar, on the other hand, reduced the euro-denominated returns from silver.

“During the third quarter, we also started drilling aimed at extending the life of the mine in the depth extension, as well as exploratory drilling for potential mineralization on the side of the current ore. We will tell you more about extending the life of the mine at the end of 2025 after all the results have been completed. Similarly, we will tell you more about the potential on the side of the current ore in early 2025,” says Jalasto.

“We expect that the demand for silver and the general market situation will continue to be favorable, and to respond to this, we will continue to develop production together with the mining contractor.”