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Annual and Sustainability Report 2025
Tomorrow is made of Silver
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Table of Contents
Strategy
In case of discrepancies, the official Swedish version of this report prevails.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Where are we today?
We’re living through uncertain times, and global
instability is putting many industries under
pressure. 
In the midst of it all, mining has a solid foundation. In times like these, the
importance of local and reliable raw material production becomes
critical. At Sotkamo Silver, we have strong confidence in the future.
That's because the green transition simply cannot happen without mines.
The world needs more silver, as it is a critical element in solar panels,
electric vehicles, and modern electronics, to name a few.
2023-09-14_sotkamosilver_062_webewfsr copy4s2.jpg
At Sotkamo Silver, we meet this demand with the only mine in the Nordic
region that produces silver as its main product. Our mine is located in
Kainuu and in addition to silver, it produces gold, zinc, and lead, all widely
used from batteries to space technology.
At the core of everything is the mineralisation that formed 2.8 billion
years ago – the very foundation on which our silver mine is built. A
surface drilling campaign carried out already in the 1980s succeeded in
outlining a 40–100 metre wide mineralised zone stretching 550 metres
in length. Today, we know that the mineralisation continues down to at
least 900 metres and to the west of it there is a similar mineralisation in
the exploration phase. To put is simply: it is a significant deposit, and its
full potential is still unknown.
What happens above ground is just as important. In recent years, we
have taken a deep dive into our operating methods and systematically
streamlined our processes, so that the mine’s full potential can be
realised.
The current life of the silver mine extends at least until 2035, with
potential to continue beyond that. Sotkamo Silver is also exploring
promising new prospects in the areas surrounding the existing mine.
For now, investments in new exploration targets are made with careful
consideration. 
Mining inevitably affects its surrounding environment and it is essential
to be open about that. It is important to us that the impact on nature is
kept as small as possible. Continuous development and modern
technology ensure that we operate with respect for nature. 
For us, responsibility is not just about meeting requirements. It means
collaborating closely with the local community and keeping an open
dialogue with the authorities. Trust is key to sustainable mining. It’s the
way we believe mining should be done. 
Through vision, systematic work, and the courage to renew ourselves, 
we are ready for the next steps. The accelerating green transition is on
our side. We mine the metals the world needs. We have the capability for
steady production, and the pace is picking up.
Tomorrow is made of silver, and we are ready for it.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Year in brief
HIGHLIGHTS
The Company significantly increased its mineral
resources, extending the estimated life of the mine
to at least 2035. Financially, the Company
strengthened its position by extending loan
maturities and converting debt into equity. Higher
metal prices supported profitability while
production volumes were lower than in the
previous year.
• The production was approximately 803,077 ounces of silver
(1,166, 065), 1,829 ounces of gold (2,595), 602 tonnes of lead (729),
and 1,472 tonnes of zinc (1,642) in concentrates.
• Net sales decreased by 5 percent from the previous year. Lower metal
grades and lower mill feed led to lower production. Higher silver and
gold prices did not fully compensate for the decline in net sales .
• EBITDA weakened to SEK 80 million (109) and EBITDA margin to 20%
(26).  Inadequate mining resources and rock mechanical challenges led
to lower silver production and decreased  profitability especially
during the first half of 2025.
• Average silver head grade decreased from previous year and was 71
(89) g/t in 2025.
2023-09-14_sotkamosilver_070_web (1).jpg
• According to the estimates published at the end of 2025, mineral
resources increased by more than four million tonnes, and the most
accurate category, Measured, grew very significantly. Current
resources and reserves are estimated to enable operations to continue
at least until 2035. Mineralisation both at greater depth and west of
the current operating area provides promising targets for continued
exploration.
• The Senior Loan maturity was extended and of EUR 1 million
additional financing was agreed.  About half of the Company’s EUR 6.3
million convertible loan 2022/2026 was exchanged for new shares in
the Company EUR 2.6 million (30 MSEK) of the convertibles was
exchanged for new convertibles 2025/2029. The maturity date of the
new convertibles is 31 October 2029.
• Sotkamo Silver kept Level A in all categories of Finland's Towards
Sustainable Mining (TSM) system.
ANNUAL REVENUE 2025
BY-PRODUCTS
393 MSEK
Gold 1,829 oz
EBITDA 2025
Lead 602 t
80 MSEK
Zinc 1,472 t
SILVER PRODUCTION
803,077 oz
ENRICHING
SILVER GRADE
425,000 t 
71 g/t
INVESTMENTS
63 MSEK
Comparative figures refer to the corresponding period of the previous year.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Financial key figures
Net Sales, MSEK
30
Equity ratio, %
36
EBITDA, MSEK
41
Cash liquidity, %
47
EBIT, MSEK
52
Net debt-to EBITDA, %
58
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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CEO review
In 2025, Sotkamo Silver strengthened operational resilience by expanding
underground development and advancing drilling programs to support more
stable production. Improved silver market conditions and continued
progress toward extending mine life underpin the Company’s long‑term
value creation and profitability outlook.
sivu_05.png
The year 2025 was a year of contrasts for Sotkamo Silver. It tested our
operational resilience during the first half, demanded decisive actions
from management, and ultimately demonstrated the strength of our
strategy as performance improved toward the end of the year. While the
year was operationally challenging, it also laid a strong foundation for the
future of the Company.
The beginning of the year was marked by continued underground mining
challenges. Rock mechanical issues, limited access to planned stoping
areas and inadequate mining capacity reduced production volumes and
negatively impacted profitability during the first half of the year. In
addition, an isolated safety incident early in the year temporarily
disrupted production. These challenges were well understood, but their
scale and duration proved more demanding than expected. As a result,
silver production and grades remained below our targets, and cash flow
was under pressure.
Despite these difficulties, our teams acted decisively. We revised mining
plans, focused resources on stabilising production and prioritised access
to more reliable mining areas. Throughout the year, our primary
operational objective was to restore predictability and reliability in
underground mining. This focus guided all key decisions taken during
2025.
From mid-year onwards, the outlook began to improve. Mining
volumes increased, operational disruptions decreased, and access to
new production areas improved. Although production for the full
year remained below our long-term targets, the operational
performance during the second half of the year was stronger than
during the first half.
A significant positive factor was the strong development of silver and
gold prices. Market conditions remained favourable, with demand
exceeding supply, supporting higher price levels. Rising prices clearly
strengthened our revenue, profitability and cash flow during the
second half of the year.
In parallel with operational stabilisation, we made substantial
progress in strengthening the Company’s financial position. During
the year, we successfully refinanced our long-term debt, extended
loan maturities and completed the exchange of convertible loans.
These actions improved our liquidity position, reduced refinancing
risk and strengthened the balance sheet. Securing financing was a
critical milestone in 2025 and an essential enabler for executing our
strategy going forward.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Another important achievement in 2025 was the successful completion
of extensive exploration and infill drilling programmes. Updated Mineral
Resource and Ore Reserve estimates published at the end of the year
confirmed a significant extension of the life of the mine, with current
estimates supporting operations at least until 2035. Mineralisation at
depth and to the west of the current mining area continues to show
strong potential, providing attractive targets for future exploration and
development.
Operational development continued beyond production stabilisation.
Preparations for the transition to a new underground mining
contractor were completed during the year, and the new contractor
commenced operations at the beginning of 2026. This change is a key
element in improving long-term mining performance, capacity and
reliability. In addition, we strengthened our internal organisation by
recruiting key personnel and launching structured operational
development programmes to support sustainable performance
improvements.
Safety and responsibility remained at the core of our operations
throughout the year. We made meaningful progress in strengthening
safety culture and procedures, and despite the challenges faced, our
long-term safety performance improved during the year. We also
continued to operate in line with the Towards Sustainable Mining
framework, maintaining strong performance across environmental,
social and governance areas. Responsible water management,
environmental permitting and open dialogue with stakeholders remained 
our priorities.
rick-rothenberg-Tgv9CCZTPqE-unsplash copy2.jpg
In summary, 2025 was challenging yet crucial year. The first half
highlighted the vulnerabilities in underground mining, while the second
half demonstrated our ability to stabilise operations, strengthen finances
and deliver improving results under challenging conditions. Most
importantly, the actions taken during 2025 have created a solid platform
for future growth.
I would like to thank our employees and service providers for their
professionalism, commitment and resilience throughout the year. Their
efforts were essential in navigating the challenges we faced and in
building the foundation for a stronger future. With improved operational
stability, extended mine life, a strengthened financial position and
favourable market fundamentals, we enter the coming years with
confidence.
Mikko Jalasto
Chief Executive Officer
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Strategy and activities
Sustainability and active stakeholder
work are at the heart of our strategy
Our mission is to ”Discover,
mine and create – metals and value”
STRATEGY
The cornerstones of
Sotkamo Silver’s
strategy are:
Development of the existing silver mine and
ensuring a solid foundation for the
Company’s expansion
Increase mineral resources by continuing
exploration in the current mine and the
Kainuu region
Responsible use of natural resources
Sotkamo_Silver_raakakuvat_MF_hires_ (65)_edit (1)2.jpg
During 2025:
• Zero lost time injury (LTI) on own personnel
• Successfully executed infill and exploration drilling programs  and
fulfilled the target of increasing life of the mine to 2035.
• A project was initiated to enhance the reliability of silver production by
ensuring adequate mining capacity and developing processes and mining
plan to better cope with unforeseen situations in underground mining
• Continued delivering pyrite (by-product) to reduce the environmental
impacts and increase resource efficiency.
• Company’s Finland's Towards Sustainable Mining (TSM) system on
level A in each category.
• We signed an agreement to extend the maturity of the Senior Loan and
of EUR 1 million additional financing.
• About half of the of the Company’s  EUR 6.3 million convertible loan
2022/2026 was exchanged for new shares in the Company. EUR 2.6
million (30 MSEK) of the convertibles was exchanged for new
convertibles 2025/2029. The maturity date of the new convertibles is
31 October 2029.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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KEY FOCUS AREAS IN 2026
Sotkamo Silver has invested in production and production
management capabilities by recruiting key personnel, changing
underground contractor and acquiring operational development
consulting. The measures aim to increase silver production from
the 2025 level and, on the other hand, to ensure stable
production for the coming years. The capacity of underground
production will be increased by preparing new underground
mining levels for efficient production earlier than before and by
creating alternative production areas to reduce operational risks.
During the H1/26 development work, the open-pit ore will be
utilised to supplement underground production to bring the
necessary development measures to the level required for the
targeted production.
Acceleration of underground mine development
Primary short-term focus is on ensuring the execution of
drifting and infrastructure building -plans together with the new
mining contractor. Acceleration in both is needed to provide
adequate alternative and independent mining areas for the
future. Being able to segregate mine development and
production areas will provide more predictability for
underground mining and resilience in case of any adverse events
in the future.
Underground operational performance
The mining efficiency improvement project aims to enhance
overall operational performance. Key areas for 2026 include
resource reliability, work scheduling, follow-up, and daily
management. Our focus, alongside the new mining contractor
and external consultants, is achieving operational results that
satisfy all stakeholders.
Safety
Significant advancements in our safety standards were achieved
in 2025 through the implementation of several well-planned and
executed safety initiatives. In 2026, as we accelerate mine
development and operational activities, it will be essential to
prioritise safety by incorporating lessons learned from previous
years into the onboarding and training together with our new
mining contractor.
Exploration activities for future growth
Sotkamo Silver continues exploration planning activities on
Tipasjärvi greenstone belt and during 2026 focuses on
exploration of very promising West mineralisation inside existing
mining license area. We are also in process to strengthen our
Sotkamo_Silver_raakakuvat_MF_hires_2Edit (1) copy2.jpg
geology team to be better prepared to plan and timely execute
detailed exploration activities in future years.
Financing of investments
After successful refinancing in 2025 our investment plan will
continue to accelerate the underground mine development. We
estimate that we can implement the investment plan with cash
flow financing. However, we maintain a contingency funding plan
to ensure access to alternative sources of liquidity in the event of
unexpected disruptions. We will also work to renew the
environmental guarantee.
Responsible use of natural resources
We will focus on completing the environmental permitting
process for the tailings pond expansion and starting construction
during the year. In parallel, we aim to increase the utilisation rate
of tailings in our mining operations by developing and adopting
new methods in the underground mine backfilling process that
support both material and operational efficiency.
We continue to work actively to protect the ecological health and
recreational value of local water bodies through responsible water
management. We are investing in measures to reduce nutrient
loads and to keep the sulphur content of the tailings consistently at
a low, environmentally sound level. We maintain open and
transparent communication about the environmental impacts of
our operations as part of our ongoing efforts to operate
responsibly.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Why invest in Sotkamo Silver
A Strong Demand for
Silver on the Market
Capability to
Increase Production
Volumes
Strong Profitability
and Cash Flow
Generation
Clear Potential for
Resource Growth and
Mine-Life Extension
Nordic Producer of
Critical Metals with
High ESG Standards
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Share
Shares and trading
Sotkamo Silver AB’s share capital on December 31, 2025, was  310,511,626
SEK and the number of shares was 322,068,107. Sotkamo Silver AB’s shares
are traded on NGM Equity Stockholm and on Nasdaq Helsinki. The Company
ticker code is SOSI at NGM Equity and SOSI1 at Nasdaq Helsinki. The shares’
ISIN number is SE0001057910. The shares are also traded on Börse Berlin,
Open Market, where the Company code number is A0MMF4 and ISIN-number
is the same as on NGM Equity Stockholm; SE0001057910. During 2025
367,162,503 (329,187,719) shares were traded on NGM Equity in Stockholm
and Nasdaq in Helsinki.
The articles of association contain no restrictions on the transferability of the
Company’s shares, such as post-transfer acquisition rights clauses, and no other
circumstances of that type have been identified that the Company is liable to
disclose under the provisions in Chapter 6, Section 2a of the Swedish Annual
Accounts Act. To the best of Company’s knowledge, there are no shareholder
agreements or other agreements between the Company’s shareholders aimed
at jointly influencing the Company. Neither does the Board of Directors know of
any agreements or similar that could lead to a change in control of the Company.
Shares Traded (million)
1278
Share information
31 Dec 2025
31 Dec 2024
Share price, SEK
2.15
1.00
Highest share price during the period, SEK
2.15
2.09
Lowest share price during the period, SEK
0.85
0.73
Quota value; SEK
0.96
0.96
Market cap, MSEK
691
286
Number of shares
322,068,107
286,148,387
Number of shares, diluted
350,587,714
327,383,120
Share capital, MSEK
311
276
Largest shareholders 31 Dec 2025
Name
Number of
shares
Ownership
(%)
Hexof Oy
22,744,812
7.1
Sprott Asset Management
8,025,353
2.5
Esa Tauriainen
4,800,000
1.5
Mikko Leinonen
3,835,000
1.2
Avanza Pension
3,796,064
1.2
Antti Halonen
2,750,415
0.9
Others
276,116,463
85.7
Total shares
322,068,107
100.0
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Sotkamo_Silver_braÌ_ndikuvat_MF_hires_300dpi-12 (1)edit4.jpg
Targets and guidance
On 20 February 2026, Sotkamo Silver published
guidance for 2026.
Guidance
• The Company expects to produce 0.9 – 1.2 million ounces of silver
• Annual EBITDA is expected  to be over EUR 25 million
• Net debt-to-EBITDA is expected to be below 1.0 at year-end
The Company's profitability is significantly affected by external factors,
such as metal prices and exchange rates and internal factors like
uncertainties related to ore volumes and metal grades. The prices used in
the guidance for silver and gold are slightly lower than at the time of
publication of the guidance (20 February 2026). 
Medium-term Targets
Medium-term targets until the end of year 2028.
• Annual silver production of 1.4 million ounces
• Annual EBITDA margin > 30%
• Net debt-to-EBITDA < 2.0
• Performance on A-level in Towards Sustainable Mining (TSM)
standard
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Silver market
Silver enables to use green, renewable energy,
such as wind and solar power.
Silver plays a key role in the industry, in the continuous electrification of
modern society and in many key renewable energy solutions. Silver has
the best thermal conductivity of all metals, and its ability to conduct heat
and electricity makes it a versatile material for the needs of the metal
industry*. In 2025, the U.S. Geological Survey (USGS) added silver to its
2025 List of Critical Minerals. This marked a significant shift in U.S.
policy, reclassifying silver from a traditional "precious metal" to a
"strategic industrial asset" essential for national security and economic
stability.
In its latest annual outlook, published on 10 February 2026, the Silver
Institute notes that the rally comes after a year when silver saw its
strongest annual performance since 1979. Investor interest accelerated
into early 2026 and pushed the price to multiple record highs, driving the
gold-silver ratio below 50 for the first time since 2012. Looking forward,
global silver investment is expected to remain strong this year as the
market posts its sixth consecutive annual deficit. The Institute's forecast,
based on analysis by London-based consultancy Metals Focus, points to a
67 million ounce shortfall in 2026, with total demand once again
outstripping total supply. Most of the world's silver supply (80%), comes
from mines, and the remaining 20% is mainly derived from recycling. The
industry is responsible for more than half of global silver demand, but
silver is also used in the jewellery industry, in cutlery, in coins and as an
investment.
Silver demand exceeds supply
1099511635487
Source: Silver Institute's World Silver Survey 2025 and press release on 10 February 2026
*Silver Institute An annual report on the global silver market, “World Silver Survey” has been
published since 1990 by the Silver Institute. The Survey provides market participants with
supply and demand statistics for key sectors of the silver market, as well price and trade data.
Copies of each year’s report are available in PDF format on the web pages of the Silver Institute
and are freely downloaded: https://www.silverinstitute.org/all-world-silver-surveys-2025/. Silver
Institute's 2026 supply and demand forecast: https://silverinstitute.org/global-silver-investment-
to-remain-strong-in-2026-against-the-backdrop-of-a-sixth-consecutive-annual-market-deficit/
Electric Vehicles, Data Centers, Artificial Intelligence and
Renewable Energy
• Silver and gold in semiconductors, sensors, cable harnesses,
controllers, displays, etc.
• Silver carbonate anodes in solid electrolyte lithium batteries
• Concentrating solar power plants, wind turbines and new battery
technologies
Photovoltaics
Silver plays a key role in the production of solar cells to be used as a
source of green electricity.
Smartphones and Other Devices
Silver nanowires replace indium tin oxide in touchscreens.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Silver mine and production
Mining operations at the Sotkamo silver mine continued throughout
2025 under operationally challenging conditions, particularly during the
first half of the year. The year was characterised by lower underground
mining volumes and reduced silver grades compared to the previous
year, mainly due to rock mechanical challenges and insufficient mining
capacity in certain areas of the mine. During the second half of the year,
operational performance improved, supported by higher metal prices,
targeted development measures and the gradual transition to new
mining areas.
Sotkamo Silver has continued to invest in improving the resilience and
long‑term sustainability of its mining operations. During the year,
development work focused on increasing drifting, opening alternative
mining areas and strengthening the foundation for future production
stability. In parallel, the Company progressed with in-fill and exploration
drilling aimed at extending the life of the mine and improving the quality
of mine planning.
Silver remains the Company’s primary product. In addition to silver, the
mine produces gold, zinc and lead as by‑products. The concentrates
produced are sold to smelters in accordance with existing offtake
agreements, and the Company does not engage in downstream
processing or marketing activities beyond concentrate delivery.
Sotkamo Silver employs around 50 people in its concentration plant,
administration, planning, and supervision. A contractor with about 100
employees handles mining operations. Most personnel and production
costs are variable.
Production and operational performance
In 2025, the total amount of milled ore decreased compared to the
previous year, reflecting lower underground mining volumes, particularly
in the first half of the year. Silver production was adversely affected by
both reduced mill feed and lower average silver head grades, which were
influenced by the sequencing of available stopes and operational
constraints in underground mining.
During the year, the total amount of milled ore decreased by 14% to
425,000 tonnes compared to the previous year (497,000 ) . Silver
production was below the Company's production plans, mainly due to
inadequate mining resources and rock mechanical challenges especially
during the first half of 2025. In total, the production amounted to
803,077 ounces silver (1,166,065), 1,829 ounces of gold (2,595), 602
tonnes of lead (729), and 1,472 tonnes of zinc (1,642) in concentrates.
During the first half of 2025, underground mining performance was
below plan due to rock mechanical challenges and limitations in available
mining areas. These issues led to ore dilution, lower silver grades and
intermittent ore shortages at the concentration plant. In addition, a
vehicle fire in the underground mine in February temporarily halted
production and further affected mining volumes during the first quarter.
Operational performance improved during the second half of the year as
mining activities gradually shifted towards more stable areas of the mine
and development work began to deliver additional stoping options.
Although production volumes remained below the previous year, the
improved operational stability in the latter part of the year provided a
stronger basis for future production.
Mine development and investments
To address the operational challenges encountered in 2025 and to
strengthen long‑term production reliability, Sotkamo Silver prioritize
mine development and started improvement program to speed up the
development investments as well as to improve the operational
performance. Drifting volumes were increased to create additional
mining flexibility and to reduce dependence on individual production
areas. This work is intended to improve resilience against geological
uncertainties and to enable more consistent ore blending in the future.
Capital expenditure during the year focused primarily on underground
development, infill drilling and exploration drilling. These investments
are aimed at extending the life of the mine, improving the accuracy of
mine planning and ensuring sufficient ore availability in the coming years.
As part of the long‑term development of underground mining
performance, preparations for a change of mining contractor were
completed during 2025. The new mining contractor commenced
operations at the beginning of 2026. The transition was carried out
according to plan, and the Company expects the change to support
improvements in operational efficiency, capacity and predictability over
the medium term.
Exploration and life‑of‑mine development
Infill and exploration drilling progressed as planned during 2025. Infill
drilling continued to support the conversion of mineral resources into
ore reserves and to improve the quality of short‑ and medium‑term mine
planning. Exploration drilling in the current mine focused on extending
known mineralisation to greater depths with objective of extending the
life of the mine beyond 2035. Based on these drillings updated mineral
resource and ore reserve estimates were published at the end of the
year, supporting the targeted extension of the mine’s life and
strengthening the long‑term outlook for the operation.
During the year, Sotkamo Silver also advanced exploration activities
west of the existing ore body. The results obtained supported the
Company’s view of promising mineralisation in this area and provided a
basis for further exploration planning.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Operational key figures
Milled ore, tonnes
35
Gold production, oz
41
Silver production, koz
46
Lead production, tonnes
52
Silver head grade, g/tonne
57
Zinc production, tonnes
63
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Mine expansion, mineral deposits
and ore reserves
DEFINITIONS IN BRIEF
Ore reserves represent the area where production is focused on in the
short-term. Detailed infill drilling is conducted in this region to ensure
optimized mine planning and to optimize silver grade in production. The
objective of Sotkamo Silver is to ensure that ore reserves are annually
increased by a minimum one year’s worth of production with infill
drilling.
Mineral resources represent resources which are fairly well-known, but
not yet drilled in detail. The best-known resources in this area form the
basis for estimating the current Life-of-Mine (LOM). Mineral resources
are upgraded to Ore reserves with infill drilling.
Areas beyond the above-mentioned mineral resources represent further
potential for exploration to expand the Life-of-Mine.
Mineral Resources and Ore Reserves are categorized based on the
international JORC code.
Sotkamo_Silver_braIÌ__ndikuvat_MF_hires_300dpi-8W_edit.jpg
The Company’s classified
mineral resources
12.7 million tonnes
Measured and indicated
resources
9.1 million tonnes
Silver equivalent content
91 g/t Ag
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
17
In accordance with its updated ore reserve estimate published on
31.12.2025, Sotkamo Silver estimates that the ore reserves of the silver
mine total to 1.598 million tonnes and mineral resources have increased
to 12,7 million tonnes, which includes silver, gold, lead and zinc.
The Company believes that the ore reserves and economically
extractable mineral resources is now sufficient for at least 10 years of
operations. It is possible to increase the reserves and resources further
with planned infill- and exploration drilling.
The purpose of infill drilling is to enable the upgrade of the mine’s
currently known mineral resources to ore reserves. Exploration drilling
aims to expand the known amount of mineral resources either in the
current mine or in new ore exploration areas.
During 2026-2027 Sotkamo Silver will focus on increasing ore reserves
within known mineral resources mainly in depth-direction. Second focus
area is on developing very promising western mineralisation (Project
WEST) towards separate operative mining area for future years.
thesilvermine2.jpg
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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The Company’s classified mineral resources
Table 1
Mineral Resources Sotkamo Silver as of 31 Dec. 2025
Category
Tonne
(kt)
Silver
(g/t)
Gold
(g/t)
Lead
(%)
Zinc
(%)
AgEq
(g/t)
Silver
(koz)
Gold
(koz)
Lead
(t)
Zinc
(t)
Measured
7,335
58
0.23
0.19
0.45
92
13,755
54
13,625
33,191
Indicated
1,802
46
0.27
0.24
0.57
86
2,693
16
4,313
10,347
Sub total
9,136
56
0.24
0.20
0.48
91
16,447
70
17,939
43,538
Inferred
3,527
36
0.31
0.13
0.30
73
4,138
35
4,516
10,656
Grand Total
12,664
51
0.26
0.18
0.43
86
20,585
106
22,455
54,194
Table 2
Ore reserves Sotkamo Silver as of 31 Dec. 2025
Category
Tonne
(kt)
Silver
(g/t)
Gold
(g/t)
Lead
(%)
Zinc
(%)
AgEq
(g/t)
Silver
(koz)
Gold
(koz)
Lead
(t)
Zinc
(t)
Proven
1,463
86
0.22
0.22
0.51
120
4,021
10
3,262
7,520
Probable
135
76
0.20
0.20
0.60
110
330
1
270
803
Total
1,598
85
0.22
0.22
0.52
119
4,351
11
3,532
8,323
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Ore exploration programme
Long term Ore exploration for Tipasjärvi greenstone belt –
around the Silver Mine
In addition to the development projects of the silver mine, Sotkamo
Silver also develops and searches for future growth paths in accordance
with its strategy. Project REX is a local ore exploration programme to
develop an attractive mineral resource portfolio and to find new
exploitable ore reserves in the Kainuu region.
Sotkamo Silver has carried out preliminary interpretations based on
existing data from previous geological and geophysical surveys. The work
identified seven high-priority goals or target areas that were proposed
for further work and follow-up. An assessment of the aforementioned
data strengthens the potential of exploration in the greenstone belt, and
management is confidently looking forward to the next phase of
investigation.Rough roadmap for next steps has been created and will be
further developed during 2026 for future years’ project plan
Peura-aho and Hietaharju – nickel, copper, platinum
and palladium
Sotkamo Silver Oy owns the mining and exploration rights for the
Hietaharju and Peura-aho mining concessions and for the Hietaharju
North exploration area in Suomussalmi from Boliden.
The Kiannanniemi nickel-copper-platinum-palladium deposits are
located in the northern part of the Kuhmo greenstone belt and were
discovered and investigated by Outokumpu in the early 1960s. The stone
samples detected by a prospector were the first indication. The most
recent work was carried out by Altona Mining Ltd in 2005–2011.
Sotkamo Silver conducted pre-feasibility study during 2024 and planning
phase for next feasible steps is ongoing.
Altona Mining Ltd prepared mineral resource calculations for the
deposits in accordance with the Australasian JORC Code. The estimates
are shown in table 3.
The estimates of the mineral resources are based on the results of core
holes drilled in the area (21 kilometres overall). Metallurgical laboratory
testing of Peura-aho and Hietaharju yielded marketable concentrates. In
addition to nickel and copper, the concentrations of platinum and
palladium are significant.
Local Ore Exploration Programme and Development
In short term the primary focus of exploration activities is concentrated
within the current mining concession.  The promising mineralisation
target on the west side of the currently operated mine will be further
mapped trough exploration drilling. Next drilling campaigns have been
planned during 2025.
Exploration of the broader Kainuu region
annual-and-sustainability-report-2023-sotkamo-silver_11.jpg
Table 3
Mineral resources in Peura-Aho and Hietaharju as of 31 Dec. 2025
Category
Million
tonnes
Ni
%
Cu
%
Co
%
Pt
g/t
Pd
g/t
Indicated
0.40
0.63
0.29
0.04
0.28
0.62
Inferred
0.09
0.48
0.23
0.04
0.21
0.42
Total Peura-Aho
0.49
0.60
0.27
0.03
0.27
0.58
Indicated
0.85
0.85
0.44
0.06
0.53
1.25
Inferred
0.24
0.59
0.27
0.04
0.34
0.89
Total Hietaharju
1.09
0.80
0.40
0.05
0.49
1.17
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Sustainability Report
TABLE OF CONTENTS
INTRODUCTION
Sotkamo Silver’s sustainability principles
are the foundation of everything we do. We
want to operate sustainably and responsibly
from the perspective of the environment, our
stakeholders, customers and shareholders.
This Sotkamo Silver Sustainability Report, the
fourth of its kind, describes our operations in
2025. It outlines the main goals, measures and
indicators of the Company’s sustainability
work. We focus our sustainability work and
reporting on the themes that are most material
to our operations.
The report follows the principles outlined
in the guidelines of the Global Reporting
Initiative (GRI). Sotkamo Silver complies with
sustainability reporting requirements in
accordance with the legislation in force at any
given time and the timetable defined in
legislation.
2025 IN BRIEF
We achieved our occupational safety target of
zero lost‑time injuries among our own
personnel.
We strengthened our practices in line with the
TSM Finland Mining Responsibility System to
maintain the A‑level rating verified by an
independent third party the previous year, and
we adopted the Equal, Diverse and Inclusive
Workplaces assessment tool.
We advanced the integration of circular
economy principles into extractive waste
management and closure planning by initiating
studies on the potential use of tailings in the
cover structures of waste facilities.
Resource efficiency remained at a good level,
with the amount of pyrite concentrate
delivered to customers accounting for more
than 70% of total production in 2025.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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SOTKAMO SILVER AS A COMPANY
Sotkamo Silver Group consists of the parent company Sotkamo Silver AB
and its Finnish subsidiary Sotkamo Silver Oy. Sotkamo Silver AB is listed
on the NGM Main Regulated Equity in Stockholm and on the main listing
on Nasdaq Helsinki. 
Sotkamo Silver’s purpose is to produce precious metals responsibly and
efficiently, and to develop its operations profitably on a long-term basis.
The Company is guided by two strong values: responsibility and locality.
The main principles in our everyday operations are sustainability,
transparency, respect and reliability. Our operations generate well-being
and value for our owners, our personnel and the local community. 
Sotkamo Silver produces concentrates containing silver, gold, zinc, lead
and pyrite. The Company’s main project is the silver mine located in
Sotkamo, Finland. The mine began production in March 2019. Its
operations are divided into an underground mine and an open pit and
include the mining, storing, crushing and transport of ore and waste rock
as well as the concentration of ore.
In 2025 the Sotkamo Silver produced 803,077 ounces of silver. The mine
also produces gold, zinc and lead. The ores are processed into
concentrates, which are sold to smelters in accordance with a supply
agreement.
By the end of 2025, Sotkamo Silver had invested SEK 870 million in the
silver mine, of which about 15% represents environmental investmentsIn
2025, the Group’s turnover was SEK 393 million. 
Sotkamo Silver's business has significant positive regional economic and
social impacts. More than 50% of the turnover is estimated to remain in
the local economy in Eastern and Northern Finland through services and
goods procured and wages paid. The mining tax, property taxes,
employer-related tax-like payments, and employee income taxes totaled
SEK  14.5 million in 2025
annual-and-sustainability-report-2023-sotkamo-silver_20.jpg
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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OUR STAKEHOLDERS
At Sotkamo Silver, we are committed to transparent and open
operations. We want to build trust and strong relationships with our
stakeholders.
We actively collaborate with our stakeholders and we  present our
operations and their impacts to them. Identified stakeholders are
interested in our operations and they expect continuity of our
operations. Our main stakeholders, their expectations and engagement
methods are listed in Table 4. 
A monitoring group, made up of representatives of local communities,
met four times in 2025. The monitoring group includes persons from
both permanent and summer residents of the area near the mine,
landowners, village associations, fisheries associations, the Kainuu
district of the Finnish Association for Nature Conservation, the
municipality of Sotkamo, Metsähallitus and the local authorities.
The meetings covered the mine’s environmental impacts and other
current topics, including the ongoing stream restoration project in the
nearby watercourses of the Silver Mine area, which aims to improve
habitat conditions for migratory fish.
Stakeholder
Expectations
Engagement methods
CUSTOMERS
• High quality
• Ethical and responsible operations
• Customer meetings
• Visits to the mine
• Open interaction
PERSONNEL
• Responsible operations
• A safe and healthy working environment
• Stable employment relationships
• A quarterly employee survey
• Performance appraisals
• Training
• Continual improvement of safety
LOCAL COMMUNITY AND
ORGANIZATIONS
• Minimising environmental impacts
• Transparency
• Employment opportunities
• Open interaction
• Regular meetings of the joint monitoring group
• Annual reporting
LICENSING AUTHORITIES
• Compliance with permit decisions
• Open proactive communication
• Continuous monitoring and reporting
• Regular meetings with the authorities
SHAREHOLDERS
• Responsible and profitable operations
• Continuous improvement of responsibility and risk
management
• Value creation
• Financial reporting
• Disclosures according to stock exchange rules
• Investor meetings
SUPPLIERS AND SUBCONTRACTORS
• Responsible operations
• A safe working environment
• Long-term partnerships
• Local collaboration opportunities
• Open interaction
• Continual improvement of safety
• Code of Conduct
OTHER FINNISH MINING COMPANIES
• Industry collaboration
• Implementation of responsible mining
• Active participation in the activities of the trade
association (Finnish Mining Association)
Table 4. Sotkamo Silver’s stakeholder collaboration
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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THE GOALS OF OUR SUSTAINABILITY WORK
Safety and the development of a positive safety culture are at the core of
our sustainability policy. We identify and assess risks and impacts to the
environment, safety, and the community before taking action.
We are committed to preventing the degradation of habitats,
biodiversity, and ecosystem services caused by our operations and to
compensating for any negative impacts through biodiversity offset
measures. We continuously improve the efficiency of energy and natural
resource use.
We are actively and openly in contact with those affected by our
operations and strive to take their views into account. In our operations,
we respect the habits, interests and rights of our stakeholder
communities.
We uphold ethical practices. We offer our employees and contractors a
working environment in which everyone is treated fairly and
respectfully.
We are committed to the TSM Finland Mining Responsibility System.
Our sustainability work is focused on three themes:
• Responsible operations
• Safety and commitment
• Caring for the environment
Our activities and performance in these topics are later presented in this
report in their respective sections.
Responsible operations
operations.png
• We are a reliable partner
and uphold ethical business
practices
• Risk management is a
central part of building a
sustainable business
We are number one in our
size category in terms of
responsible mining
Safety and commitment
safety.png
• We ensure a safe and
healthy working
environment
• Committed and satisfied
personnel is a prerequisite
for our success
We are constantly and
systematically improving
our safety culture
Caring for the environment
environment.png
• We minimize the environmental
impact of our operations
• We are taking action to achieve
carbon neutrality by 2035
We are committed to the
goaI of the Paris Climate
Agreement
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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RESPONSIBLE OPERATIONS
“We are number one in our size category in
terms of responsible mining”
We are a reliable partner and follow ethical practices. Risk management
is central to the development of our responsible operations. Sotkamo
Silver’s sustainability management is based on the Company’s own
responsibility policy, the TSM Finland Mining Responsibility System and
the principles of the international ISO 9001, ISO 14001 and ISO 45001
standards for quality, environment and occupational health and  safety.
The Company’s operations are guided by the Code of Conduct, which is
based on the principles of the UN Global Compact initiative and defines
the key ethical practices for the Group’s personnel and Board. The Code
of Conduct describes the principles and procedures to which the
organisation is committed, including respect for human rights and the
prevention of corruption and bribery.
The ethical principles are supplemented by more detailed guidelines,
such as the personnel manual, administrative regulation, and insider
policy.
Sotkamo Silver’s Code of Conduct is available on the Company’s website:
https://www.silver.fi/en/sustainability/code-of-conduct-en
Rating A in TSM Finland Mining Responsibility System
In 2025, Sotkamo Silver continued the actions required under the Mining
Responsibility System to maintain the performance level that was
externally verified in 2024. In addition, the Company adopted the
assessment tool on Equal, Diverse and Inclusive Workplaces, the results of
which will be reported publicly after the next external verification in 2027.
The results externally verified in 2024 are presented below:
Protocol                                              Performance level
Crisis management                       compliant
Stakeholder Co-operationAA
Tailings Management A
Water Management A
Occupational Health and Safety A
Climate Change                       A
Biodiversity ManagementA
Mine ClosureA
TSM Finland standard is based on the international Towards Sustainable
Mining (TSM) standard. The companies committed to the system follow
principles that are sustainable from the point of view of nature, people and
the economy throughout the life cycle of mining, from prospecting for
minerals to the closure and aftercare of mines.
The performance  is assessed in the protocols on scale from C to AAA (C, B,
A, AA and AAA), of which the lowest, Level C, corresponds to compliance
with legal requirements. In general, reaching  A in rating requires
developing and implementing the processes defined in the protocols. At
Level A, communications regarding the management systems must be
transparent and the reporting must be public. The Crisis management
performance level is assessed as compliant/non-compliant instead of the
rating system.
TSM standard creates a concrete basis for the development of responsible
operations. Companies report their results annually, and their performance
is verified by an external expert every three years.
More  information on TSM Finland: www.kaivosvastuu.fi
ESG risk management (Environmental, Social and Governance)
We are continuously assessing ongoing and potential risks to our
operations. The CEO and the Board of Directors are responsible for
operational risk management procedures and for ensuring that the risks
are taken into account in strategic planning.
Mining operations cause environmental risks, which are being constantly
assessed and monitored. The provisions of the environmental permit
issued for the operations also set a benchmark for risk management. The
most significant risks are related to water management and solid mining
waste. These, as well as emissions to the air, vibration and noise are
monitored carefully according to a detailed monitoring programme.
In occupational safety, we invest in the continuous identification of
hazards and risk management. We conduct occupational safety risk
assessments regularly and use this information to prepare our annual
action plan. We have conducted risk assessments for routine work and
based our work instructions on them. Hazards related to the task at hand
are always reviewed prior to the start of work.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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SAFETY AND COMMITMENT
”We are constantly and systematically
improving our safety culture”
Occupational health and  safety
We are committed to zero lost time injury goal in occupational safety.
The employer is responsible for enabling safe working conditions. It is the
collective responsibility of all personnel and contractors working at the
mine to use appropriate protective equipment and follow safe working
procedures, as well as to report safety deficiencies and other
observations.
In our occupational health and safety management system the
responsibilities, duties and other tasks of the Company’s management
and personnel are clearly documented. We base our safety work in
systematic approach by identifying  the potential hazards and assessing
the risks related in the work tasks.  Safety orientation and training is
1
mandatory for everyone working at the mine, and occupational health
and safety are part of the selection criteria for contractors and suppliers.
We have created a detailed monitoring and reporting method for safety
observations, near miss situations and lost time injuries. The targets and
their achievement rate, needed corrective actions and their follow-up is
regularly reported to the management.
We monitor occupational safety every month with the Lost Time Injury
Frequency Rate (LTIFR), which measures the number of accidents
leading to absences per million hours worked. Sotkamo Silver monitors
the accident frequency of both its own personnel and its regular
contractors’ personnel.
At the end of 2025, the LTIFR  of Sotkamo Silver’s personnel was 0 and
that of its contractors 20.8. At the end of the year, the LTIFR  of everyone
working at the Silver Mine was 14.4. The development of the LTIFR
Sotkamo_Silver_brändikuvat.jpg
presented in Figure 1.
In 2025, we strengthened our safety work by enhancing hazard
identification and root cause analysis in our daily safety practices. For
our own personnel, we achieved our target of zero lost-time injuries.
In 2026, we will continue to strengthen the measures initiated in the
previous year, particularly with regard to our long-term contractors. We
will also further enhance the systematic implementation of hazard
identification, risk assessment and safety measures before work begins,
supporting the continuous improvement of our proactive safety efforts.
Figure 1. LTIFR at the silver mine 2020–2025
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Employee satisfaction and commitment
The Company supports employee well-being by fostering an open and
respectful work community, effective collaboration, and continuous
competence development. Well-being at work is further strengthened
through voluntary employee benefits and shared activities. In addition to
statutory requirements, the Company continuously develops its occupational
health and well-being practices to meet the needs of its operations.
We carry out employee satisfactory surveys four times a year. The
results are used for monitoring employee satisfaction and identifying
development areas as well as for daily management and its development.
As metrics for employee satisfaction, we use indicators describing the
success of leadership and ability to work, as well as the eNPS engagement
index. The questions in the personnel survey are answered on a scale of 1
to 5, in which 3.5 to 4 is considered good and 4 to5 excellent.
The indicator describing the leadership success (Figure 2) is affected by
the responses to the questions “I know what is expected of me in my
work”, “I have a clear understanding of my role and responsibilities”, “My
immediate manager supports me in succeeding in my tasks” and “I get
sufficient feedback about my work” in the employee satisfactory survey.
The December 2025 result of 3.86 fell slightly short of the target level of
4.0, which reflects excellent performance. Development measures have
included supervisor training as well as strengthening communication and
feedback practices.
Ability to work indicator (Figure 3) is examined with the following
questions: “there is a caring atmosphere at our workplace”, “My
employer cares about the personnelʼs well-being at work”, “My job does
not put my health or safety at risk”, and “I feel healthy enough to work in
my current position in two yearsʼ time”. The work ability indicator was
below the targeted excellent level (4.0) in 2025. We develop
occupational safety and well-being continuously in cooperation with the
occupational health and safety committee and occupational health care.
Employee engagement is tracked with the eNPS (Employee Net
Promoter Score) engagement index (Figure 4), which is based on how
likely the employees would recommend the Company as a workplace.
Based on the responses, the personnel is divided into three groups:
promoters, passives and detractors. The eNPS is obtained by subtracting
the percentage of promoters from the percentage of detractors. The
minimum promoter score is –100 (everyone is a detractor) and the
maximum score is 100 (everyone is a promoter).  The net promoter score
was below the target  level 30 in 2025
The Company has a workplace well‑being development team with
representatives from all employee groups. The team promotes an
inclusive organisational culture and aims to strengthen employee
satisfaction and commitment. Based on the team’s initiatives,
development actions are implemented to enhance leadership capabilities,
internal communication, work ability, and inclusive ways of working.
Leadership success indicator
5168
Figure 2. Leadership success indicator, scale 1 to 5
Ability to work indicator
5226
Figure 3. Ability to work indicator, scale 1 to 5
eNPS
5281
Figure 4. Net promoter score eNPS, scale –100 to 100
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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CARING FOR THE ENVIRONMENT
”We are committed to the goal of the Paris Climate Agreement”
Our environmental work is guided by the Company’s sustainability policy
and the valid environmental permit. We are also aware of our
stakeholders’ high expectations regarding environmental protection. We
develop our operations so that we can operate within the limits set by the
environmental permit and meet the expectations of our stakeholders.
Carbon footprint and energy consumption
We calculate our company’s carbon footprint in accordance with the
Greenhouse Gas  Protocol of the World Resources Institute (WRI) and
the World Business Council for Sustainable Development (WBCSD), as
well as the supporting guidance.
Scope 1 emissions include greenhouse gas emissions caused by the fuels
used in the Company’s own and contractors’ vehicles, machinery, and
equipment within the mining area, as well as by explosives used in the
mine.
Scope 2 includes emissions from purchased electricity, which are
reported using both market-based and location-based approaches. The
market-based approach takes into account renewable energy guarantees
of origin, while the location-based approach is based on a nationally
determined emission factor that is internationally comparable.
For Scope 3, we have considered the most relevant categories as listed in
Table 5. Emissions from upstream energy production are reported using
both the market‑based and location‑based approaches.
In 2025, the market‑based carbon dioxide emissions were 17% lower
than in 2024, mainly due to a lower emission factor for purchased
electricity affecting Scope 2 emissions.
2025
2024
SCOPE 1
Use of explosives
100
91
Vehicles
2,501
2,543
Own heat production
457
625
Scope 1 in total
3,057
3,259
SCOPE 2
Electricity purchased – market-based
9,716
13,872
Electricity purchased – location-based
1,231
2,332
SCOPE 3
Materials and services purchased
5,353
4,790
Capital goods
370
696
Upstream  energy - market based
2,704
3,274
Upstream energy - location based
1,259
1,640
Transport and distribution (incoming)
451
415
Operational waste
113
94
Business Travel
8
5
Commuter traffic
196
195
Transport and distribution (outgoing)
564
562
Scope 3 in total (location-based)
8,314
8,397
CO2 EMISSIONS IN TOTAL
Scope 1, 2 & 3  (market-based)
22,531
27,162
Scope 1, 2  & 3 (location-based)
12,601
13,988
Table 5. CO2 emissions (tCO2e).  Calculation method: https://www.silver.fi/en/sustainability/
greenhouse-gas-emissions-calculation.
Energy Consumption
1961
Figure 5. Energy consumption in gigawatt-hours (GWh).
Energy consumption (Figure 5) includes the use of fuels and electricity
across the entire mine site. Our infrastructure and production machinery
are mainly electricity‑powered, but fuel oil and diesel are also used in
mining, excavation and transportation. Propane is used for heating the
ventilation air in the underground mine during winter.
In 2025, the energy consumption of underground mine heating was
reduced by improving the efficiency of control and regulation systems.
Electricity consumption decreased slightly, while fuel consumption
remained at the previous year’s level.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
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Mining waste
Sotkamo Silver’s mining operations generate waste rock and tailings as
mining waste. The management of mining waste is guided by the
requirements of the environmental permit and the Company’s principles
of minimizing waste generation and promoting reuse.
We prevent waste generation by careful planning and scheduling of
mining operations. The excavation of waste rock is timed so that we can
utilise the materials as efficiently as possible in the backfill of the
underground mine. The tailings are used as construction material for the
dam raises of the tailings pond and as backfill material in the mine.
Mining waste is deposited in designated mining waste areas, such as the
waste rock area and the tailings pond. Unutilised tailings are finally
disposed of in the tailings pond, which will be closed in accordance with
the mine’s closure plan.
After the mine closure, no  waste rock will remain in the waste rock area,
as all material will be fully utilised as underground backfill during
operations. The utilisation of extractive waste, the amounts generated,
and the corresponding utilisation rates are presented in Table 6.
In 2025, the volume of waste rock extracted was higher than in the
previous year, as ore was mined both from the underground mine and
from the open pit, whereas in 2024 all ore was produced from
underground operations. Open‑pit mining typically generates more
waste rock per tonne of ore than underground mining.
In 2025, we initiated studies on the potential use of tailings in cover
structures of mining waste areas as part of the mine’s closure planning,
with the aim of strengthening circular‑economy integration.
In 2026, our objective is to increase the utilisation rate of tailings by
advancing the development and implementation of new backfilling
methods in the underground mine.
annual-and-sustainability-report-2023-sotkamo-silver_09.jpg
2025
2024
Waste rock
Tailings
Waste rock
Tailings
Quantity produced (kt)
354
409
218
478
Underground mine backfill (kt)
260
10
218
26
Dam raise (kt)
0
45
0
63
Quantity utilised (kt)
260
55
218
89
Utilisation rate (%)
73
14
100
19
Table 6. Quantities of mining waste (kt=kilotonnes=1,000 t) and the utilisation rate (%)
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
29
vastuullisuusrapsaan valokuva1 das.jpg
Other waste for recovery and final disposal
Recoverable waste materials generated at the Silver Mine include scrap
metal & other recyclable materials, mixed waste utilised for energy
recovery, and clean wood waste. Construction waste that cannot be used
for energy recovery is directed to final disposal. Waste classified as
hazardous consists almost entirely of waste oils and oily waste, which are
delivered to external waste treatment facilities for compliant processing.
The amount of hazardous waste increased slightly from the previous year
due to the removal of stored waste during a contractor change. The
quantities of the generated waste fractions are presented in Table 7.
2025
2024
Recycled materials (t)
205
227
Waste to energy and clean wood
waste (t)
49
47
Construction waste (t)
30
35
Waste classified as hazardous (t)
40
31
Table 7. Other waste generated in the mine for recovery and final disposal (t=tonnes )
Promotion of the circular economy
Sotkamo Silver’s goal is to minimize the amount of waste generated in its
operations and to use natural resources efficiently. We follow the key
principles of the circular economy, and our most significant actions to
promote it are presented in Table 8.
Sale of pyrite concentrate
The ore mined at the Sotkamo Silver mine contains 3 to 5 % pyrite, a
sulphur-rich mineral. Pyrite concentrate is one of Sotkamo Silver’s
products, which is the result of a three-stage concentration process.
During the first stage, the precious metals and galena are separated by
flotation from the ground ore. During the second stage, sphalerite
containing silver is separated from the ore. During the last stage, the
sulphur-containing minerals, pyrite and pyrrhotite, are separated to
pyrite concentrate, which also contains some gold and silver.
 
Aspect
2025
Closed loop
Continuously high level of recycled water used in
production
The utilisation of waste rock in underground mine
backfill
Use of tailings as a building material for dam raises and
underground mine backfill
Resource
efficiency
Optimisation of mine ventilation and heating
Sale of pyrite concentrate
Utilisation of an
industrial
by-product
Use of  a circuit board manufacturing by-product as a
flotation chemical
Table 8. Examples of promoting the circular economy
The pyrite concentrate production has several benefits. The three-stage
concentration process enables removing the mineral with the highest
sulphur content from the tailings. This reduces the environmental risks of
piled tailings during mining and increases their recovery potential.
Pyrite is used, for example, as the main raw material in the production of
sulphuric acid and as an auxiliary material in copper, lead and nickel
smelters. In total, 8,700 tonnes of pyrite concentrate were delivered,
representing more than 70% of the pyrite produced in 2025.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
30
Water management
Responsible water management is a cornerstone of our operations and
the high recycle rate of water in our concentrate production reflects this.
We operate our concentrate production with almost solely recycled
water and minimize the lake water intake. We  recycle the water from
the tailings management facility back to the concentrate production and
use treated mine water as a fresh water in the process. Combined, these
water streams account for 99 % of the water usage at Silver Mine.   
The recycling rate is  presented in Figure 6. The amount of lake water
used in production is presented in Figure 7. In 2025, the recycling rate
remained at the same level as in the previous  year.
The water discharged from the mine area is treated to minimize
environmental impacts on natural waters. 
Recycling rate of water used in production, %
6698
annual-and-sustainability-report-2023-sotkamo-silver_13.jpg
Figure 6. Recycling rate of water used in production, %.
Use of lake water in production
6762
Figure 7. Use of lake water in production, 1,000 m3
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
31
Environmental permitting and impacts
Our operations are guided by environmental permits. In 2025, we
supplemented the permit application for the tailings pond expansion with,
among other things, an updated mining waste management plan and an
updated mine closure plan.
We  monitor the level of environmental protection in accordance with
the authority approved monitoring programme and  publish the reports
on the Company’s website.
Sotkamo_Silver_brändikuvat_MF_sefsf.jpg
In 2025, we reported two exceedances of permit limits. In addition, we
reported three environmental deviations with no impacts outside the mine
area. We recorded one inquiry from a resident living near the mine
concerning vibration caused by blasting. The resident was provided with
previous vibration measurement reports, and the next measurements
were agreed upon. The annual permit limits for nitrogen and phosphorus
loads were exceeded; however, we succeeded in reducing both nutrient
loads compared with the previous year. Despite the exceedances,
monitoring data continue to indicate an excellent ecological status, with no
signs of eutrophication in the nearest classified lakes. The annual permit
limits for nutrient loads and the sulphur content of tailings are presented in
Table 9.
We continue to develop explosives management and water treatment
methods to reduce the nitrogen load in 2026. We are awaiting the permit
authority’s decision on our application for a higher permit limit for
phosphorus load, as our phosphorus emissions consist mainly of
phosphinate‑phosphorus, which does not pose a eutrophication risk to
the receiving water bodies. To ensure the protection of the receiving
waters, we will nevertheless continue our development work to reduce
the phosphorus load.
We participate in a local watercourse project aimed at improving the
living conditions of migratory fish by removing barriers and restoring
spawning areas. We also continue the wetland project, which aims to
enhance the development of favourable habitats for bird species.
Load
Permit
limit
Actual level
in 2025
Actual level
in 2024
Total nitrogen (kg/year)
7,000
7,858
8,070
Total phosphorus (kg/year)
40
65
90
Sulphur content of the tailings (%)
0.30
0.20
0.26
Table 9. Annual permit limits and actuals  in 2025and 2024.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
32
TARGETS FOR 2026
In occupational safety, our target is zero lost-time
injuries. We aim to strengthen proactive safety work
by ensuring that hazard identification, risk
assessment and the required safety measures are
carried out systematically before starting each task.
We will continue our active work to protect the
ecological status and recreational use of the local
water bodies through responsible water
management. Our focus is on reducing nutrient loads
and on keeping the sulphur content of tailings
consistently low and environmentally sustainable. We
will maintain open and transparent communication on
the environmental impacts of our operations as part
of our ongoing commitment to responsible practices.
We aim to ensure performance at Level A in the TSM
Finland Mine Responsibility System and will prepare
for the next external verification by carrying out
internal audits and developing our practices based on
the audit findings.
We seek to increase the utilisation rate of tailings in
mining operations by developing and applying new
methods.
The Board of Directors and the CEO approve Sotkamo Silver AB’s (publ) Sustainability Report for 2025, which is
published as part of the Annual Report. The report describes the company’s work on economic, environmental and
social aspects. It has been prepared in accordance with the Annual Accounts Act.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
33
This is a translation from the Swedish original report
Auditor’s opinion regarding the
statutory sustainability report
TO THE GENERAL MEETING OF THE SHAREHOLDERS IN SOTKAMO
SILVER AB (PUBL), CORPORATE
IDENTITY NUMBER 556224-1892
Engagement and responsibility
It is the board of directors who is responsible for the sustainability report for the year 2025 on pages 20-32 and
that it is prepared in accordance with the Annual Accounts Act in accordance with the older wording that
applied before 1 July 2024. 
The scope of the examination
Our examination has been conducted in accordance with FAR:s auditing standard RevR 12 The auditor's
opinion regarding the statutory sustainability report. This means that our examination of the statutory
sustainability report is different and substantially less in scope than an audit conducted in accordance with
International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the
examination has provided us with sufficient basis for our opinion.
Opinion
A statutory sustainability report has been prepared.
Stockholm, 31 March 2026
KPMG AB
Ola Larsmon
Authorised Public Accountant
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
34
Board of Directors’ Report
The Board of Directors and the CEO of Sotkamo Silver AB, business ID 556224-1892,
with a registered office in Stockholm, Sweden, hereby issues the financial statements for
the Group and the parent company for the financial year 2025.
THE YEAR IN BRIEF
• Sales revenue SEK 393 million (412).
• EBITDA SEK 80 million (109).
• EBIT SEK 9 million (32).
• Profit for the year amounted to SEK -53 million (-16).
• Result per share SEK -0.16 (-0.06).
• Cash and cash equivalents decreased to SEK 14 million (88).
• Investments amounted to SEK 63 million (70).
• During the year, 425,000 (497,000) tonnes of ore were enriched, and
the average silver grade was 71 (89) g/t.
• During the year, Sotkamo Silver produced:
– 0.80 (1.17) million ounces of silver, equivalent to 25 tonnes
– 1,829 (2,595) ounces of gold
– 602 (729) tonnes of lead
– 1,472 (1,642) tonnes of zinc.
• The Company generated cash flow from operating activities SEK 28
million (112). Cash and cash equivalents decreased to SEK 14 million
(88) . According to the company’s estimate, its liquidity is adequate for at
least the next 12 months of operations, including loan instalments and
interest payments. However, the Company’s cash position was at the
year-end still weak and as there is uncertainty about the future liquidity,
the Company partly manages this risk by committed credit facility, and
by continuously monitoring forecasted and actual cash flows.
• The Company continued infill drilling to enable cost-effective detailed
planning for the coming years. On 31st December 2025, Sotkamo
Silver updated the  silver mine’s mineral resources and ore reserve
estimates which support significant extension of the life of the mine.
Based on the drillings, Sotkamo Silver’s reported mineral resources
have increased to 12.7 million tonnes. Previously, at the end of 2024,
reported mineral resources totaled 8.5 million tonnes. Notably, the
most precise category, Measured, grew significantly from 0.9 million
tonnes to 7.3 million tonnes. Current ore reserves and estimated
economically mineable mineral resources give a strong base to
continue mining operations for at least next ten years, and the aim is to
extend the mine lifetime by additional exploration drilling.
• As per 31 December 2025, LTIFR (Lost Time Injury Frequency Rate)
totalled 14 (15).
20250526_113630F.jpg
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
35
Operations
Mining and production
Sotkamo Silver's mining operations experienced difficulties in 2025,
mainly caused by rock mechanics and limited capacity, which led to
reduced underground volumes and lower silver grades. Later in the year,
performance rebounded thanks to higher metal prices, new mining
zones, and focused development efforts. To tackle ongoing challenges,
the company launched an accelerated investment program alongside a
development initiative to enhance underground mining performance.
Investments focus on expanding the mine and its infrastructure, aiming
to increase future mining volumes and provide sufficient mining areas.
The targeted development project concentrates on planning and
overseeing underground contractors, ensuring both contractor and
company teams are properly resourced and capable. Preparations to
bring in a new contractor were completed, with the transition scheduled
for early 2026 to improve efficiency and reliability.
Infill and exploration drilling was carried out as planned and updated
resource estimates were published at year's end. Company’s mid term
target for extending the life of mine to 2035 was fulfilled and area west
of the current ore body was identified promising mineralisation for
future development.
Sotkamo Silver has also continued planning longer-term exploration of
the Kuhmo-Suomussalmi greenstone belt in the Kainuu region. The
preparations for the close by exploration areas will continue in 2026,
while the potential within the current mining concession remains priority
for the exploration activities. .
Good development in work safety was reached and during 2025 there
was zero  loss time incidents within Sotkamo Silver own personnel.  The
Company maintained the  Level A in all categories of Finland’s Towards
Sustainable Mining (TSM) system and licensing for the tailings area
expansion was started.
Result
EBIT for 2025 was SEK 9 million (32). Inadequate mining resources and
rock mechanical challenges led to lower silver production and decreased
profitability especially during the first half of 2025.
14 February 2025 the Company set a goal of producing 1.2.- 1.4 million
ounces of silver, annual EBITDA margin to be at least 30% and net debt-
to-EBITDA to be below 1.5 at year end.  12 June 2025 the Company
relased that the silver production is expected to fall slightly below the
lower end of the previously estimated production range and  the EBITDA
margin and the net debt relative to EBITDA are also  expected to fall
slightly short of the targets. In 31 July, the Company updated the silver
production guidance to 1.0-1.2 million ounces, annual EBITDA margin to
at least 22% and net debt relative to EBITDA below 2.5 at year-end. In 21
November, the Company updated the silver production guidance to
0.8-0.9 million ounces, annual EBITDA margin to 16% and net debt
relative to EBITDA below 2.5 at year-end. During the year, 425,000 ore
tonnes were processed, and 0.8 million ounces of silver was produced. 
The EBITDA margin was 20%. The net debt-to-EBITDA ratio was 2.5.
Changes in management
No changes took place in management.
2025 and beyond
Sotkamo Silver aims to increase production by ensuring adequate
resources in underground mining and enhancing the processes and mine
planning. Accelerated investments will provide stability and alternatives
for future underground mining.
Exploration activities are planned for Tipasjärvi greenstone belt, with
short term focus on promising West mineralisation within the current
mining concession.
The Company made notable safety improvements in 2025 and strong
focus on safety along with responsible use of natural resources is
maintained.
After refinancing in 2025, Sotkamo Silver will continue investing in mine
development, relying on cash flow while having contingency plans in
place. Environmental efforts include renewing environmental guarantee,
completing permitting and construction for tailings pond expansion and
maintaining responsible water management. The company is committed
to transparency about environmental impacts and ecological protection.
Changes in equity
Convertibles in an aggregated nominal amount of SEK 32.7 million was
converted to shares.
Events after the reporting period
As part of the long-term consistency and development of underground
mining performance, a new mining contractor started the operations
from the beginning of 2026.
During January, the number of shares and votes in Sotkamo Silver AB has
increased as a result of the conversion of convertibles of series
2022/2026. Before the conversion, there were a total of 322,068,107
shares and votes in the Company. At the end of January, there was a total
of 322,718,497 shares and votes in the Company. The conversion
reduced the principal of the convertible loan from EUR 0.54 million (SEK
5.7 million) to EUR 0.44 million (SEK 4.6 million).
During February, the number of shares and votes in Sotkamo Silver AB
has increased as a result of the conversion of convertibles of series
2025/2029. Before the conversion, there were a total of 322,718,497
shares and votes in the Company. At the end of February, there was a
total of 333,517,189 shares and votes in the Company. The conversion
reduced the principal of the convertible loan from EUR 2.64 million (SEK
28.2 million) to EUR 1.50 million (SEK 16.0 million).
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
36
Other information
Company in brief
Sotkamo Silver is a mining and ore prospecting company that develops
and utilizes mineral deposits in the Kainuu region in Finland.
Employees
As of 31 December 2025, the Group employed 48 (51) people.
Remuneration of senior executives
The primary purpose of remuneration is to attract, retain and motivate
people and provide a competitive remuneration package. To ensure that
remuneration is in line with the interests of shareholders, remuneration
is based on the achievement of specific individual targets that are set
annually by Board of Directors. If the award levels are close to the
maximum, the Board  of Directives may delay part of the payment (max
50%) for the following year.  The Company’s remuneration levels are
systematically compared to the industry’s general remuneration
practices and long-term incentive programmes based on the
development of the Company’s objectives.
The 2025 Annual General Meeting renewed the guidelines that
essentially mean the Company will offer its management team market-
based remuneration, enabling the Company to recruit and retain
qualified employees. Remuneration can consist of the following
components: (i) a fixed base salary, (ii) variable remuneration, (iii) pension
benefits and (iv) other customary benefits. Variable remuneration is
based partly on the profit targets set for the Company as a whole and
partly on the targets achieved by the individual. Variable remuneration
may not exceed 40% of the fixed salary. Pension benefits are
contribution-based and can amount to a maximum of 20% of the base
salary.
The Board was also authorised, under special circumstances, to deviate
from these remuneration guidelines in individual cases. Should this take
place, information about the reasons for the deviation must be provided
at the following Annual General Meeting.
In 2025, the Company has complied with the guidelines for remuneration
adopted by the Annual General Meeting.
The CEO and management have severance agreements from three to six
months. On the CEO's side, the notice period is three months. The
Company may terminate the CEO contract with immediate effect. The
notice period for other management is three months on both sides.
Proposal on guidelines for senior executives for the 2026
Annual General Meeting
The Board’s proposed guidelines concerning the salary and other remu-
neration of Company management for the General Meeting on 21 April
2026 is in accordance with the provisions in chapter 8 of the
Companies Act.
A successful implementation of Sotkamo Silver’s business strategy and
the safeguarding of Sotkamo Silver’s long-term interests, including its
sustainability, requires that Sotkamo Silver is able to offer its senior
executives market-based remuneration that enables the Group to recruit
and retain qualified employees. Company management and senior
executives include the CEO and other members of the management
team. The guidelines do not cover remuneration decided by the Annual
General Meeting such as the remuneration to the members of the Board
of Directors.
The remuneration to the Company management may consist of the fol-
lowing components: (i) a fixed base salary, (ii) variable salary, (iii) pension
benefits, (iv) customary benefits. Variable salary is based on the
achievement of profit targets set for the Company as a whole and on the
targets achieved by the individual and the completion of specific
projects. Variable salary may not exceed 40% of the fixed base salary.
Pension benefits are contribution-based and can amount to a maximum
of 20% of the base salary.
In the case of termination by the employer, the notice period is a maxi-
mum of six months, and in the case of termination by the senior
executive, the notice period is three months.
The Board of Directors may decide to temporarily deviate from the
guidelines in whole or in part if there are special reasons to do so in an
individual case and a deviation is necessary to meet the long-term
interests, including sustainability, of the Sotkamo Silver Group or to
safeguard the Group’s financial viability.
Parent company
The parent company’s business consists of managing group-wide
functions and handling stock market-related issues.  Net result for the
year was SEK -2 million (-15). The relevant figures can be found in the
parent company’s balance sheet and income statements.
Company information
Company name: Sotkamo Silver AB
Business ID: 556224-1892
Address: Box 5216, SE-102 45 Stockholm, Sweden
Registered office: Stockholm, Sweden
Branch
The parent company has a branch in Finland whose business consists of
administering group-wide functions.
Company information
Company name: Sotkamo Silver AB, Branch in Finland
Business ID: 2946859-8
Address: Hopeatie 20, 88600 Sotkamo, Finland
Registered office: Sotkamo, Finland
Impact of operations on external environment
The Group reports in its annual report in accordance with the Swedish
Accounting Act (Årsredovisningslagen, ÅRL Chapter 6, Section 1) on its
permit- and notification-required activities and their environmental
impact. The Group's operational activities take place primarily in Finland,
and it adheres to Finnish environmental legislation in its operations. The
reporting covers the status of permit- and notification-required
activities, any missing permits, the Group's dependence on them, and
significant requirements under Finnish environmental legislation.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
37
taneli-lahtinen--b19XY-T6GU-unsplash (3) copyEDIT2.jpg
The Group reports in the sustainability report on the main environmental
impacts, such as emissions to air, water, and soil, as well as waste and
noise. The nutrient load limits for water were exceeded for nitrogen and
phosphorus in 2025. This is also detailed in the sustainability report.
The Silver Mine’s environmental permit covers its operations and is valid
indefinitely. The Company obtained the expansion permit for the silver
mine concession from the mining authority, enabling us to extend the
underground mine into a wider area and to utilize the known ore body
more efficiently. The environmental permit from the authority was also
obtained  to raise the existing tailings storage facility dam. The permitted
and planned raises secure sufficient tailings deposition capacity until the
planned commissioning of the tailings pond expansion in 2027.  The
permit process for the tailings pond expansion progressed during the
year through close collaboration with the authorities and stakeholders.
In addition to the tailings storage facility permit applications, the Group
has applied for a higher annual total phosphorus emission limit. The
requested change does not pose a risk to the ecological status or
recreational use of nearby water bodies. With the increase in the total
phosphorus emission limit as outlined in the permit application, the
Group can continue using its current phosphorus-containing but
environmentally safe chemical in its production.
Sustainability report
The statutory sustainability report in accordance with the Annual
Accounts Act (ÅRL (1995:1554)) comprises pages 20–32.
Significant risks and uncertainties
Significant risks and uncertainties facing the Company are described in
the Corporate Governance Report on pages 45-49.
Treasury shares
The Company does not hold any own shares.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
38
Key performance measures
Amount in million SEK
Group
2025
2024
2023
2022
2021
Sales revenue
393.4
412.2
410.3
370.9
386.8
Other income
1.8
1.4
1.5
11.1
0.6
Result for the year
-52.8
-16.4
27.2
-27.8
-17.5
Balance sheet total
609.3
698.7
697.4
642.5
663.6
Result per share, before dilution (SEK)
-0.16
-0.06
0.10
-0.14
-0.09
Result per share, after dilution (SEK)
-0.16
-0.06
0.08
-0.14
-0.09
Equity per share, before dilution (SEK)
0.76
1.01
1.04
1.22
1.24
Equity per share, after dilution (SEK)
0.69
0.88
0.91
1.03
1.18
Equity/assets ratio, %*
40.0
41.3
42.5
37.9
37.5
Quick ratio, %*
49.0
75.0
100.9
46.4
27.2
Cash and cash equivalents
13.7
88.3
78.9
0.8
36.7
Average number of employees
50
51
46
51
53
Parent company
2025
2024
2023
2022
2021
Sales revenue
0.0
1.5
0.0
0.0
0.0
Other income
0.0
0.0
0.0
0.0
0.6
Result for the year
-2.1
-15.1
-171.9
-292.0
32.7
Balance sheet total
350.1
346.7
324.2
440.3
713.5
Result per share, before dilution (SEK)
-0.01
-0.05
-0.60
-1.46
0.16
Result per share, after dilution (SEK)
-0.01
-0.05
-0.60
-1.46
0.16
Equity per share, before dilution (SEK)
0.75
0.73
0.79
1.84
3.29
Equity per share, after dilution (SEK)
0.69
0.64
0.70
1.55
3.13
Equity/assets ratio, %*
69.3
60.6
69.2
83.6
92.5
Quick ratio, %*
10.0
9.0
67.0
224.0
68.0
Cash and cash equivalents
3.3
0.7
2.9
0.7
31.5
Average number of employees
0
0
0
0
0
Alternative key performance measures are marked with *. For more detailed definitions, please see section
Definitions on pages 85-87.
Proposed allocation of the parent company’s result, SEK
Share premium reserve
503,305,617
Retained earnings
-585,334,925
Result for the year
-2,047,145
Total
-84,076,453
The Board of Directors proposes that the share premium account, the retained
earnings and the result for the year, totalling SEK -84,076,453, be carried forward.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
39
Corporate Governance Report 2025
Sotkamo Silver AB (“Company or Sotkamo Silver”), a limited liability
Company incorporated in Sweden, is governed under the provisions of
the Swedish Companies Act and its Articles of Association. The Board of
Directors (“Board”) has responsibility for control and management of the
Company, and the Chief Executive Officer holds the day-to-day
responsibility. Shareholders participate in the control and management
of Sotkamo Silver through actions taken at general meetings.
The Board of Directors at Sotkamo Silver sets the standard for the
Company’s business. The importance of good corporate governance is
implicit in this philosophy. It is the duty of the Board of Directors to serve
as a prudent fiduciary for shareholders and to oversee management. To
fulfil its responsibilities and to discharge its duty, the Board of Directors
follows the procedures and standards that are outlined in the Swedish
Corporate Governance Code and the Guidelines issued by NGM Equity
stock exchange, Stockholm. Sotkamo Silver applied the Code in 2025.
The Company applies the Swedish Corporate Governance Code. The
Swedish Corporate Governance Code is available at bolagsstyrning.se.
The foremost aims of corporate governance are to promote active and
responsible ownership; to uphold a transparent and sound balance of
power between owners, board and corporate management; and to 
ensure correct and accessible corporate information for the
shareholders, the capital market and society.
The Board of Directors is responsible for ensuring that the Company’s
organisation is structured in such a way that the Company’s financial
circumstances can be adequately controlled and that external financial
information such as interim reports and annual reports are prepared in
accordance with the relevant accounting standards, legal requirements
and other rules and directives applicable to listed companies. Sotkamo
Silver applies to the IFRS Accounting Standards as adopted by the
European Union.
The Company has also chosen to report on mineral resources and ore
reserves according to the 2012 JORC Code.
Interim reports are issued by the Chief Executive Officer (“CEO”) on
behalf of the Board and examined by the Audit Committee and then by
the Board as a whole. The CEO ensures that financial accounting in the
group companies is carried out in compliance with legal requirements
and that financial management is conducted in a satisfactory manner.
The Board ensures the quality of the Group’s financial reporting
and deals not only with the Company’s financial reports and significant
accounting matters, but also matters related to internal control,
compliance with rules, reliability of reported values, events
after the balance sheet date, changes in estimates, judgments and other
conditions that affect the quality of the financial statements.
Risks management
Sotkamo Silver works continuously to assess and evaluate risks that the
Group is, and may be, exposed to.
The CEO and the Board are responsible for specifying and implementing
day-to-day risk management procedures and for ensuring that risks are
taken into account in the Group’s strategic planning.
The Chief Financial Officer (“CFO”) coordinates risk management
activities and risk reporting.
Sotkamo Silver divides its risks into three main categories: financial,
operational and other risks.
Direct or indirect shareholdings in the Company, representing
at least one-tenth of the voting rights of all shares in the
Company
A list of the Company’s largest shareholders is available on page 11 and is
updated on an ongoing basis on the Company’s website.
Nomination Committee
The Annual General Meeting adopts the following guidelines for the
nominating process. The owner that holds the largest number of shares
and voting rights, based on statistics from Euroclear Sweden AB on 31 
August appoints a Nomination Committee of three people after
consultation with the three next biggest shareholders. The Nomination
Committee for the 2026 Annual General Meeting comprises Vesa
Heikkilä, Matti Saarikoski and Harri Widing. Lawyer Peter Vennerstrand
is the secretary of the Nomination Committee. Peter Vennerstrand
receives initiatives and proposals and answers shareholders questions
regarding the Nomination Committee. The Nomination Committee’s task
is to present proposals to the Annual General Meeting regarding the
number of Board members, the composition of the Board and fees
payable to Board members as well as any special fees payable for
Committee assignments.
The Nomination Committee presents proposals for the Chair of the
Board and the Chair presiding over the Annual General Meeting and,
where applicable, on auditors and their fees. The Chair of the Nomination
Committee is appointed by the Nomination Committee. The Nomination
Committee’s mandate continues until the appointment of a new
Nomination Committee. If a member of the Nomination Committee
leaves the Committee before its assignment has been completed, or if a
material change occurs in the ownership after the appointment of the
Committee, the Nomination Committee’s composition is changed in
accordance with the above principles.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
40
Changes in the composition of the Nomination Committee are published
on the Company’s website.
The Nomination Committee applied as a diversity policy rule 4.1 of the
Code, according to which the Board is to have a composition appropriate
for the Company’s operations, phase of development and other relevant
circumstances. The Board members elected by the shareholders meeting
are collectively to exhibit diversity and breadth of qualifications,
experience and background. The Company is striving for gender balance
on the Board. The Nomination Committee’s proposals are publicly
announced in connection with the publication of the notice of the Annual
General Meeting. In connection with its assignment, the Nomination
Committee is required to fulfil the duties which, according to the
Swedish Corporate Governance Code are to be considered in the
Company’s nominating process, and at the Committee’s request,
Sotkamo Silver must provide personnel resources, such as a secretarial
function for the Nomination Committee, to facilitate the Committee’s
work. If required, Sotkamo Silver must also bear reasonable costs for
external consultants, which the Nomination Committee deems necessary
for the Committee to fulfil its assignment.
The Nomination Committee has met four times during the year and has
also been in contact by telephone. Information on how shareholders can
submit proposals to the Nomination Committee has been available on
the Company’s website. The Nomination Committee’s task is to ensure
that the Board is made up of members who together have the knowledge
and experience that shareholders require from senior management. The
Nomination Committee’s work also includes preparing the election of
auditor.
Annual General Meeting 24 April 2025
The following decisions were made at the meeting: The income
statements and balance sheets for the parent Company and the Group
for the financial year 2024 were adopted. The meeting decided that no
dividend would be paid. The members of the Board of Directors and the
CEO were discharged from liability for the financial year.
The meeting decided that the Board would consist of six members
without deputies. Jukka Jokela, Joni Lukkaroinen, Kimmo Luukkonen,
Sixten Sunabacka, Eeva-Liisa Virkkunen and Mauri Visuri were re-
elected as Board members. Eeva-Liisa Virkkunen was re-elected as Chair
of the Board.
The meeting decided to elect the auditing Company KPMG as the 
Company’s auditor until the end of the 2026 Annual General Meeting 
with authorised auditor Ola Larsmon as auditor in charge until further
notice. The meeting resolved not to authorise the Board of Directors to
issue new shares or other financial instruments. 
The Company is governed by the General Meeting, the Board of
Directors and the CEO in accordance with the rules and regulations of
the law or other statutes.
The General Meeting is the Company’s highest decision-making body. 
The General Meeting elects the members of the Board of Directors,
adopts the income statement and balance sheet, decides on the
allocation of profits and discharge from liability for the members of the
Board of Directors, and adopts the remuneration to the Board of
Directors and the auditor, as well as the terms of remuneration for the
Company’s senior executives.
The General Meeting authorises the Board of Directors to make
decisions on matters that do not concern day-to-day operations. All the
shares in Sotkamo Silver have the same voting rights, with one vote per
share. All shareholders who are registered in the share register and who
have notified the Company of their participation in the meeting by the
date specified in the notice have the right to participate in the Company’s
meetings and vote their shares. Shareholders may also be represented by
proxy at the meeting
Extraordinary General Meeting 23 July 2025
The Extraordinary General Meeting decided on 23 July 2025 to
authorise the Board to resolve new issues of shares, warrants and/or
convertibles. The authorisation covered a maximum dilution of the
number of shares that, at the time of the first issue resolution under this
authorisation, corresponded to 35 percent of the total number of
outstanding shares in the Company, based on the total number of shares
in the Company at the time when the Board of Directors first exercised
the authorisation. The purpose of the authorisation was to enable the
completion of the offer to the holders of the Company's convertible loan
of EUR 6.3 million 2022/2026 to exchange their existing convertible
debentures for either new shares or new convertible debentures in the
Company.
Articles of Association
The Articles of Association regulate the Company’s operations, share
capital, appointment and dismissal of Board members. The Board of
Directors must consist of at least three and no more than seven
members. The Articles of Association also regulate how and within which
period notice of meetings must be given.
Members of the Board of Directors
The Company’s Board of Directors consists of six members. The work of
the Board is led by Chair Eeva-Liisa Virkkunen. Jukka Jokela, Joni
Lukkaroinen, Kimmo Luukkonen, Sixten Sunabacka and Mauri Visuri are
members.
Board of Directors
The Board is elected at the Annual General Meeting for the period until
the next Annual General Meeting. The Board of Directors is responsible
for the Company’s organisation and management. At the constitutive
Board meeting immediately following the Annual General Meeting, the
Board adopts rules of procedure that regulate its work and
responsibilities of the Chair in greater detail. The Chair leads the work of
the Board and monitors the business through continuous dialogue with
the CEO, who manages the day-to-day administration. The division of
work between the Board of Directors and the CEO is stated in the CEO’s
instructions, which are adopted at the constitutive meeting of the Board
of Directors.
Each year, the Board is required to hold at least six meetings, one
constitutive and five regular Board meetings. At its regular meetings, the
Board discusses the CEO’s report on operations regarding the
Company’s economic and financial position, the report on the subsidiary
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
41
and the report on operations. In addition, it adopts interim reports and
year-end reports and approves the annual report with proposals for
profit allocation. The Board also reviews the rules of procedure,
considers the budget for the coming year and decides on meetings and
reporting for the coming year.
The Board of Directors plays the main role in internal control and risk
management.
At the beginning of each year, the Board determines the themes to be
addressed in addition to reviewing the business. Examples of such
themes include interim reporting and budget work, visits to the mine and
meetings with the auditor.
During 2025, the Board held 23 board meetings. In addition, the Board of
Directors has been in continuous contact about the Company’s
operations and development. The year’s board meetings mainly
discussed
• The mining investment, performance of the mining contractor and
cost development
• Cash flow development
• Sustainability and
• Financing.
All board members participated in all Board meetings.
Remuneration of the Board of Directors
Decisions on the remuneration to the Board are made by the Annual
General Meeting. The Annual General Meeting on 24 April 2025 decided
that a total of EUR 169,600, excluding meeting fees, would be paid in
remuneration to the Board of Directors and that the Chair would receive
an annual remuneration of EUR 45,000, the Vice Chair would receive an
annual remuneration of EUR 28,600 and the other Board members not
employed by the Sotkamo Silver Group would receive an annual remu-
neration of EUR 24,000 each. In addition, it was decided that meeting
fees of EUR 500 per meeting would be paid to each board member. A
meeting fee of EUR 500 per meeting is paid to each member for work in
the Audit Committee and other board committees.
Remuneration of senior executives
The primary purpose of remuneration is to attract, retain and motivate
people and provide a competitive compensation package. To ensure that
remuneration is in line with the interests of shareholders, remuneration
is based on the achievement of specific individual targets. The Company’s
remuneration levels are systematically compared to the industry’s
general remuneration practices and long-term incentive programmes
based on the development of the Company’s objectives. The 2025
Annual General Meeting renewed the guidelines that essentially mean
the Company will offer its management team market-based
remuneration, enabling the Company to recruit and retain qualified
employees. Remuneration can consist of the following components:
(i) a fixed base salary, (ii) variable remuneration, (iii) pension benefits and
(iv) other customary benefits. Variable remuneration is based partly on
the profit targets set for the Company as a whole and partly on the
targets achieved by the individual. Variable remuneration may not
exceed 40% of the fixed salary. Pension benefits are contribution-based
and can amount to a maximum of 20% of the base salary.
The Board was also authorised, under special circumstances, to deviate
from these remuneration guidelines in individual cases. Should this take
place, information about the reasons for the deviation must be provided
at the following Annual General Meeting.
In 2025, the Company has complied with the guidelines for remuneration
adopted by the Annual General Meeting.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
42
MEMBERS OF THE BOARD OF DIRECTORS
Eeva-Liisa.png
Eeva-Liisa Virkkunen
Chair since 2020 and member of the
Board since 2018
Eeva-Liisa Virkkunen (b. 1957)
holds a master’s degree in economics
from the Helsinki School of Economics.
Eeva-Liisa is the Chair of Fingrid Board
and the Remuneration Committee,
Vice Chair of West Railway Board and
a Member of Robit Board. Eeva-Liisa is
also the Chair of the Audit Committee
in West Railway Ltd and Robit Plc. In
2014–2020, she held the position of
senior vice president, group finance
and control at Metso Corporation in
Helsinki. Previously she has been
member of the Board of Directors of
Destia, Finland, and has handled board
duties in several companies of the
Metso Group and Rettig Group in
Finland.
Shareholding (own or related party): 0.
She is independent in relation to the
Company and management and major
shareholders of the Company.
Sixten.png
Sixten Sunabacka
Board member since 2020
Sixten Sunabacka (b. 1960) holds a
master’s degree in forestry from the
University of Helsinki and an Executive
MBA from Aalto University. He is the
founder of SuFor Oy and the Chair of
the Board of Oy Stockfors Ab and the
Finland’s Forest Museum Foundation.
He is also a board member of Oy
Arbonaut Ltd and Senior Advisor at
MW Group AB in Sweden. Previously,
Sixten was CEO of Tornator Oyj and
served as director of the forest sector
and bioeconomy for the Finnish
government. He has also held senior
management and board positions at
UPM Oyj. He has been honored with
the title Forstråd/Metsäneuvos by the
President of Finland.
Shareholding (own or related party): 0.
He is independent in relation to the
shareholders of the Company.
Kimmo.png
Kimmo Luukkonen
Board member since 2021
Kimmo Luukkonen (b. 1957) has a
master’s degree in mining engineering
from the Helsinki University of
Technology. Kimmo is senior adviser at
X3 Advisors Group in Finland. Kimmo
has a total of 35 years of experience in
management positions in the mining
industry in Finland and abroad. Kimmo
was managing director of Pyhäsalmi
Mine Oy in Finland in 2009–2020 and
during the period 2001–2009 he held
managerial positions in Inmet Mining
Corporation in Turkey, Nalunaq Gold
Mine A/S in Greenland and Tara Mines
Ltd and Outokumpu Oyj in Ireland.
Shareholding (own or related party): 0.
He is independent in relation to the
Company and management and major
shareholders of the Company.
Jukka.png
Jukka Jokela
Board member since 2022
Jukka Jokela (b. 1954) has a master’s
degree in geology and mineralogy from
the University of Turku. Jukka has long
and comprehensive experience in the
international exploration and mining
industry. Jukka is the managing
director and founder of Joexco Oy,
Finland; senior advisor at FinEx Metals
Ltd, Canada; and board member of
Endomines Oyj, Finland. He was
previously CEO of Anglo American
Sakatti Mining Oy, Finland; VP Finnish
operations of Northland Resources AS,
Norway; and CEO of Northland Mines
Oy, Finland. Jukka has also held various
senior positions at Store Norske Gull
AS, Norway; Polar Mining Oy, Finland;
and Outokumpu Mining Oy, Finland.
Shareholding (own or related party): 0.
He is independent in relation to the
Company and management and major
shareholders of the Company.
Mauri.png
Mauri Visuri
Board member since 2023
Mauri Visuri (b. 1957) has a master’s
degree in economics from the
University of Vaasa and a degree in
mechanical engineering. Mauri is the
CEO and Chair of Teknoventure Oy
Board. Mauri has been active in the
financial and capital markets for
several years and has extensive
experience in the mining and process
industry. In addition, he has held over
twenty-five positions as board member
(chair or member) of listed and unlisted
companies. Mauri has been CEO of
four different companies since the late
1980s.
Shareholding (own or related party):
105,957 through companies. He is
independent in relation to the
Company and management and major
shareholders of the Company.
JoniL_muokattu.png
Joni Lukkaroinen 
Board member since 2024
Joni Lukkaroinen (b. 1965) has a 
master’s degree in engineering from 
the Helsinki University of Technology.
Joni is the Chair of Laania Oy, Ductor
Oy, Aurajoki Oy and Extron
Engineering Oy. Joni has over 35 years
leadership experience in the heavy
base industries - Metals and Mining,
Oil and Chemicals and Forest Products.
Last 8 years Joni was the CEO of
Terrafame Oy, before that CEO of
Kronochem Group and before that
various leadership positions at
Finnforest Oyj, Dynea Oy and Neste
Oy.
Shareholding (own or related party): 0.
He is independent in relation to the 
Company and management and major 
shareholders of the Company.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
43
COMPANY MANAGEMENT
Mikko.png
Mikko Jalasto
CEO and Managing Director of
Sotkamo Silver AB and Sotkamo Silver
Oy since 2022
Mikko Jalasto (b. 1976) has a MSc
(Eng.) from the University of
Technology in Helsinki. Mikko has
strong industrial experience gained
both in Finland and abroad.
Mikko worked as Chief Operating
Officer (COO) from January 2021
before becoming CEO.
Shareholding (own or related party): 
250,000.
Tommi.png
Tommi Talasterä
Group Chief Financial Officer (CFO)
since 2021
Tommi Talasterä (b. 1973) has a
master’s degree in business
administration from Hanken School of
Economics in Helsinki. Tommi has over
25 years of experience in managerial
positions in finance in both the mining
and service sectors.
Shareholding (own or related party):
187,500.
Arttu.png
Arttu Ohtonen 
Chief Sustainability Officer (CSO)
since 2021
Arttu Ohtonen (b. 1983) has a MSc
(Eng.) in process and environmental
engineering from the University of
Oulu.  From 2012, Arttu worked as the
subsidiary's Environmental Manager. 
Shareholding (own or related party): 
25,000.
Pasi.png
Pasi Määttä
Chief Operating Officer (COO) since
2022
Pasi Määttä (b. 1970) has a MSc (Eng.)
from the University of Oulu. Pasi has
over 20 years of experience in various
positions in the mining and process
industry. Pasi worked as a mine
manager from September 2021 before
becoming the Chief Operating Officer
(COO).
Shareholding (own or related party): 
56,117.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
44
Committee work
Audit Committee
The Board appoints Audit Committee to assist in its work. The Audit
Committee consists of Eeva-Liisa Virkkunen, Joni Lukkaroinen and
Kimmo Luukkonen. Joni Lukkaroinen joined the Audit Committee in
April. During the year, the Committee held nine meetings. Eeva-Liisa
Virkkunen and Kimmo Luukkonen participated in each committee
meeting and Joni Lukkaroinen in six meetings. The Committee reviews
and examines the quarterly reports, and also ensures the Company’s
internal control, primarily regarding the financial statements. In 2025,
the Committee and companies followed the same IFRS accounting rules
as in the previous year, which the Company is required to apply. The
signing audit partner attended three of the Audit Committee’s meetings
during the year.
The Audit Committee’s tasks include:
• Monitoring financial reporting and ensuring its reliability
• Ensuring the effectiveness of the internal control system
• Planning and determining the scope of and following up on the year’s
external audit
• Evaluating the independence of the statutory audit firm
• Preparing the proposal for resolution on the election of the auditor.
Remuneration Committee
The Remuneration Committee consists of the entire Board of Directors.
All matters relating to the remuneration of employees in the Group are
considered to be of the utmost importance. Thus, the Board of Directors
is of the opinion that these matters are best addressed by the Board as a
whole together with the CEO.
Technical Committee
The Technical Committee consists of the entire Board of Directors. All
matters relating to exploration and mining are considered to be of the
utmost importance. Thus, the Board of Directors is of the opinion that
these matters are best addressed by the Board as a whole.
Internal control
Definition of internal control
Internal control is the process influenced by the Board of Directors,
management and other personnel designed to provide the Board of
Directors with
reasonable assurance that the Company’s targets are achieved in the
following areas:
• Purposeful and efficient operations
• Reliable financial reporting
• Compliance with applicable laws and regulations.
A description of how internal control over financial reporting is
organised:
Control environment
The foundation for internal control over financial reporting is laid by the
control environment, including the organisation, decision paths,
powers and responsibilities. This has been documented and
communicated in governing documents such as internal guidelines,
manuals and codes, including, for example, the division of tasks between
the CEO and the other bodies established by the Board, as well as
instructions for authorisation and accounting and reporting instructions.
The Company works actively on risk assessment and risk management to
ensure that the risks to which the Company is exposed are managed
within the established framework.
In the risk assessment, attention has been paid to matters such as
significant balance sheet and income statement items, where the risk of
material error could arise. Control activities are carried out monthly
based on this risk assessment, both in the form of preventive guidelines
and observation reconciliations.
Information and communication
Guidelines and manuals are continuously updated and communicated
internally within the Group.
Follow-up
The Board receives monthly financial reports and discusses the financial
situation of the Company and Group at each Board meeting.
In 2025, special emphasis was placed on the follow-up of the operational
performance, liquidity forecast and profitability development.
Production has been a particular focus area, with follow-ups of revenues
and costs as well as liquidity forecasts.
Evaluation and position regarding a special internal audit
function
Due to the limited scope of operations, the Board of Directors is of the
opinion that no special internal audit function is needed and that internal
control can be performed through the organisation and working methods
described above.
Audit
The Company’s auditors review the financial statements and the
management of the Company by the Board of Directors and the CEO.
The auditors are appointed annually by the General Meeting. The audit
firm KPMG was elected auditor at the Annual General Meeting on 24
April 2025, with Ola Larsmon as auditor in charge, for the period until the
end of the 2026 Annual General Meeting.  According to the resolution of
the Annual General Meeting, reasonable audit fees shall be paid based on
an invoice. In 2025, remuneration to the auditor amounted to SEK 2.0
million (2.2). During the year, the auditor participated in six meetings of
the Audit Committee.
The Company’s auditor performed a limited review of the interim report
for the period January–September 2025.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
45
RISK FACTORS
Sotkamo Silver operates in an international cyclical industry that is exposed to fluctuations in metal prices. The business affects the surrounding environment, and working
environment and safety risks are associated with many of the processes. Sotkamo Silver has a strong focus on the environment and safety work. In general, the risks to which Sotkamo
Silver’s operations are exposed can be divided into operational and financial risks. These risks and Sotkamo Silver’s approach to managing them are described below.
Risk
Risk description
Risk mitigation and comments for the year
Operational risks
Mineral resources and ore
reserve risk
Estimates of mineral resources and ore reserves are inherently uncertain.
Uneven distribution of metals in the mineralisation, density of drilling and
samples, bias, inaccuracy and precision of sampling and analysis of the
impact on the accuracy of the data used for interpolating the ore model.
Consequently, the ore model and mining plans are best estimates and
may contain misinterpretations and errors
Increasing the confidence level of mineral resources and ore reserves
through continuous exploration, mining facility and development
mitigates the risk and ensures the long-term viability of operations.
Sufficient drilling and use of industry best practices in combination with
quality assurance and quality control practices minimise the risk of
data-driven errors in estimates.
Geotechnical risk in underground
mining
Fall of ground in a decline or connecting drift can interrupt production,
limit access to mining areas and put people working in the mine at risk.
A cave-in in one of the stopes in production will cause delays, possible ore
losses and dilution, and extra costs due to handling oversize and installing
additional support to regain access to one or more stopes but does not
prevent operations in other areas of the mine.
The Company utilizes geotechnical data (RQD and Q’) and other
applicable information in operational planning and installs engineered
support for the tunnel network and for the stopes. The measures taken
and their adequacy are monitored.
The Company aims to the situation where it has several independent
operating areas in the mine.
Risk of unplanned interruption
of production
Large and highly developed machinery and equipment are used in mining
operations. Unplanned interruptions can occur, for example, due to
technical problems, injuries, accidents or strikes. This, in turn, can lead to
delays and failure to reach production and cost targets.
Great emphasis is placed on training and maintenance as well as on
identifying critical elements to minimise these risks during production.
The Company aims to minimise the total cost of the Group’s damage
risks. This is done by continuously developing damage prevention and
damage limitation in the operations and by introducing and developing
insurance solutions. The Company has chosen to employ qualified
personnel, most of whom have long experience in the position in
question.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
46
Risk
Risk description
Risk mitigation and comments for the year
Operational risks
Environmental risk
Environmental risk management and risk assessment consider both 
inherent and external environmental risks. Inherent risks are direct risks 
in mining operations. External risks include, for example, climate change 
and extreme weather conditions that could affect the mining area.
The results of mining operations have a direct impact on the
environment. The operations generate waste streams that must be
processed in accordance with circular economy principles to minimize
the environmental impacts of the operations and maximize resource
efficiency. The unutilized mining waste must be deposited in the
designated mine waste areas to ensure environmental safety.
Releases into water may contain residues of chemicals and explosives, oil,
leachate from the processed ore and waste rock. Releases into air may
contain soot, dust, greenhouse and related gases. These releases  are
monitored  according to environmental and other related legislative
requirements. 
The Company has invested in the latest technology for water treatment 
and in mining waste deposition sites. The facilities fulfill the authorities’
requirements,  planning and executing follows BAT principles.
Environmental operations are being regularly assessed by the TSM
Finland (Towards Sustainable Mining) standard protocols.
Extreme weather conditions have been taken into account in the
planning of environmental investments. Water quality is sampled 
on an ongoing basis. Work on emissions is based on risk analyses, ongoing
control and maintenance. The Company is in regular contact with the
environmental authorities.
Occupational health and
safety risks
Mining work and following processes are carried out in a demanding
environment including several known dangers and risk-factors.
The operations involve, for example, handling chemicals, heavy
machinery, vehicles and explosives that can injure workers. Accidents
can occur and if they do, they will have a direct impact on the Company’s
opportunities and value.
The Company has invested in the development of safety culture and
employs roles like Working Safety Manager and Mine Safety Manager .
Mine Safety Manager is a certified mine safety officer. In order to control
down the risks associated to all operations , systematic risk assessment
together with safety audits are carried out. Systematic investigations of
near-misses and workplace accidents with lessons- learned culture is in
place.
Main KPI,  the number of lost time injuries for a million working hours
(LTI), is discussed also at each Board meeting. The Company’s goal is to
reach zero LTI.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
47
Risk
Risk description
Risk mitigation and comments for the year
Operational risks
Risk of skills supply
The Company is dependent on qualified personnel in different positions.
The ability to retain current personnel and recruit new employees is
central to the Company’s future development.
The Company is working continuously on being an attractive employer to
help it retain and recruit qualified personnel. The Company maintains
good cooperation with recruitment and staffing companies. As regards
service providers, the Company chooses the best available partners with
good credentials and a strong financial standing.
Supply of goods and services
All of the Company’s operations depend on the continuous supply of
equipment, supplies and services. Suppliers’ goods and service produc-
tion as well as logistics chains for inbound and outbound deliveries are
sensitive to external influences and disturbances.
The Company works actively to reduce these risks by having several
qualified suppliers in each category and area. In cases where only one
supplier is available, the risk is reduced through safety stocks and by
identifying alternative supply solutions. Preventive risk management
takes place on a continuous basis, but the organisation’s ability to quickly
adapt is also important in the management of supply risks.
Permit risks
Sotkamo Silver currently has all the necessary permits in place for the
Silver Mine. Delays in the authorities’ processing of permits may affect
the Company’s production volumes.
The Company has always maintained good communication with the
relevant authorities and stakeholders. The Company has implemented
sustainability standard TSM Finland to further improve its operations
according to the environmental and other permit requirements placed on
the Company.
Image risk
Negative publicity in national, local and/or social media and general
opposition to the mining industry or the Company itself. Deliberate
media attacks.
Transparent communication and public relations with the media and
other relevant stakeholders. Open and transparent information via press
releases and the Company’s website.
Risk of losing social licence
The social license and acceptance of businesses and mining by all
stakeholders are critical to successful operations. Undesired
environmental impacts, conflicts with local stakeholders or failures
regarding health and safety may affect stakeholder acceptance.
A sustainable and responsible approach to environmental issues and
impacts, as well as transparent and timely reporting, are key factors in
maintaining the social license and acceptance of the various stakeholders.
Active collaboration with the local stakeholders, regular monitoring
group meetings with the representatives from the local communities.
Exchange rate and metal price risks
Pricing terms for products are based mainly on metal exchanges, and
ours are priced in USD. As a result, transaction exposure arises as
exchange rates fluctuate between the moment the transaction is agreed
and the moment it is settled. Changes in exchange rates and metal prices
have a major impact on Sotkamo Silver’s profit and cash flow
The Company implemented silver metal price risk hedging with euro-
denominated instruments in 2025 according to hedging policy approved
by the Board of Directors.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
48
Risk
Risk description
Risk mitigation and comments for the year
Financial and market risks
Translation risk
The Group's balance sheet consists mainly of assets and liabilities in euros.
Consequently, the Company has an exposure of the net in the balance
sheet in EUR/SEK as the Parent Company's accounting currency is SEK
Under the company’s Treasury Policy, the Company does not actively
eliminate the effect of translation exposure through equity hedging.
Refinancing and liquidity risks
The risk that the Company will be unable to obtain the requisite financing
or meet its payment obligations due to insufficient liquidity.
The Company limits refinancing risk through diversification of
counterparties, financing sources and maturities, and through good
governance to ensure compliance with loan agreement terms. Current
liquidity is available in the form of unutilised credit facility and is
reviewed regularly.
The Company’s cash position decreased during the year and was at the
year-end still weak and as there is uncertainty about the future liquidity,
the Company partly manages this risk by committed credit facility, and by
continuously monitoring forecasted and actual cash flows. As the current
cash position is not sufficient to run the operations for 12 months
without positive cash flows, the Company conducts regular stress testing
under various market and operational scenarios to assess the impact on
liquidity to strengthen resilience. In addition, a contingency funding plan
is in place to ensure access to alternative sources of liquidity in the event
of unexpected disruptions.
Interest rate risk
The change in the market value of the debt and
current cost in the event of a change in interest rates.
The Company's senior loan is tied to a variable interest rate, which
exposes the Company to interest rate risk. The convertible loan and
other minor loans are tied to a fixed interest rate. The Company does not
currently work with interest rate derivatives. Smaller agreements as
leasing agreements are dependent on market interest rates. The
Company has chosen not to secure them.
Energy price risk
Changes in energy prices constitute a risk for our financial performance.
The Company has hedged partially the electricity purchase price
according to the policy approved by the Board of Directors.
Credit risk
Risk of financial loss if a customer or counterparty to a financial
instrument fails to meet its contractual obligations.
The Company’s credit risk arises principally from the Company’s
receivables from customer and silver price hedging counterparty. The
Company manages this risk by monitoring the creditworthiness of its
counterparties and credit control procedures.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
49
Risk
Risk description
Risk mitigation and comments for the year
Other risks
Geopolitical risks
Instability and the emergence of new geopolitically unstable areas can
also disturb manufacturing and deliveries, affect the Company’s raw
material and transport costs as well as exchange rates and metal prices,
which in turn affect the Group’s financial results.
The Company closely monitors events that may have a negative impact
on the macroeconomic or geopolitical factors affecting its markets.
The geopolitical landscape of 2025 was defined by a decisive shift into a
competitive age characterised by structural fragmentation and the
erosion of the rules-based international order. This transition marks the
end of market-led globalisation, replaced by a geoeconomic
confrontation where states utilise trade, subsidies, and export controls as
primary instruments of national security. 
The global power balance was undergoing a political revolution centered
in the United States, where a move toward transactional diplomacy and
isolationist doctrines has created a leadership vacuum in traditional
alliances. This shift is compounded by aggressive techno-nationalism, as
governments treat Artificial Intelligence and critical minerals as vital
sovereign infrastructure. Consequently, the competition for "future-
tech" inputs like lithium and high-end semiconductors is driving a wedge
between major economies, forcing a decoupling that complicates global
supply chains.
Operational environments are increasingly shaped by gray-zone tactics,
including infrastructure sabotage and sophisticated disinformation
campaigns that target corporate stability.
The Company works continuously on business continuity plans based on 
the possible consequences of such events. 
Cyber risks
Various cyber risks ranging from identity fraud to attacks on the IT
network and IT services and even process control systems have become
increasingly common and may hit the Company, causing financial damage
and disruption to operations.
The Company has taken steps to control the access and identity of the
users who have access to the IT systems. Data networks are segmented
and protected by security zones. In addition, virus protection, firewalls,
and other technological methods for software and hardware are kept up
to date, and best practices are applied to ensure cybersecurity. Staff are
trained and kept aware of risks, and they alerted if the level of risk is
found to be elevated.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
50
Financial Statements
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
51
Consolidated statement of comprehensive income
Amount in million SEK
Note
2025
2024
Net sales
393.4
412.2
Other income
1.8
1.4
Total 
2
395.1
413.6
Change in inventories
-0.8
13.5
Purchases of raw materials, services and supplies
-222.1
-220.1
Other external expenses
3
-48.3
-53.6
Employee expenses
4
-44.3
-44.3
Depreciation and amortization
5
-71.0
-76.5
EBIT
8.8
32.5
 
Financial income
6
5.1
6.4
Financial expenses
7
-66.7
-41.2
Net financial items
-61.6
-34.8
Income after financial items
-52.8
-2.3
 
Taxes
8
0.0
-14.1
Result for the year
-52.8
-16.4
 
Amount in million SEK
Note
2025
2024
Other comprehensive income
Items that may be reclassified to the income statement
Translation differences
-15.2
9.4
Cash flow hedges
-11.9
-2.1
Income tax on cash flow hedges
2.4
0.4
Total comprehensive income for the year
-77.5
-8.7
 
Comprehensive income for the year attributable to:
Parent company’s shareholders
-77.5
-8.7
 
Earnings per share, non-diluted (SEK)
16
-0.16
-0.06
Earnings per share, diluted (SEK)
16
-0.16
-0.06
Total number of shares
322,068,107
286,148,387
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
52
Consolidated balance sheet
Amount in million SEK
Note
31 Dec. 2025
31 Dec. 2024
ASSETS
Fixed assets
Intangible fixed assets
9
0.2
0.3
Right-of-use assets
23
2.7
4.7
Tangible fixed assets
10
499.1
541.3
Deferred tax assets
8
2.6
0.3
Other non-current receivables
13, 25
1.4
2.3
Total fixed assets
506.1
548.9
Current assets
Inventories
16.1
17.9
Trade receivables
25
63.1
30.3
Other current receivables
14, 25
6.5
9.0
Derivative instruments
28
0.0
0.0
Accrued income and prepayments
15
3.8
4.4
Cash and cash equivalents
19, 25
13.7
88.3
Total current assets
103.2
149.8
Total assets
609.3
698.7
Amount in million SEK
Note
31 Dec. 2025
31 Dec. 2024
EQUITY AND LIABILITIES
Equity
Share capital
16
308.6
275.9
Other contributed capital
236.6
236.6
Translation differences
8.9
24.4
Cash flow hedges
-10.5
-1.3
Retained earnings
-247.3
-231.0
Result for the year
-52.8
-16.4
Equity attributable to the parent company's shareholders
243.5
288.3
Total equity
243.5
288.3
Liabilities
Non-current liabilities
Interest-bearing liabilities
17
148.9
190.0
Non-current lease liabilities
17
0.3
1.7
Non-current derivative liabilities
17, 25
0.0
0.0
Provision for restoration of land
24
39.0
42.4
Total non-current liabilities
188.1
234.1
Current liabilities
Interest-bearing liabilities
17
64.7
71.6
Current lease liabilities
17
2.9
3.8
Derivative instruments
28
13.1
1.6
Trade payables
57.7
53.0
Other current liabilities
17.2
18.0
Accrued expenses and deferred income
18, 25
22.2
28.3
Total current liabilities
177.7
176.3
Total liabilities
365.8
410.4
TOTAL EQUITY AND LIABILITIES
609.3
698.7
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
53
Consolidated statement of changes in equity
Equity attributable to the parent company's shareholders
Amount in million SEK
Share capital
Other contributed
capital
Translation
differences
Cash flow hedges
Retained earnings
incl. result for the
year
Total equity
Opening equity on 1 Jan. 2024
275.5
236.3
15.0
0.4
-230.9
296.3
Comprehensive income
Result for the year
-16.4
-16.4
Other comprehensive income
Translation differences
9.4
0.0
9.4
Cash flow hedges
-2.1
-2.1
Income tax on cash flow hedges
0.4
0.4
Total comprehensive income
0.0
0.0
9.4
-1.7
-16.4
-8.7
Share issue and convertible loan conversion
0.4
0.3
0.7
Bonus issue
0.0
0.0
0.0
Share issue
0.0
0.0
0.0
Total transactions with shareholders
0.4
0.3
0.0
0.0
0.0
0.7
Closing equity on 31 Dec. 2024
275.9
236.6
24.4
-1.3
-247.3
288.3
Comprehensive income
Result for the year
-52.8
-52.8
Other comprehensive income
Translation differences
-15.5
0.3
-15.2
Cash flow hedges
-11.9
-11.9
Income tax on cash flow hedges
2.4
2.4
Total comprehensive income
0.0
0.0
-15.5
-9.2
-52.8
-77.5
Share issue and convertible loan conversion
32.7
0.0
32.7
Bonus issue
0.0
0.0
0.0
Share issue
0.0
0.0
0.0
Issue cost
0.0
0.0
Total transactions with shareholders
32.7
0.0
0.0
0.0
0.0
32.7
Closing equity on 31 Dec. 2025
308.6
236.6
8.9
-10.5
-300.1
243.5
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
54
Consolidated cash flow statement
Amount in million SEK
Note
2025
2024
Operating activities
Result for the period
-52.8
-16.4
Items not affecting cash flow
20
128.0
118.3
Interest paid
-24.4
-20.5
Cash flow from operating activities before changes in working
capital
50.8
81.5
Increase (-)/Decrease (+) in inventory
0.8
-13.7
Increase (-)/Decrease (+) in operating receivables
-29.0
41.8
Increase (+)/Decrease (-) in operating liabilities
5.2
2.1
Cash flow from operating activities
27.8
111.6
Investing activities
Acquisition of tangible fixed assets
10
-58.2
-69.7
Cash flow from investing activities
-58.2
-69.7
Financing activities
Expenses for convertible loan conversions
-1.6
0.0
Amortisation of lease liabilities
17
-4.7
-5.3
Loans raised
17
11.1
0.0
Repayment of loans
17
-45.5
-29.9
Cash flow from financing activities
-40.7
-35.2
Cash flow for the year
-71.1
6.7
Cash and cash equivalents as at the beginning of the year
88.3
78.9
Foreign exchange differences in cash and cash equivalents
-3.4
2.7
Cash and cash equivalents as at the end of the year
13.7
88.3
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
55
Parent company income statement
Amount in million SEK
Note
2025
2024
Net sales
2
0.0
1.5
Other income
2
0.0
0.0
Total income
0.0
1.5
Supplies
0.0
0.0
Other external expenses
3
-7.9
-11.5
Employee expenses
4
-2.6
-2.5
Depreciation
5
-0.1
-0.1
EBIT
-10.6
-12.6
Financial income
6
31.8
71.9
Financial expenses
7
-14.6
-47.0
Net financial items
17.2
24.9
Result before tax
6.6
12.3
Group contributions
-8.6
-13.3
Tax for the year
8
0.0
-14.1
Result for the year
-2.1
-15.1
As the parent company has no transactions attributable to Other comprehensive income, no Statement of
comprehensive income has been prepared.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
56
Parent company balance sheet
Amount in million SEK
Note
31 Dec. 2025
31 Dec. 2024
ASSETS
Fixed assets
Intangible fixed assets
Mining rights
9
0.0
0.0
Tangible fixed assets
Machinery and equipment
11
0.1
0.1
0.1
0.1
Financial assets
Shares in Group companies
12
191.0
174.9
Receivables from Group companies
150.8
165.6
Other non-current receivables
13
0.0
0.0
341.8
340.6
Total fixed assets
341.8
340.6
Current assets
Receivables from Group companies
4.1
4.3
Other current receivables
14
0.8
0.7
Accrued income and prepayments
15
0.1
0.3
Cash at bank and in hand
19
3.3
0.7
Total current assets
8.3
6.0
TOTAL ASSETS
350.1
346.7
Amount in million SEK
Note
31 Dec. 2025
31 Dec. 2024
EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital
16
310.5
275.9
Reserve account
16.1
16.1
326.7
292.0
Unrestricted equity
Share premium account
503.3
503.3
Retained earnings
-585.3
-570.2
Result for the year
-2.0
-15.1
-84.1
-82.0
Total equity
242.6
210.0
Provisions
0.0
0.0
Liabilities
Non-current liabilities
Long-term convertible loan
17
27.1
72.0
Total non-current liabilities
27.1
72.0
Current liabilities
Trade payables
0.2
0.3
Short-term convertible loan
17
5.5
0.0
Other payables
68.1
62.4
Accrued expenses and deferred income
18
6.7
2.0
Total current liabilities
80.5
64.7
Total liabilities
107.5
136.7
TOTAL EQUITY AND LIABILITIES
350.1
346.7
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
57
Parent company change in equity
Amount in million SEK
Share
capital
Reserve
account
Share
premium
account
Retained
earnings
incl. result
for the
year
Total
equity
Opening equity on 1 Jan. 2024
275.5
16.1
502.9
-570.2
224.4
Comprehensive income
Result for the year
-15.1
-15.1
Other comprehensive income
Translation differences
Total comprehensive income
-15.1
-15.1
Transactions with shareholders
Bonus issue
Share issue
0.4
0.3
0.7
Issue costs
Decrease in equity
Total transactions with shareholders
0.4
0.3
0.7
Closing equity on 31 Dec. 2024
275.9
16.1
503.2
-585.3
210.0
Amount in million SEK
Share
capital
Reserve
account
Share
premium
account
Retained
earnings
incl. result
for the
year
Total
equity
Comprehensive income
Result for the year
-2.0
-2.0
Other comprehensive income
Translation differences
Total comprehensive income
Transactions with shareholders
Bonus issue
Share issue
34.6
34.6
Issue costs
Decrease in equity
Total transactions with shareholders
Closing equity on 31 Dec. 2025
310.5
16.1
503.2
-587.3
242.6
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
58
Parent company cash flow
Amount in million SEK
Note
2025
2024
Operating activities
EBIT
-10.6
-12.6
Adjustment for items not included in cash flow
20
0.1
0.1
Interest paid
-5.3
-5.8
Other financial expenses
0.0
0.0
Interest received
17.2
0.2
Taxes paid
0.0
0.1
Cash flow from operating activities before changes in working
capital
1.3
-18.0
Cash flow from changes in working capital
Increase (-)/Decrease (+) in operating receivables
0.3
-0.5
Increase (+)/Decrease (-) in operating liabilities
2.6
5.2
Cash flow from operating activities
4.2
-13.3
Investing activities
Investment in tangible assets
0.0
Loans raised
0.0
0.0
Cash flow from investing activities
0.0
11.0
Amount in million SEK
Note
2025
2024
Financing activities
Share issue
0.0
0.0
Expenses for convertible loan conversions
-1.6
0.0
New loans raised
0.0
0.0
Repayment of loans receivable
0.0
0.0
Cash flow from financing activities
-1.6
0.0
Cash flow for the year
2.6
-2.2
Cash and cash equivalents at the beginning of the year
0.7
2.9
Foreign exchange gains/losses on cash and cash equivalents
0.0
0.0
Cash and cash equivalents at the end of the year
3.3
0.7
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
59
Notes to the financial statements
Note 1 Key accounting and valuation principles
GENERAL ACCOUNTING PRINCIPLES
Sotkamo Silver AB , business ID 556224-1892, is a limited liability Company
registered in Sweden. The Company’s registered office is in Stockholm, and the
address is Nybrogatan 34, 102 45 Stockholm. Sotkamo Silver’s share is listed on
NGM Equity in Stockholm. The Company has a secondary listing on NASDAQ
Helsinki and  on Börse Berlin, Open Market.
The Company is the parent company of Sotkamo Silver Group, which engages
primarily in mining and related activities.
The annual report was approved for issuance by the Board of Directors on
31 March 2026. The balance sheets and income statements will be presented for
adoption by the Annual General Meeting on 21 April 2026.
BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with the
IFRS Accounting Standards  as approved by the EU as well as IFRIC
Interpretations. Furthermore, the Group also applies the Swedish Corporate
Reporting Board’s recommendation RFR 1 Supplemental Accounting Rules for
Groups, which specifies the additions to IFRS disclosures required by the
provisions of the Annual Accounts Act.
The parent company’s accounting currency is the Swedish Krona (SEK), which is
also the reporting currency for the Group and the parent company.
In the Group’s accounting, items are measured at cost, with the exception of
certain financial assets that are measured at fair value.
The parent company’s accounting principles follow those applied by the Group
except for the rules set out in the Swedish Corporate Reporting Board’s
recommendation RFR 2 Accounting for Legal Entities. The parent company’s
accounting principles are described under the heading Parent company’s
accounting principles.
The key accounting principles applied are described below. These principles have
been applied consistently for the year presented, unless stated otherwise.
NEW AND AMENDED STANDARDS APPLIED BY THE GROUP
The new standards that entered into force in 2025 did not have any significant
impact on the Group’s financial reporting nor any impact on the Group’s result or
financial position. The Group has not proactively applied new amended standards
and amendments and interpretations of existing standards that have not yet
entered into force.
ESTIMATES AND JUDGEMENTS
To prepare financial statements in accordance with the IFRS, assessments and
assumptions must be made that affect the disclosed asset and liability amounts,
income and expense amounts, and other information disclosed in the financial
statements. The estimates and judgements of the Board of Directors and
management are based on past experience and forecasts of future development.
The actual outcome may differ from these judgements.
Valuation of inventory
The Group’s inventories mainly consist of concentrate, spare parts and ore.
Inventories are reported at the lower of cost and net realisable value. The
acquisition value is determined using the first in, first out method (FIFO). The
acquisition value for concentrate consists of ore from the Company’s own mine,
direct wages, other direct costs and attributable indirect manufacturing costs,
including attributable depreciation based on normal production capacity. The net
realisable value is the estimated selling price of metal content in accordance with
the applicable sales conditions less any applicable variable selling expenses.
Revenue recognition
Silver concentrate is usually sold under pricing arrangements which means that
the final price is determined based on quoted market prices for a specified period
after the actual date of sale. Regarding these sales, the Group must estimate the
transaction price to be received on the date of sale, considering relevant
commodity market prices. Adjustments to the receivable due to changes in the
quoted commodity prices are made up to the date of final pricing.
Legal disputes
Sotkamo Silver regularly analyses and assesses outstanding legal disputes using
external advisors to assess the need for provisions. See Note 22, Pledged assets
and contingent liabilities.
Asset retirement obligation (ARO)
The Company has made a provision for the restoration of the mining area. In the
balance sheet, this reserve is recorded as a provision and a fixed asset,
respectively. The asset is depreciated according to the same principle as the
mining asset with production units (units-of-production method). Provisions for
reclamation are made based on an assessment of future costs on the basis of
current conditions.
Provisions are reviewed regularly, and updates are made if necessary when
assessments of useful life, costs, technical requirements, regulations or other
conditions change. See Note 10, Tangible fixed assets and Note 24, Provisions for
land restoration.
Valuation of fixed assets
Impairment tests for tangible and intangible assets are based on the Company’s
internal business plan and assumptions about the future development of, for
example, metal prices, smelting and refining wages and exchange rates. Changes in
the market prices of metals, smelting and refining fees and exchange rates have a
major impact on the Group’s future cash flows and thus on estimated impairment.
Assumptions about the price development of metals, refining costs and exchange
rates are made by Company management with the support of external experts.
Assumptions are reviewed annually and adjusted if required. For more
information, see Note 10, Tangible fixed assets.
Capitalised preparations, facilities and equipment in mines are depreciated at the
rate at which the ore extracted from the underlying mines is used, that is, using the
unit-of-production method. The depreciation rates are based on ore reserves and
the mineral resources that are expected to be extracted from these. In turn, these
estimates are highly dependent on ore reserves and consequently, on matters
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
60
such as expected future metal prices. Changing circumstances may cause changes
in the future depreciation rate.
Fixed assets are depreciated based on the useful life of individual assets. Changes
in estimates of ore reserves and mineral resources typically affect the estimated
life of mine, depending on the volume of ore fed to the concentrator. Furthermore,
variations in the quantities of ore reserves and mineral resources directly
influence depreciation under the unit‑of‑production method, whereas changes in
the estimated life of mine affect the depreciation of other property, plant and
equipment based on their useful lives.
MINERAL RESOURCES
Sotkamo Silver’s mineral resources are divided into the categories probable or
proven. The assessment is based on geological measurements and assumptions
explained in more detail on pages 16–18. Sotkamo Silver’s assessment of the size
of its mineral resources affects the annual depreciation costs and impairment
tests.
ACCOUNTING PRINCIPLES
Consolidated financial statements
The consolidated financial statements comprise the parent company and all the
companies over which the parent company exercises a dominant influence
through direct or indirect ownership. Dominant influence refers to companies in
which Sotkamo Silver has influence, is exposed to or is entitled to variable returns
from its involvement, and can use its influence over the Company to affect its
return. This is usually the case if the ownership and voting rights exceed 50%. The
existence and impact of potential voting rights, which are currently exercisable or
convertible, are taken into account when assessing whether the Group can
exercise a dominant influence over another company. Subsidiaries are included in
the consolidated financial statements from the date on which a dominant
influence is acquired, and divested companies are included in the consolidated
financial statements until the date of divestment, that is, until the date on which
dominant influence ceases.
The consolidated financial statements are prepared in accordance with the
acquisition method, which means that the acquisition cost of a business is the fair
value of the consideration issued (including the fair value of any assets, liabilities
and equity instruments issued). The acquired identifiable assets, liabilities and
contingent liabilities are recognised at fair value at the acquisition date. For each
acquisition, a decision is made whether to recognise non-controlling interests at
fair value or at the proportionate share of the acquired Company’s net assets. If
necessary, the subsidiaries’ accounts are adjusted to comply with the same
principles applied by other Group companies. All internal transactions between
the Group companies and Group holdings are eliminated when preparing the
consolidated financial statements.
Translation of foreign subsidiaries and other foreign operations
The functional currency is the currency of the primary economic environment in
which the subsidiaries operate. Upon consolidation into the reporting currency,
the balance sheets of foreign subsidiaries are translated at the exchange rates
prevailing at the end of the reporting period and the income statement is
translated at the average rates of the reporting period. Accrued exchange
differences and accumulated translation differences related to the translation of
subsidiaries are reported under other comprehensive income.
Revenue recognition
The Group’s revenue consists primarily of the sales of silver concentrates and by-
products. Sales are recognised as revenue when control of the concentrate is
transferred to the customer, which is considered to have been done when the
concentrate has been transported and received by the customer. Where the
agreements contain multiple performance commitments, the transaction price is
allocated to each separate performance commitment based on their standalone
selling prices.
For revenue related to the flotation concentrate, the transaction price is
calculated based on preliminary data on the amount of concentrate, metal content
and metal price, less reimbursement for treatment costs and contaminant content.
Final invoicing takes place when all the input parameters (concentrate quantity,
metal content and price, contaminant content, etc.) have been determined. Any
changes in the amount of concentrate and metal content in final invoicing are
reported as net sales.
Silver concentrate is usually sold under pricing arrangements which means that
the final price is determined based on quoted market prices for a specified period
after the actual date of sale. Regarding these sales, the Group must estimate the
transaction price to be received on the date of sale, considering relevant
commodity market prices. Adjustments to the receivable due to changes in the
quoted commodity prices are made up to the date of final pricing.  Adjustments for
both metal content and changes in market prices in the final sales revenue of
products after an estimate made on the trade date are presented in the income
statement in net sales. 
Revenue from activities that are not part of ordinary activities is reported under
other income.
FINANCIAL INSTRUMENTS
Valuation principles
Fair value
Trade receivables are measured at fair value using market prices for metals from
trading venues for metal derivatives, that is, the London Metal Exchange (LME)
and the London Bullion Market Association (LBMA). The discount rates are based
on current market rates per the currency and time to maturity of the financial
instrument. Exchange rates are taken from the Riksbank, Sweden’s central bank.
Trade receivables are measured at level 2, that is, as instruments that are not
traded in an active market but for which observable market data are used as the
basis for the instrument’s measurement (either directly or indirectly).
The fair value of other current receivables and trade payables is considered to be
the same as the carrying value due to short maturity. For reasons of materiality,
the fair value of other financial instruments is assessed to be essentially the same
as the carrying value.
The Company uses  swaps to hedge silver price risk and electricity price fixing
agreements to hedge the electricity price risk. Derivatives are initially recognised
at fair value on the day the derivative contract is entered into and subsequently
remeasured at fair value at the end of each reporting period. The recognition of
subsequent changes in fair value depends on whether the derivative is designated
as a hedging instrument and, if it is, the nature of the item being hedged. The
Company identifies certain derivatives as hedges of a certain risk associated with
the cash flows of recognised assets and liabilities and highly probable forecast
transactions (cash flow hedges).
At the inception of the hedging relationship, the entity documents the economic
relationship between hedging instruments and hedged items, including whether
changes in the cash flows of hedging instruments are expected to offset changes in
the cash flows of hedged items. The Company documents its risk management
objective and strategy to complete its hedging transactions. The fair value of
derivative instruments designated in hedging relationships were  SEK-13 million
(silver price hedges) and  SEK -0.2 million (electricity price hedges). at the end of
the year.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
61
The effective portion of changes in the fair value of derivatives that are designated
and meet the conditions for cash flow hedges is recognised in the cash flow hedge
reserve in equity. The gain or loss attributable to the ineffective portion is
recognised immediately in the income statement, under other gains/(losses).
The cumulative amounts in equity are reclassified in the periods when the hedged
item affects profit or loss.
Amortised cost
Amortised cost is calculated using the effective interest method. This means that
any premiums or discounts as well as directly attributable costs or income are
accrued over the term of the contract using the calculated effective interest rate.
The effective interest rate is the interest rate that gives the instrument’s
acquisition value as a result of the present value calculation of future cash flows.
Classification and measurement category
Sotkamo Silver assigns financial instruments into the following measurement
categories and classifies the instruments at amortised cost, fair value through
profit or loss or fair value through other comprehensive income, see also Note 25.
The classification depends on the characterisation of the instrument and the
business model within which it is held.
Financial assets at amortised cost
Financial assets categorised as amortised cost include cash and cash equivalents
and other long- and short-term receivables. These financial instruments are
characteristically debt instruments held within a “hold to collect” business model
with the purpose of receiving cash flows from payments of principal and any
interest.
Cash and cash equivalents include short-term investments with a maturity of no
more than three months from the date of acquisition that can easily be converted
into cash. Financial instruments in this category are initially recognised at fair
value plus transaction costs and in subsequent periods at amortised cost. The
expected maturity of other current receivables is short, which is why they are
recognised at nominal amount without discounting in accordance with the
amortised cost method.
Sotkamo measures the future expected credit losses related to investments in
debt instruments recognised at amortised cost based on forward-looking
information. The Group chooses the provisioning method based on whether there
has been a significant increase in credit risk.
Financial assets at fair value through profit or loss
Financial assets in this category consist of trade receivables arising from the sale
of silver. These trade receivables are initially recognised at fair value with any
transaction costs directly in the income statement. In subsequent periods, changes
in fair value are recognised as other income. Further details are provided under
“Revenue recognition”, discussed above.
Financial assets are included in current assets except for items with maturities
more than 12 months after the end of the reporting period, which are classified as
non-current assets.
Convertible loans
Convertible loans are initially recognised at fair value and in subsequent periods
at amortised cost. Where the convertible loan note has a separate equity
component, the fair value of the debt component is determined using a discount
rate based on the market rate of a loan with the same terms but without the share
conversion right. The amount is recognised as a liability at amortised cost using
the effective interest rate method  until the loan note is converted or matures. The
conversion right is initially recognised as the difference between the fair value of
the financial instrument as a whole and the fair value of the debt component. The
difference is reported under equity net of tax, or alternatively, if the conversion
right does not meet the definition of equity under IFRS standards, as a liability.
At the beginning of April 2022, the Company carried out a directed issue of
convertibles with an aggregate nominal amount of up to EUR 6.4 million (SEK 71
million). During Q3 2024 convertibles in an aggregated nominal amount of EUR
60,018  (SEK 0.7 million) and during Q3 2025 EUR 3,160,948  (SEK 34.6 million)
were converted to shares. After conversions, the aggregated nominal amount for
the outstanding convertibles amounts to approximately EUR 0.5million (SEK 5.5
million). The convertibles carry an annual interest of 8.0%. The term of the
convertibles is 4.5 years with a maturity date on 30 September 2026, to the extent
that conversion has not taken place before such date. The conversion price at the
time of issuance was 0.175 EUR (1.951 SEK) per share and after the share issue
the conversion price is 0.1538 EUR (1.714 SEK) per share.  The Company carried
out in August 2025 an exchange offer to the holders of the Company’s convertible
loan 2022/2026 to exchange their convertibles for either new shares or new
convertibles in the Company. 41.6 percent (nominal value EUR 2,640,792  (SEK
29.5 million)) of the convertibles was exchanged for new convertibles 2025/2029.
The convertibles carry an annual interest of 9.0%. The maturity date of the new
convertibles is 31 October 2029, to the extent that conversion has not taken place
before such date. The conversion price at the time of issuance was 0.1056 EUR
(1.1782 SEK) per share.
Both convertibles contain two components: a conversion option component that
will be recognised at fair value under the Black-Scholes model through profit and
loss and a debt component that will be recognised at amortised cost using the
effective interest method. At the inception date, the fair value of the conversion
option was SEK 34 million and the fair value of the debt component was SEK 32
million. On 31 December 2025, the fair values of the convertible option
components were SEK 37 million and the value of the liability components
measured at amortized cost were SEK 20 million. The changes include the
conversion made in August 2025 into shares and a new convertible bond. Of
these, non-recurring financial expenses of SEK 4 million were recorded. The fair
value changes during 2025 for the conversion option liabilities were SEK -24
million, and the effective interest rate cost recorded for the liability components
was SEK 12 million.
Recognition and measurement
Purchases and sales of financial assets are recognised on the business day – the
date on which the Group undertakes to buy or sell the asset. Financial assets are
derecognised when the right to receive cash flows from the instrument has
expired or been transferred, and the Group has transferred substantially all of the
risks and rewards of ownership.
However, liabilities to credit institutions are not recognised until the settlement
date. A financial liability is derecognised when the obligation in the contract has
been fulfilled or if significant parts of the loan terms have been renegotiated.
Other financial liabilities
Financial liabilities mainly consist of liabilities to credit institutions and trade
payables. The expected maturity of trade payables is short, which is why they are
recognised at nominal amount in accordance with the amortised cost method
when the amount is considered to correspond to the fair value. Liabilities to credit
institutions are initially measured as the funds received less any set-up fees and
are later valued at amortised cost.
Interest expenses are recognised on an ongoing basis in the income statement
except for the part that is included in the acquisition value of tangible fixed assets.
Accumulated set-up fees are recognised directly for the loan to the extent that the
loan agreement’s underlying loan commitment has been utilised and is accrued in
the income statement as other financial expenses over the contractual loan term.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
62
Assets and liabilities in foreign currency
Receivables, liabilities and derivatives in foreign currencies are converted into
SEK at the rate on the balance sheet date. Exchange differences from operating
receivables and operating liabilities are included in EBIT. Exchange differences
from other financial assets and liabilities, including any income, are recognised
under financial items.
Government grants and subsidies
Government subsidies refer to aid and support, the purpose of which is to provide
an economic advantage, while government grants provide companies with
resources that can be allocated to an undertaking. Government grants
attributable to assets are recognised either as deferred revenue or as an item
reducing the carrying amount of the asset.
Intangible fixed assets
Intangible fixed assets include licences, other similar rights and exploration rights
obtained in business combinations.
Separately acquired intangible assets are recognised at cost. Intangible assets
acquired through a business combination are recognised at fair value on the
acquisition date.
Intangible assets have a determinable useful life and are recognised at cost less
accumulated amortisation and impairment losses. Other intangible fixed assets,
excluding exploration rights, are amortised over an estimated useful life of 10
years. For exploration rights, see below.
Exploration rights and research and development costs related to exploration and
evaluation assets
Sotkamo Silver's research and development mainly consists of exploration. The
Company also engages in the development of mining and concentration processes.
Research expenditure is expensed when it arises. Where the economic potential
has been determined for the extraction of a mining deposit, the expenditure is
expensed up to this point. Exploration and evaluation assets are measured at cost.
The following are examples of expenses that can be included in the acquisition
cost of exploration and evaluation assets: acquisition of prospecting rights;
topographical, geological, geochemical and geophysical studies; exploratory
drilling; trenching; sampling; and activities related to the evaluation of the
technical feasibility and commercial viability of extracting a mineral resource.
Additional principles are described under tangible and intangible fixed assets.
Exploration rights obtained in business combinations have been treated as
intangible assets.
Tangible fixed assets
Land, plant and equipment and associated costs for development, preparatory
production measures and future reclamation costs are recorded at acquisition
cost less depreciation and any impairment. Repair and maintenance costs are
expensed, major improvements and replacements are capitalised.
Projected future costs for the dismantling and removal of a tangible asset and the
restoration of the place or area where the tangible asset is located (reclamation
costs) are capitalised. The capitalised amount consists of projected discounted
costs which are simultaneously reported as provisions. The effects of subsequent
events that result in costs exceeding the provision are discounted, capitalised as
fixed assets and increased provisions and depreciated over the remaining life of
the asset.
Deferred mining costs consist partly of waste rock excavation to access the ore
body, and partly of work related to infrastructure facilities, roads, tunnels, shafts
and inclined drifts, as well as service, electricity and air distribution facilities. Costs
for preparation incurred to expand mining capacity, develop new ore bodies and
prepare mining areas for future ore production are capitalised.
DEPRECIATION POLICIES FOR TANGIBLE FIXED ASSETS
Depreciation is based on the acquisition cost and estimated useful life.
Depreciation of an asset begins when it can be used.
Facilities and capitalised values included in preparations are depreciated
according to the unit-of-production method that is based on the ore reserves and
partly on the mineral resource in the ore body. Depreciation is carried out to the
estimated residual value. The estimated residual values and production capacity
are regularly tested. Facilities that are not directly linked to production capacity
are depreciated based on asset’s expected life. The estimated useful life is based
on the assumption that the necessary environmental permits can be obtained.
The following estimated useful lives are applied to tangible fixed assets, including
future reclamation costs: Preparations and capitalised restoration costs in parallel
with metal extraction.
• Buildings 60–135 months
• Land improvements 135 months
• Machinery 12–135 months
• Equipment, tools and installations 12–135 months
Sotkamo Silver applies component depreciation, which means that larger process
facilities are divided into sub-components with different useful lives and thus
different depreciation periods.
IMPAIRMENT
On each reporting date, an assessment is made to determine whether there is any
indication of impairment of the Group’s assets. If this is the case, the asset’s
recoverable amount is calculated. Intangible assets are subject to annual
impairment tests even if there is no indication of impairment. The recoverable
amount of an asset is the higher of its value in use and the value received if the
asset were sold to an independent party, calculated as the fair value less costs to
sell. The value in use is the present value of all incoming and outgoing payments
attributable to the asset during its expected use in operations, plus the present
value of the net realisable value at the end of the asset’s useful life. The period the
asset is expected to be used is based on the assumption that the necessary
environmental permits can be obtained. If the estimated recoverable amount is
less than the carrying amount, a write-down is made to the asset’s recoverable
amount. Impairment losses are recognised in the income statement. Impairments
are reversed if changes in the assumptions leading to the original impairment
mean that the impairment is no longer warranted. Impairments are not reversed
to such an extent that the carrying amount exceeds the value that would have
been reported, after deduction of planned depreciation and amortisation, if no
impairment had been made. Impairment reversals are recognised in the income
statement. Goodwill impairment is not reversed. See also the section on Valuation
of fixed assets.
LEASING
The Group leases various buildings, mining machinery, equipment for
concentration plants and crushing plants.
Leases are recognised as right-of-use assets and corresponding liability on the
date on which the leased asset becomes available for use by the Group. Each lease
payment is divided into debt amortisation and financial expense.
The financial expense must be distributed over the lease period so that an amount
corresponding to a fixed interest rate for the liability reported in the respective
period is allocated to each accounting period. The right of use is depreciated on a
straight-line basis over the shorter of the asset’s useful life and the lease term.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
63
Assets and liabilities arising from leases are reported initially at present value.
Lease liabilities comprise the present value of the following lease payments:
• fixed fees (including fees that are fixed in substance), less incentive receivables
• Amounts expected to be payable by the lessee under residual value guarantees
• the exercise price of a call option, if it is reasonably certain that the lessee will
exercise the option, and the lease payments are discounted at the implicit
interest rate if it can be determined, and otherwise at the margin loan rate.
Right-of-use assets are measured at cost and include the following:
• the amount the lease liability was originally valued at SEK 71.6 million
• leasing fees paid on or before the commencement date, after deduction of any
benefits received in connection with the signing of the lease
• initial direct expenses
Payments for short-term contracts and leases of lesser value are expensed on a
straight-line basis in the income statement. Short-term contracts are contracts
with a lease term of 12 months or less.
Options to extend or terminate contracts are included in the asset and liability
when it is reasonably certain that they will be exercised.
Terms are applied to maximise flexibility in the management of contracts.
TAXES
The tax expense (income) for the period comprises current tax and deferred tax.
Taxes are recognised in the income statement, other comprehensive income or
equity depending on where the underlying transaction has been recognised.
Current tax is the tax calculated on the taxable profit (loss) for the period. The
taxable profit (loss) for the year differs from the reported profit (loss) for the year
before tax in that it has been adjusted for non-taxable and non-deductible items as
well as temporary differences. The Group’s current tax is calculated according to
the tax rates prescribed or announced at the balance sheet date.
Deferred tax is reported using the balance sheet method. According to it, deferred
tax liabilities are reported in the balance sheet for all taxable temporary
differences between the reported and fiscal values of assets and liabilities.
Deferred tax assets are recognised in the balance sheet in respect of losses carried
forward and all deductible temporary differences to the extent that it is probable
that the amounts can be used to offset future taxable surpluses. The carrying
amount of deferred tax assets is tested at each closing date and reduced to the
extent that it is no longer probable that sufficient taxable surpluses will be
available. Deferred tax is calculated according to the tax rates expected to apply
for the period in which the asset is recovered or the liability is settled. Both
deferred and current tax assets and tax liabilities are offset when they are related
to income tax levied by the same tax authority.
PROVISIONS
Provisions are recognised when the Group has or can be assumed to have an
obligation as a result of past events and it is probable that payments will be
required to fulfil the obligation. A further prerequisite is that it is possible to
reliably estimate the amount to be paid.
When a significant effect arises as to the point at which a provision is made, the
provision is measured at the present value of the amount expected to be required
to settle the obligation. Here, a pre-tax discount rate is used that reflects current
market assessments of the time value of money and the risks associated with the
provision. The increase due to the passage of time is reported as an interest
expense. Provisions are divided into a current and non-current part.
With the exception of pensions (see separate section), Sotkamo Silver's provisions
primarily refer to reclamation costs that are expected to arise when an operation
is discontinued. Provisions are also made for any remuneration payable upon
termination of employment when an employee has received notice of termination
or accepts voluntary redundancy. A provision and an expense are recognised in
connection with a termination if Sotkamo Silver is obligated to either give notice
of termination prior to the normal end of employment or provide remuneration to
encourage early retirement.
CONTINGENT LIABILITY
A contingent liability is a potential liability arising from past events, the realisation
of which depends on one or more uncertain future events and is outside the
control of the Group. A contingent liability may also be an existing obligation that
is not recognised in the balance sheet because it is unlikely that an outflow of
resources will be required or because the size of the obligation cannot be reliably
calculated.
SHARE CAPITAL
Ordinary shares are classified as share capital. Transaction costs related to a new
share issue are reported as a deductive item, net of tax, from the issue proceeds
received.
SEGMENT AND GEOGRAPHICAL MARKET INFORMATION
A small integrated organisation, Sotkamo Silver comprises a single segment for
mining, concentration and exploration. Mining and concentration are located at
the silver mine in the municipality of Sotkamo in Finland, and exploration is carried
out by geologists at the silver mine.
PARENT COMPANY’S ACCOUNTING PRINCIPLES
The parent company’s annual financial statements have been prepared in
accordance with the Annual Accounts Act, the Swedish Corporate Reporting
Board’s recommendation RFR 2 Accounting for Legal Entities and statements
issued by the Corporate Reporting Board. Under RFR 2, the parent company must,
in the accounts for the legal entity, apply all EU-approved IFRS Accounting
Standards  and statements to the extent that this is possible within the framework
of the Swedish Annual Accounts Act and with due regard to the connection
between reporting and taxation. The recommendation specifies the exceptions
and additions to be made in relation to the IFRS. The differences between the
Group’s and the parent company’s accounting principles are described under the
headings below.
Financial instruments
The parent company does not measure financial instruments in accordance with
IFRS 9. Financial fixed assets are measured  at acquisition cost minus any
impairment and financial current assets according to the principle of the lowest
value (see the Group’s accounting principles). At the end of 2023, the Group
evaluated the loan granted by Sotkamo Silver AB to Sotkamo Silver Oy in view of
the regulations of IFRS 9, which require interest-free loans to be evaluated. An
impairment of SEK 116 million was recognised for the purpose of strengthening
equity in the subsidiary. This did not affect the consolidated financial statements.
Subsidiary
Shares in subsidiaries are reported in the parent company in accordance with the
acquisition value method. Transaction costs in connection with the acquisition of
subsidiaries are reported as an expense in the consolidated financial statements,
and in the parent company, they are reported as part of the acquisition value.
The value of subsidiaries and fixed assets is tested when there is an indication of
impairment. The most important parameters in an impairment test of a subsidiary
are the expected future free cash flow in the subsidiary and assumptions about
the discount rate. In the applied forecasts, the key assumption for future
profitability is based on estimated metal prices and production. The metal prices
used in forecasts were: silver USD 50 per oz, zinc USD 2,803 per t, gold USD 4,056
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
64
per oz and lead USD 2,016 per t. The EUR/USD rate used in forecasts was 1.15.
Impairment testing did not show any indication of impairment.
Leasing
The parent company does not apply IFRS 16 for leasing but accounts for lease
payments on a straight-line basis over the lease period.
FINANCIAL RISK MANAGEMENT
A group is typically exposed through its operations to a variety of financial risks:
market risk (including currency risk, interest rate risk, and price risk), credit risk,
liquidity risk and cash flow risk.
To eliminate market risk as far as possible, Sotkamo Silver has set up certain goals,
principles and methods.
The methods for doing this are to closely monitor developments on the cost side,
metal prices and exchange rates and adopt measures without delay to eliminate
the risks that may arise in the business. Monitoring is carried out by both
management and the Board of Directors over the short and long term.
(a) Market risk
i. Currency risk
The Company’s value development is affected by both metal prices and
currency fluctuations. Most of the Company’s operating expenses are in EUR
and administrative expenses in SEK, while revenue from future products is
priced in USD. The relationship between these currencies will affect the
Company’s value development.
The subsidiary’s loans and the parent company’s convertible loans are in EUR,
similar to the major costs. This reduces currency risk. The Company
continuously evaluates whether to hedge its currency risk.
During 2025, the euro weakened against the Swedish krona, moving from
11.46 at the beginning of the year to 10.82 at the end of the year. This had a
positive impact of SEK 1.7 million on the Company’s result. The weakening of
the euro decreased the company's assets by SEK 37.6 million and the
Company's liabilities by SEK 17.9 million.
ii. Price risk
The Group is exposed to price risk related to the development of commodity
prices. The Company uses swaps to hedge silver price risk. The change in the
price of silver by one dollar will affect net sales by approximately SEK 10
million.
iii. Interest rate risk related to cash flows and fair values
iv. Sotkamo Silver Oy has loans in EUR at variable interest rates. The Company is
exposed to interest rate risk due to changes in market rates. Sotkamo Silver
Oy’s borrowing in EUR amounts to SEK 156.1 million (201.5). An interest rate
increase of 1% would increase interest expenses by approximately SEK 1.6
million (2.0).
(b) Credit risk
Credit and counterparty risk is the risk that the counterparty in a financial
transaction fails to meet its obligations on the due date. Credit risk is
managed at the group level and arises primarily through bank deposits,
blocked bank assets and loan receivables. The Group only accepts banks,
financial institutions and customers with high creditworthiness.
(c) Liquidity risk
Prudence in managing liquidity risk means holding sufficient cash and
marketable securities to meet the liquidity needs created by the exploration
business. In the current phase of operations, the Group strives to ensure
liquidity through owner and loan financing. Management also closely
monitors rolling forecasts of the Group’s liquidity.
(d) Capital risk
The Group's objective regarding the capital structure is to secure the Group’s
ability to continue its operations so that it can generate returns to
shareholders and benefits to other stakeholders and to maintain an optimal
capital structure to keep the cost of capital down.
GOING CONCERN
The Company’s management and Board of Directors monitor cash flows and cash
flow forecasts for the coming year on an ongoing basis. The cash flow forecast
includes expected production, costs and projected metal prices. If any parameter
changes from the forecast, the Board and management will react to the extent
possible to review the need for any external funding. The cash flow forecast
indicated that the Company was a going concern with a positive cash flow.
However, the Company’s cash position was at the year-end still weak and as there
is uncertainty about the future liquidity, the Company partly manages this risk by
committed credit facility, and by continuously monitoring forecasted and actual
cash flows.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
65
MATURITY ANALYSIS OF FINANCIAL LIABILITIES
The table below analyses the Group’s financial liabilities, broken down by the time
remaining until the contractual maturity date on the balance sheet date. The
amounts included in the table are the undiscounted cash flows of the instruments.
The amounts due within 12 months of the balance sheet date correspond to the
carrying amount of the items because the discounting effect is insignificant.
Parent’s financial liabilities (Convertible loan) amount to SEK 32.6 million and
are due in year 2026 (SEK 5.5 million) and in year 2029 (SEK 27.1 million) to the
extent conversion has not taken place.
EXCHANGE RATES
The following exchange rates have been used in this report for conversion from EUR
to SEK.
2025
2024
Rate at the balance sheet day
10.8180
11.4865
Average rate
11.0677
11.4322
Contractual maturities of financial liabilities as of 31 December 2025 (MSEK)
0–1 years
1–2 years
2–5 years
More than
5 years
Total
contractual cash
flows
Loans from credit institutions
34.6
11.6
11.5
0.0
57.7
Lease liabilities
2.9
0.3
3.1
Senior loans
22.7
30.3
45.4
0.0
98.4
Convertible loans
5.5
0.0
27.1
0.0
32.6
Trade payables*
57.7
0.0
0.0
0.0
57.7
*All trade payables are due in 2026
Contractual maturities of financial liabilities as of 31 December 2024 (MSEK)
0–1 years
1–2 years
2–5 years
More than
5 years
Total
contractual cash
flows
Loans from credit institutions
25.7
12.3
24.5
0.0
62.5
Lease liabilities
3.8
2.3
0.3
0.0
6.4
Senior loans
45.9
93.0
0.0
0.0
139.0
Convertible loans
0.0
72.0
0.0
0.0
72.0
Trade payables*
53.0
0.0
0.0
0.0
53.0
*All trade payables are due in 2025
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
66
Note 2 Income and fixed assets
Amount in million SEK
2025
2024
Group
Net sales by geographic area and product
Finland, Zinc-silver concentrate
31.8
35.4
Finland, pyrite
1.9
2.4
Sweden, Silver-lead concentrate
359.7
374.4
Sweden, pyrite
0.0
0.0
Total turnover
393.4
412.2
All concentrates have been sold to Boliden Commercial AB.
Amount in million SEK
2025
2024
Group
Tangible fixed assets  by geographic area
Finland
499.0
541.2
Sweden
0.1
0.1
Summa tangible fixed assets
499.1
541.3
Note 3 Auditors’ fees and reimbursement of expenses
AUDIT FEE
Amount in million SEK
2025
2024
GROUP
KPMG
Audit assignment 1)
2.0
2.2
Fees for audit-related consulting services2)
0.0
0.0
Fees for tax consulting 3)
0.0
0.0
All other fees4)
0.0
0.0
Total
2.0
2.2
PARENT COMPANY
KPMG
Audit assignment 1)
1.3
1.3
Fees for audit-related consulting services2)
0.0
0.0
Fees for tax consulting 3)
0.0
0.0
All other fees4)
0.0
0.0
Total
1.3
1.3
1 Audit fees consist of fees for the annual audit assignment and other audit services of the kind
that can only be performed by the external auditor and include the audit of the consolidated
financial statements and the statutory audit.  Parent company  audit assignment was SEK 1.3
million (1.3)  and other fees  SEK 0.0 (0.0) million.
2 Fees for audit-related consulting services consist of fees for statements and other
assignments that are relatively closely related to the audit of the Group’s and companies’
annual reports and that are traditionally performed by an external auditor.
3 Fees for tax consulting include fees for transfer pricing, charges for tax services, tax
consultations and tax advice related to acquisitions, divestments and other projects as well as
support for tax audits.
4 All other fees - Fees for other services.
Note 4 Personnel
Average number of employees
2025
2024
Parent company in Sweden
Men
0
0
Women
0
0
Total in parent company
0
0
Subsidiary in Finland
Men
44
43
Women
6
8
Total in subsidiary
50
51
Group, total
50
51
Salaries, other remuneration and social
security expenses in million SEK
2025
2024
Group
Board of Directors, CEO and management
9.6
10.6
(of which variable remuneration)
0.0
0.0
Other employees
27.0
26.5
Less capitalised payroll costs
Total
36.6
37.1
Social security expenses
1.4
0.4
Pension expenses
6.3
6.8
Less capitalised social security costs and
pensions
Total
7.7
7.2
Parent company
Board of Directors
2.7
2.5
Other employees
0.0
0.0
Total
2.7
2.5
Social security expenses
0.0
0.0
Pension expenses
0.0
0.0
Total
0.0
0.0
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
67
REMUNERATION TO SENIOR EXECUTIVES
2025
Amount in thousand SEK
Gender
Base salary/fee
Variable
remuneration
Audit
Committee
Social security
expenses
Pension
expenses
Total
expense
Eeva-Liisa Virkkunen, Chair of the Board
Female
611
50
661
Sixten Sunabacka, Vice Chair of the Board
Male
430
430
Kimmo Luukkonen, Board member
Male
382
50
432
Jukka Jokela, Board member
Male
379
379
Mauri Visuri, Board member
Male
379
379
Joni Lukkaroinen, Board member
Male
379
33
412
Mikko Jalasto, CEO
Male
2,212
61
383
2,656
Other senior executives, 3
Male
4,689
130
813
5,632
Total
9,461
0
133
191
1,196
10,981
2024
Amount in thousand SEK
Gender
Base salary/fee
Variable
remuneration
Audit
Committee
Social security
expenses
Pension
expenses
Total
expense
Eeva-Liisa Virkkunen, Chair of the Board
Female
576
46
622
Sixten Sunabacka, Vice Chair of the Board
Male
403
403
Jarmo Vesanto, Board member
Male
99
99
Kimmo Luukkonen, Board member
Male
345
46
391
Jukka Jokela, Board member
Male
345
345
Mauri Visuri, Board member
Male
351
351
Joni Lukkaroinen, Board member
Male
246
246
Mikko Jalasto, CEO
Male
2,799
83
489
3,371
Other senior executives, 3
Male
5,401
161
943
6,505
Total
10,565
0
92
244
1,432
12,333
BENEFITS OF SENIOR EXECUTIVES
Principles
The remuneration to the Board, including the Chair of the Board, is determined by
the shareholders at the Annual General Meeting and applies to the period until the
next Annual General Meeting.
Remuneration and benefits of the Board of Directors
The total remuneration paid to the Board of Directors for the financial year 2025
amounted to SEK 2.69 million (2.44).
Audit Committee
The members of the Audit Committee received EUR 500 per meeting, totalling
SEK 133,000 (92,000) in 2025.
Remuneration and benefits of CEO
In 2025, remuneration to the CEO amounted to SEK 2.656 million (3.371). The
CEO’s remuneration consisted of fixed salary. Variable remuneration was not paid
for the CEO or other senior executives for 2025.  The CEO and management have
severance agreements from three to six months. On the CEO's side, the notice
period is three months. The Company may terminate the CEO contract with
immediate effect. The notice period for other management is three months on
both sides.
Pension plans
Group
Both the parent company and the subsidiary, Sotkamo Silver Oy, have defined
contribution pension schemes.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
68
Note 5 Depreciation and write-downs of tangible and
intangible fixed assets
Amount in million SEK
2025
2024
Group
Depreciation of intangible assets
0.0
Depreciation of tangible fixed assets
66.7
71.6
Depreciation of right-of-use assets
4.3
4.9
Write-down of intangible assets
0.0
Total depreciation
71.0
76.5
Parent company
Depreciation of tangible fixed assets
0.1
0.1
Write-down of intangible assets
0.0
0.0
Total depreciation and write-downs
0.1
0.1
Note 6 Financial income
Amount in million SEK
2025
2024
Group
Exchange rate gains
4.0
4.0
Interest income
0.4
2.5
Fair value gains on debt instruments at fair
value through the income statement
0.6
0.0
Total financial income
5.1
6.4
Parent company
Exchange rate gains
3.6
0.8
Exchange rate gains, Group
0.0
40.2
Interest income
0.0
0.1
Interest income, Group
28.2
30.8
Total financial income
31.8
71.9
Note 7 Financial expenses
Amount in thousand SEK
2025
2024
Group
Exchange rate losses
6.8
0.6
Interest on restoration reserve
1.6
2.3
Interest on lease liabilities
0.3
0.4
Interest expenses
48.8
31.4
Other financial expenses
9.2
6.5
Total financial expenses
66.7
41.2
Parent company
Interest expenses, other
7.5
7.4
Adjustments to interest on previous years’
0.0
0.0
Exchange rate losses
6.2
0.0
Exchange rate losses, Group
0.9
39.6
Total financial expenses
14.6
47.0
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
69
Note 8 Income tax
On 31 December 2025, tax losses in the Group amounted to approximately SEK
47 million (86). The parent company has no tax losses. Deferred tax assets
attributable to tax losses have not been included in the balance sheet.
GROUP
Amount in million SEK
%
2025
%
2024
Result before tax
-52.8
-2.3
Tax according to the applicable tax rate of the
Group
20.0
10.6
20.0
0.5
Tax effect of
Non-deductible expenses
-11.3
-5.7
Losses carried forward
0.0
0.0
Tax effect of net loss from operations not
recognised as a deferred tax asset
0.0
0.0
Increase in deferred depreciation in taxation
-4.7
5.8
Other items
0.0
-0.5
Adjustment for previous years
0.0
-14.1
Reported current tax
0.0
-14.1
PARENT COMPANY
Amount in thousand SEK
%
2025
%
2024
Result before tax
-2.1
-1.0
Tax according to the applicable tax rate of the
parent company
20.0
0.4
20.0
0.2
Tax effect of
Non-deductible expenses
-0.5
-0.2
Non-taxable income
0.0
0.0
Losses carried forward
0.0
0.0
Tax effect of net loss from operations not
recognised as a deferred tax asset
Adjustment for previous years
0.0
-14.1
Other items
0.0
0.0
Reported current tax
0.0
-14.1
EXPIRY YEAR OF LOSSES CARRIED FORWARD
Amount in thousand SEK
Group
Parent
company
Losses excluding recognised deferred tax asset
46.9
0.0
Losses carried forward per expiry year
2029
22.0
2030
10.4
2032 or later
14.6
Without time limit
0.0
0.0
Total
46.9
0.0
On 31 December 2025, the Company has a deferred tax asset of SEK 2.6 million 
(0.3) related to the valuation of cash flow hedges. The change in the deferred tax
asset has been recorded in other comprehensive income on the line Cash flow
hedges tax.
Sotkamo Silver AB has been liable to pay corporate tax on its global income in
Finland since 2021.
Note 9 Exploration rights and research and development
costs related to exploration and evaluation assets
Amount in million SEK
2025
2024
Accumulated cost
At the beginning of the year
50.4
50.4
Acquisitions during the year in parent
0.0
0.0
Translation differences
0.0
0.0
Closing accumulated cost
50.4
50.4
Accumulated depreciation and impairment
At the beginning of the year
-50.3
-50.3
Depreciation for the year
0.0
0.0
Impairment for the year
0.0
0.0
Translation differences
0.0
0.0
Closing accumulated impairment
-50.3
-50.3
Carrying amounts
0.0
0.0
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
70
Note 10 Tangible fixed assets – Group
Amount in million SEK
Buildings and
land
Machinery and
equipment
Deferred mining
costs
Work in
progress
Total tangible
fixed assets
Acquisition cost
Opening balance on 1 Jan. 2024
197.0
262.5
359.9
6.7
826.0
Investments
0.2
11.2
58.8
6.8
77.0
Disposals and retirements
0.0
0.0
0.0
0.0
0.0
Translation differences for the year
3.8
12.7
12.9
0.3
29.7
Closing balance on 31 Dec. 2024
201.0
286.4
431.6
13.7
932.8
Opening balance on 1 Jan. 2025
201.0
286.4
431.6
13.7
932.8
Investments
4.4
7.1
43.8
5.0
60.3
Disposals and retirements
-4.4
-4.4
Translation differences for the year
-6.5
-22.5
-26.1
-0.9
-56.1
Closing balance on 31 Dec. 2025
194.6
271.0
449.3
17.8
932.6
Depreciation
Opening balance on 1 Jan. 2024
-46.0
-138.2
-124.3
0.0
-308.5
Depreciation for the year
-7.8
-30.6
-33.2
0.0
-71.6
Translation differences for the year
-1.5
-5.3
-4.5
0.0
-11.3
Closing balance on 31 Dec. 2024
-55.2
-174.2
-162.0
0.0
-391.4
Opening balance on 1 Jan. 2025
-55.2
-174.2
-162.0
0.0
-391.4
Depreciation for the year
-6.8
-28.0
-31.8
-66.7
Translation differences for the year
3.1
11.4
10.1
24.6
Closing balance on 31 Dec. 2025
-58.9
-190.8
-183.7
0.0
-433.5
Carrying amount, balance sheet 31 Dec. 2024
145.8
112.3
269.6
13.7
541.3
Carrying amount, balance sheet 31 Dec. 2025
135.6
80.2
265.6
17.8
499.1
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
71
Note 11 Tangible fixed assets – parent company
MACHINERY AND EQUIPMENT
Amount in million SEK
Acquisition cost
Opening balance on 1 Jan. 2024
0.3
Investments
0.0
Disposals and retirements
0.0
Closing balance on 31 Dec. 2024
0.3
Opening balance on 1 Jan. 2025
0.3
Investments
0.0
Disposals and retirements
0.0
Closing balance on 31 Dec. 2025
0.3
Depreciation
Opening balance on 1 Jan. 2024
-0.1
Depreciation for the year
-0.1
Closing balance on 31 Dec. 2024
-0.2
Opening balance on 1 Jan. 2025
-0.2
Depreciation for the year
-0.1
Closing balance on 31 Dec. 2025
-0.2
Carrying amount, balance sheet 31 Dec. 2024
0.1
Carrying amount, balance sheet 31 Dec. 2025
0.1
Note 12 Participations in Group companies
PARENT COMPANY
Amount in million SEK
31 Dec. 2025
31 Dec. 2024
Accumulated cost
At the beginning of the year
174.9
174.9
Closing balance
174.9
174.9
Carrying amount at the end of the year
174.9
174.9
Subsidiary/Business ID/
Registered Office
Number of
shares
Proportion,
%
Equity,
million SEK
Book
value,
million SEK
Sotkamo Silver Oy
2029706-7, Sotkamo, Finland
180,000
100
221.3
190.9
Shares in subsidiaries are reported in the parent company in accordance with the
acquisition value method. Transaction costs related to the acquisition of
subsidiaries are reported as an expense in the consolidated financial statements,
and in the parent company, they are reported as part of the acquisition value.
The value of subsidiaries and fixed assets is tested annually. The most important
parameters in an impairment test of a subsidiary are the expected future free cash
flow in the subsidiary and the assumptions about the discount rate. In the applied
forecasts, the key assumption for future profitability is based on estimated metal
prices and production. The metal prices used in forecasts were: silver USD 50 per
oz, zinc USD 2,803 per t, gold USD 4,056 per oz and lead USD 2,016 per t. The
EUR/USD rate used in forecasts was 1.15. Impairment testing did not show any
indication of impairment.
Note 13 Other non-current receivables
Amount in million SEK
31 Dec. 2025
31 Dec. 2024
Blocked bank assets
1.4
2.3
Total non-current receivables
1.4
2.3
Subsidiary
SEK 1.1 million concern securities to authorities (The Safety and Chemicals
Agency, Tukes and Kainuu Centre for Economic Development, Transport and the
Environment).
Parent company
SEK 0.3 million concern blocked bank assets for credit card.
Note 14 Other receivables
Amount in million SEK
31 Dec. 2025
31 Dec. 2024
Group
VAT receivable
5.9
8.4
Tax receivable
0.6
0.5
Other items
0.0
0.3
Total
6.5
9.3
Parent company
VAT receivable
0.3
0.5
Tax receivable
0.6
0.2
Other items
0.0
0.0
Total
0.8
0.7
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
72
Note 15 Accrued income and prepayments
Amount in million SEK
31 Dec. 2025
31 Dec. 2024
Group
Prepayments
3.8
4.4
Other items
0.0
0.0
Total
3.8
4.4
Parent company
Prepayments
0.1
0.3
Other items
0.0
0.0
Total
0.1
0.3
Note 16 Equity
The Company has only ordinary shares. All the shares are fully paid. Each share
entitles to one vote.
Result per share
Result per share is calculated by dividing the period’s result attributable to the
parent company’s shareholders by the  number of shares
Amount in million SEK
31 Dec. 2025
31 Dec. 2024
Result attributable to the parent company’s
shareholders
-52.8
-16.4
Weighted average number of shares before
dilution
322,068,107
286,148,387
Weighted average number of shares after
dilution
350,587,714
327,383,120
Result per share, before dilution (SEK)
-0.16
-0.06
Result per share, after dilution (SEK)
-0.16
-0.06
If the convertible loan 2022/2026 is converted in full, the number of shares will
increase by 3,512,107 shares (conversion price EUR 0.1538). If the convertible
loan 2025/2029 is converted in full, the number of shares will increase by
25,007,500 shares (conversion price EUR 0.1056).
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
73
Note 17 Interest-bearing liabilities
Amount in million SEK
31 Dec. 2025
31 Dec. 2024
INTEREST-BEARING NON-CURRENT
LIABILITIES, GROUP
Loans from credit institutions
23.1
36.9
Lease liabilities
0.3
1.7
Derivative liabilities
35.0
7.3
Senior loans
75.70
93.04
Convertible loans*
15.1
52.8
Total
149.1
191.7
*See Note 1: Convertible loans
INTEREST-BEARING CURRENT LIABILITIES,
GROUP
Loans from credit institutions
34.6
25.7
Lease liabilities
2.88
3.81
Senior loans
22.72
45.95
Convertible loans
7.4
0.0
Total
67.6
75.4
LIABILITIES, SUBSIDIARY
Loans from credit
institutions
Interest rate
Amount in
thousand EUR
Amount in
million SEK
SP Optia
12-month Euribor
+2.5%
23
0.3
Business Finland
Base rate minus 3%
(always at least 1%)
5,308
57.4
OP Bank
3-month Euribor
+1.75%
0
0.0
Senior loan
12-month Euribor
+6.5%
9,100
98.4
Total
14,431
156.1
The Company signed an agreement to extend the maturity of the Senior Loan and
of EUR 1 million  additional financing.
EUR 3.2million (SEK 35million) of the Company’s EUR  6.3 million convertible loan
2022/2026 was exchanged for new shares in the Company leading to an increase
in share capital by SEK 33 million. EUR 2.6 million (SEK 27 million) of the
convertibles was exchanged for new convertibles 2025/2029. The maturity date
of the new convertibles is 31 October 2029. The remaining principal of the
convertible 2022/2026 is EUR 0.5 million (SEK 5 million) and the maturity date is
30 September 2026.
The fair value of the Group’s  interest bearing liabilities is the same as the reported
value due to variable interest rates.
LIABILITIES, PARENT COMPANY
Loans from credit
institutions
Interest rate
Amount in
thousand EUR
Amount in
million SEK
Convertible loan
2022/2025
8%
540
5.5
Convertible loan
2025/2029
9%
2,641
27.1
Total
3,181
32.6
LIABILITIES ATTRIBUTABLE TO FINANCING ACTIVITIES GROUP
Amount in million SEK
Interest-bearing
liabilities
Lease liabilities
Total
Total 1 January 2024
267.1
10.5
277.7
Cash flow
-29.9
-5.3
-35.2
Change in lease agreement
0.0
0.3
0.3
Convertible loan
conversion
9.3
0.1
9.3
Other changes
-0.7
0.0
-0.7
Exchange rate differences
8.5
0.0
8.5
Total 31 December 2024
254.3
5.5
259.9
Cash flow
-34.4
-4.7
-39.2
Change in lease agreement
0.0
2.2
2.2
Exchange rate differences
-13.4
0.1
-13.3
Other changes
-1.3
0.0
-1.3
Total 31 December 2025
176.1
3.2
179.3
The option component is reported under non-current derivative liabilities and is
not included in interest-bearing liabilities in the balance sheet.
Note 18 Accrued expenses and deferred income
Amount in million SEK
31 Dec. 2025
31 Dec. 2024
Group
Accrued personnel costs and board fees
6.8
6.8
Accrued interest expenses
5.5
12.2
Other items
9.8
9.3
Total
22.2
28.3
Parent company
Accrued interest expenses
4.0
0.0
Other items
2.7
2.0
Total
6.7
2.0
Note 19 Cash and cash equivalents
The item cash and cash equivalents comprises bank deposits.
Blocked bank assets are reported as financial fixed assets. The total assets in the
blocked accounts amount to SEK 1.4 million.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
74
Note 20 Items not included in cash flow
Amount in million SEK
Note
2025
2024
Group
Adjustment for items not included in
cash flow
Depreciation and impairment of
intangible assets
9
4.3
0.0
Depreciation of tangible fixed assets
10
66.7
76.5
The year’s provision for land
restoration.
0.0
0.0
Other items not affecting cash flow
57.0
41.8
128.0
118.3
Parent company
Adjustment for items not included in
cash flow
Depreciation of tangible fixed assets
10
0.1
0.1
0.1
0.1
Other items that do not affect cash flow mainly consist of exchange rate
differences.
Note 21 Pledged assets, contingent liabilities and
commitments
Amount in million SEK
31 Dec. 2025
31 Dec. 2024
Group
Contingent liabilities
Pledged assets
Pledged assets related to senior loan
324.1
825.4
Blocked bank assets related to bonds
0.0
0.0
Blocked bank assets for restoration
1.2
2.0
Blocked bank assets related to credit cards
0.3
0.3
Total pledged assets
325.6
827.7
Commitments
Investment commitments related to tangible
fixed assets
0.0
0.0
Commitments attributable to start of
production 1)
1.1
1.1
Total commitments
1.1
1.1
1) Related to the remaining part of the premiums for restoration insurance.
Amount in million SEK
31 Dec. 2025
31 Dec. 2024
Parent company
Contingent liabilities
0.0
0.0
Pledged assets related to senior loan
324.1
825.4
Pledged assets
Blocked bank assets related to credit cards
0.3
0.3
Total contingent liabilities and pledged assets
324.4
825.7
Senior loan securities consist of:
(a) Parent Guarantee
(b) Pledges by the Parent:
(1) Shareholder loan receivables (149,2 MSEK)
(2) Shares  of the subsidiary (174.9 MSEK)
(c) Pledges by the Subsidiary:
(1) Mining concession (reg.no. K8194)
(2) Business mortage  (35 MEUR)
(3) Real estate mortage (35 MEUR)
Note 22 Related party transactions
Group
Amount in million SEK
2025
2024
Related party relationship
service
purchases
service
purchases
CEO, through the company
0.0
0.0
Other senior executives
0.0
0.6
Total
0.0
0.6
Parent company sales to subsidiary
Amount in million SEK
Intra-group interest rates
28.2
30.8
Management fee
0.0
0.0
Total
28.2
30.8
All transactions were made at arm’s length.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
75
Note 23 Right-of-use assets
Right-of-use assets
Amount in million SEK
Carrying amount
1 Jan. 2025
Carrying amount
31 Dec. 2025
Additional lease
Translation
differences
Depreciation
Buildings
1.1
1.0
1.0
-0.1
-1.1
Machinery and equipment
3.6
1.7
1.5
-0.2
-3.2
Total
4.7
2.7
2.5
-0.2
-4.3
Rent from low-value leases have been recognised in the income statement at SEK 0.2 million (0.2).
Right-of-use assets
Amount in million SEK
Carrying amount
1 Jan. 2024
Carrying amount
31 Dec. 2024
Additional lease
Translation
differences
Depreciation
Buildings
2.4
1.1
0.0
0.1
-1.3
Machinery and equipment
6.9
3.6
0.0
0.2
-3.6
Total
9.3
4.7
0.0
0.3
-4.9
Amount in million SEK
2025
2024
Cash flow
Cash flow from operating activities
Interest paid
-0.3
-0.4
Cash flow from financing activities
Amortisation of lease liabilities
-4.7
-5.3
For information about contractual lease liabilities, see Note 1.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
76
Note 24 Provision for restoration of land
Amount in million SEK
Carrying amount at the beginning of the financial year
42.4
Change in provision
-4.7
Discounting effect
1.3
Carrying amount at the end of the financial year
39.0
For a description of the reserve, see Note 1.
Note 25 Financial assets and liabilities
Amount in million SEK
31 Dec. 2025
31 Dec. 2024
Financial assets
Financial assets are measured at amortised
cost*
Other non-current receivables
1.4
2.3
Other receivables
6.5
9.0
Cash and cash equivalents
13.7
88.3
Total
21.7
99.6
Financial assets measured at fair value
through profit and loss
Trade receivables
63.1
30.3
Derivative
0.0
0.0
Financial liabilities
Financial liabilites measured at fair value
through profit and loss
Non-current derivative liabilities
0.0
0.0
Liabilities measured at amortised cost*
Borrowing
213.6
261.6
Trade payables and other payables
74.9
71.0
Lease liabilities
3.1
5.5
Accrued expenses and deferred income
22.2
28.3
Total
313.8
366.4
*Fair value approximates the value according to amortised cost
CHANGES IN THE CONVERSION OPTION COMPONENT IN THE
CONVERTIBLE LOAN (LEVEL 3)
Amount in million SEK
Derivative
liabilities
Total 1 January 2024
4.1
Changes through profit or loss
3.1
Exchange rate differences
0.2
Total 31 December 2024
7.3
Changes through profit or loss
23.9
Exchange rate differences
-1.1
Conversion of convertible loan
7.4
Total 31 December 2025
37.4
The conversion option component of the convertible loan has been recorded at
fair value using the Black-Sholes model through profit or loss.
Note 26 Proposed allocation of the parent company’s
result, SEK
Share premium account
503,305,617
Retained earnings
-585,334,925
Result for the year
-2,047,145
Total
-84,076,453
The Board of Directors proposes that the share premium account, the retained
earnings and the profit for the year, a total of SEK -84,076,453, be carried
forward.
Note 27 Events after the reporting period
As part of the long-term consistency and development of underground mining
performance, a new mining contractor started the operations from the beginning
of 2026.
During January, the number of shares and votes in Sotkamo Silver AB has
increased as a result of the conversion of convertibles of series 2022/2026.
Before the conversion, there were a total of 322,068,107 shares and votes in the
company. At the end of January, there was a total of 322,718,497 shares and
votes in the Company. The conversion reduced the principal of the convertible
loan from EUR 0.54 million (SEK 5.7 million) to EUR 0.44 million (SEK 4.6 million).
During February, the number of shares and votes in Sotkamo Silver AB has
increased as a result of the conversion of convertibles of series 2025/2029.
Before the conversion, there were a total of 322,718,497 shares and votes in the
company. At the end of February, there was a total of 333,517,189 shares and
votes in the Company. The conversion reduced the principal of the convertible
loan from EUR 2.64 million (SEK 28.2 million) to EUR 1.50 million (SEK 16.0
million).
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
77
Note 28 Derivatives
2024
Anticipated accounting
Amount in million SEK
Carrying
amount
Fair
value
2025
2026
2027
2028
After 2028
Electricity price contracts
-1.6
-1.6
-1.2
-0.4
0.0
0.0
0.0
Hedging of future cash flows
-1.6
-1.6
-1.2
-0.4
0.0
0.0
0.0
2025
Anticipated accounting
Amount in million SEK
Carrying
amount
Fair
value
2026
2027
2028
2029
After 2029
Electricity price contract
-0.2
-0.2
-0.2
0.0
0.0
0.0
0.0
Silver price hedging
-12.9
-12.9
-12.9
0.0
0.0
0.0
0.0
Fair value of the hedging instruments with a hedged purchase price of 18.4 MW of electricity and with a hedged silver sales
price of 97,700 oz is included in the Cash flow hedges item in the balance sheet. Hedges were fully effective.
VALUE ADJUSTMENT OF HEDGING INSTRUMENTS
Amount in million SEK
2025
2024
Total value adjustment of hedging instruments reported in other comprehensive income during the year
11.5
-2.1
SENSITIVITY ANALYSIS OF CONVERSION OPTION COMPONENTS IN THE CONVERTIBLE LOANS
Profit or loss
Increase
Decrease
31 December 2024
Expected share price (10% movement)
1.8
-1.8
Expected volatility (10% movement)
1.4
-1.4
31 December 2025
Expected share price (10% movement)
5.3
-5.3
Expected volatility (10% movement)
1.5
-1.5
For the fair values of convertible loans, reasonably possible changes at the reporting date to significant unobservable input,
holding other inputs constant, would have the following effects.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
78
Signing of the annual report
Eeva-Liisa Virkkunen
Sixten Sunabacka
Jukka Jokela
Chair of the Board
Vice Chair of the Board
Board member
Kimmo Luukkonen
Joni Lukkaroinen
Mauri Visuri
Board member
Board member
Board member
Mikko Jalasto
Chief Executive Officer
Our audit report has been submitted on 31 March 2026
KPMG AB
Ola Larsmon
Authorised Public Accountant
The Board of Directors and the CEO declare that the consolidated
financial statements have been prepared in accordance with the IFRS
Accounting Standards as adopted by the EU, and give a true and fair view
of the Group’s position and performance. The Annual Report has been
prepared in accordance with generally accepted accounting principles,
and gives a true and fair view of the parent company’s position and
performance.
The Board of Directors’ Report for the Group and the parent company
gives a true and fair view of the development of the Group’s and the
parent company’s operations, position and results, and describes
material risks and uncertainties faced by the parent company and the
companies included in the Group.
The Annual Report along with the auditor’s report will be presented for
adoption to the Annual General Meeting on 21 April 2026.
Stockholm, on 31 March 2026
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
79
Auditor’s report
(This is a translation of the Swedish original)
To the general meeting of the shareholders of
Sotkamo Silver AB (publ), corporate
identity number 556224-1892
Report on the annual accounts and consolidated
accounts
Opinions
We have audited the annual accounts and consolidated accounts of
Sotkamo Silver AB (publ) for the year 2025, except for the corporate
governance statement on pages 39-49. The annual accounts and
consolidated accounts of the company are included on pages 34-78 in
this document.
In our opinion, the annual accounts have been prepared in accordance
with the Annual Accounts Act, and present fairly, in all material respects,
the financial position of the parent company as of 31 December 2025
and its financial performance and cash flow for the year then ended in
accordance with the Annual Accounts Act. The consolidated accounts
have been prepared in accordance with the Annual Accounts Act and
present fairly, in all material respects, the financial position of the group
as of 31 December 2025 and their financial performance and cash flow
for the year then ended in accordance with IFRS Accounting Standards,
as adopted by the EU, and the Annual Accounts Act. Our opinions do not
cover the corporate governance statement on pages 39-49 and the
sustainability report on pages 20-32. The statutory administration report
is consistent with the other parts of the annual accounts and
consolidated accounts.
We therefore recommend that the general meeting of shareholders
adopts the income statement and balance sheet for the parent company
and the group.
Our opinions in this report on the the annual accounts and consolidated
accounts are consistent with the content of the additional report that has
been submitted to the parent company's audit committee in accordance
with the Audit Regulation (537/2014) Article 11.
Basis for opinions
We conducted our audit in accordance with International Standards on
Auditing (ISA) and generally accepted auditing standards in Sweden. Our
responsibilities under those standards are further described in the
Auditor’s Responsibilities section. We are independent of the parent
company and the group in accordance with professional ethics for
accountants in Sweden and have otherwise fulfilled our ethical
responsibilities in accordance with these requirements.This includes
that, based on the best of our knowledge and belief, no prohibited
services referred to in the Audit Regulation (537/2014) Article 5.1 have
been provided to the audited company or, where applicable, its parent
company or its controlled companies within the EU.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinions.
Key audit matters
Key audit matters of the audit are those matters that, in our professional
judgment, were of most significance in our audit of the annual accounts
and consolidated accounts of the current period. These matters were
addressed in the context of our audit of, and in forming our opinion
thereon, the annual accounts and consolidated accounts as a whole, but
we do not provide a separate opinion on these matters.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
80
Key audit matter
Response in the audit
Valuation of tangible fixed assets related to the Silver Mine in Sotkamo according to the consolidated
financial statements, as well as the valuation of shares in subsidiaries and receivables from subsidiaries in the
parent company.
See disclosure 10 and disclosure 12 and accounting principles on pages 59-64 in the annual account and
consolidated accounts for detailed information and description of the matter.
Description of key audit matter
As of December 31, 2025, the group's reported value for tangible fixed assets amounts to SEK 499
million, which constitutes 82% of the total assets. As of December 31, 2025, the parent company's
reported value for shares in subsidiaries amounts to SEK 191 million, which constitutes 54% of the total
assets, and receivables from subsidiaries amount to SEK 151 million, which constitutes 43% of the total
assets.
Given that the life of the mine is limited, management is annually preparing an impairment test of the
group’s tangible fixed assets and the parent company’s shares in subsidiaries and receivables from
subsidiaries. The impairment test is complex and involves significant management judgments. According
to current requirements, the test must be conducted using a relevant technique where the judgments
are based on the company's internal business plan and future development. Examples of such judgments
include future cash flows, which require assumptions about future metal prices, smelting and refining
costs, and foreign exchange rates. Another important assumption is the discount rate to be used to
reflect market assessments of the time value of economic benefits and the specific risks the business
faces.
Given the above, there are significant judgments that are key to the accounting, and therefore the area
has been assessed as a key audit matter in our audit.
We have reviewed management's impairment test to assess whether it has been conducted in
accordance with the relevant technique. Furthermore, we have evaluated management's forecasts for
future cash flows and the assumptions underlying them, which include the long-term growth rate and
the assumed discount rate, by reviewing and evaluating management's documentation and plans. We
have also evaluated previous years' judgments in relation to actual outcomes. We have also checked the
completeness of the disclosures in the annual report and assessed whether they are consistent with the
assumptions management has applied in its impairment testing and whether the information is
sufficiently comprehensive to understand management's judgments.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
81
Other Information than the annual accounts and consolidated
accounts
This document also contains other information than the annual accounts
and consolidated accounts and is found on pages 1-32 and 85-90. The
other information comprises also of the remuneration report [and report
X] which we obtained prior to the date of this auditor’s report, [and the Y
report, which is expected to be made available to us after that date]. [The
Board of Directors and the Managing Director] are responsible for this
other information.
Our opinion on the annual accounts and consolidated accounts does not
cover this other information and we do not express any form of
assurance conclusion regarding this other information.
In connection with our audit of the annual accounts and consolidated
accounts, our responsibility is to read the information identified above
and consider whether the information is materially inconsistent with the
annual accounts and consolidated accounts. In this procedure we also
take into account our knowledge otherwise obtained in the audit and
assess whether the information otherwise appears to be materially
misstated.
If we, based on the work performed concerning this information,
conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Board of Director's and the Managing
Director
The Board of Directors and the Managing Director are responsible for
the preparation of the annual accounts and consolidated accounts and
that they give a fair presentation in accordance with the Annual
Accounts Act and, concerning the consolidated accounts, in accordance
with IFRS Accounting Standards as adopted by the EU. The Board of
Directors and the Managing Director are also responsible for such
internal control as they determine is necessary to enable the preparation
of annual accounts and consolidated accounts that are free from material
misstatement, whether due to fraud or error.
In preparing the annual accounts and consolidated accounts The Board
of Directors and the Managing Director are responsible for the
assessment of the company’s and the group's ability to continue as a
going concern. They disclose, as applicable, matters related to going
concern and using the going concern basis of accounting. The going
concern basis of accounting is however not applied if the Board of
Directors and the Managing Director intend to liquidate the company, to
cease operations, or has no realistic alternative but to do so.
The Audit Committee shall, without prejudice to the Board of Director’s
responsibilities and tasks in general, among other things oversee the
company’s financial reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable assurance about whether the
annual accounts and consolidated accounts as a whole are free from
material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinions. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs and generally accepted auditing standards in
Sweden will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
annual accounts and consolidated accounts.
As part of an audit in accordance with ISAs, we exercise professional
judgment and maintain professional scepticism throughout the audit. We
also:
a. Identify and assess the risks of material misstatement of the annual
accounts and consolidated accounts, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
b. Obtain an understanding of the company’s internal control relevant
to our audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control.
c. Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by the Board of Directors and the Managing Director.
d. Conclude on the appropriateness of the Board of Directors’ and the
Managing Director's, use of the going concern basis of accounting in
preparing the annual accounts and consolidated accounts. We also
draw a conclusion, based on the audit evidence obtained, as to
whether any material uncertainty exists related to events or
conditions that may cast significant doubt on the company’s and the
group's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the annual accounts and
consolidated accounts or, if such disclosures are inadequate, to
modify our opinion about the annual accounts and consolidated
accounts. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or
conditions may cause a company and a group to cease to continue as
a going concern.
e. Evaluate the overall presentation, structure and content of the
annual accounts and consolidated accounts, including the
disclosures, and whether the annual accounts and consolidated
accounts represent the underlying transactions and events in a
manner that achieves fair presentation.
f. Plan and perform the group audit to obtain sufficient and
appropriate audit evidence regarding the financial information of the
entities or business units within the group as a basis for forming an
opinion on the consolidated accounts. We are responsible for the
direction, supervision and review of the audit work performed for
purposes of the group audit. We remain solely responsible for our
opinions.
We must inform the Board of Directors of, among other matters, the
planned scope and timing of the audit. We must also inform of significant
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
82
audit findings during our audit, including any significant deficiencies in
internal control that we identified.
We must also provide the Board of Directors with a statement that we
have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence,
and where applicable, measures that have been taken to eliminate the
threats or related safeguards.
From the matters communicated with the Board of Directors, we
determine those matters that were of most significance in the audit of
the annual accounts and consolidated accounts, including the most
important assessed risks for material misstatement, and are therefore
the key audit matters. We describe these matters in the auditor’s report
unless law or regulation precludes disclosure about the matter.
Report on other legal and regulatory
requirements
Auditor's audit of the administration and the
proposed appropriations of profit or loss
Opinions
In addition to our audit of the annual accounts and consolidated
accounts, we have also audited the administration of the Board of
Directors and the Managing Director of Sotkamo Silver AB (publ) for the
year 2025 and the proposed appropriations of the company's profit or
loss.
We recommend to the general meeting of shareholders that the profit be
appropriated in accordance with the proposal in the statutory
administration report and that the members of the Board of Directors
and the Managing Director be discharged from liability for the financial
year.
Basis for opinions
We conducted the audit in accordance with generally accepted auditing
standards in Sweden. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities section. We are
independent of the parent company and the group in accordance with
professional ethics for accountants in Sweden and have otherwise
fulfilled our ethical responsibilities in accordance with these
requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinions.
Responsibilities of the Board of Director's and the
Managing Director
The Board of Directors is responsible for the proposal for appropriations
of the company’s profit or loss. At the proposal of a dividend, this
includes an assessment of whether the dividend is justifiable considering
the requirements which the company's and the group's type of
operations, size and risks place on the size of the parent company's and
the group’s equity, consolidation requirements, liquidity and position in
general.
The Board of Directors is responsible for the company’s organization and
the administration of the company’s affairs. This includes among other
things continuous assessment of the company’s and the group's financial
situation and ensuring that the company's organization is designed so
that the accounting, management of assets and the company’s financial
affairs otherwise are controlled in a reassuring manner.
The Managing Director shall manage the ongoing administration
according to the Board of Directors' guidelines and instructions and
among other matters take measures that are necessary to fulfill the
company's accounting in accordance with law and handle the
management of assets in a reassuring manner.
Auditor’s responsibility
Our objective concerning the audit of the administration, and thereby
our opinion about discharge from liability, is to obtain audit evidence to
assess with a reasonable degree of assurance whether any member of
the Board of Directors or the Managing Director in any material respect:
a. has undertaken any action or been guilty of any omission which can
give rise to liability to the company, or
b. in any other way has acted in contravention of the Companies Act,
the Annual Accounts Act or the Articles of Association.
Our objective concerning the audit of the proposed appropriations of the
company’s profit or loss, and thereby our opinion about this, is to assess
with reasonable degree of assurance whether the proposal is in
accordance with the Companies Act.
Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with generally accepted auditing
standards in Sweden will always detect actions or omissions that can give
rise to liability to the company, or that the proposed appropriations of
the company’s profit or loss are not in accordance with the Companies
Act.
As part of an audit in accordance with generally accepted auditing
standards in Sweden, we exercise professional judgment and maintain
professional scepticism throughout the audit. The examination of the
administration and the proposed appropriations of the company’s profit
or loss is based primarily on the audit of the accounts. Additional audit
procedures performed are based on our professional judgment with
starting point in risk and materiality. This means that we focus the
examination on such actions, areas and relationships that are material for
the operations and where deviations and violations would have
particular importance for the company’s situation. We examine and test
decisions undertaken, support for decisions, actions taken and other
circumstances that are relevant to our opinion concerning discharge
from liability. As a basis for our opinion on the Board of Directors’
proposed appropriations of the company’s profit or loss we examined
whether the proposal is in accordance with the Companies Act.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
83
The auditor’s examination of the ESEF report
Opinion
In addition to our audit of the annual accounts and consolidated
accounts, we have also examined that the Board of Directors and the
Managing Director have prepared the annual accounts and consolidated
accounts in a format that enables uniform electronic reporting (the Esef
report) pursuant to Chapter 16, Section 4(a) of the Swedish Securities
Market Act (2007:528) for Sotkamo Silver AB (publ) for year 2024.
Our examination and our opinion relate only to the statutory
requirements.
In our opinion, the Esef report has been prepared in a format that, in all
material respects, enables uniform electronic reporting.
Basis for Opinions
We have performed the examination in accordance with FAR’s
recommendation RevR 18 Examination of the Esef report. Our
responsibility under this recommendation is described in more detail in
the Auditors’ responsibility section. We are independent of Sotkamo
Silver AB (publ) in accordance with professional ethics for accountants in
Sweden and have otherwise fulfilled our ethical responsibilities in
accordance with these requirements.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Responsibilities of the Board of Directors and the
Managing Director
The Board of Directors and the Managing Director are responsible for
the preparation of the Esef report in accordance with the Chapter 16,
Section 4(a) of the Swedish Securities Market Act (2007:528), and for
such internal control that the Board of Directors and the Managing
Director determine is necessary to prepare the Esef report without
material misstatements, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assurance whether the Esef
report is in all material respects prepared in a format that meets the
requirements of Chapter 16, Section 4(a) of the Swedish Securities
Market Act (2007:528), based on the procedures performed.
RevR 18 requires us to plan and execute procedures to achieve
reasonable assurance that the Esef report is prepared in a format that
meets these requirements.
Reasonable assurance is a high level of assurance, but it is not a
guarantee that an engagement carried out according to RevR 18 and
generally accepted auditing standards in Sweden will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions
of users taken on the basis of the Esef report.
The audit firm applies International Standard on Quality Management 1,
which requires the firm to design, implement and operate a system of
quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and
applicable legal and regulatory requirements.
The examination involves obtaining evidence, through various
procedures, that the Esef report has been prepared in a format that
enables uniform electronic reporting of the annual accounts and
consolidated accounts. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement
in the report, whether due to fraud or error. In carrying out this risk
assessment, and in order to design procedures that are appropriate in the
circumstances, the auditor considers those elements of internal control
that are relevant to the preparation of the Esef report by the Board of
Directors and the Managing Director, but not for the purpose of
expressing an opinion on the effectiveness of those internal controls. The
examination also includes an evaluation of the appropriateness and
reasonableness of the assumptions made by the Board of Directors and
the Managing Director.
The procedures mainly include a validation that the Esef report has been
prepared in a valid XHTML format and a reconciliation of the Esef report
with the audited annual accounts and consolidated accounts.
Furthermore, the procedures also include an assessment of whether the
consolidated statement of financial performance, financial position,
changes in equity, cash flow and disclosures in the Esef report have been
marked with iXBRL in accordance with what follows from the Esef
regulation.
The auditor’s examination of the corporate
governance statement
The Board of Directors is responsible for that the corporate governance
statement on pages 39-49 has been prepared in accordance with the
Annual Accounts Act.
Our examination of the corporate governance statement is conducted in
accordance with FAR´s standard RevR 16 The auditor´s examination of
the corporate governance statement. This means that our examination of
the corporate governance statement is different and substantially less in
scope than an audit conducted in accordance with International
Standards on Auditing and generally accepted auditing standards in
Sweden. We believe that the examination has provided us with sufficient
basis for our opinions.
A corporate governance statement has been prepared. Disclosures in
accordance with chapter 6 section 6 the second paragraph points 2-6 of
the Annual Accounts Act and chapter 7 section 31 the second paragraph
the same law are consistent with the other parts of the annual accounts
and consolidated accounts and are in accordance with the Annual
Accounts Act.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
84
KPMG AB, Box 382, 101 27, Stockholm, was appointed auditor of
Sotkamo Silver AB by the general meeting of the shareholders on the 23
April 2024. KPMG AB or auditors operating at KPMG AB have been the
company's auditor since 2024.
Stockholm, 31 March 2026
KPMG AB
Ola Larsmon
Authorized Public Accountant
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
85
Definitions
Key performance indicators and glossary
The use of key performance indicators (KPI) not defined in the IFRS. The
Company’s financial statements are prepared in accordance with the
IFRS. See above for further information on accounting principles. Only a
few KPIs are defined in the IFRS. Since the second quarter of 2016, the
Company has applied ESMA’s (European Securities and Markets
Authority) new guidelines for alternative performance measures. An
alternative performance measure is a financial measure of historical or
future performance, financial position or cash flow that is not defined or
specified in IFRS. To facilitate management’s and other stakeholders’
analysis of the Group’s development, the Company discloses certain
alternative performance measures that are not prepared in accordance
with the IFRS. The alternative performance measures provide additional
information and do not replace key performance indicators defined in
accordance with the IFRS. The Company’s definitions of alternative
performance measures may differ from those of other companies.
AG
The chemical symbol for silver.
AG/EQ
Silver equivalent. Mineral resources are often reported in metal
equivalents of the primary metal, e.g. AgEq. The secondary minerals are
multiplied by their current metal prices, and the result is divided by the
current metal price of the primary metal to obtain the corresponding
metal equivalent.
CONCENTRATION
Concentration of minerals and/or metals from the ore to metals or
mineral/metal concentrates.
INFERRED MINERAL RESOURCE
Mineral resource estimated on the basis of assumed content and
continuity, extrapolation from known and indicated mineral resource, for
which there is a geological basis. Inferred mineral resources may or may
not be supported by samples or measurements. See also Terminology
regarding mineral resources and ore reserves at the end of this section.
AU
The chemical symbol for gold.
PROVEN MINERAL RESERVE
Proven ore reserve is the proven economically mineable part of a known
mineral resource. The economic conditions must be established in a
feasibility study, at least in a pre-feasibility study. The quantity of the ore
reserve is calculated on the basis of the size demonstrated in slabs, shafts
or drill holes. The grade/quality is calculated based on the results of a
detailed sampling. The observations, samples and measurements are of
such density and the geological conditions so well known that the size,
geometric shape, depth, metal grade and grade continuity in the ore are
well known. See also Terminology regarding mineral resources and ore
reserves at the end of this section.
CORE
Cylindrical samples from diamond drilling analysed for metal grade.
CUT-OFF
The lowest grade included in the mineral resource or ore reserve
estimate of the mineral/ore deposit, depending on the metal grade and
metal price.
OPEN PIT
Mining above ground.
DIAMOND DRILLING (CORE DRILLING)
Drilling in rock that produces a rod-shaped sample of the rock.
EQUITY PER SHARE
Equity in relation to the number of shares on the balance sheet date.
Calculation: Equity divided by the number of shares.
EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortisation
EBIT
Earnings Before Interest and Taxes
FINNMIN
Finnish Mining Association
FLOTATION
Process engineering method using surfactants to separate and enrich
minerals and metals from a water mixed slurry.
MINING
Production of metal/mineral concentrates that are further refined in
smelters.
GREENSTONE BELT
Geographical area with metamorphic and sedimentary rocks, which are
usually found in the Precambrian shield area.
GTK
Geological Survey of Finland
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
86
INDICATED MINERAL RESOURCE
Mineral resource, the quantity and quality of which are calculated in the
same way as for a measured mineral resource, but the distance between
the observation points is greater. The degree of certainty, even though it
is lower than that of measured mineral resources, is high enough to
presume continuity between the observation points. See also
Terminology regarding mineral resources and ore reserves at the end of
this section.
EXPLORATION PERMIT
Older designation of exploration permit.
INVESTMENTS
Investments refer to investments in tangible fixed assets and
investments in
right-of-use assets
IRR
Internal Rate of Return. The average annual return of an investment.
JORC CODE
An Australasian code for reporting mineral resources and ore reserves to
investors and other stakeholders.
CASH AND CASH EQUIVALENTS
Short-term assets less inventories in relation to short-term liabilities
QUALIFIED PERSON
A person who is registered and approved by the mining industry’s
interest organisations for the accounting of mineral resources. A
qualified person must be deeply familiar with the mineral industry, hold a
university degree and at least five years of relevant professional
experience.
MEASURED MINERAL RESOURCE
Mineral resources are calculated based on the quantity demonstrated in
slabs, shafts or drill holes.
The grade/quality is calculated based on the results of a detailed
sampling. The observations, samples and measurements are of such
density and the geological conditions so well known that the size,
geometric shape, depth and metal grade of the mineral resource are well
known. See also Terminology regarding mineral resources and ore
reserves at the end of this section.
CORE DRILLING (DIAMOND DRILLING)
Drilling in rock that produces a rod-shaped sample of the rock.
LTIFR
(Lost time injury frequency rate) meaning sickness absence in days due to
workplace accident per million hours worked.
ORE
Metallic mineral deposit that can be mined economically.
MINERAL
A naturally formed solid inorganic substance often with a definite
chemical composition and usually with a definite crystal form.
MINERALISATION
Natural concentration in rock or soil of one or more economically
valuable minerals can also be called a deposit.
ORE RESERVES
The economically workable portion of probable and proven mineral
resources determined based on at least one initial feasibility study.
MINERAL RESOURCE
The economically workable portion of measured and indicated mineral
resources determined based on at least one initial feasibility study.
NPV
Net Present Value. The present value is the estimated value of an
investment’s future cash flows, discounted taking into account a given
discount rate. The net present value is the difference between the
present value and the discounted investment cost.
PB
The chemical symbol for lead.
DECLINE
A spiral tunnel close to the ore that is mainly used for transport.
PROSPECTING
A search for economically minable ores.
TEST DRILLING
Deep sampling to gather information for geological modelling of the
deposit regarding the content and size of the deposit. See also core
drilling.
RESULT PER SHARE
Result divided by the number of shares.
RETURN ON EQUITY
Income after financial items and financial expenses as a percentage of
average equity.
OVERALL PROFITABILITY RATE
Income after financial items and financial expenses as a percentage of
average total capital.
COVERAGE RATIO
Income after financial items plus interest expenses divided by interest
expenses.
PROBABLE ORE RESERVE
The economically mineable part of an indicated mineral resource. The
economic conditions are determined through a full feasibility study also
in this case. The quantity of the ore reserve (ore) is calculated in the same
way as for proven ore reserves, but the distance between the
observation points can be greater. The degree of certainty, even though
it is lower than that of measured ore reserves, is high enough to presume
continuity between the observation points. See also Terminology
regarding mineral resources and ore reserves at the end of this section.
SOTKAMO SILVER AB – ANNUAL AND SUSTAINABILITY REPORT 2025
87
SGU
Geological Survey of Sweden.
EQUITY/ASSETS RATIO
Equity in relation to total assets.
SVEMIN
The Swedish Association of Mines, Mineral and Metal Producers.
See www.mining.se.
TAIVALJÄRVI
Location in the municipality of Sotkamo, where the Company’s main
assets are located.
BUSINESS FINLAND (FORMERLY TEKES)
Finnish state authority. Business Finland funds and promotes ambitious
research and development projects of companies, universities and
research institutes.
T
Unit of mass. In Sotkamo Silver’s English-language reports, t (tonnes) is
used as a metric unit of measurement.
UNDERGROUND MINE
A mine where the mining of ore takes place in underground tunnels, in
contrast to open pit mines.
EXPLORATION PERMIT
A time-bound exclusive right to explore a specific land area containing
metal deposits. Provides the opportunity to protect the investments
made. The commitment includes land reclamation and payment to the
landowner.
OUNCE, TR. OZ.
Troy ounce, 1 troy ounce = 31.1035 grams, unit of measure for silver,
gold and other precious metals.
RECOVERY
The proportion of a metal that can be extracted in the concentration
process.
ZN
The chemical symbol for zinc.
PRECIOUS METAL
Gold, silver, platinum and palladium.
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SILVER IN A NUTSHELL
A quick guide to silver
Each element is unique in its own way, but the properties of silver make it
exceptional among all substances found in the periodic table. The atomic
symbol of silver is Ag.
For example, silver is malleable and supple, making it perfect for
jewellery and cutlery. Because it is one of the world’s most reflective
substances, silver has a uniquely beautiful shine.
Silver is also one of the world’s best conductors of electricity, offering
applications in electronic components such as wires, switches and circuit
Ag
boards. The combination of ductility and electrical conductivity makes
silver perfect for electronics gadgets like smartphones, as it can be bent
and pressed into small spaces without breaking.
Silver also exhibits the unique property of penetrating bacterial cell
walls. This enables silver ions to be used as biocides, which is becoming
increasingly important as the overuse of chemical antibiotics is making
some bacteria immune to them.
As if this were not enough, silver has been valued for centuries as an
investment similar to gold. However, due to its lower value, silver is more
accessible to a larger number of people who choose to hold on to physical
silver instead of paper currency.
Silver is found in the earth’s crust. Silver is usually mined as a secondary
metal, found mainly in combination with gold, copper and lead, from
which it must be separated.
Silver has been considered a precious metal for around 6,000 years. It
was first used as a currency in 700 BC and has had a role as a trading
metal in almost every ancient and modern culture. From the drachma of
the ancient Greeks, which contained an eighth of an ounce of silver, to
the Roman denarius and the British pound, which contained a certain
amount of the metal.
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ANNUAL GENERAL MEETING
AND CALENDAR
Annual General Meeting
The Annual General Meeting will be held on 21 April 2026.
Calendar
Sotkamo will publish financial information
as follows:
• Q1/2026 will be published on 29 April 2026
• Q2/2026 will be published on 31 July 2026
• Q3/2026 will be published on 23 October 2026
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