Interview with Sotkamo Silver’s CFO Tommi Talasterä

For those not yet familiar with Sotkamo Silver – could you briefly describe the company, your business model, and the role you play within the Nordic mining sector?

Sotkamo Silver is a mining and ore exploration company operating in the Kainuu region in Finland. Our main asset is the Sotkamo Silver Mine, where we produce silver as the primary metal, alongside gold, zinc and lead as by-products. The ore is processed into concentrates and sold to smelters under supply agreements. In addition to current operations, we hold mining and exploration rights in the surrounding area, supporting future resource development. We aim to produce the metals needed for the green transition responsibly and in close cooperation with local stakeholders. At the end of 2025, updated mineral resource estimates increased total resources by more than four million tonnes, with a significant increase in the Measured category. Current resources and reserves are estimated to support operations at least until 2035, with further exploration potential at depth and west of the current mining area. Sotkamo Silver is listed on NGM Main Regulated in Stockholm and Nasdaq Helsinki, with approximately 38,000 shareholders, mainly from Finland and Sweden. For 2026, we guide silver production of 0.9–1.2 million ounces, annual EBITDA exceeding EUR 25 million, and a net debt-to-EBITDA ratio below 1.0 at year-end. Our medium-term targets until the end of 2028 include annual silver production of 1.4 million ounces, an EBITDA margin above 30 percent, net debt-to-EBITDA below 2.0, and achieving A-level performance in the Towards Sustainable Mining standard.

Sotkamo Silver has a clear exposure to silver, alongside zinc and lead through your production. How do you view the market outlook for these metals in 2026, and how does that influence your strategic priorities?

Our strategy is not to speculate on prices but to maximize operating leverage so we can capture upside when market conditions are strong. With current favorable pricing, our priority is maintaining steady throughput at the Silver Mine to benefit from high silver and gold prices. Silver has seen strong performance, supported by both investment demand and structural industrial demand from solar PV expansion and electrification. Gold demand reached record levels in 2025 and remains supported by central bank accumulation and its role as a hedge. As gold is a by-product of our silver production, high gold prices support our margins. Zinc and lead provide additional revenue streams that strengthen overall cash flow. We expect production volumes to increase in 2026 compared to last year, and our cash position to improve supported by positive price development.

Over the past years, you have focused on stabilising production and improving operational efficiency at the mine. What are the most important operational focus areas right now to enhance profitability?

We have strengthened production and production management capabilities by recruiting key personnel, changing underground contractor and engaging operational development consulting. The aim is to increase silver production compared to 2025 and ensure stable production in the coming years. Underground capacity will be increased by preparing new mining levels earlier and creating alternative production areas to reduce operational risks. During H1 2026, open-pit ore will supplement underground production while development work progresses. Our short-term focus is on executing drifting and infrastructure plans together with the mining contractor. Separating mine development and production areas improves predictability and resilience. The mining efficiency improvement program focuses on resource reliability, scheduling, follow-up and daily management to enhance overall operational performance.

Cost control and cash flow are crucial in the mining industry, particularly in a volatile commodity environment. How are you working to strengthen your financial position and build a more resilient operation?

Our resilience is based on proactive operational management. We expect production volumes to increase in 2026 compared to last year, and together with favorable metal prices this supports our target of annual EBITDA exceeding EUR 25 million. A one USD change in the silver price impacts annual revenue by approximately SEK 10 million. We focus on converting current price levels into balance sheet strengthening. Cost discipline, energy optimization and improved efficiency through our new mining partnership support cash flow generation. Cash flow will be used to fund mining CAPEX and reduce net debt, strengthening the financial position and improving resilience also in a lower-price environment.

How do you view the potential for further resource and reserve development, and the opportunity to extend the life of the mine?

Updated resource estimates at the end of 2025 significantly strengthened our mineral base. Current resources and reserves support operations at least until 2035. Mineralisation both at depth and west of the current operating area provides promising targets for continued exploration and potential mine-life extension.

Where do you see Sotkamo Silver one year from now?

In one year, we expect to have a full year of data from our new mining partnership, with more stable and optimized production processes. From a financial perspective, we aim to further reduce net debt and improve our equity ratio, strengthening financial flexibility. Strategically, we see ourselves as a reliable Nordic producer of critical metals, supported by consistent operational and financial performance.

Finally – can you give three reasons why Sotkamo Silver is an interesting investment case at this stage?

First, strong operating leverage to silver and gold prices, where current market conditions support earnings generation.
Second, improved operational stability and cash flow generation, strengthening the balance sheet and reducing financial risk.
Third, clear potential for resource growth and mine-life extension through continued exploration at depth and west of current operations.