Sotkamo Silver’s Q3/2026 Interim Report: Strong cash flow enabled investing in future growth

HIGHLIGHTS

July – September

• Net sales increased by 55% to 171 MSEK (110*) driven by higher gold, zinc and lead production and higher silver, gold and zinc prices.
• EBITDA rose to 91 MSEK (35) and EBITDA margin strengthened to 53% (32). During the quarter, approximately 22 MSEK of the Business Finland research and development loan was converted into a grant.
• EBIT increased to 52 MSEK (16). The Company revised the estimated remaining useful life of the existing tailings pond, with depreciation now scheduled to end on 30 June 2027. The change in estimate increased depreciation for the quarter by approximately 16 MSEK. In addition, the Company recognised an impairment loss of approximately SEK 11 million on capitalised development expenditure, as the project achieved only partial success.
• Profitability improved from the comparison period mainly due to increased gold production and positive price development of silver, gold and zinc. The growth achieved in mining volumes and a slight rise in unit costs increased underground mining cost compared with the comparison period and quarter-on-quarter.
• Part of the costs relate to drift development and stope preparation carried out to support ore mining in the near term. OPEX drifting increased by 71% to 927 metres (542).
• Accelerated underground mine development increased CAPEX to 34 MSEK (16).
• The production amounted to 231,098 ounces of silver (255,194), 620 ounces of gold (468), 180 tonnes of lead (167), and 454 tonnes of zinc (404) in concentrates.
• Following the 0.1 MEUR (1 MSEK) conversion of convertibles of series 2022/2026, the entire outstanding loan principal was converted into shares. The total principal of the convertibles of series 2025/2029 was 1.0 MEUR (11 MSEK) at the end of the quarter.
• Cash and cash equivalents including financial assets at fair value through P&L rose to 118 MSEK (1). The Company invests surplus liquidity in a low-risk fixed income fund. Such investments are recognised in the balance sheet as financial assets at fair value through P&L and are presented within investing activities in the statement of cash flows.

January – September

• Net sales increased by 115% to 555 MSEK (258) driven mainly by higher silver and gold production and higher silver and gold prices.
• EBITDA rose to 276 MSEK (29), EBITDA margin strengthened to 50% (11).
• EBIT increased to 215 MSEK (-24).
• The new mining contractor commenced operations at the beginning of January, and full operational capability and performance are in place.
• Cash and cash equivalents including financial assets at fair value through P&L rose from year-end by 105 MSEK and increased to 118 MSEK (14).
• CAPEX increased to 71 MSEK (48).
• The production amounted to 649,784 ounces of silver (610,296), 2,399 ounces of gold (1,250), 496 tonnes of lead (447), and 1,105 tonnes of zinc (1,084) in concentrates.
• Due to conversions of convertible loans, the total principal of convertibles decreased by 2.2 MEUR (24 MSEK).

*Comparative figures refer to the corresponding period of the previous year.

In case of discrepancies, the official Swedish version of this report prevails.

OUTLOOK

Guidance for 2026 (unchanged)

The Board of Directors concluded 28 May on new guidance for year 2026:

• The Company expects to produce 0.9 -1.2 million ounces of silver
• Annual EBITDA is expected to be over 33 MEUR
• Net debt-to-EBITDA is expected to be below 0.1 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.

CEO REVIEW

Efforts to increase mining volumes are paying off – cash flow enables investment for the future

Mining volumes have increased as expected, and silver production continued to grow in the third quarter compared to the previous quarters of the year.

Our investment capacity is strong, and we continued to systematically advance projects aimed at growth. At the beginning of October, we announced progress in the further exploration of the mineralisation located west of the current mine. To date, assay results have been received from seven of the 15 holes in our exploration drilling programme, with mineralised intersections identified in each of them.

Based on the exploration results, we have already decided to conduct further exploration and develop exploration drifts close to the mineralisation during the remainder of the year. The area under exploration, which is located within the current mining concession, has the potential to significantly extend the life of the mine and create an entirely new parallel production area.

Although mining volumes increased and silver production grew, our net sales decreased from the previous quarter. This was due to the lower average silver price. In the second quarter, the price was USD 73 per ounce, whereas this quarter it was around USD 63 per ounce.

We are not satisfied with the development of the silver grade during the third quarter, but we expect it to continue to improve over the coming quarters. In July and August, the silver grade in the mined areas proved to be significantly lower than our forecasts. In September, grades improved and came close to our target.

We are confident about the development during the remainder of the year and next year. Our cash flow and financial position are strong, enabling us to invest for the long term. Through the development work carried out together with our mining contractor, we have been able to significantly increase mining volumes, providing a solid foundation for near-term growth.

KEY FIGURES

Alternative key performance measures are marked with asterisk. For more detailed definitions, please see the full report.

EVENTS AFTER THE REPORTING PERIOD

On 7 October 2026, the Company released that it has taken a significant step in the further exploration of the mineralisation located west of the current mine. As of the date of the release, assay results have been received for seven of the 15 holes (3,620 metres) drilled as part of the Company’s exploration drilling programme, and mineralised intersections have been identified in all seven holes. In light of the promising preliminary results, the Company has decided to develop exploration drifts near the new mineralisation during the remainder of the year. The exploration drifts will enable more detailed follow-up studies to assess the mineralisation’s economic viability.

FINANCIAL CALENDAR

• Q4/2026: 18 February 2027
• Financial statements and the Board of Directors' report for 2026: during the week commencing 29 March 2027
• Q1/2027: 30 April 2027
• Q2/2027: 30 July 2027
• Q3/2027: 27 October 2027

The Annual General Meeting is scheduled to be held on 22 April 2027 in Stockholm.

WEBINAR

The result webinar will be held today on 23 October at 1:00 p.m. Finnish time (EET). You can participate in the event through the link: https://events.inderes.com/sotkamosilver/2026-q3-tulos

The webinar will be conducted in Finnish, with the material presented in English. During the event, you can ask questions using the chat function. The presentation from the webinar will be made available on the company's website at: https://www.silver.fi/en/investors/presentations

Stockholm, 23 October 2026

Sotkamo Silver AB’s Board of Directors and CEO

CONTACT INFORMATION

Mikko Jalasto,
CEO of Sotkamo Silver AB
mikko.jalasto@silver.fi
+358 50 482 1689

Tommi Talasterä,
CFO of Sotkamo Silver AB
tommi.talastera@silver.fi
+358 40 712 6970

Sotkamo Silver in brief

Sotkamo Silver is a mining and ore exploration company that develops and utilises mineral deposits in the Kainuu region in Finland. Sotkamo Silver supports the global development towards green transition technologies and produces the metals needed responsibly and by taking local stakeholders into account. Sotkamo Silver’s main project is a silver mine located in Sotkamo, Finland. In addition to silver, the mine produces gold, zinc and lead. The company also has mining and ore prospecting rights for mineral deposits in the vicinity of the silver mine in Kainuu. Sotkamo Silver Group consists of the parent company Sotkamo Silver AB and its wholly owned Finnish subsidiary (Sotkamo Silver Oy). Sotkamo Silver AB is listed at NGM Main Regulated in Stockholm (SOSI) and Nasdaq Helsinki (SOSI1).

Read more about Sotkamo Silver at www.silver.fi/en/