Sotkamo Silver lifts profit as silver grades fall short of forecasts

Sotkamo Silver’s revenue and operating profit rose sharply in the third quarter, although silver grades at its mine were lower than forecast, Yle reported. The company’s revenue increased 55% from a year earlier to 171 million Swedish kronor, while operating profit climbed to 52 million kronor from 16 million.

The company said higher production of gold, zinc and lead, along with higher prices for silver, gold and zinc, supported the year-on-year growth. Sotkamo Silver reports its results in Swedish kronor because it is listed on the Stockholm Stock Exchange.

Revenue fell from 198 million kronor in the second quarter, however. Chief executive Mikko Jalasto attributed the decline to a lower average silver price: it was about 73 dollars per ounce in April-June and 63 dollars in July-September. Mining volumes and silver production increased in the third quarter.

Silver grades were lower this year than last. Jalasto said grades in areas mined in July and August were significantly below forecasts, but improved in September to near the company’s target.

Sotkamo Silver said strong cash flow had enabled investment in developing the mine. Drilling west of the current mine has produced promising results, with all samples analysed so far indicating that mineralisation continues in the area. The company has decided to carry out further investigations before the end of the year, Jalasto said, adding that the area could extend the mine’s life and create a separate production area.