g/t - ProKaivos

Silver Mine Project
Investment Opportunity
in Scandinavia
KPMG Corporate Finance (“KPMG”) has
been retained by Sotkamo Silver as
exclusive Financial and Strategic adviser
in connection with the Project
REASONS TO INVEST IN SOTKAMO SILVER
•  LOW TECHNICAL AND GEOLOGICAL RISK
•  PROVEN MANAGEMENT TEAM
•  JORC RESERVES AND ADITIONAL EXPLORATION POTENTIAL
•  FORECASTED OPERATING CASH FLOWS ARE STRONG
•  WE DELIVER – EXPERIENCED MANAGEMENT
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SENIOR MANAGEMENT HAVE EXTENSIVE MINING
EXPERIENCE IN THE NORDIC REGION
Timo Lindborg – President &
CEO
! Doctor of Technology, MSc
( Civil Engineering) and BSc
(Geology). Professor at Oulu
University
! 35 years experience with
mining projects and Nordic
companies
! Former Chief Executive Officer
of Endomines AB, Endomines
Oy and Kalvinit Oy
! Extensive experience in silver
and gold mining projects
! Born 1955
pic
Ilkka Tuokko – Managing
Director Sotkamo Silver Oy
! MSc in Geology and
mineralogy from Oulu
University
! More than 30 years
experience in mining projects,
precious metals and
international mining
companies
! ”Competent Person” status,
according to Australian JORC
and Swedish SveMin
! Former Group Geology &
Mining Manager of Mondo
Minerals B.V.
! Born 1950
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BOARD OF DIRECTORS HAVE EXTENSIVE MINING
EXPERIENCE IN THE NORDIC REGION
Mauri Visuri – Chairman of the Board (since
2011)
!  MSc in Economics from the University Of
Vaasa
!  Bachelor of Science in Machinery
Engineering from Vaasa Polytechnic
!  Extensive experience in mining and process
industry
!  Mr. Visuri is also Managing Director of
Teknoventure Oy
!  Born 1957
Teuvo Jurvansuu – Board member
(since 2010)
!  35 years experience in the mining
industry
!  Worked in various mines in Finland
during that period including Vihanti,
Keretti, Enonkoski and Pyhäsalmi
mines
!  In 2001 he entered the position of
Managing Director of Pyhäsalmi Mine
Oy and at the same time, Inmet
Finland Oy (retired in 2009)
!  Born 1948
Joanna Kuntonen-van ‘t Riet – Board
member (since 2012)
!  MSc in Environmental Sciences from the
University of Helsinki
!  Over 13 years experience in
environmental and safety management
in the mining industry
!  Presently Environmental and Safety
Manager at Northland Resources
!  Born 1974
Jarmo Vesanto – Board member
(since March 2013)
!  MSc (Geology and Mineralogy)
!  Member of the Australian Institute of
Mining and Metallurgy
!  More than 30 years experience in
mining and exploration including 10
years in Australia and Canada with
Outokumpu Oyj
!  Currently General Manager - Finland
at Altona Mining Ltd
!  Born 1954
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OVERVIEW OF SOTKAMO SILVER
!  Headquarter is in Stockholm, Sweden. The
Company also has an operations office in Oulu
and a field office in Sotkamo, Finland
!  The primary listing is on the NGM Equity stock
exchange in Stockholm with secondary listing on
the Nasdaq OMX Helsinki
!  Current market capitalization is about " 24 million
!  The Company had " 4.1 million of net cash at the
end of Q1 2013
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REPUTABLE KEY SHAREHOLDERS WITH EXTENSIVE
EXPERIENCE IN MINING SECTOR INVESTMENTS
%
ownership
Market value
(EUR’m)
Teknoventure Oy
14.2
3.5
Finnish Industry Investments Ltd
14.2
3.5
Timo Lindborg (through a company)
10.2
2.5
Jouko Jylänki
8.9
2.2
Ilmarinen Mutual Pension Insurance
Company
8.5
2.1
Total top five shareholders
56.0
13.9
Other shareholders
44.0
10.9
100%
24.8
Top five shareholders
Total
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ATTRACTIVE LOCATION OF THE SILVER MINE
Port of Oulu
Finland
SOTKAMO
Sotkamo
Silver Mine
Helsinki
Main road
Boliden zinc plant, Kokkola
Road
Railway
!  The Silver Mine is located close to the town of Sotkamo in the Kainuu region of
eastern Finland.
!  Adjacent roads, railways and a nearby sea port provide efficient transportation to
both domestic and international customers
!  Electricity connection to the local grid is currently being constructed Supply of
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process water from a neighbouring lake
SILVER MINE AREA
ALL NECESSARY MINING LICENSES
AND
ENVIRONMENTAL PERMITS RECEIVED
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SILVER MINE OVERVIEW
!  Extensive exploration has been carried out and Sotkamo
Silver acquired the Silver Mine rights in 2007 and the
land area in 2012.
!  Total amount of drilling is 53,1 km.
!  The BFS was completed on the Project in March 2012 by
Wardell Armstrong International, with a supplementary
mine plan review performed by Outotec.
!  Current JORC classified mineral resources are 5 million
tonnes, including 3 million tonnes of ore reserves at
86.11 g/t Ag amounting to 8.2M oz of silver.
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MINERAL RESOURCES
Mineral Resource Estimate for the Silver Mine (Taivaljärvi)
Tonnes Density
(kt)
(t/m3)
Ageq
(g/t)
JORC Classification
Volume
(m3)
Measured
490,889
1,374
2.8
133.24
96.06
0.36
0.70
0.30
Indicated
767,303
2,148
2.8
122.68
87.12
0.34
0.73
0.25
1,258,192
3,523
2.8
126.80
90.65
0.35
0.72
0.27
529,035
1,481
2.8
128.70
95.93
0.26
0.70
0.25
Measured + Indicated
Inferred
Ag (g/t) Pb (g/t) Zn (g/t) Au (g/t)
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ORE RESERVES AND MINE ECONOMICS
KEY PROJECT SUMMARY
Ore reserves
Ore
tonnage
Ag Grade
Ag
Proven
1.19 Mt
90.18 g/t
3 442 141 oz
Probable
1.78 Mt
83.40 g/t
4 786 353 oz
Proven and probable ore reserves
2.97 Mt
86.11 g/t
8 228 494 oz
MINE ECONOMICS
Production of payable silver
0.8 million oz Ag per annum and 7.4
million oz Ag over LOM
Operations commencement date
Q4 2014
Average operating cash costs
" 10.5 / oz Ag over LOM (US$ 13.7)
Required capital expenditure (including
infrastructure)
" 30.7 million
Required net financing (including contingency,
working capital and guarantees)
" 40 million
KPMG Corporate Finance (“KPMG”) has been retained by Sotkamo Silver as exclusive Financial and Strategic adviser
in connection with the Project.
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RAMP-UP PHASE WILL BENEFIT SIGNIFICANTLY FROM THE EXISTING WORK
Mining plan
! The mining plan
allows for initial
shallow open-pit
mining with
subsequent
underground mining
to depths of
approximately 450
metres
! The projected mine
life is 9 to 10 years
based on current
estimated mineable
ore reserves of
approximately 3.0Mt
Open pit
Existing ventilation shaft
Existing Mine Decline (brown)
Backfill with waste rock
Year Colour
2014 Green, Brown
2015 Red
2016 Yellow
2017 Blue
2018 Black
2019 – 2021 Grey
Planned extension of the decline (green)
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KEY INVESTMENT HIGHLIGHTS
! Operations are expected to commence in Q4 2014 and
Short
negotiations with potential off-takers are in advanced stages
timeframe to
! All necessary mining licenses and environmental permits
production
received
Completed
Bankable
Feasibility
Study (BFS)
! Extensive exploration and technical mine planning completed,
including a BFS prepared by Wardell Armstrong in May 2012
! Review of the final mining plan completed by Outotec in May
2012
Production
! Average silver production of 0.8 million oz Ag per annum.
! Silver : 7,386,148 oz; Gold : 23,166 oz (LOM)
! Zinc : 17,468 t; Lead : 7,564 t (LOM)
Low capital
expenditure
! Capital expenditure of approximately " 30.7m required, which
includes construction of a processing plant and infrastructure
! Contract negotiations are near complete with all suppliers
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LOW RISK AND SIGNIFICANT GROWTH POTENTIAL
Low risk mining ! Deposit mineralogy is simple, well understood and easy to process, with
and processing
standard grinding and flotation with recovery above 86%.
Significant
! Geophysical surveys suggest substantial extension to potential mine life and
growth potential resource mineralization.
! Exploration mineral resource estimate in the inferred category (NI 43-101
compliant) is 13 Mt of ore for 26 Moz silver at 65g/t (cut-off grade 30 g/t Ag).
! Substantial pipeline of promising exploration projects in the surrounding
Silver Mine region.
Mining friendly
jurisdiction
! Finland is a AAA-rated country and was ranked as the most favourable
mining jurisdiction (Fraser Institute Survey of Mining Companies 2012-2013).
! The surrounding region has a well-established mining community with readily
available subcontractors and qualified personnel.
Management
team with
proven track
records
! The management team has wide experience of running mines in Finland.
Both CEO Timo Lindborg and Managing Director Ilkka Tuokko are
experienced mining professionals with a proven track record of exploration
and production.
Environment
! Equator Principles Assessment received with no significant issues noted.
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RAMP-UP BENEFITS SIGNIFICANTLY FROM THE EXISTING WORK
!  The mining plan allows for initial shallow open-pit mining with
subsequent underground mining to depths of approximately 450
metres.
!  Annual production is planned at 350,000 tonnes of ore. Total
saleable production is estimated to comprise of approximately
2,000 tonnes of Ag-Au-Pb concentrate, 4,800 tonnes of Zn-Ag
concentrate and 9,000 tonnes of pyrite-Ag concentrate.
Existing underground access
!  The existing mine decline of 2.6 km and ramp access (25 m2) to
the ore, as well as the vertical ventilation shaft extending 350
meters from the surface, are both already in place and ready for
operational use.
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SOTKAMO SILVER HAS SUBSTANTIAL GROWTH POTENTIAL
Additional potential of the existing Silver Mine deposit
!  Whilst the known and defined deposit extends to
550 metres, geophysical surveys show a
continuity of the known mineralisation, which
extends down to 1,000 metres depth.
Exploration Potential
13 Mill.t, Ag 60 g/t; including
Ore Reserve 3 Mill.t, Ag 86 g/t
Exploration Potential
15 Mill.t, Ag 60 g/t
Drill Intersection
R-129: 13.04 m, Ag 74 g/t
Drill Intersections
R-110: 27.25 m, Ag 92 g/t
R-106: 23.40 m, Ag 148 g/t
Drill Intersections
R-100: 13.44 m, Ag 68 g/t
R-102: 7.35 m, Ag 66 g/t
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Exploration Potential
EXPLORATION POTENTIAL
13 Mill.t, Ag 60 g/t; including
Ore Reserve 3 Mill.t, Ag 86 g/t
Exploration Potential
15 Mill.t, Ag 60 g/t
Drill Intersection
R-129: 13.04 m, Ag 74 g/t
Drill Intersections
R-110: 27.25 m, Ag 92 g/t
R-106: 23.40 m, Ag 148 g/t
Drill Intersections
R-100: 13.44 m, Ag 68 g/t
R-102: 7.35 m, Ag 66 g/t
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FURTHER EXPLORATION POTENTIAL
!  Exploration projects ongoing in
the surrounding Silver Mine
region, with claims made on
plots covering over 3,000
hectares in the Tipasjärvi
greenstone belt
!  The map illustrates locations of
the applied claims (previous
Mining Act) and ore exploration
permit applications
!  Additional prospects include
Hopeavuori (Vammala Migmatite
Zone) in Southern Finland.
Management believe there is significant
potential in these zones
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PRIMARY CONTACT REGARDING THIS INVESTMENT OPPORTUNITY
KPMG Corporate Finance contacts
Rama Ayman
Mikko Harju
Tommi Valento
Partner, Global Head
Metals & Mining Corporate Finance
+44 20 7311 5092
Mob. +44 7826 918 994
[email protected]
Senior Manager,
Corporate Finance
+358 20 760 3288
Mob. +358 50 339 5910
[email protected]
Senior Manager,
Head of Debt Advisory
+358 20 760 3246
Mob. +358 40 720 8951
[email protected]
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