Sotkamo Silver OY – Analysis

Q2 2026 (reported July 31): record net sales 198 MSEK, EBITDA 86 MSEK (43% margin), silver 217,722 oz at 56 g/t on record mill feed 148 kt, gold 996 oz. Guidance unchanged. Net debt ~55 MSEK (0.2x). Grade threshold fired.

Primary silver producer, post-deleveraging. Thesis now a single-variable bet on H2 grade recovery — with more leverage in both directions than the pre-report model carried.

Guidance reiterated; Boliden offtake to 2030 already signed.
Volume, not grade, drove the production beat. Grade weakness partly deliberate (open-pit ore while underground development accelerated).
Silver still trades through the rates channel.

Last Updated: 2026-08-04
Ticker: SOSI (Stockholm), SOSI1 (Helsinki), A0MMF4 (Berlin)
Type: Primary Silver Producer (Finland)

Market Data Snapshot (2026-08-04)


Silver / SOSI	~$58.2–58.4/oz · ~3.98 SEK (Inderes 4 Aug 08:01)
Shares / Mcap / EV	340,464,781 → mcap ~1,352; trailing ND ~55 → EV ~1,407; pro-forma ND ~33 (post BF grant) → EV ~1,385; forward ND ~0 → EV ~1,352
Guidance / FY branches	Floor >33 MEUR (~366 MSEK at BS-day EUR/SEK 11.09; ~356 at H1 avg 10.79) · H2 needed ~180 to clear · two branches
Multiples (trailing ND)	~3.8x floor · ~4.3–4.8x no-recovery branch (~295–325) · ~3.8x recovery branch (~370)
FX / Gold / calendar	USD/SEK ~9.53 · EUR/SEK ~11.0 · Au ~$4,090–4,100 · Q3 23 Oct 2026 · Webinar deck not yet posted

Read: deleveraging cut the multiple vs pre-report (~4.0–4.1x floor at ND 131). The open question is no longer the balance sheet — it is whether grade recovers to 80–90 g/t in H2.

Quick Take: Valuation at a Glance

Ag / production / annualized run-rate or FY-branch EBITDA / multiple. (EBITDA × multiple − 55) ÷ 340.465 (trailing ND). Trough production no longer assumes 200–220 koz/qtr — Q2 did 218 at 56 g/t.

Scenario	Ag	Production	EBITDA input	Multiple	Per share	vs 3.97
Trough (grade stays 56–65)	~$59	220–250 koz/qtr	FY branch ~295–325 / run-rate ~220–280	6x	~3.7–4.8 SEK	−7% to +21%
Central (partial recovery)	~$60–65	255–290 koz/qtr	~320–360	8x	~7.4–8.3 SEK	+86% to +109%
Grade recovers 80–90 (mgmt path)	~$60–65	300–350 koz/qtr	FY ~370 (clears floor)	8x	~8.5 SEK	+114%
Re-rating on recovery path	~$70–80	~310+ koz/qtr	~400–450	10x	~11.6–13.0 SEK	+192–227%

Floor vs silver: guidance 366 MSEK needs **$82 Ag** on the no-recovery run-rate vs ~$61 if grade recovers to 80–90 g/t — reachable on grade, not on price alone at spot ~$58. See silver-price sensitivity.

New here: Q3 prediction card, then scored Q2 card.

Q3 2026 prediction card (post-Q2, July 31, 2026)

Pre-report forecast for the 23 October 2026 Q3 release. Priors 25% / 50% / 25%. Built from feed × grade × recovery (~82%) with gold/grade inverse correlation applied from the start — the explicit fix for the Q2 card miss. Source: Q2 release / PDF.

Metric	Negative (~25%)	Conservative (~50%)	Positive (~25%)
Mill feed (kt)	135–145	145–155	155–170
Silver grade (g/t)	56–64	65–75	78–88
Silver production (koz)	215–250	255–290	300–340
Gold (oz)	900–1,050	750–900	600–750
Realized Ag ($/oz)	$54–58	$58–63	$64–70
Net sales (MSEK)	170–185	190–210	215–240
EBITDA (MSEK)	50–68	78–92	95–115
EBITDA margin	30–37%	40–45%	45–50%
Net debt (MSEK)	20–40	net cash 0–20	net cash 20–50
Guidance action	Cut	Reiterate	Narrow range upward
Grade commentary	Still "towards year-end"	Recovery visible	80+ achieved

Deliberate inversion: Negative pairs low grade with high gold; Positive pairs high grade with low gold. That is the Q2 lesson encoded — do not stack grade recovery and gold by-product upside.

Model anchors:

Production ≈ mill feed × grade × ~82% recovery (Q2 implied: 148 kt × 56 g/t → ~266 koz contained vs 218 produced)
Cash opex ≈ mill feed (kt) × ~800 SEK/t (Q1→Q2: cost/t 842→803, −4.7% while feed +33% — margin compression was grade dilution, not cost inflation). Two-quarter calibration; re-check each print. At 148 kt ≈ 118 MSEK/qtr — sensitivity tables unchanged.
Hedge horizon is one month — minimal H2 cushion at soft spot (Q2 hedges added +5 MSEK)
Silver sensitivity: $1/oz ≈ 9 MSEK annual revenue

What would surprise me (off-card): guidance cut; another mill-feed step-up beyond 170 kt; impairment; grade ≥90 with gold still rising; quantify expensed development in opex; reserve/resource update timing; West drilling results; drilling share of CAPEX.

Stock implication: Q3 is the grade-proof quarter. Soft grade again at high feed = structural path confirmed and the 1.4 Moz 2028 ambition weakens further. Grade ≥78 with gold easing = management path intact and floor clears.

Q2 2026 prediction card (scored, July 31, 2026)

Pre-report forecast locked July 27. Priors 25% / 50% / 25%. Forecast columns frozen — Actual filled and scored only. Critical framing held: a strong Q2 on high Apr–Jun silver validates H1 cash; it does not by itself validate the FY case at soft spot.

Metric	Negative (~25%)	Conservative (~50%)	Positive (~25%)	External est.	Actual (Jul 31)
Silver production (koz)	185–200	205–225	230–250	250 (0.25 Moz)	218 — Conservative
Mill feed / mining volume	Soft	Flat vs Q1	Higher	—	148 kt (+33% QoQ) — Positive (we said flat)
Avg Ag grade (g/t)	68–74	75–80	82–90	below 80–90	56 — Miss (18% below Negative floor)
Realized Ag ($/oz)	$62–68	$69–75	$76–82	—	$73.1 — Conservative
Gold (oz)	480–560	570–680	690–800	—	996 — Miss (25% above Positive ceiling)
Net sales (MSEK)	155–172	175–198	200–222	~188	198 — Conservative (top edge)
EBITDA (MSEK)	70–82	85–100	105–122	~102	86 — Conservative (bottom edge)
EBITDA margin	44–48%	48–52%	52–56%	~55%	43% — Miss (below all three)
EPS (SEK)	—	—	—	0.27	0.14
Cash (MSEK)	90–110	115–140	145–175	—	141 — Conservative (1 over)
Net debt (MSEK)	100–125	60–95	20–55	—	~55 — Positive (top edge)
Net debt/EBITDA	0.40–0.55x	0.20–0.35x	<0.15x	—	0.2x — Conservative
Guidance action	Cut / cautious H2	Reiterate 33 MEUR	Raise or narrow production range	—	Reiterated — Conservative
Grade commentary	Still "coming quarters"	Recovery underway	80+ confirmed	below 80–90 target	Still "H2 / towards year-end" — Negative
Boliden terms	Not quantified	Qualitative colour	Quantified TC/RC benefit	—	Qualitative only — Conservative

External estimate source (named once): Inderes, Aapeli Pursimo, estimates as of 29 July 2026. Everywhere else below: “the external estimate.”

Predictions are scored as made. Cards are never edited after the fact. When the model is right, the record shows it; when it is wrong, the miss is stated plainly in the same place.

Score summary

Inside band (9): production (Conservative), net sales (Conservative, top edge), EBITDA (Conservative, bottom edge), realized Ag $73.1 (Conservative), cash 141 (Conservative), net debt ~55 (Positive, top edge), ND/EBITDA 0.2x (Conservative), guidance reiterated (Conservative), Boliden qualitative only (Conservative).

Missed (4) — stated without softening:

Metric	Our range	Actual	Miss
Grade	Negative floor 68–74	56	18% below our worst case; lowest of five quarters
Gold	Positive ceiling 800	996	25% above our best case; fifth straight rise
Margin	Negative floor 44–48%	43%	below all three columns
Mill feed	Conservative "flat vs Q1"	+33% QoQ	called Positive, we said flat

Diagnosis: all four misses are one error. We identified the gold-rich/silver-poor stope mechanism — management's own wording matches ours — flagged that our Positive column wrongly paired high grade with high gold, and then left the card's gold and grade ranges built on a reversion assumption the mechanism contradicts. The insight arrived one pass too late to shape the card. This is not a near-miss. Grade at 56 is a clean, large miss.

Vs the external estimate: our Conservative band contained the actual on production (218 vs their 250), net sales (198 vs 188), and EBITDA (86 vs 102); both missed margin, ours by less. Their EPS of 0.27 vs 0.14 actual missed the 16.4 MSEK tax charge and 10.6 MSEK financial expenses. Q2 revenue beat the external estimate (198 vs 188); the EBITDA shortfall was entirely the opex line (93.6→118.8), which fell on a per-tonne basis. CAPEX of 22 MSEK sits below EBITDA and did not affect it.

Grade threshold — fired

The standing rule was that a third ~70 g/t print reclassifies grade from timing to structural. We got 56 — worse than that trigger. The trigger fired. Treat soft grade as structural / mine-plan until 80–90 prints; the 1.4 Moz path is weaker until recovery is evidenced. Score the H2 80–90 promise against the print — it is now in its third consecutive quarter. Volume does not un-fire the threshold.

What Q2 added (facts)

Operational

Mill feed 148 kt, a record (+36% YoY / +33% QoQ). Volume, not grade, drove the production beat.
Implied recovery ~82% (148 kt × 56 g/t = ~266 koz contained vs 218 produced) — first recovery figure in this document; needed for grade-leverage maths below.
Grade weakness is partly deliberate: open-pit ore supplemented underground while development accelerated — mine-plan choice, not pure geological failure. H2 guidance still 80–90 g/t as mining shifts lower.
Decline reached 595 m. Contractor at full capability.
Part of Q2 cost is expensed drift development / stope preparation for future ore — amount undisclosed. If that runs ~10–15 MSEK/qtr inside EBITDA, true steady-state cost is lower and Branch A understates earnings.

Financial

Silver sensitivity: $1/oz ≈ 9 MSEK annual revenue.
Hedge horizon is one month, not two. Hedging added +5 MSEK to Q2 net sales. With silver down from the $73.1 quarterly average, the one-month horizon means minimal H2 protection — prior speculation that hedges could cushion H2 was wrong.
Mining tax for 2026 expected ~19 MSEK. Tax expense 16.4 MSEK — first material charge; the company is now a taxpayer.
H1 financial expenses −89.7 MSEK, dominated by −78 MSEK non-cash fair-value change on conversion option liabilities. EPS-quality issue: H1 EBIT 162 vs EPS 0.22.
Convertibles down to 1.1 MEUR total (0.1 MEUR of 2022/2026, 1.0 MEUR of 2025/2029). Diluted share count 350,587,714. Dilution overhang nearly closed.
Post-period: Business Finland converted 2.0 MEUR (21.7 MSEK) of R&D loan principal into a grant (16 July). Remaining 3.3 MEUR repaid in five annual instalments from July 2027. Pro-forma net debt ≈ 33 MSEK.
Equity 423 MSEK = 1.24 SEK/share book (1.21 diluted).
Q2 silver range $57.4–86.8; H1 $57.4–118.5; quarter-end $58.8; Q2 average $73.1.
Q2 share data: close 4.30, high 5.94, low 3.74, quarter-end mcap 1,464 MSEK.

Net debt (verified): non-current borrowings 139.3 + current 53.7 + leases 2.7 = 195.7 − cash 140.5 = ~55 MSEK. Cross-check: 0.2 × rolling-12m EBITDA (35+51+99+86 = 271) = 54.

Webinar: held 13:00 EET 31 July. Presentation not yet posted on silver.fi/presentations at time of this update (only 2020–2023 materials listed).

FY 2026: two branches, not one point

H1 actual EBITDA 185. Floor >33 MEUR ≈ ~366 MSEK at balance-sheet-day EUR/SEK 11.09 (H1 average 10.79 → ~356 MSEK — show both). H2 required: ~180 MSEK ≈ 90/quarter to clear the 366 floor.

Grade leverage at constant 148 kt feed and 82% recovery:

Grade	Implied production/qtr
56 g/t (Q2 actual)	218 koz
70 g/t	~272 koz
80 g/t	~311 koz
90 g/t	~350 koz

Branch	H2 EBITDA	FY 2026	vs floor (~366)
Grade recovers to 80–90	~185–190	~370	floor cleared
Grade stays 56–65	~110–140	~295–325	11–19% short

Plainly: our pre-report 280–315 was correct conditional on no grade recovery — which is the branch we assumed. What we under-modelled was the size of the upside branch, because we held production flat instead of letting feed and grade compound. The FY outcome is now essentially a single-variable bet on grade, with more leverage in both directions than the old model carried.

Asymmetry for the reader: management reiterated guidance, which is a statement that they expect the upper branch.

Contractor-roll-off retired. Forward costs scale with feed (~800 SEK/t) — see model anchors. Sensitivity tables assume 148 kt and are unchanged; this FY section is calendar (H1 banked), not run-rate.

Q1 2026 Report — Score & Reaction (April 29, 2026)

Published 09:00 EEST. Full release: silver.fi. Forward-looking commentary superseded by Q2 — scored card and headlines retained.

Headline numbers

	Q1/26	Q1/25	YoY	Q4/25	QoQ
Net sales (MSEK)	186	69	+170%	135	+37%
EBITDA (MSEK)	99	-8	n/m	51	+94%
EBITDA margin	53%	-11%	—	38%	—
Silver production (koz)	201	169	+19%	193	+4%
Avg Ag grade (g/t)	70	69	+2%	65	+8%
Cash (MSEK)	74	1	—	14	+60
Net debt / EBITDA	0.7x	2.5x	—	2.5x	—
Equity ratio	50%	41%	—	40%	—

Pre-report prediction card — scored

Metric	Negative	Conservative	Positive	Actual	Verdict
Production (koz)	180–195	200–220	225–245	201	Conservative low end
Grade (g/t)	65–70	75–82	85–92	70	Negative top edge
Realized Ag ($/oz)	$62–66	$67–72	$73–77	~$75–80 (implied)	Beat positive
Net revenue (MSEK)	140–155	165–180	190–215	186	Positive low end
EBITDA (MSEK)	55–65	75–90	100–120	99	Positive (just below)
Cash + facility (MSEK)	30–40	45–60	65–85	96	Beat positive
Net debt (MSEK)	~200	~185	~170	~131	Beat positive
Guidance language	No tailwind	+ tailwind	Tilted-bullish	No tailwind	Negative
Contractor	Issues	On-track	Beat	"as expected"	Conservative
Offtake	Not signed	Signed	Signed + financing	Not mentioned	Negative (provisional)

Post-Q1 footnote (do not change the scored row above): offtake resolved 24 June 2026 with Boliden through end-2030. Recorded as a hit — see Forward calls scored.

Net result: financials beat; grade soft. Cash conversion and net debt were the model's biggest miss (too cautious). Realized silver beat the hedge-fear case.

Forward calls scored

Call (date made)	Outcome	Verdict
Offtake: "handled quietly, not a crisis…" (pre-Q1 Apr 2026)	Boliden to 2030 (24 Jun)	Correct
"management is clearly sandbagging" the 270 MSEK floor (post-Q1)	Raised to 33 MEUR on 28 May	Correct
Silver: "$70 floor holding…" (June 2026)	Fell to mid-$50s via rates channel	Wrong
Contractor-startup costs rolling off into H2 (pre-Q2)	Contractor at full capability; costs still rose to ~119 MSEK	Wrong — retired
H2 hedge cushion from May–June locks (pre-Q2)	Hedge horizon is one month; minimal H2 protection	Wrong — corrected

Q4 2025 Recap (now historical context)

Q4 2025 (FSR published Feb 20, 2026): revenue 135 MSEK, EBITDA 51 MSEK (38%), Ag 193 koz at 65 g/t, hedge drag -25 MSEK, ND/EBITDA 3.9x → 2.5x.

Original 2026 guidance (20 Feb): 0.9–1.2 Moz, EBITDA >25 MEUR, ND/EBITDA <1.0 YE
Superseded 28 May 2026: EBITDA >33 MEUR, ND/EBITDA <0.1 YE

Company Overview

Sotkamo Silver operates the Taivaljärvi silver mine in Finland – one of the few primary silver producers in Europe. The company produces silver, gold, zinc, and lead concentrates.

Key Facts

Metric	Value
Location	Taivaljärvi, Finland
Mine Type	Underground (+ open-pit ore used as supplement in Q2)
Cash and cash equivalents	140.5 MSEK (30 Jun 2026)
Net debt	~55 MSEK (30 Jun 2026); pro-forma ~33 MSEK after BF grant conversion; YE25 was ~200 MSEK
Shares outstanding	340,464,781 basic; 350,587,714 diluted
Convertibles	1.1 MEUR total remaining — dilution overhang nearly closed
Equity / book	423 MSEK → 1.24 SEK/share (1.21 diluted)
2025 Production (actual)	804 koz silver
2026 Guidance	0.9–1.2 Moz; EBITDA >33 MEUR (~366 MSEK at EUR/SEK 11.09); ND/EBITDA <0.1 YE (raised 28 May; reiterated 31 Jul)
Mid-term Target (2028)	1.4 Moz, EBITDA margin >30%, Net debt/EBITDA <2.0, TSM A-level
Next Report	Q3 2026: 23 October 2026 · Q4 TBD

Recent Developments

Jul 31, 2026: Q2/H1 Interim Report — sales 198 / EBITDA 86 / Ag 218 koz at 56 g/t / feed 148 kt / Au 996 oz. Guidance unchanged. ND ~55. See scored Q2 card.
Jul 16, 2026 (post-period): Business Finland converted 2.0 MEUR R&D loan into a grant; remaining 3.3 MEUR amortises from Jul 2027.
Jul 29, 2026 (macro): Silver ~$57–58 into FOMC; gold ~$4,020–4,040. See rates channel.
Jul 27, 2026 (macro): US paused strikes on Iran → oil down → metals up. Rates channel ran in reverse.
Jun 24, 2026: Boliden offtake through end-2030 (release).
May 29, 2026: Share count → 340,464,781 via 2025/2029 conversions. Sprott 9,159,673 / 2.69%.
May 28, 2026: Positive profit warning — EBITDA >33 MEUR; ND/EBITDA <0.1 YE (release).
Apr 29, 2026: Q1 record — sales 186 / EBITDA 99 / Ag 201 koz at 70 g/t. See Q1 Score.
Apr 21, 2026: AGM — did not authorize new issuance.
Feb 20, 2026: Q4/FY 2025 FSR; original 2026 guidance.
Jan 2026: New mining contractor started — now at full operational capability (Q2).
Dec 2025: Mineral Resources / Ore Reserve update — mine life to at least 2035.
Nov 2025: Profit warning – production targets missed.
Aug 2025: Refinancing completed.

Silver Price Context (July 31, 2026: ~$59/oz)

ATH Jan 29: ~$121/oz
Feb 28 (Iran conflict start): ~$70/oz
March low: ~$60–62/oz
April 16 rebound: ~$80.80/oz
June 9–10: ~$64/oz; June 15–16: ~$70–71
Jul 17 low (chart): ~$54.77
Jul 22 area (chart): ~$60.94
Jul 27: pause day — silver ~$59.6–59.7
Jul 28–29: ~$57–58 into FOMC
Jul 31: ~$58.8–59.1; Q2 average was $73.1; quarter-end $58.8
~51% off ATH

Rates channel (falsifiable model)

Observed 2026 mechanism: oil spike → higher inflation expectations → higher Fed hike probability → higher real yields → precious metals down. Under that mechanism, Middle East escalation is currently bearish for silver — the opposite of the safe-haven relationship assumed before July 2026.

Symmetry (Jul 27, 2026): the channel also runs in reverse. US pause on Iran strikes → oil gap lower → inflation expectations / yields down → metals up. Nothing was falsified — the mechanism held.

The silver recovery path now runs through Middle East de-escalation plus a dovish Fed — not through conflict. Peace is bullish; escalation is bearish.

Falsification: if a future oil/geopolitical shock coincides with silver rising, the rates channel is no longer dominant and this framing must be retired. Jul 27 did not trigger this — silver rose with de-escalation / lower yields.

Fed chair is Kevin Warsh. September hike odds remain the live risk if oil re-spikes. See Catalysts.

Silver Price Regime Framework

Regime	Silver Price	Implication for SOSI
Bear	<$55	Balance sheet / guidance stress
Soft / borderline	$55–60	Live band (~$59) — FCF thinner; floor needs grade recovery
Neutral	$60–75	Modest FCF, limited re-rating
Bull	$80–100	Accelerated deleveraging under model assumptions
Mania	>$110	High upside but unstable

Bull Case

Rare European primary silver producer; $1/oz ≈ 9 MSEK annual revenue; feed × grade compounds
Record mill feed; contractor at full capability; management reiterated >33 MEUR (upper grade branch)
Grade counter-case (beside unmet promises): mine already printed 85 g/t (Q3/25 — series 65→85→65→70→56); Q2 soft grade partly deliberate (open-pit while developing); decline hit 595 m; infill to 25 m grid / 700 m by YE to convert resources→reserves. CEO chain: accelerated deepening → new mining areas → operational reliability. Frame: the silver is there and access is being built.
Offtake: Boliden to end-2030. Near-deleveraged (ND ~55 / pro-forma ~33); dilution overhang nearly closed
Macro (rates channel): ME de-escalation + dovish Fed → silver re-rates from $55–60

Bear Case

Grade threshold fired at 56 g/t — structural until 80–90 prints; third consecutive H2 promise
Rates-channel silver risk — live ~$58; soft Ag + high feed still means high absolute opex even as unit cost/t improves
No-recovery FY branch ~295–325 is 11–19% short of the floor
Gold/grade inverse: by-product strength leaves if grade recovers — do not stack both
One-month hedge horizon = minimal H2 cushion at soft spot
Taxpayer now — tax and conversion-option FV distort EPS quality
Missed 2025 production (804 koz vs 1.0–1.2 Moz); sole analyst still Reduce / SEK 3.90 (updated 3 Aug)

Sentiment & Positioning

Sprott (as of 2026-05-29): 9,159,673 shares (2.69%) — #2 behind Hexof Oy (5.40%), per company shareholder registry
Between Feb 13 (10,018,240 / 3.10%) and 2026-05-29 Sprott trimmed ~858,000 shares (−8.6% of stake)
Honest read: mild negative sentiment signal, not a thesis-breaker — re-pull after the Q2 reaction settles
Other notable holders: Avanza Pension (2.53%), Elo Mutual Pension Insurance (1.05%)

2025–Q2 2026 Quarterly Snapshot

Quarter	Net Rev	EBITDA	Margin	Ag prod	Feed	Grade	Gold	Avg Ag $	Notes
Q1/25	69	-8	-11%	169 koz	—	69 g/t	—	~$30	weakest quarter
Q2/25	79	1	2%	187 koz	109 kt	65 g/t	417	~$34	—
Q3/25	110	35	32%	255 koz	~110 kt	85 g/t	468	~$41	strongest ops print
Q4/25	135	51	38%	193 koz	110 kt	65 g/t	579	$54.7	hedge drag -25 MSEK
Q1/26	186	99	53%	201 koz	111 kt	70 g/t	783	~$75–80	gold-rich / Ag-poor
Q2/26	198	86	43%	218 koz	148 kt	56 g/t	996	$73.1	record feed; grade miss; recovery ~82%
H1/26	384	185	48%	419 koz	259 kt	62 g/t	1,779	$78.8	—
FY 2025	393	80	20%	804 koz	425 kt	71 g/t	—	—	-31% production YoY

Production = feed × grade × recovery. At constant 148 kt / 82%: each ~10 g/t ≈ ~39 koz/qtr.

Revenue Prediction Model

Live anchor is Q2 2026 (198 MSEK net on 218 koz × $73.1). Opex scales with feed (~800 SEK/t).

Methodology

Formula: Net revenue (MSEK) ≈ [Σ (production × price × FX)] × 0.83–0.88

Production: koz ≈ mill feed (kt) × grade (g/t) × recovery (~0.82) / 31.1035 × 1000
Simplified at 148 kt / 82%: koz ≈ grade × 3.89.

The 0.83 factor reflects TC/RC, smelter payability, transport, hedge timing, and FX. Q1 implied ~0.96; Q2 hedging contributed +5 MSEK. For forward modeling: 0.85–0.88 central; 0.83 conservative.

Silver sensitivity (company): $1/oz ≈ 9 MSEK annual revenue.

By-product contribution (post-Q2)

Q2 gold 996 oz at ~$4,100 and USD/SEK ~9.53 → ~39 MSEK gross. Zinc/lead smaller. Total other metals still elevated while grade is soft.

Metal	Q2 volume	Spot (approx.)	Gross MSEK
Gold	996 oz	~$4,100/oz	~39
Zinc	345 t	~$3,550/t	~12
Lead	172 t	~$2,100/t	~3
Total other metals (gross)			~54

Hard constraint: gold ounces and silver grade move in opposite directions. Grade-recovery scenarios must cut gold toward 600–750 oz, not hold 996. Do not stack both upsides.

Boliden / net revenue factor

June 24 release: market terms, positive profitability impact. Q2 did not quantify TC/RC. Keep 0.83 as conservative until numbers appear.

Hedge structure

Canonical reference — corrected July 31.

Mechanics: Portion of near-term silver hedged with derivatives. Hedging horizon is one month (not two). Final selling price of silver deliveries determined one month after the delivery period. Only realized hedges hit P&L; unrealized MTM through equity.

Q2 impact: hedges increased net sales by 5 MSEK.

H2 implication (corrected): prior speculation that May–June hedges could cushion H2 at soft spot was wrong. With a one-month horizon and spot already off the $73.1 Q2 average, H2 protection is minimal. Realized H2 silver tracks near-term spot, not the Q2 average.

Timeline: Sept 2025 covenant breach → Dec 2025 unhedged → Feb 2026 hedging resumed → Q4 2025 impact −25 MSEK.

EBITDA & Cash-Flow Stress Analysis

Sensitivity: Rebuild around feed × grade × recovery and opex ≈ feed × ~800 SEK/t. Old flat-cost / flat-production grids retired. Illustrative grid below; live scenarios use FY branches and silver-price sensitivity.

Key Assumptions

Production: feed × grade × ~82% recovery — not static 255 koz/qtr
Net revenue factor: 83–88% of gross
Operating costs: mill feed (kt) × ~800 SEK/t (Q1–Q2 calibration; re-check each quarter). At 148 kt ≈ 118 MSEK — matches sensitivity Branch A. Follow company cost guidance when it contradicts the model.
Sustaining capex: ~15–22 MSEK/qtr (Q2 was 22)
Interest / tax: cash interest modest; mining tax ~19 MSEK FY; watch non-cash conversion-option FV in EPS

Quarterly P&L by Silver Price Scenario (illustrative — 255 koz baseline)

Note: Revenue includes ALL metals. By-product line is soft-grade elevated; cut gold if grade recovers. Cost row reset vs pre-Q2 grid.

Line Item	$40 Ag	$60 Ag	$80 Ag	$100 Ag	$120 Ag	$150 Ag
Net Revenue (MSEK)	110	160	200	240	280	350
Operating Costs	-115	-120	-125	-130	-135	-145
EBITDA	−5	40	75	110	145	205
Sustaining Capex	-18	-18	-18	-18	-18	-18
Interest Expense	-5	-5	-5	-5	-5	-5
Free Cash Flow	−28	+17	+52	+87	+122	+182

$40 row is stress only — not live. At soft ~$59 and Q2-like feed/grade, use the FY branches (~55–95 EBITDA/qtr depending on grade path), not the old 66-at-$60 grid.

Break-even & AISC

Run-rate cash breakeven (EBITDA = 0) from the sensitivity model: ~$33/oz Branch A (no recovery), ~$29/oz Branch B (grade recovers). Company-reported AISC still not guided. The cost line is a downside risk, not an upside lever.

Valuation

Guidance Summary (current — raised 28 May 2026, reiterated 31 Jul)

Metric	Current (28 May / 31 Jul)	Original (20 Feb)
Silver Production	0.9–1.2 Moz (unchanged)	0.9–1.2 Moz
EBITDA	>33 MEUR (~366 MSEK at EUR/SEK 11.09; ~356 at H1 avg 10.79)	>25 MEUR (~270 MSEK)
Net Debt/EBITDA (YE)	<0.1	<1.0

Sources: May 28 profit warning; Q2 report.

Live valuation at raised floor (July 31)

Using 340.5M shares, SOSI ~3.97 SEK:

	Trailing ND ~55	Pro-forma ND ~33 (BF grant)	Forward YE ND ~0
Mcap	~1,352 MSEK	~1,352 MSEK	~1,352 MSEK
EV	~1,407 MSEK	~1,385 MSEK	~1,352 MSEK
EV / floor (~366)	~3.8x	~3.8x	~3.7x
EV / no-recovery FY ~295–325	~4.3–4.8x	~4.3–4.7x	~4.2–4.6x
EV / recovery FY ~370	~3.8x	~3.7x	~3.7x

Cheaper than the pre-report ~4.0–4.1x floor print — almost entirely from ND 131 → 55, not from a lower equity price. A forward multiple that assumes YE net cash (guidance <0.1x) remains the right year-end delivery frame. For silver × grade run-rate fair values, see silver-price sensitivity.

Production bands (2026 guidance)

Scenario	Annual Production	Description
Low Case	0.9 Moz	Bottom of guidance; grade stays soft despite high feed
Base Case	1.05 Moz	Guidance midpoint — needs partial H2 grade recovery
High Case	1.2 Moz	Top of guidance; 80–90 g/t lands at scale
2028 ambition	1.4 Moz	Mid-term target — not current valuation

Production = mill feed × grade × recovery. Q2 proved feed can move 33% QoQ; grade is the swing factor for the floor. Sensitivity Branch A (~0.87 Moz run-rate) sits below guidance low; Branch B (~1.32 Moz) above guidance high — those are capacity/run-rate cases, not the 2026 guidance path.

Dilution Math

Basic 340,464,781. Diluted 350,587,714. Convertibles cut to 1.1 MEUR total (0.1 MEUR 2022/2026 + 1.0 MEUR 2025/2029) — overhang nearly closed. Apr 21 AGM did not authorize new issuance. Per-share in live tables: equity ÷ 340.5M basic. Book value 1.24 SEK (1.21 diluted) on 423 MSEK equity.

Net debt (current)

~55 MSEK at 30.6.2026 (verified from borrowings + leases − cash). Pro-forma ~33 MSEK after the 16 July Business Finland grant conversion (21.7 MSEK). YE25 was ~200–203 MSEK. Guidance <0.1x YE 2026 implies near-zero ND or net cash. Rolling-12m EBITDA 271 → reported 0.2x matches.

Silver-price sensitivity (two branches, run-rate)

Steady-state annualized EBITDA at constant silver — not calendar FY. Same grade branches as FY 2026: two branches, but without H1's high-price bank. Trailing ND 55 throughout. Model USD/SEK held at 9.5.

Derivation (auditable):

Company: $1/oz ≈ 9 MSEK annual revenue at guidance production (~1.05 Moz). Scale linearly:

slope (MSEK per $1/oz) = production (koz/yr) ÷ 1,050 × 9

Annual EBITDA = (slope × silver price) − fixed drag, where fixed drag = cash costs − by-product/other income.

	Branch A — no grade recovery	Branch B — grade 80–90 g/t
Production	218 koz/qtr → 872 koz/yr	~330 koz/qtr (148 kt × mid-grade × 82%) → 1,320 koz/yr
Gold	996 oz/qtr (Q2 run-rate)	~600 oz/qtr (inverse correlation)
Slope	872 ÷ 1,050 × 9 = 7.46	1,320 ÷ 1,050 × 9 = 11.31
Cash costs	4 × 118.8 = 475 MSEK/yr	~500 MSEK/yr (+5% on metal/TC/RC; feed flat)
By-products + other	~230 MSEK/yr	~173 MSEK/yr (gold −40%)
Fixed drag	475 − 230 = 245	500 − 173 = 327
EBITDA	7.46 × P − 245	11.31 × P − 327

Per share = (EBITDA × multiple − 55) ÷ 340.465.

Calibration: at Q2 realized $73.1, Branch A → 300 MSEK/yr vs Q2 underlying annualized ~298 (EBITDA 85.7 − hedge +5 − finished-goods +6.3, × 4). Within ~1%.

Branch A — no grade recovery (~872 koz/yr)

Silver	EBITDA (MSEK/yr)	@6x	@8x
$40	53	0.77	1.08
$50	128	2.09	2.85
$54	158	2.62	3.55
$58	188	3.15	4.26
$60	203	3.42	4.61
$64	232	3.93	5.29
$70	277	4.72	6.35
$80	352	6.04	8.11
$100	501	8.67	11.61
$130	725	12.62	16.87

Branch B — grade recovers to 80–90 g/t (~1,320 koz/yr)

Silver	EBITDA (MSEK/yr)	@6x	@8x
$40	125	2.04	2.78
$50	239	4.05	5.45
$54	284	4.84	6.51
$58	329	5.64	7.57
$60	352	6.04	8.11
$64	397	6.83	9.17
$70	465	8.03	10.76
$80	578	10.02	13.42
$100	804	14.01	18.73
$130	1,143	19.98	26.70

Key readings

What the current price implies. At ~4.03 SEK (Inderes 3 Aug 09:55; EV ≈ 1,427 MSEK on ND 55), the market is pricing:

	@6x	@8x
Branch A	~$65 silver	~$57
Branch B	~$50	~$45

Spot is ~$58. On the no-recovery branch at 6x, the market is already paying for silver above spot — the stock is not obviously cheap if grade stays at 56 g/t. On the recovery branch it is discounting silver well below spot.

The guidance floor (~366 MSEK) needs:

~$82 silver without grade recovery
~$61 silver with it

Spot is ~$58. The floor is reachable on grade and essentially unreachable on price alone. That is why the 56 g/t print mattered more than the silver tape.

Cash breakeven (EBITDA = 0): ~$33 Branch A, ~$29 Branch B. Substantial distance below spot before the business stops generating cash.

Sensitivity caveats

By-products are held flat — the weak link. Gold and silver correlate; at $100 silver, gold will not stay at ~$4,100. Branch A understates the high rows and overstates the low ones — the true curve is steeper at both ends.
The 8x column above ~$80 is arithmetic, not a forecast. Markets pay lower multiples on peak-cycle earnings, typically 4–5x. Do not quote those cells as targets.
USD/SEK held at 9.5. Silver strength usually coincides with dollar weakness, which partly offsets in SEK terms.
Branch B assumes recovery at current feed (148 kt). If feed rises as well, Branch B is understated.
Costs are held flat with silver price. Mining tax (~19 MSEK/yr) and royalties scale somewhat with revenue, so high rows are mildly optimistic.

What Multiple is Reasonable?

Multiple	Typical For
4-6x	Distressed miners, high-risk jurisdictions
6-8x	Small-cap producers, turnaround stories
8-10x	Established mid-tier producers
10-12x	Premium producers, growth stories

Sotkamo context: Small-cap European primary producer, near-deleveraged, five-year offtake, grade path unproven at 56 g/t. 6–10x depending on whether H2 grade recovers. Live trailing multiples (~3.8x floor) still sit in the distressed/high-risk band — the re-rating case if the upper branch prints.

Valuation Caveats

Calendar FY vs run-rate: FY branches bank H1; sensitivity is constant-silver run-rate — do not mix the EBITDA columns
Sensitivity caveats (by-product flat, 8x peak-cycle not a target, USD/SEK, feed, tax) live under that section — do not quote 8x cells above ~$80 as fair value
Live equity math states trailing vs pro-forma vs forward ND
Hedging: one-month horizon — see hedge structure
Grade recovery and gold by-product are negatively correlated — do not stack both upsides
EPS quality: non-cash conversion-option FV (−78 MSEK H1) and new tax charge

Invalidation triggers

Trigger	Severity	Notes
Sustained silver below ~$55–60	Very High	Live ~$59; raised floor needs grade recovery
Grade threshold fired at 56 g/t (Jul 31)	High — active	Structural until 80–90 prints; 1.4 Moz path weakened
No timetable for alternative mining areas	High	Structural lever still thin after soft grade
Another soft grade print in Q3	High	Third H2 promise fails; cut toward 0.9 Moz floor
Hedging lag / one-month horizon	Medium	Minimal H2 cushion at soft spot — corrected
Equity dilution despite strong metals	Reduced	Convertibles 1.1 MEUR; AGM did not authorize issuance
Fed path / real yields keep silver sub-$55	High	Rates-channel invalidation. Falsify if oil/geo spikes coincide with silver rising

These are measurable invalidation triggers, not short-term volatility noise.

Catalysts

Q3 2026 — 23 October 2026 (primary): grade vs 80–90; feed; gold/grade inversion; guidance; cost colour / expensed development; <0.1x YE path
West mineralisation drilling — finalises Q3 2026. Inside the existing mining licence (no new permitting). No assays, metres, or announcement pathway disclosed — Q3 finalisation means drilling stops, not that a result arrives.
Infill drilling to 25 m grid, 700 m — target end-2026. Aimed at converting resources → ore reserves. No reserve update announced or dated — intention ≠ upgrade.
Tailings permit decision — final phase; intended to secure deposition capacity through the extended LOM
September FOMC / Q4 2026 (TBD) / BF remaining 3.3 MEUR from Jul 2027

Ordlista / Glossary

Bilingual (EN/SV) for Swedish readers

Term	Meaning
EBITDA	Earnings Before Interest, Taxes, Depreciation & Amortization. Resultat före räntor, skatt, avskrivningar och amorteringar – mått på kassaflödespotential.
EV (Enterprise Value)	Bolagsvärde = Börsvärde + Nettoskuld. Vad det kostar att "köpa hela bolaget".
EV/EBITDA	Värderingsmultipel. EV delat med EBITDA. State whether ND is trailing, pro-forma, or forward.
FCF (Free Cash Flow)	Kassaflöde efter capex och räntor. Pengar som faktiskt blir över.
Net Debt (Nettoskuld)	Räntebärande skulder minus likvida medel. ~55 MSEK per 30 Jun 2026; pro-forma ~33 after BF grant. Guidance YE26: ND/EBITDA <0.1.
AISC	All-In Sustaining Cost. Total produktionskostnad per uns silver.
AgEq (Silver Equivalent)	Alla metaller omräknade till silvervärde för jämförbarhet.
SEK/USD sensitivity	Live ~9.53 (Jul 31). A 5% weaker SEK increases SEK revenue by ~5%. Company: $1/oz Ag ≈ 9 MSEK annual revenue.
Basic vs Fully Diluted	Basic 340,464,781 / Diluted 350,587,714. Convertibles 1.1 MEUR remaining.
Recovery	Produced metal / contained metal in feed. Q2 implied Ag recovery ~82%.

Sources

Primary (company filings):

Q2 2026 Interim Report (July 31, 2026) — current primary
Q2 2026 PDF
Positive profit warning / guidance raise (May 28, 2026)
Boliden offtake (June 24, 2026)
Share count correction (May 29, 2026) — 340,464,781
Q1 2026 Interim Report (Apr 29, 2026) — historical for Q1 actuals
Investor center & reports
Presentations — Q2 webinar deck not yet posted as of this update
Q2 2026 webinar link
FSR 2025 (20 Feb 2026); Q3 2025 interim — model calibration history

Ownership & corporate actions:

Shareholder registry — Sprott last verified 2026-05-29
AGM Apr 21, 2026 (Placera)

Market & macro (August 4 pass):

Silver ~$58.2–58.4; Q2 company average $73.1
SOSI: Inderes ~3.98 SEK (2026-08-04 08:01)
EUR/SEK BS-day 11.09 / H1 avg 10.79 per Q2 report
External estimate: one-line note under the scored Q2 card
Sole-analyst: Reduce / SEK 3.90 (updated 3 Aug 2026)

Disclaimer: This analysis was created with the help of multiple AI tools, data from various public sources, and valuable input from other investors. Not financial advice – do your own research.

Author: Jakob Fireld – jakob@fireld.se

Analysen är framtagen med hjälp av AI och publika datakällor.

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