SOTKAMO SILVER. A mining Investment Opportunity

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1 SOTKAMO SILVER A mining Investment Opportunity

2 FINLAND AS A MINING COUNTRY Ø History of mining and mining equipment manufacturing Ø Stable taxation (dropping from 32% to 20% in the last 8 years) Ø No royalties Ø Very low political risk Ø Highly educated workforce Ø Good infrastructure Ø High security Ø Low corruption

3 SOTKAMO SILVER AB Company shareholders as of December 30, 2013 Ø The company has been founded by Dr. Lindborg, Mr. Jylänki and Mr. Taipale. Ø Sotkamo Silver consists of the parent company, Sotkamo Silver AB, with one wholly owned subsidiary in Finland: Sotkamo Silver Oy. Ø Sotkamo Silver develops silver, gold and zinc deposits in the Nordic region. The Company has completed the Bankable Feasibility Study for Silver Mine project and is working on project financing issues Ø Invested capital so far about 25 M. 12 M has been invested in the project Silver Mine deposit before Sotkamo Silver bought the rights to this mineral reserve. After this 13 M has been invested by the investors of Sotkamo Silver. Shareholders Number of shares % Teknoventure Oy ,2 Finnish Industry Investment Ltd ,2 Timo Lindborg through company ,2 Ilmarinen Mutual Pension Insurance Company ,5 Jouko Jylänki ,5 Kaarlo Taipale ,6 FIM Bank Ltd ,0 Nordea Finland ,5 Öhman Luxemburg ,3 Försäkringsaktiebolaget, Avanza Pension ,2 Olli Salo ,7 Pohjola Bank PLC Client ,6 Nordnet Pensionsförsäkring AB ,5 Göran Sundholm ,4 Folke Hillberg ,4 Other ,1 TOTAL ,0 Number of registered shareholders Share capital development

4 MANAGEMENT Chief Executive Officer Sotkamo Silver AB Dr. Timo Lindborg has been the Chief Executive Officer and President of Sotkamo Silver AB since May 1, Dr. Lindborg has a vast experience of more than 35 years in Nordic exploration and development companies and projects, encompassing gold, silver and industrial minerals. He has a strong track record of the successful implementation of projects, from financing and project management, to managing knowledge-based companies. Dr. Lindborg served as the Chief Executive Officer of Kalvinit Oy, Endomines AB and Endomines Oy. He serves as the Chairman of the Board of Sotkamo Silver Oy. Dr. Lindborg has been a Director of Endomines AB since He serves as an Adjunct professor in Oulu University and has experience in Business Development of Mining industry. Dr. Lindborg holds a Doctor of Technology degree in industrial management from Oulu University in Finland, Master of Sciences degree in Engineering from Oulu University and Bachelor of Science in Geology degree from Uppsala University in Sweden. Managing Director Sotkamo Silver Oy Ilkka Tuokko made his MSc in geology and mineralogy at the University of Oulu, Finland. During University Ore Project of Prof Tauno Piirainen he found together with Kalle Taipale the Taivaljärvi deposit in 1980, all three were granted later Prospecting Award of State. Ilkka Tuokko has more than 35 years experience in exploration and mining projects and international mining companies. He started his career in 1981 as geologist of Kajaani Oy, focusing in Taivaljärvi silver deposit during tunnel-construction and associated investigations. In 1991 he joined talc and nickel producer Mondo Minerals, where his position was since 1995 Group Geology and Mining Manager, besides he has been board member of Sotkamo Silver AB. He is a member of AusIMM.``Competent Person status, according to Australian JORC. Ilkka Tuokko was appointed Managing Director of Sotkamo Silver Oy in August 2011."

5 BOARD OF DIRECTORS HAVE EXTENSIVE MINING EXPERIENCE IN MINING 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 exindustry perience in mining and process Mr. Visuri is also Managing Director of Teknoventure Oy Born 1957 Teuvo Jurvansuu (since 2010) 35 years experience in the mining industry Worked in various mines in Finland during that period including Vihanti, Keretti, Enonkoski and Pyhäsalmi 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 Katja Keitaanniemi(since 2014) A Licentiate of Science from the Helsinki University of Technology Shehas previously been Head of Investment Banking Finland & Member of Management Group of Global Investment Banking at Swedbank in Helsinki Born 1973 Jarmo Vesanto (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

6 PROPERTY DESCRIPTION AND LOCATION Ø The Sotkamo Silver Mine Project is located in the municipality of Sotkamo in eastern Finland, 475km from Helsinki. Ø Kajaani Airport within 80km Ø Paved Roads Ø Ports of Oulu, Kemi and Kokkola within 350km

7 BANKABLE FEASIBILITY STUDY DONE UNDERGROUND ACCESS IN PLACE THE NECESSARY MINING LICENSE ENVIRONMENTAL PERMIT RECEIVED ACCESS TO LAND

8 MINERAL RESORCE ESTIMATES The resources of the Taivaljärvi Ag-Zn-Pb-Au deposit are classified in accordance with guidelines of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves [JORC Code (2012)]. Sotkamo Silver Mine Classified Mineral Resources 2014/01/15 Cut-Off Grade 50g/t Ag applied Top cut-off grades: 1200 g/t Ag, 12 g/t Au, 9% Pb, 6,6% Zn JORC Classificatio n Volume m 3 Tonnage t Density t/ m 3 Ag g/t Au g/t Cu g/t Pb % S % Zn % Measured Indicated Total ,8 2,8 2,8 80,6 87,0 83,4 0,24 0,24 0,24 106,7 125,7 115,1 0,3 0,3 0,3 1,8 1,6 1,7 0,6 0,7 0,6 Inferred ,8 75,5 0,22 99,2 0,2 1,6 0,5 Notes: 1. Mineral Resources are not Ore reserves until they have demonstrated economic viability based on a Feasibility study or pre-feasibility study. 2. Mineral Resources are reported inclusive of any reserves. 3. Grade represents estimated contained metal in the ground and has not been adjusted for metallurgical recovery

9 ORE RESERVES ESTIMATES Ø A summary of the Ore Reserves is presented in the table below, based on the update mineral-resources of 2013 mine-plan

10 ADDITIONAL EXPLORATION POTENTIAL MORE THAN 20 Mt Ø Geophysical surveys showing beyond this to 1km depth and with a potential additional strike length of an additional 1km. Ø Exploration Target more than 20 Mt mineralresources with 60 g/t Ag at cut- off grade 30 g/t Ag. Ø Deposit continues down to at least 1400 meters, to be investigated and developed for mining while producing from upper parts Ø Based on geophysical survey mineralized zone is wider in depth Ø Lower apparent resistivity of deep parts indicates higher amount of ore minerals Ø Huge future potential in the area. 3D model of the Silver Mine (Taivaljärvi) deposit; measured and indicated resource is red; blue is the extension of mineralization inferred with Sampo soundings; green lines indicate drill-holes. Production tunnel has been mined down to 350 meters level

11 MINING PLAN START WITH HIGH GRADES Ø Mine plan for first production years is prepared for high quality open pit and underground ores down to -110m from sea level. Ø During the first four planned production-years the silvercontent will vary between 120 to 130 g/ton and gold-content will be about 0.4 g/ton. During the third planned production-year the plan-capacity is planned to increase from tons to tons/year. Ø Planned production-time based on presently known reserves will be 8 to 9 years

12 Bankable feasibility study update March OPEN PIT MINING 16 Open pit mining plan Open pit/mining Year Ore Waste Tonnes Ageq Calc Ag Au Pb Zn Tonnes ,74 127,91 0, ,74 127,91 0, ,39 123,91 0, ,48 120,77 0, * ,50 121,56 0, ,18 108,99 0, ,18 108,99 0, ,78 85,12 0, ** ,91 53,30 0, ** ,91 53,30 0, Total ,39 99,84 0, * starter pit ends ** marginal ore A Underground

13 Underground mining plan is presented in Table below and Figure 34. UNDERGROUND MINING Table 17 Underground mining plan Underground mine/mining Year Ore Stopes Drifting Drifting Drifting Total mining Tonnes Ageq Calc Ag Au Pb Zn Meters Tonnes levels Tonnes 1 Open pit: years , ,75 214,23 0, C ,120,240, ,46 128,41 0, C160, A140, A120, B240, B , 320, 300, ,69 136,41 0, H340, H320, H300, B180, B ,400, 380, * ,68 122,34 0, C420 C340, I410 I ,82 84,75 0, A160 A120, C320, C300, B ,82 84,75 0, ,82 84,75 0, ** ,77 78,58 0, Unplanned reserve ** Total ,89 102,52 0, Ø During the first four planned production-years the silver-content will vary between 120 to 130 g/ton and gold-content will be about 0.4 g/ton. During the third planned production-year the plan-capacity is planned to increase from tons to tons/year. Planned production-time based on presently known reserves will be 8 to 9 years

14 ADDITIONAL SHORT TERM POTENTIAL Bankable feasibility study update March 24 th 2014 Ø Beside these ore reserves there are earlier published mineral resources of 1.33 million tons inferred resources with 75 g/ton silver and about 0.5 million tons containing more than 100 g/ ton Ag. A substantial portion of these resources are expected to be converted to ore reserves in a costeffective way, with reasonable amount of drilling from existing decline. Figure 34 Underground mining plan

15 BANKABLE FEASIBILITY STUDY FINANCIAL PARAMETERS Bankable feasibility study update March 24 th 2014 Financial parameters

16 For Base Case an annualized cash flow position is shown in Figure 44 and a detailed cash flow analysis is given in Table 31. SOTKAMO PROJECT ECONOMICS Figure 44 Annualized cash flow, Base Case

17 Down side Ag 15, Down side EUR/USD 0, Bankable feasibility study update March 24 th 2014 SOTKAMO PROJECT ECONOMICS Up side Ag 28, Up side EUR/USD 0, The payback time is calculated from the process start-up. In the EUR/USD cases Ag price 21,50 USD/oz was used. Base case Down side Ag 15, Down side EUR/USD 0, Up side Ag 28, Up side EUR/USD 0, The payback time is calculated from the process start-up. In the EUR/USD cases Ag price 21,50 USD/oz was used. Resulting effects on NPV, IRR and payback time before tax Financial sensitivity NPV 1000 IRR % Payback time (Y) Base case Down side Ag 15, Up side Ag 28, FINANCIAL ANALYSIS Bankable feasibility study update March 24 th Basis of economic evaluation Resulting effects on NPV, IRR and payback time before tax Table 31 Capital and operating cost estimates were generated and inputted to an economic model Detailed along cash flow with analysis, other economic Base Case inputs including product prices and exchange rates. Production data from the mining plan were also input. The economic model was then used to Financial sensitivity NPV 1000 IRR % Payback time (Y) Production AgPb evaluate Zn different Revenue scenarios in order Total to determine the Capex viability of Opex 1000 the project. Annual Cumulative year Con Con 1000 mining 1000 total cash cash flow Base case Taxation and depreciation was also taken into account in the model. An annual discount 1000 tpa flow 1000 rate of 8% is used. The Net Present Value calculation assumes cash flows occur at the Down side Ag 15, middle of each year, and are discounted back to 1 January Up side Ag 28, flow Also a model where the construction 546 year and first two production years where calculated as monthly basis was modelled. This was then chosen as the final model for the financial analyses For Base Bankable Case feasibility annualized study cash flow update position is March shown 24in th Figure 44 and a detailed cash The model contains one construction year (-Y1) and 8 production years. The model incorporated flexibility for the key drivers of the project enabling analysis and the sensi flow analysis is given in Table 31. Resulting effects on NPV, IRR and payback time (tax included) tiveness of key variables USD/Euro exchange rate 0,76 was used for product 377 pricing. All 17 cost 060 information is input Financial sensitivity NPV 1000 IRR % Payback time (Y) into the model in real terms as Q3/ Sotkamo Silver base case An international market report was used to evaluate the future product prices For this BFS Update the following price scenarios was used: 16.5 Conclusions Table 27 Product prices The updated Bankable Feasibility Study (BFS) has demonstrated both the technical and Metal price Down side Base case Up side economic viability of the project. The results of Base Case profitability calculation are Ag USD/oz presented in Appendix 17 Profitability calculation, Base Case. Au USD/oz Zn USD/t Pb USD/t EUR/USD The historical silver price development is illustrated in the Figure 43. In the financial model Zinc and Lead prices are based on long term forecast. The prices used are presented in table 28. In financial calculations the Silver and Gold prices has been kept stable based on each case.

18 ENVIRONMENT MATERS EQUATOR PRINCIPLES ASSESSMENT Sotkamo Silver has undertaken an independent consultant-report concerning an Environmental, Health and Safety and Limited Social Review - Equator Principles Assessment in relation to financing arrangements in order to construct and operate the Company s Silver Mine in Sotkamo municipality, Finland. This independent assessment has revealed that proposed actions will comply with i) the 2007 IFC Environmental, Health and Safety Guidelines for Mining, ii) requirements of the EU BAT BREF 2009: Management of Tailings and Waste Rock in Mining Activities and iii) with the 108 requirements set forth in the site s Integrated Environmental Permit no 33/2013/1, Dno PSAVI/ 91/04.08./2011 issued on 16 April It is worth noting that the requirements set forth in the Site s Integrated Environmental Permit are in many cases significantly more stringent than those in the 2007 IFC Environmental, Health and Safety Guidelines for Mining and that the technical solutions /structures required often exceed the BAT or implement several or all of the BAT options presented in the applicable BAT BREF The approach taken is path-breaking in the mining industry and results from the recent lessons learnt from the mining industry in Finland

19 POTENTIAL FOR FURTHER SILVERDEPOSIT Prospects of Sotkamo Silver Oy in Tipasjärvi Greenstone Belt area; aeromagnetic low altitude map, picture width 22km Ø A mining lease of about 400 hectares covers the mining area. Applied claims cover the possible extensions of the silver deposit and all the known mineral prospects in the Tipasjärvi greenstone belt. Ø Silver-zinc-lead-gold type prospects. Ø Known centres of acid volcanic activity along the Tipasjärvi belt; eg at Hiidenkirkko and Hietajärvi areas are potential host areas for silver-zinclead deposits; gold belongs also into this type. Acid volcanic rocks containing fragments of volcanic material and sulfide minerals are often host rocks for high-value deposits of Zn-Pb-Cu- Ag and Au In Archean Greenstone belts. These rocks are called in Canada mill-rocks ; while often one can hear sound of process mills when standing on outcrops of these kind of rocks

20 MINERAL RESOURCES ESTIMATES The resources of the Taivaljärvi Ag-Zn-Pb-Au deposit are classified in accordance with guidelines of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves [JORC Code (2012)]. Ø Mm than m drilled Ø Measured resources based on a drill grid of 20m along strike and 17m down dip with 15 samples having been used in the estimation. Ø Indicated resources based on a drill grid of 20-30m along strike and 17m to 25m down dip with 15 samples used for estimation. Ø Inferred resources within defined mineralized wireframes and not estimated in the Measured and Indicated searches. Silver in drill hole

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