Botnia Exploration Holding AB (publ)

Hej och välkomna till dagens webcast med Botnet Exploration där vd Fredrik Bergström kommer att presentera bokslutskommittén för 2024. Efter presentationen kommer det hållas en Q&A och med det sagt så lämnar jag över ordet till dig Fredrik.

Thank you, my name is Fredrik Bergsten and I'm the director of Botnia Exploration. I'm going to tell you a little bit about our Q4 report. But I will also talk a little bit about the presentation and the update of mineral resources that we also released today. Today we will listen to what we are going to talk about in the Q4 report. important events during the quarter and also during the year. And a little bit about what we can expect from the production and the financial results as well. So we will end later and talk a little bit about the block model and the changes of the year and a little bit about our assumed mineral resources and our geological potential as you can see. The fourth quarter har varit väldigt intressant och spännande och framgångsrik kvartal för Botnia. Vi började kvartalet med att leverera vår första guldtacker, som ni kan se på en bild här till vänster. Vi har också under hösten genomfört ett diamantpårprogram tillsammans med vår entreprenör Protec. Det var väldigt mycket framgångsrikt. Vi fortsätter att ha väldigt bra båleträffar mot djupet. We have also, during this period, carried out two additional short-term development campaigns with adjustments in the development board between each campaign to try to optimize the results. Then it is also very, very exciting that Bergsstaten announced a withdrawal from the so-called prohibition year due to our investigation status. for the Stenberget area. And that means that it now feels very safe and with high probability that we will get our renewed research status, which will be called Färbockärn number 2, but actually the same, even if it is still not clear. So a very exciting fourth quarter for Botnia, both the first quarter with malm production and supply and distribution of gold for us. It follows the previous quarter of 2024, which has also been very eventful and successful for Botnia. It starts with one of the last important pieces of the puzzle being put in place for us, with us being able to sign our agreement on legal enrichment with Dragon Mining's refinery in Svartliden. We have also strengthened the organization during the year to adapt it to the future production organization. with a participant of mine, but during the autumn we also added a production geologist, Jessica Sidenmark, and a new CFO, Robert Johansson. During the spring, we have done a lot of intensive work to complete the the industrial area by the mine. And this led to our first high-tech day, which was the introduction of underground work in the mine on the 2nd of May. What happened after the end of the year, at the end of January, is that we have now also carried out a block model update, where we were able to take into account Both the drill results that we got from the autumn, but also actually added some of the tests that were taken in connection with the test break that was done in 2017 to generate a new block model. When we look at the year as it has gone, we say that we have broken about 19,502 tons of malm. 13,850 of them now in the last quarter, so you can see that we are ramping up the production here. But the year has above all been characterized by an incredible amount of cleaning work, as we call it, and actually what it's about is to make tunnels in the mountain on the side of Malmö. And in this sketch, as you can see, we first have the straight ramp that we made during the summer, then we have the spiral ramp that goes down to the side of Malmö, to give us a lot of opportunities to work with. And in connection with the change of year, we had three production levels, sheet 1, 2 and 3, and we were on our way down to sheet 4. We were about where the yellow marking is in the middle of the ramp. Skiva 4 has been in production today. It is the first marble machine on Skiva 4, which is very exciting. And we are now also preparing Skiva 3 to become the first bottom board, so to speak, for our slightly larger method. Because what you can see is that all the marbles we have broken so far have been signifikant dyrare av de två brytningsmetoderna som Botnia använder sig av. Vi använder sig av den för att skapa positioner för den mer storskaliga brytningsmetoden. När det gäller våra produktionsförväntningar för 2025 så ser ni här egentligen, det här är en bild som visar liksom ackumulerade anrikade tonnager under året. Vi räknar med att landa strax under anrikade thousand tons. But as you can see, there is a small weight point during the first eight months of the year. This actually has the production level of the mine, which is illustrated by the monthly, isolated month's production level here. You can see that we have a much higher production capacity here in the first half of the year. This is part of the natural variation, with a cycle of about 8-10 months, where we have a period with a large-scale, very productive rupture, while we also prepare new positions for that type of rupture, but we then get a lower period when we only have rupture with a less productive method for a few months before the large-scale method starts again. This also happens when we look at the Q4 report on results and cash flows. that we see that the cost level has been higher than what is actually the planned future average of the mine. And that actually means that we have just broken with this higher cost method, which has a little lower productivity to create positions for those who are large scale. And that is also a result of the mine initially We can also say that we have transferred almost SEK 58 million during the fourth quarter from these three enrichment campaigns. This is a little better than the expectations we had ourselves, and it actually depends 100% on the fact that the gold price has been better than expected. A part of the mulch that has been enriched during this period is also a B-mulch, a mulch of lower quality, which actually has its origin in a test break from the Varvbäcken Fyndigheten on the other side of the river, which we have post-treated during the autumn. In this post-treatment, we noted that there was a mountain range that we needed to get rid of, and we suspected that this would lead to positive results, so we took that into account as well. It generated a post-treatment income of about 1.1 million, which is why we see that it will be a negative post-treatment in our work, because this has been returned as a negative post-treatment balance. As you can see, the majority of our costs are built on external costs and production and management costs. This is a natural cause of the fact that the mine is driven 100% by entrepreneurs. So the absolute majority of these costs are in return for our entrepreneurs, Dragon Mining and Bell Team. We have also, during the period, started to write off our mining grants that we have received, both through prospecting and the status quo earlier, also by building the physical infrastructure. When the mine starts to generate money, we have to write off this compensation. We also see what is very exciting here, that we already have the first quarter with income, a positive EBIT, a moving margin, at 13.6 million. This is a strong message for a new start-up to go directly into profitable operations. And something we are happy about, of course, is the help of good gold prices. This also makes us feel quite safe with the fact that we will in the future be able to use de skattemässiga underskottsavdrag som Botnia Exploration historiskt har upparbetat och gör att vi är nu beredda att värdera det där som en uppskjuten skatteintäkt. Det är därför vi får en positiv skattekostnad här nere också. The company's cash flow, we can say here that we are ready to show a cash flow in balance already during the first quarter of revenue, which is a strong message. This is a little better than what we have previously guided for, but Vi står ändå kvar vid vår rekommendation, vår guidning sen tidigare, att vi blir kassaflödespositiva i slutet av första kvartalet eller i början av andra kvartalet. Orsaken till det är att vi har fortfarande väldigt mycket investeringar på kassaflöde som ska ut under de första två månaderna av 2025 som hör till byggnationerna och gruvan. Vi ser också här att vi har bundit en hel del i förändringar i rörelsekapital. This is due to the fact that the last campaign, the money from it was delivered just days before the change of year. And even if we had been able to invoice this and register the revenues, it took a few days before these revenues had appeared on our accounts, so to speak. So we have built a short-term plan for the change of year. When we look at the company's balance sheet, we see that the company continues to be fully financed, largely through capital, plus a bridge loan that we took up during the autumn from a consortium of our three largest owners. We also have a smaller convertible loan from Norrlandsbonden, which will expire in 2027. We can also see here, during short-term feedings, that here we have the short-term feedings that we had, as I mentioned, in the previous year's shift, linked to the last delivery of gold at the end of the year. We can also see from the analysts that we have invested a lot in our analysts, even though we have started to write them down.

Thank you for the presentation, Fredrik. Let's jump straight to the questions. During the fourth quarter, you did the first diamond drilling program of the FÄB and the nuclear analysis is ongoing, but are there any early projections on how long the drilling can be extended?

Yes, as I have said in the presentation, we have the results from all the analyses done just now. And in general, this extends the production of the mine by a little over a year, not a full year and a half. I would say that the lifespan now is indicated at some point during the later part of the second quarter of 2028.

Tack så mycket. Vilka förhoppningar har ni gällande Fäbokärn 2 och hur stor är sannolikheten att undersökningstillståndet godkänts enligt er bedömning?

Ja, vi har väldigt stora förhoppningar om det. Särskilt som att Bergstaten har ju redan godkänt connected to the previous prospecting status that we had there. And considering that we are the ones who have a mine in the middle of that, and we also have a protection area, a strong protection area around the mine that makes it very, very difficult for another actor to be able to come in and build a mine there. I would say that there is a very high chance that it will start to get closer soon.

If we look at the financials, the fourth quarter results in black numbers. What does the forecast look like for 2025?

The forecast for 2025 looks pretty good regarding the metal prices we have now. that continues to apply. And that we achieve these goals that we have with our gravel mixture, because it spills out the Malmö, so to speak, because we do not get revenue from driving an extra ton of gravel through Andriktningsverket under the Malmö market. In such cases, it looks very, very good and we have a very strong positive cash flow and very strong results.

Thank you very much. I think it's a bit early, but if we look ahead, how do you see the shareholding of shareholders in the future?

Shareholding of shareholders is something that shareholders should ask for. As it looks for Botnia Exploration right now, we still have quite a lot of accumulated historical funds to earn again. And we haven't started to earn, even if we had a good fourth quarter now, it's still a loss for the whole year. Så det kan inte bli frågan om man har aktieutdelning på på stämman i år. Men det är klart att styrelsen kommer nog förmodligen att arbeta under det här året för att kunna komma med något förslag till stämman i framtiden. Om det är utdelning på stämman 2026 eller om det dröjer ytterligare ett år, det är för tidigt att säga.

Jag förstår, jag förstår. You also mentioned that Vargbäcken contains lower gold content with a larger volume compared to Färb och Kärn. Does this mean that the process of breaking gold becomes more costly?

Vargbäcken is a project that we haven't really done any research on in recent years. Vargbäcken is also a property that differs a lot in relation to Färb och Kärn. Vargbäcken is a that is to be terminated as a day crime, which means senselessly low termination costs. On the other hand, the environmental costs of a large hole in the hill are a little bigger, so that is something we have to deal with. Then, what is most important with the halter in Varvbäcken is that it does not really tolerate a lot of transport, but it needs to have some kind of halting or some kind of revision. on site in Varjebäcken to be able to continue to work on economic profitability. So it's really not the mining costs in Varjebäcken that will be very, very low, but rather the treatment costs after the mine, which is the challenge there. And that is something that we have not yet given ourselves to, to investigate exactly how it will go there, because we have focused all resources in recent years on getting fair income.

Jag förstår. Det kanske blir en kommande fråga något annat kvartal senare.

Ja, så att säga. Vi kommer givetvis att börja titta på varje vecka, men jag kan i dagsläget inte säga någonting om tidplanen för när vi skulle kunna färdigställa ett projekt för varje vecka eller när en utbyggnad skulle kunna komma till.

I understand. And that leads me to the next question here, since you may actually answer a little bit here, but further communicates that you intend to update the plans regarding Varjebäck under 2025. Is there any early estimate when those plans will be presented?

It's a little too early to say. We will probably start to overlook those plans in the short term, but it's too early to say how long that project is expected to take or then how long a construction of Fynder Hedda would take.

Thank you. You are now a gold-producing company that has delivered its first gold to customers. What do the future prospects look like when we enter 2025?

I think we have every reason to have great expectations for the future. Vi har nu en gruva som jag tycker fungerar ganska bra. Det är lite små justeringar kvar. Vi har en spännande period fram oss nu att lyckas med vår första storskaliga produktiva position, så kallad real mining, för de som är tekniskt intresserade. Det är alltid spännande när man ska göra det första gången och lyckas med det. Men om allting fortsätter som det har gjort och guldpriset håller sig på den här nivån så tror jag att We have a lot of exciting goals ahead of us.

I understand. And finally, how do you see the need for capital investment in the form of commercial emissions or the like?

At the moment, we don't see any need for any additional capital investment. Rather, we see that the mining industry as it is today will start to generate a positive cash flow.

Stort tack för att du tog dig tid att presentera och svara på våra frågor här. Det ska bli spännande att följa er framöver.