MONTREAL, May 12, 2023
/CNW/ - Aya Gold & Silver
Inc. (TSX: AYA) (OTCQX: AYASF) ("Aya" or the
"Corporation") is pleased to announce interim financial and
operational results for the first quarter ended March 31, 2023. All amounts are in thousands of
US dollars unless otherwise stated.
First Quarter 2023 Highlights
- Strong operational performance:
-
- Silver production of 474,813 ounces ("oz"), a 54% increase from
Q1-2022
- Recoveries reached 87.1% in Q1-2023, compared to 80.4% in
Q1-2022
- Ore processed increased to 72,737 tonnes ("t") compared to
62,001t in Q1-2022
- Revenue of $10.4 million, a 14%
increase from Q1-2022
- Silver sales of 508,204 oz, a 25% increase from Q1-2022
- Operating cash flow for the quarter of $4.1 million
- Cash cost of $14.56 per oz
compared to $15.37 per oz in Q1-2022
(¹)
- Completed 3,263 meters ("m") of drilling at Zgounder
- Conducted 3,948m of diamond drill
hole ("DDH") drilling on Zgounder Regional properties
- Completed 12.7 kilometers ("km") of the 36km DDH program at
Boumadine on targets identified by comprehensive geophysical and
mapping program data
-
- Results drilled in Q1-2023 confirmed the presence of a new type
of mineralization comprising a high-grade sulphide stockwork
zone
- Extended the strike to 3.4km towards the south, which remains
open in all directions
- Advanced Zgounder Mine expansion:
-
- Overall construction 32% complete
- Completed over 5,107m of lateral
underground development
- Completed plant and road earthworks
- Concrete contractor mobilised and foundations poured for leach
reactors, ball mill, jaw crusher, and ore silo
- Advanced detailed engineering and fabrication of the ball mill
to over 88%, and manufacturing of crushing equipment to 90%
completion
- Continued construction of the new tailings and water storage
facilities on schedule
- Solid financial position with $91
million of cash, cash equivalents and restricted cash
(²) compared to $42
million at December 31,
2022
- Contributed to the long-term sustainability of Zgounder
operations:
-
- Launched construction of the 90km powerline that will connect
Zgounder to renewable grid power
- Provided over 1,035 hours of health & safety training
- Implemented the Stakeholder Engagement Plan and Community
Grievance Mechanism
1 The
Corporation reports non-GAAP measures, which include cash costs per
silver ounce and free cash flow, which are widely used in the
mining industry as a benchmark for performance, but do not have a
standardized meaning and the methods used by the Corporation to
calculate such measures may differ from methods used by other
companies with similar descriptions. See "Non-GAAP Measures" on
pages 13 & 14 of the Corporation's Q1-2023 MD&A for a
reconciliation of non-GAAP to GAAP measures.
|
2 Non-GAAP
Measures, consisting of cash and cash equivalents of $88,496,800
and restricted cash of $2,503,022.
|
"We had an excellent start in 2023, with strong cash flow and
silver production of 474,813 ounces, our second-highest quarterly
production to date, which was driven by record mill processing,"
said Benoit La Salle, President and
CEO. "Our ongoing focus on mechanization through the delivery of
new trucks contributed to mining averaging 922 tpd in the quarter,
and even 1,027 tpd in March. We expect to maintain the momentum
gained over the past quarters in the remainder of the year, putting
us firmly on track for achieving 2023 production guidance.
Furthermore, the Zgounder Mine expansion is one third complete
and continues to track on budget. After the quarter, we received
exceptional drill results from Boumadine that, coupled with the
discovery of new stockwork mineralization, extended the footprint
to 3.4km which remains open along strike and at depth. The strong
cash flow from Zgounder, combined with our enhanced balance sheet,
places us on solid footing to expand our drilling efforts and
resource and deliver value for all stakeholders."
Q1-2023 Operational and Financial Highlights
Key Performance
Metrics*
|
|
March
31,
2023
|
March 31,
2022
|
Variation
|
Operational
|
|
|
|
|
Ore Mined
(tonnes)
|
|
80,902
|
61,367
|
32 %
|
Ore Processed
(tonnes)
|
|
72,737
|
62,001
|
17 %
|
Average Grade (g/t
Ag)
|
|
235
|
192
|
22 %
|
Mill Recovery
(%)
|
|
87.1
|
80.4
|
6.7 %
|
Silver Ingots Produced
(oz)
|
|
168,648
|
123,336
|
37 %
|
Silver in Concentrate
Produced (oz)
|
|
306,165
|
185,009
|
65 %
|
Total Silver
Produced (oz)
|
|
474,813
|
308,345
|
54 %
|
Silver Ingots Sold
(oz)
|
|
149,915
|
199,500
|
(25 %)
|
Silver in Concentrate
Sold (oz)
|
|
358,289
|
207,308
|
73 %
|
Total Silver Sales
(oz)
|
|
508,204
|
406,808
|
25 %
|
Avg. Net Realized
Silver ($/oz)
|
|
20.55
|
22.52
|
(9 %)
|
Cash Costs per Silver
Ounce Sold (¹)
|
|
14.56
|
15.37
|
(5 %)
|
Financial
|
|
|
|
|
Revenue
|
|
10,443
|
9,163
|
14 %
|
Cost of
sales
|
|
8,360
|
6,962
|
20 %
|
Gross Margin
|
|
2,083
|
2,201
|
(5 %)
|
Operating
(loss)
|
|
(85)
|
(250)
|
66 %
|
Net Earnings
(loss)
|
|
1,060
|
(1,962)
|
154 %
|
Operating Cash
Flow
|
|
4,063
|
(815)
|
NM
|
Cash and Restricted
Cash (2)
|
|
90,999
|
76,594
|
19 %
|
|
|
|
|
|
Shareholders
|
|
|
|
|
Earnings (Loss) per
Share – basic
|
|
0.01
|
(0.02)
|
NM
|
Earnings (Loss) per
Share – diluted
|
|
0.01
|
(0.02)
|
NM
|
(1,2) See footnotes (1, 2)
on first page.
|
First Quarter 2023 Financial & Operational
Highlights
- Quarterly silver production of 474,813 oz, comprising 306,165
oz as silver concentrate and 168,648 oz as silver ingots. The
54% quarter-over-quarter increase in silver oz produced is a direct
result of significantly higher grade processed, and recovery.
- Mill average feed grade of 235 g/t Ag was reported in
the quarter compared to 192 g/t Ag in Q1-2022, an
increase of 22%.
- Milling operations reached 808 tonnes per day ("tpd"),
surpassing design capacity of 700 tpd.
- Average combined mill recovery increased to 87.1% in the
quarter compared to 80.4% in Q1-2022, an increase of
6.7%.
- Plant availabilities reached 94.3% and 94.1% for the flotation
and cyanidation plants, respectively.
- Cash flows generated by operating activities of $4,063 in the quarter compared to outflow of
$815 in operating cash flows in
Q1-2022.
- Revenue from silver sales for the quarter totaled $10,443 (Q1-2022 – $9,163), an increase of 14% representing an
average realized price of $20.55/oz.
(Q1-2022 - $22.52/oz).
- Operations generated a gross margin of $2,083 in the quarter compared to $2,201 in Q1-2022, a decrease of 5%. This was due
to an increase in the Q1-2023 volume of silver sold to
508,204 oz (compared to 406,808 oz sold in Q1-2022) that
was largely offset by a lower net realized silver price per oz in
Q1-2023 of $20.55 compared to
$22.52 in Q1-2022, a reduction of
$1.97 per oz.
- Net income for the quarter was $1,060 (diluted EPS of $0.01), compared to a net loss of ($1,962) (diluted EPS of $(0.02)) in Q1-2022.
Q1-2023 Operations Review
During the first quarter, the Zgounder team focused on preparing
for the ramp up of the underground mine from 700 tpd to 1,200 tpd
through 2024. An average mining rate of 922 tpd was achieved in the
first quarter, with a record of 1,027 tpd in March 2023. Three underground dumper trucks and
one loader were delivered on site, enhancing production in Q1-2023,
and most particularly in March 2023.
In Q2-2023, the open pit contractor is expected to mobilise.
Over 1,035 hours of employee health & safety training were
dispensed in the areas of fire management, supervision, and
including certification of aptitude in safe driving of R482 trucks
for underground machinery operators.
Zgounder Development
Construction of the plant and surface infrastructure continued
to track on budget. At the end of Q1-2023, overall construction was
32% complete, and engineering for the entirety of the project had
reached 80% (see Figure 1).
During the quarter, the main equipment on the critical path
continued their fabrication to plan and on schedule. Work on the
new tailings and water storage facilities is progressing as
planned. Bulk earthworks were nearly complete, and civil works were
tracking as planned. The power line contractor began erecting
pylons along the path, and the power line is tracking to
schedule.
Underground mining activities continued in line with the planned
timeline with over 5,100m of lateral
development completed. The vertical development contractor began
working during the quarter and had completed 140m of vertical development by quarter-end. A
portion of the new mining equipment arrived on site to support the
ramp up of the underground mine, achieving an average daily mining
rate of 922 tpd.
At the end of Q1-2023, $119
million had been contracted across all capital cost
categories and $26.5 million had been
incurred.
The table below presents construction progress by main project
area:
Area
|
Progress
|
Process
Plant
|
26 %
|
Underground and
Open-Pit Mines
|
29 %
|
Tailings & Water
Management
|
41 %
|
Electrical
Infrastructure
|
18 %
|
On-site
Infrastructure
|
53 %
|
Q1-2023 Exploration
Zgounder
A total of 3,263 m of DDH and RC
drilling was conducted on Zgounder near-mine targets (exploration
and definition drilling) in the first quarter, principally to
confirm the vertical and lateral continuity of known mineralized
envelopes. In addition, 5,557m of T28
and Yak underground drilling were completed. In Q1-2023, the final
results from the 2022 drilling campaign were received. Surface
drill holes ZG-DCD-22-06 and ZG-DCD-22-07 intersected 1,220 g/t Ag
over 6.5m and 846 g/t Ag over
9.5m, respectively, confirming
high-grade mineralization at depth towards the contact with the
granite and outside of the resource envelope. Two drill surface
drill rigs and two underground rigs are currently active on the
property.
Zgounder Regional
In the first quarter of 2023, 3,948m of DDH drilling were completed on Zgounder
Regional properties, mainly on the Zgounder Far West, Tala and Izza
drill areas. The Tala and Izza areas were also prioritized as they
had both returned high-grade grab samples in silver, copper and
gold associated with a very strong spectral alteration signature.
Results are expected in H1-2023.
All results from last year's sediment geochemistry program have
been received and integrated with our geophysics and spectral data,
adding to our understanding of the properties.
Boumadine
The first quarter saw the Corporation intensify its DDH program
at Boumadine with the objective of exploring strike length
extensions and the central zone at depth. In February 2023, results from Q4-2022 drilling were
released, confirming that parallel zones had been discovered along
the main trend in addition to the historically known mineralization
at the Tizi Zone.
At quarter-end, a total of 12,700m
had been drilled and five drill rigs were turning, up from three in
January. Results from the first-quarter program were released in
mid-April, confirming the extension of the main trend
mineralization to 3.4km in strike; with BOU-DD23-095 intersecting
129.4m of mineralization. In
addition, a new style of mineralization was identified. The new
mineralization consists of a large sulphide stockwork zone
(sulphide-rich stringer) comprising five distinct massive sulphide
veins. The concentration of sulphide veinlets in these stockwork
varies from 8% to 15% and is composed mainly of pyrite with traces
of sphalerite, galena, and chalcopyrite. This new mineralization
encountered in BOU-DD23-095 significantly opens the potential at
depth and toward the south.
The main mineralization generally consists of 1m to 4m wide
(locally reaching over a 10m width)
N340-oriented massive sulphide lenses/veins sharply dipping
eastward (>70°). The massive sulphide veins (>80%) are mainly
composed of pyrite, with variable proportions of sphalerite,
galena, and chalcopyrite.
The technical information relating to Zgounder, Zgounder
Regional and Boumadine properties was reviewed and approved by
David Lalonde, B. Sc, Head of
Exploration, designated as a Qualified Person under National
Instrument 43-101.
Q1-2023 Conference Call
The Corporation will hold a conference call today at
10 am EDT to discuss its Q1-2023
financial and operational results. The webcast can be accessed as
follows:
- Via webcast: https://app.webinar.net/0QdN6LQnmKE
- Via URL entry: https://emportal.ink/41P6R2w
To join the call without operator assistance,
register and enter your phone number to receive an instant
automated call back.
- Via telephone: Local and international: (+1) 416-764-8650
N. American Toll Free: 888-664-6383
You can also dial direct to be entered to the
call by an operator. To ensure your participation, please call
approximately five minutes prior to the scheduled start of the
call.
The conference call and webcast will be available for replay by
dialing (+1) 416-764-8677 or toll-free on 1-888-390-0541, entry
code 955969 #. The conference call replay will expire on
May 19, 2023.
The presentation slides will also be posted on Aya's
website.
About Aya Gold & Silver
Inc.
Aya Gold & Silver Inc. is a
rapidly growing, Canada-based
silver producer with operations in the Kingdom of Morocco.
The only TSX-listed pure silver mining company, Aya operates the
high-grade Zgounder Silver Mine and is exploring its properties
along the prospective South-Atlas Fault, several of which have
hosted past-producing mines and historical resources. Aya's
Moroccan mining assets are complemented by its Tijirit Gold Project
in Mauritania, which is being
advanced to feasibility.
Aya's management team is focused on maximising shareholder value
by anchoring sustainability at the heart of its operations,
governance, and financial growth plans.
For additional information, please visit Aya's website at
www.ayagoldsilver.com.
Forward-Looking Statements
This press release contains certain statements that constitute
forward-looking information within the meaning of applicable
securities laws ("forward-looking statements"), which reflects
management's expectations regarding Aya's future growth and
business prospects (including the timing and development of new
deposits and the success of exploration activities) and other
opportunities. Wherever possible, words such as "will", "expect",
"maintain", "achieve", "expand", "ramp-up", "plan", "as-planned",
"tracking", "guidance", "potential", "deliver", "committed",
"continue", "growth", "advance", "expected", "increase", and
similar expressions or statements that certain actions, events or
results "may", "could", "would", "might", "will", or are "likely"
to be taken, occur or be achieved, have been used to identify such
forward-looking information. Specific forward-looking statements in
this press release include, but are not limited to, statements and
information with respect to the exploration and development
potential of Zgounder and the conversion of Inferred Mineral
Resources into Measured and Indicated Mineral Resources, future
opportunities for enhancing development at Zgounder, executing on
the planned expansion at the Zgounder mine, and timing for the
release of the Company's disclosure in connection with the
foregoing. Although the forward-looking information contained in
this press release reflect management's current beliefs based upon
information currently available to management and based upon what
management believes to be reasonable assumptions, Aya cannot be
certain that actual results will be consistent with such
forward-looking information. Such forward-looking statements are
based upon assumptions, opinions and analysis made by management in
light of its experience, current conditions, and its expectations
of future developments that management believe to be reasonable and
relevant but that may prove to be incorrect. These assumptions
include, among other things, the closing and timing of financing,
the ability to obtain any requisite governmental approvals, the
accuracy of Mineral Reserve and Mineral Resource Estimates
(including, but not limited to, ore tonnage and ore grade
estimates), silver price, exchange rates, fuel and energy costs,
future economic conditions, anticipated future estimates of free
cash flow, and courses of action. Aya cautions you not to place
undue reliance upon any such forward-looking statements. The risks
and uncertainties that may affect forward-looking statements
include, among others: the inherent risks involved in exploration
and development of mineral properties, including government
approvals and permitting, changes in economic conditions, changes
in the worldwide price of silver and other key inputs, changes in
mine plans (including, but not limited to, throughput and
recoveries being affected by metallurgical characteristics) and
other factors, such as project execution delays, many of which are
beyond the control of Aya, as well as other risks and uncertainties
which are more fully described in Aya's 2022 Annual Information
Form dated March 31, 2023, and in
other filings of Aya with securities and regulatory authorities
which are available on SEDAR at www.sedar.com. Aya does not
undertake any obligation to update forward-looking statements
should assumptions related to these plans, estimates, projections,
beliefs and opinions change. Nothing in this document should be
construed as either an offer to sell or a solicitation to buy or
sell Aya securities. All references to Aya include its subsidiaries
unless the context requires otherwise.
SOURCE Aya Gold & Silver
Inc