MONTREAL, May 13, 2022
/CNW Telbec/ - Aya Gold &
Silver Inc. (TSX: AYA) (OTCQX: AYASF) ("Aya" or the
"Corporation") is pleased to report interim financial and
operational results for the first quarter ended March 31, 2022. All amounts are in US dollars
unless otherwise stated.
Highlights
- Produced 308,345 ounces ("oz") of silver ("Ag"), a 21% decrease
from Q1-2021, which is a result of the lower grade mined as per the
planned mining sequence
- Revenue of $9.2 million, a 7%
increase from Q1-2021 driven by Ag oz withheld in Q4-2021 that were
sold in Q1-2022 at a higher Ag price
- Processed 62,001 tonnes ("t") of ore, a 28% increase from
Q1-2021
- Mill recoveries reached 80.4%, compared to 82.8% in
Q1-2021
- Silver sales of 406,808 oz, a 16% increase from Q1-2021
- Head grade of 192 grams per tonne ("g/t") Ag, which will
improve in line with guidance as development increases and mining
of higher-grade stopes restarts
- Successful drill program at Zgounder
-
- Delivered a maiden reserve estimate of 8.59 million tonnes
("Mt") grading 257 g/t for 70.9 million ounces ("Moz") Ag
- Initial drill results extended eastern strike by 50 meters
("m") and increased continuity at depth
- Over 4,100m of diamond drill hole
("DDH") drilling completed on Imiter bis with results pending
- ESG initiatives with long-life impact
-
- Launched a five-year community investment and entrepreneurship
program
- Entered into a partnership to implement zero-emission power at
Zgounder by 2024 through an interconnection agreement with ONEE and
plan to sign a renewable power purchase agreement
- Progress on Zgounder production expansion
-
- Completed the Zgounder 2,000 tpd expansion Feasibility Study
("FS") that extends the mine life to 11 years and quadruples
post-expansion annual production to +7 Moz
Ag
- Received Environmental and Social Impact Assessment approval
("ESIA")
- Awarded underground development contracts: 365m of lateral work completed
- Completed 75% of the front-end engineering design ("FEED")
- Commenced trading on the OTCQX under the ticker symbol
"AYASF"
"We had a slow start to the year as our focus on mining
infrastructure, stope accesses, and backfilling historical stopes
temporarily impacted our access to high-grade zones. February and
March production and grade were less affected. I am pleased with
the operational improvements since January and our on-schedule
construction start-up, which included delivering on some key
construction milestones in the quarter. Overall, Zgounder
operations performed well, particularly as we kicked off our mine
development program in the quarter," said Benoit La Salle, President and CEO. "As
development progresses, our access to richer ore and greater mining
capacity will position us well for delivering 2022 production
guidance. Mine development to date is also running to plan, with
the FEED tracking slightly ahead of schedule."
"Exploration at Zgounder continues to return impressive results
that we expect to include in the updated resource statement later
this year. We are excited to be completing geophysical surveys on
our three key exploration properties and start adding value for all
stakeholders through our next phase of exploration drilling.
Combined with our clean balance sheet and strong development
pipeline, we are just beginning our journey as one of the largest
primary-silver producers."
Q1-2022 Operational and Financial
Highlights
Key Performance
Metrics
|
|
Q1-2022
|
Q1-2021
|
Variation
'22 vs '21
|
Operational
|
|
|
|
|
Ore Processed
(tonnes)
|
|
62,001
|
48,472
|
28%
|
Average Grade (g/t
Ag)
|
|
192
|
296
|
(35%)
|
Mill Recovery
(%)
|
|
80.4
|
82.8
|
(3%)
|
Silver Ingots Produced
(oz)
|
|
123,336
|
190,621
|
(35%)
|
Silver in Concentrate
Produced (oz)
|
|
185,009
|
198,511
|
(7%)
|
Total Silver
Produced (oz)
|
|
308,345
|
389,132
|
(21%)
|
Silver Ingots Sold
(oz)
|
|
199,500
|
162,500
|
23%
|
Silver in Concentrate
Sold (oz)
|
|
207,308
|
189,519
|
9%
|
Total Silver Sales
(oz)
|
|
406,808
|
352,019
|
16%
|
Avg. Net Realized
Silver ($/oz)
|
|
22.52
|
24.26
|
(7%)
|
Avg. Silver Production
Cost ($/oz)
|
|
17.11
|
11.26
|
52%
|
|
|
|
|
|
Financial
|
|
|
|
|
Revenues
|
|
9,162,864
|
8,541,273
|
7%
|
Cost of
Sales
|
|
6,961,784
|
3,963,251
|
76%
|
Gross Margin
|
|
2,201,080
|
4,578,022
|
(52%)
|
Operating (Loss)
Income
|
|
(250,396)
|
2,458,478
|
(110%)
|
Net (Loss)
Income
|
|
(1,962,249)
|
819,670
|
(339%)
|
Operating Cash
Flows
|
|
(792,166)
|
4,223,564
|
(119%)
|
Cash and Restricted
Cash
|
|
76,594,171
|
31,820,687
|
141%
|
|
|
|
|
|
Shareholders
|
|
|
|
|
Earnings (Loss) per
Share – basic
|
|
(0.019)
|
0.009
|
|
Earnings (Loss) per
Share – diluted
|
|
(0.019)
|
0.008
|
|
Q1-2022 Operations
Review
The focus in the first quarter of 2022 was on commencing
development of the underground mine infrastructure to support the
expansion. Initial development was completed on schedule with over
365m of permanent infrastructure
completed and a new main portal opened. Several road segments were
maintained, the base camp was refurbished, and the new
administrative offices were fully completed. Additionally, a
portion of the project construction team was mobilized on site to
prepare the site for construction.
As mine development progresses and the new block model is
incorporated in the planning, the mine operation sequencing has
been updated to ensure that the ramp-up is aligned with the
expansion project timeline.
Mine & Milling Operations
During the first quarter, 308,345 oz were produced at a global
silver recovery of 80.4%. The cyanidation plant operated at 96%
availability, and the flotation plant at 91.5%, resulting in a
total milling rate of 689 tpd. A total of 62,001t were milled at a
silver grade of 192 g/t. The lower ounces produced compared to
Q1-2021 was directly related to lower grade mined as per the mine
sequencing plan for the year and to a lack of ore on the ROM pad as
the mining rate is equal to the processing rate.
Mine sequencing in the first quarter was planned to prioritize
mining development infrastructure. Mine grade is expected to
improve through the year as the recent block model is incorporated
in the mine planning, new stopes are opened, and definition
drilling accelerates. Delivery of additional mining equipment is
expected in Q2-2022 that will provide Aya with more mining capacity
than milling capacity. This will allow the Corporation to build up
an ore stockpile beginning in Q3-2022.
Capital Projects
Two significant capital infrastructure projects were completed
during the first quarter: the new site administrative offices and
the 60,000m3 water
retention pond, the latter of which will benefit from the ongoing
wet season. This water retention pond will secure Aya's current
water needs in the dry season. Improvement is ongoing at the camp,
including sanitary installations for camp wastewater that will be
used to irrigate the site vegetation.
A new jumbo was received for commissioning in Q2-2022.
Furthermore, a 70t crane was delivered to facilitate plant
maintenance that will also be useful during the upcoming expansion
project. Surface roads between mine levels were improved to sustain
interlevel production.
Zgounder Development
On February 22, 2022, Aya
completed an expansion FS to grow Zgounder production from 700 tpd
to 2,700 tpd capacity (see press release dated February 22, 2022) that includes a maiden reserve
estimate of 8.59 Mt at an average grade of 257 g/t for 70.9
Moz Ag . The initial estimated
capital expenditures are $139.4
million, and the first Ag pour is planned in Q1-2024.
Post-expansion, the mine is expected to produce 7.9 Moz Ag for an initial life of mine of 11 years
at an all-in sustaining cost ("AISC") of $9.58/oz. Project economics, using a Ag price of
$22 per oz, indicate an after-tax 5%
present value ("NPV") of $373 million
and an after-tax Internal Rate of Return ("IRR") of 48%. At a Ag
price of $23.50, the NPV increases to
$433M and the IRR to 54%.
In the first quarter, Aya began advancing the Zgounder expansion
towards construction start-up by Q3-2022, notably by achieving the
following items:
- Completed 75% of the FEED, on track for delivery in
Q2-2022
- Simplified the general flowsheet of the process plant through
additional metallurgical test work
- Issued requests for quotation for 13 long-lead items to
pre-approved vendors
-
- Launched ball mill tender package
- Received ESIA approval
- Awarded underground development to two contractors who
mobilized on site
- Completed 365m of underground
work
- Continued hiring of key personnel for the construction
phase
Q1-2022 Exploration
Zgounder
The first quarter saw Aya return high-grade DDH results that
continued to expand the eastern zone and further defined the upper
areas of the Zgounder Mine underground workings. Within Zgounder
East, highlight intervals such as DZG-21-25 and DZF-21-27 extended
the eastern strike and vertical depth beyond previously drilled
intersections, increasing the resource envelope to the east. The
vertical eastern zone remains open at depth. Below the Zgounder
Mine area, underground infill drilling results such as DZG-SF-22-07
and T28-21-1988-272 defined wide zones of mineralisation above the
260 g/t Ag reserves grade that are situated below current mine
galleries. All five DDHs drilled at depth to the granite contact
returned high-grade mineralised intercepts with ZG-21-62 hitting
663 g/t Ag over 8.5m. A total of four
rigs are currently operating on Zgounder, two on surface and two at
depth.
At the end of the quarter, the geophysical airborne survey began
over the Zgounder Regional permits. Results will be combined with
those from the mapping program to generate targets for a drilling
program later this year.
Imiter bis
Drilling continued at Imiter bis in the first quarter, with
4,130m of DDH drilling completed
mostly on three new targets (the North-West Zone, the Daoud Zone
and the North-East Zone). A follow-up drilling section was also
added north of the Middle Zone which had returned several promising
results in the 2021 exploration program including 4.2m at 1.27g/t Au (IM-DD21-014) and 1.2m at 1.20 g/t Au (IM-DD21-016). The
Corporation will build on these results with follow-up drilling in
Q2-2022.
The airborne geophysical survey, which included magnetic,
radiometric and electromagnetic surveys over 554 linear kilometers,
was completed in April 2022.
Boumadine
A 349-line km airborne geophysical survey was completed in
April 2022 and included magnetic,
radiometric, and electromagnetic surveys. The 7,500m drill exploration program is scheduled to
start in May 2022.
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 has been 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", "guidance",
extend", "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 2021 Annual Information Form dated March 31, 2022, 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