Strong Start to 2023 with Expanded Exploration
Program
MONTREAL, March 29,
2023 /CNW/ - Aya
Gold & Silver Inc. (TSX: AYA) (OTCQX: AYASF)
("Aya" or the "Corporation") is pleased to announce financial and
operational results for the fourth quarter and year ended
December 31, 2022. All amounts are in
US dollars unless otherwise stated.
2022 Annual Highlights
- Record operations including silver production, recovery,
availability, and ore processed.
- Record revenue and sales:
-
- Revenue of $38.2 million, an
11.5% increase from 2021.
- Silver sales of 1,935,154 oz, a 28% increase from 2021.
- Operating cash flow for the year of $9.6
million, compared to $17.5
million for 2021.
- Cash cost per silver ounce sold of $12.6 compared to $12.0 in 2021(1).
- Successful 21,645-meter ("m") drill program at Zgounder which
provided 15 of Zgounder's top 50 intercepts.
- Conducted a 4,012m diamond drill
hole ("DDH") program on Zgounder Regional, testing target areas
informed by the spectral and prospecting campaigns.
- Explored the Corporation's rich regional portfolio located
along the South Atlas Fault:
-
- Boumadine: completed an 18,335m
DDH program that extended the strike 23% to 3.2 kilometers ("km")
towards the south and discovered parallel zones along the main
trend.
- Imiter bis: conducted a 4,754m
DDH drill program and an airborne geophysics survey.
- Advanced Zgounder Mine expansion:
-
- Completed 4,170m of underground
development as of end of January
2023.
- Advanced bulk earthworks to near-completion and launched civil
works on site.
- Commenced construction of the new tailings and water storage
facilities on schedule.
- Consolidated 100% ownership of Zgounder Mine through the
acquisition of 15% interest from the National Office of
Hydrocarbons and Mines for approximately $5.2 million.
- Contributed to community health and education through
renovation of schools and support for both permanent and mobile
health clinics.
- Solid financial position with $41.8
million of cash, cash equivalents and restricted cash.
(²)
- Commenced trading on the OTCQX under the ticker symbol
"AYASF".
- Ranked 18th on the 2022 TSX30 as a top-performing stock with a
3-year share appreciation of 245%.
2023 Outlook and Year So
Far
- Successfully completed a C$92
million (US$69 million)
bought-deal public offering.
- Secured a $100 million debt
financing package with the European Bank for Reconstruction and
Development ("EBRD") and Climate Investment Funds' Clean Technology
Fund ("CTF").
- Guidance of between 1.7 and 1.9 million ounces ("oz")
production at cash cost of $14.40/oz.
(1)
- Provided a path to near-zero Scope 2 emissions in 2024 by
signing a renewable power purchase agreement with Energie Éolienne
du Maroc.
(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 20 & 21 of the
Corporation's Q4-2022 MD&A for a reconciliation of non-GAAP to
GAAP measures.
|
(2)
|
Non-GAAP Measures,
consisting of cash and cash equivalents of $39,360,138 and
restricted cash of $2,489,287.
|
"2022 was a year of strong execution and strategic momentum,"
said Benoit La Salle, President and
CEO. "2022's actions allowed us to mobilize almost $200 million in funds in Q1-2023, deliver record
results, begin the Zgounder Mine expansion, double the Boumadine
drill program, and be recognized as a top-performing stock in
Canada for a second consecutive
year. We are especially proud of our sustainability progress: the
ESG-linked project financing package; the significant steps towards
decarbonizing our expanded operations; and the development of a
program to align our operations with the goals of the Paris
Agreement.
We entered 2023 in a robust financial position and with a
strengthened project pipeline that shows significant potential to
deliver value for all stakeholders. Our confidence is underpinned
by advancement of Zgounder development, a strong balance sheet,
alongside increasing sustainability-driven innovation. Together
with our committed team, we are well-positioned for continued
excellence in execution throughout this buildout year."
2022 Operational and Financial
Highlights
Key Performance
Metrics
|
|
2022
|
2021
|
Variation
'22 vs
'21
|
Operational
|
|
|
|
|
Ore Processed
(tonnes)
|
|
254,976
|
224,515
|
14 %
|
Ore Mined
(tonnes)
|
|
276,013
|
213,504
|
29 %
|
Mill Average Feed Grade
(g/t Ag)
|
|
265
|
269
|
(1.5 %)
|
Mill Recovery
(%)
|
|
86.6 %
|
82.1 %
|
4.5 %
|
Silver Ingots Produced
(oz)
|
|
855,351
|
692,392
|
24 %
|
Silver in Concentrate
Produced (oz)
|
|
1,025,356
|
908,254
|
13 %
|
Total Silver Produced
(oz)
|
|
1,880,707
|
1,600,646
|
18 %
|
Silver Ingots Sold
(oz)
|
|
921,242
|
640,499
|
44 %
|
Silver in Concentrate
Sold (oz)
|
|
1,013,912
|
874,057
|
16 %
|
Total Silver Sales
(oz)
|
|
1,935,154
|
1,514,556
|
28 %
|
Avg. Net Realized
Silver ($/oz)
|
|
19.76
|
22.65
|
(13 %)
|
Cash Costs per Silver
Ounce Sold (¹)
|
|
12.63
|
11.95
|
5.7 %
|
Financial
|
|
|
|
|
Revenue
|
|
38,244,921
|
34,301,914
|
11 %
|
Cost of
sales
|
|
27,960,944
|
18,292,185
|
53 %
|
Gross Margin
|
|
10,283,977
|
16,009,729
|
(36 %)
|
Operating
Income
|
|
1,839,799
|
5,879,000
|
(69 %)
|
Net Earnings
|
|
1,469,320
|
1,272,142
|
15 %
|
Operating Cash
Flow
|
|
9,648,774
|
17,502,239
|
(45 %)
|
Free Cash Flow
(1)
|
|
5,118,103
|
13,087,685
|
(61 %)
|
Cash and Restricted
Cash (2)
|
|
41,849,425
|
84,185,219
|
(50 %)
|
|
|
|
|
|
Shareholders
|
|
|
|
|
Earnings (Loss) per
Share – basic
|
|
0.014
|
0.013
|
NM
|
Earnings (Loss) per
Share – diluted
|
|
0.013
|
0.012
|
NM
|
(1,2) See footnotes (1,
2) on first page.
|
2022 Annual Financial &
Operational Highlights
- Record Ag production of 1,880,707 oz, a 17.5% year-over-year
increase in silver ounces produced that is a direct result of the
higher mining rate, mill throughput and recovery rate.
- Milling operations averaged 699 tonnes per day ("tpd") for the
year compared to 615 tpd in 2021, an increase of 13.6%. Combined
mill recovery averaged 86.6% compared to 82.1% in 2021, an increase
of 4.5%.
- Cash flows generated by operating activities of $9,648,774 for the year, compared to $17,502,239 generated in operating cash flows for
2021.
- Revenue from silver sales totaled $38,244,921 compared to $34,301,914 in 2021, an increase of 11.5% due to
a 28% increase in the volume of sales The increase in sales volume
was partially offset by a lower average realized price in 2022 of
$19.76/oz (2021 – $22.65/oz).
- The Corporation had cash, cash equivalents and restricted cash
of $41,849,425 as at December 31, 2022 compared to $84,185,219 as at December
31, 2021
- Net income for the year was $1,469,320 (diluted EPS of $0.013), compared to a net Income of 1,272,142
(diluted EPS of $0.012) in 2021. Net
income for the year was attributable to an increase in production
and silver sales.
Fourth Quarter 2022 Financial
& Operational Highlights
- Total Ag production of 661,621 oz in Q4-2022, a
53% increase compared to Q4-2021 attributable to a higher
grade (364 g/t vs. 248 g/t) and silver recovery rate
(89.9% vs. 82.4%).
- Cost of sales of $8,602,601
(Q4-2021 – $4,634,254) with an
average cash cost per oz of $10.9
compared to $14.5/oz in Q4-2021.
- Gross margin increased by 39% to $4,719,205 compared to $3,390,868 in Q4-2021.
-
- This was due to the increase in the volume of sales during the
period (669,506 oz sold in Q4-2022 compared to 338,591 oz sold in
Q4-2021).
- Revenue from Ag sales totaled $13,321,806 (Q4-2021 – $8,025,122), an increase of 66%.
- Operating cash flow of $3,639,235
in Q4-2022, a 74% increase compared to $2,088,055 in Q4-2021
- Net income for the period was $2,035,094 (diluted EPS of $0.018), compared to a net loss of ($1,086,033) (diluted EPS of $(0.011)) in Q4-2021.
- Milling operations reached 688 tpd, surpassing design capacity
of 670 tpd.
- Average combined mill recovery increased to 89.9% in the
quarter compared to 82.4% in Q4-2021, an increase of 7.5%.
2022 Operations Review
2022 was a year focused on advancing the engineering work and
commencing construction activities for the Zgounder expansion,
while ensuring efficient production. The project construction, mine
engineering, geology and maintenance department teams were also
strengthened. Procedures, processes, mining and work methods
continued to be refined. The Corporation produced a record total of
1,880,707 oz Ag in 2022, a 17% increase from 2021. Mine production
metrics improved across the board. Mill metrics also improved to a
combined silver recovery of 86.6% and mill availability of
91.7%.
Capital Projects
All capital projects in 2022 and particularly in Q4-2022 were
primarily related to the mine expansion. These projects include
earthworks; construction start of the tailings pond and haulage
road; mine infrastructure, base camp and housing upgrades; site
electrical distribution and redundancy; and an underground workshop
for mobile equipment.
Zgounder Development
In 2022, construction of the Zgounder Expansion Project
continued to progress effectively, and the following milestones had
been achieved (as of January 31, 2023
unless otherwise stated):
- Over 4,170m of permanent
underground development had been completed out of the 11,000m program.
- Mobilization of the open-pit mining contractor expected in
April 2023.
- Detailed engineering had advanced to over 60%.
- Fixed price Engineering Procurement and Construction
("EPC"):
-
- Detailed design of the process plant is being advanced by Duro
Felguera as part of its EPC contract.
- Procurement of the mechanical equipment packages neared
completion.
- Fabrication of the 3.3-megawatt ball mill was 62%
complete.
- Manufacturing of the crushing equipment had reached 90%
completion.
- On-schedule start of construction of a new tailings storage
facility and new water storage facility.
- Construction of power line underway for planned completion in
Q1-2024.
- Award of contract for new 60/22 kilovolt electrical
substation.
- Bulk earthworks were near-complete.
- Civil works began with construction of the leach tank
foundations in February 2023.
2022 Successful Exploration
Program
Zgounder
A total of 21,645m were drilled in
the year on Zgounder with the aim of increasing reserves and
resources in the eastern portion of the deposit and at depth. A
large portion of the exploration program was carried out in the
eastern part of the deposit to define the eastern portion of the
deposit for the proposed open pit. Several directional drill holes
were carried out on the property to expand the deeper areas of the
deposits.
Zgounder Regional
In H1-2022, a comprehensive fieldwork program was carried out
across Zgounder Regional properties with a view to expanding the
Corporation's understanding of the geological structures and
controls of the permits and informing the H2-2022 drill program.
The fieldwork included an airborne geophysics survey (magnetic,
VTEM and radiometric); grab sampling; a hyperspectral program; and
a stream sediment campaign. Under the airborne geophysics survey,
8,543-line km were flown over the eleven exploration permits. A
total of 1,061 grab samples were taken across the permits during
the year, generating multiple geological targets, particularly at
the Zgounder Ouest, Izza and Tala zones. In addition, the stream
sediment program returned a total of 954 samples.
In Q3-2022, the final data from the fieldwork were combined,
defining five target areas for the 2022 drill program, which
commenced in early October. A 4,012m
DDH program was carried out by year-end 2022, and initial drilling
results are expected in H1-2023.
Boumadine
In H1-2022, a comprehensive fieldwork program was carried out on
Boumadine to expand the Corporation's understanding of the
mineralogy in the permits and to inform the 2022 drill program. The
fieldwork included an airborne geophysics survey; a hyperspectral
survey; and a litho-geochemistry program. The 349-line km airborne
geophysical survey was completed in April
2022 comprising magnetic, radiometric, and electromagnetic
surveys. Data from the survey indicated the presence of a
conductive anomaly continuing down to at least 600m below surface along the main trend,
suggesting at-depth extension. Furthermore, the survey identified
conductivity anomalies east and west of main Boumadine trend. The
hyperspectral survey outlined strong clay alteration over the main
trend and laterally.
A total of 18,335m of DDH were
drilled in 2022, more than twice the original 7,500m budget. Results confirmed polymetallic
mineralization of the main trend and extended the strike to 3.2km
towards the south. The mineralization is open at both ends along
strike and at depth within a six km hydrothermal system.
Imiter bis
In 2022, Phase 1 of the planned drill program on Imiter bis
completed 24 DDH for a total of 4,754m DDH over four target areas (Northwest,
Daoud, Northeast-Extension and Dilatation Zones). Encouraging
results were obtained in the North Zone including
3.94 g/t Au over 5.0m and
1.46g/t Au over 11.5m. Phase II
drilling, which had been scheduled for Q4-2022, was postponed to
focus on Boumadine. The geology and Phase I results indicate the
presence of a 4-km potential at-surface polymetallic structure
hosted within a low-sulphidation epithermal system. Follow-up drill
programs will focus on finding the 'boiling zone" that could host
higher-grade mineralization.
In parallel to the drilling program, an airborne geophysical
survey comprising magnetic, radiometric, and electromagnetic
surveying was completed over 554 linear km in 2022.
The technical information relating to the Zgounder, Boumadine
and Imiter bis Projects was reviewed and approved by
David Lalonde, B. Sc, Head of
Exploration, designated as a Qualified Person under National
Instrument 43-101.
2022 Sustainability
Expansion
Aya is committed to maintaining a culture of accountable mining
through high standards of Environment, Social and Governance
("ESG") practices and minimising the impact of its operations on
its people, its communities and on the natural environment.
During the year, the Corporation continued to implement its
Environment and Social Management System that is aligned with EBRD
performance requirements. ESG policies and practices are being
embedded across the business, and the Corporation reports on its
ESG performance though its Global Reporting Initiative-compliant
Sustainability report.
In a context where a growing number of companies are engaging in
decarbonization roadmaps and aligning with the recommendations of
the Task Force on Climate-related Financial Disclosures ("TCFD"),
the Corporation appointed Ernst & Young to review and assist
the Corporation in enhancing its corporate governance for effective
climate action. Under the project, a 3-year implementation program
has been developed to support the Corporation in aligning its
operations with the goals of the Paris Agreement. A first analysis
has been conducted to assess the gap between Aya's current
practices and those recommended by the TCFD, supplemented by those
of the EBRD Climate Corporate Governance framework. Achievement of
certain milestones of the plan will reduce the effective interest
rate of the CTF tranche of the Zgounder project loan.
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", "secured",
"guidance", "path", "potential", "deliver", "committed",
"continue", "progress", "align", "achieve", "plan", "expect",
"designed to", "aims to", "objective", "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 June 16, 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