MONTREAL, Aug. 12,
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 second quarter ended June 30, 2022. All amounts are in US dollars
unless otherwise stated.
Highlights
- Record operations in terms of silver ounces produced, mined,
and recovered
-
- Produced 459,061 ounces ("oz") of silver ("Ag"), a 5% increase
from Q2-2021 and a 49% increase from the previous quarter
- Mined 63,817 tonnes ("t") (701 tons per day ("tpd")) during the
quarter including monthly record production of 809 tpd in
June 2022
- Combined mill recovery of 87.9%, a 7% increase from
Q2-2021
- Silver sales of 439,080 oz, a 5% increase from Q2-2021
- Revenue of $8.6 million, a 13%
decrease from Q2-2021
- Operating cash flow for the period of $1.1 million, compared with $5.5 million in Q2-2021
- Cash costs per silver ounce sold (1) of $11.35 compared with $11.61 in Q2-2021
- Successful exploration program at Zgounder:
-
- Extended eastern zone and further defined the upper underground
mine workings
- Returned Zgounder's best-ever intersection in terms of
grade-thickness
- Completed geophysical airborne survey on Zgounder
Regional together with mapping and sampling
- Exploration of rich regional portfolio located along the South
Atlas Fault:
-
- Drilled 4,210 meters ("m") at Boumadine
following completion of geophysical airborne
survey
- Conducted a 624m diamond drill
hole ("DDH") program on Imiter bis with full
assay results expected in Q3-2022
- Advanced Zgounder production expansion on time and on
budget:
-
- Completed 1,130m of lateral
development work
- Delivered the front-end engineering design ("FEED") on
schedule
- Received quotations for 21 mechanical equipment packages,
including all key long-lead items
- Received over 90% (in value) of the mechanical equipment
procurement offers, which re-confirm the process plant CAPEX and
OPEX estimated in the feasibility study ("FS")
- Selected a supplier for the ball mill package
- Community initiatives with long-life impact
-
- Began supporting the local saffron-growing industry through
plans for a garden nursery and educational farm
- Funded and conducted two mobile health clinics benefiting
adults and children
- Increased board diversity through appointment of two
independent directors from the Canadian mining and European banking
sectors, respectively
- Robust financial position with $67.9
million of cash and restricted cash
(1)
|
The Corporation reports
non-GAAP measures, which include cash costs per silver ounce, 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 page 13 and 14 of the Corporation's Q2-2022
MD&A for a reconciliation of non-GAAP to GAAP
measures.
|
"Congratulations to the operations team for delivering a
standout second quarter with record-setting production, which
benefited from strong recoveries and best-ever throughput. As
expected, Zgounder saw meaningful improvement in grade as we
accessed richer ore and achieved greater mining capacity,
positioning us well to achieve our full-year production guidance.
We enjoyed additional exploration success this quarter with further
resource delineation at Zgounder and the completion of airborne
geophysical surveys on Zgounder Regional, Boumadine and Imiter bis.
Considerable progress was also made on the Zgounder Expansion
Project with the on-schedule delivery of the FEED, the first of our
construction milestones," said Benoit La
Salle, President and CEO.
"Last, but not least, I'm very proud of the progress we are
making and the impact that we are having with our sustainability
goals and initiatives. Specifically, we have increased board
diversity, launched our first larger-scale community project, and
demonstrated leadership in regard to local employment and
procurement."
Q2-2022 Operational and Financial Highlights
Key Performance
Metrics
|
|
Q2-2022
|
Q2-2021
|
Variation
'22 vs
'21
|
Operational
|
|
|
|
|
Ore Processed
(tonnes)
|
|
59,995
|
56,318
|
7 %
|
Average Grade (g/t
Ag)
|
|
273
|
297
|
(8 %)
|
Mill Recovery
(%)
|
|
87.9 %
|
82.0 %
|
7 %
|
Silver Ingots Produced
(oz)
|
|
219,762
|
174,786
|
26 %
|
Silver in Concentrate
Produced (oz)
|
|
239,299
|
264,363
|
(9 %)
|
Total Silver
Produced (oz)
|
|
459,061
|
439,149
|
5 %
|
Silver Ingots Sold
(oz)
|
|
196,556
|
163,499
|
20 %
|
Silver in Concentrate
Sold (oz)
|
|
242,524
|
256,498
|
(5 %)
|
Total Silver Sales
(oz)
|
|
439,080
|
419,997
|
5 %
|
Avg. Net Realized
Silver ($/oz)
|
|
19.53
|
23.51
|
(17 %)
|
Cash Costs per Silver
Ounce Sold (2)
|
|
11.35
|
11.61
|
(2 %)
|
Financial
|
|
|
|
|
Revenues
|
|
8,573,549
|
9,873,276
|
(13 %)
|
Cost of
Sales
|
|
5,780,483
|
4,922,434
|
17 %
|
Gross Margin
|
|
2,793,066
|
4,950,842
|
(44 %)
|
Operating (Loss)
Income
|
|
505,093
|
1,993,848
|
(75 %)
|
Net (Loss)
Income
|
|
724,319
|
250,693
|
189 %
|
Operating Cash
Flows
|
|
1,100,810
|
5,493,640
|
(80 %)
|
Cash and Restricted
Cash
|
|
67,944,805
|
36,874,048
|
84 %
|
|
|
|
|
|
Shareholders
|
|
|
|
|
Earnings (Loss) per
Share – basic
|
|
0.007
|
0.003
|
NM
|
Earnings (Loss) per
Share – diluted
|
|
0.007
|
0.003
|
NM
|
|
(2) See
footnote (1) on first page.
|
Q2-2022 Operations
Review
The focus in the second quarter of 2022 was on accelerating
development of the underground mine infrastructure to support the
mine expansion. A total of 765m of
permanent lateral infrastructure was completed in Q2-2022, for a
total of 1,130m year to date, in line
with the planned ramp-up. New mining equipment was received during
the quarter to sustain production efforts and to accelerate ground
support.
Due to the implementation of effective water measures, there was
no water-related impact on production despite an exceptionally dry
season compared to last year.
As part of the preparations for the expansion, detailed
engineering of the tailings storage facility ("TSF") began and the
plant FEED was completed by Lycopodium. The construction team was
fully mobilised on site as earthworks are planned to start
mid-Q3-2022. Negotiations are ongoing for the engineering
procurement construction ("EPC") contract for the plant.
Mine & Milling Operations
During the second quarter, a production record of 459,061 oz was
reached at a global silver recovery of 87.9%, another record for
Zgounder. The cyanidation plant operated at 97.1% availability, and
the flotation plant at 83.9% due to crusher maintenance, resulting
in a total milling rate of 659 tpd. A total of 59,995t were milled
at a grade of 273 g/t Ag. Silver grade significantly increased on a
quarter-over-quarter basis as new stopes prepared during the first
quarter came into operation.
During the second quarter, a mining production record of 63,817t
was achieved, at a grade of 278 g/t for a production rate of 701
tpd including a monthly record of 809 tpd in June. This was
primarily due to stope planning in the previous quarter and to a
lesser degree, to the delivery of new mining equipment.
Capital Projects
The bulk of capital projects completed this quarter related to
mine production. Two scoops, a dumper, two scissor lift platforms
and jackhammers were delivered in Q2-2022 and incorporated into
production. A temporary explosive storage facility was completed
and commissioned to ensure timely commencement of the new mill's
earthworks in Q3-2022. A platform was constructed for mobilisation
of the CMAC mining contractor, responsible for vertical mine
infrastructure. Commissioning of the cyanidation tailings thickener
commenced, with its full impact on improving water and silver
recoveries expected in Q3-2022.
The construction pace for mining infrastructure continues to
closely track the planned development ramp-up: out of the
1,130m of infrastructure completed
year-to-date, 765m were advanced in
Q2-2022, double the amount of the first quarter. This is expected
to continue to increase throughout the year.
In Q2, an on-site independent third-party sample preparation
room was commissioned by African Laboratory for Mining and the
Environment that will accelerate the turnover time of our sample
analysis.
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
silver. The initial estimated capital expenditures are $139.4 million, and the first silver pour is
planned in Q1-2024. Post-expansion, the mine is expected to produce
7.9 Moz silver for an initial life of mine of 11 years at an all-in
sustaining cost ("AISC") of $9.58/oz.
Project economics, using a silver 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%.
In the second quarter, Aya continued advancing the Zgounder
Expansion Project towards a projected construction start-up by
Q3-2022, notably by achieving the following items:
- Mine underground development on schedule and aligned with the
FS at quarter-end:
-
- A total of 1,130m of lateral
underground mine development completed to date
- Mobilised CMAC-Thyssen in July
2022 and start of vertical mine development in August 2022
- Completed the FEED on schedule in the quarter
- Simplified the general flowsheet of the process plant through
additional metallurgical test work:
-
- The new, whole-ore-leach process plant flowsheet is designed to
allow for better process water management and recycling.
Furthermore, the counter-current decantation circuit aims to offer
greater operational flexibility and leverage existing operating
expertise
- Revised and optimized the process design criteria, mass and
water balances, and the process flow diagrams
- Drafted the Initial piping and instrumentation diagrams and
issued a preliminary process control philosophy document
- Received quotations for 21 mechanical equipment packages,
including all key long-lead items, from a pre-approved list of
vendors:
-
- More than 90% (in value) of the mechanical equipment
procurement offers for the new process plant have been received and
re-confirm the process plant CAPEX and OPEX estimated in the
FS
- Selected a supplier for the ball mill package, and negotiations
of final terms and conditions are ongoing. A purchase order is
expected shortly.
- Awarded a contract for the earthworks for the new process plant
and the new haulage road to a major Moroccan contractor
- Opened discussions with two engineering and project delivery
companies regarding construction of the processing plant and
received their offers in July
2022.
- Awarded the contract for the detailed design of the new TSF to
a local Moroccan civil engineering firm
- Awarded the Engineer of Record ("EoR") mandate to a well-known
South African civil engineering company. The companies have begun
to collaborate on the detailed design of the first phase of the new
TSF.
- Completed hiring for the internal construction team.
Q2-2022 Exploration
Zgounder
The second quarter saw the Corporation return high-grade DDH
results that continued to expand the eastern zone and further
defined the upper areas of the Zgounder Mine underground workings.
During the period, three surface drills targeted the surface
extensions of the eastern zones and the central portion of the
Zgounder deposit. The objective was to increase the resources in
the far eastern portion of the deposit for the proposed open pit
designation. Several holes were also designed to confirm the
vertical and lateral continuity of known mineralized envelopes.
Notably, near-surface hole TD28-22-2030-042 returned the
thickest high-grade silver intercept publicly recorded on the
property and significantly extended the work area by delineating a
new area between two mineralized zones. Hole ZG- 22-47 confirmed
the northern extension of mineralized body 8y1965-2110. Hole
ZG-22-47 returned 47.9m (from
126.5m to 174.4m) of mineralization with several strikes of
native silver (plating in joints and passages in dissemination) and
sulfide (blend with mostly pyrite and galena in traces).
Zgounder Regional
The geophysical airborne survey of the Zgounder Regional permits
was completed in June comprising a total of 8,543-line kilometers
("km"). Results will be combined with those from the mapping
program and the hyperspectral data to generate targets for a
drilling program planned to start in Q3-2022. Mapping and
prospecting continued in the quarter. A total of 609 grab samples
have been taken year to date, and several geological targets are
already emerging.
Boumadine
A 349-line km airborne geophysical survey was completed in April
comprising magnetic, radiometric, and electromagnetic surveys. The
7,500m DDH program commenced in May
on the Central Zone, with a total of 4,210m completed by quarter-end. Massive sulphide
mineralized zones have been intersected in many holes, confirming
the extension of the Boumadine structures. Results are expected in
the third quarter.
Imiter bis
Phase I of drilling at Imiter bis was completed in April 2022, with 624m of diamond drilling in Q2-2022, bringing the
2022 total to 4,754m. Assay results
are expected to be fully received by early Q3-2022 and will inform
Phase II which is scheduled for Q4-2022.
The airborne geophysical survey comprising magnetic,
radiometric, and electromagnetic over 554km linear kilometers was
completed in April.
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.
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", "achieve",
"plan", "expect", "continue", "increase", "accelerate",
"projected", "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