Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aya Gold & Silver Inc (AYASF, Financial) reported a strong quarter with a net income of $6.8 million and revenue of $13.7 million.
- The company is on schedule and budget for commercial production at the Zgounder mine in Q4 2024, with 95% of construction completed.
- Aya Gold & Silver Inc (AYASF) has a robust balance sheet, closing the quarter with $103 million in cash and cash equivalents.
- The company has successfully drawn down the full $100 million from its EBRD loan, indicating strong financial backing and due diligence compliance.
- Exploration efforts have been fruitful, with high-grade mineralization confirmed at depth and the Zgounder drill program doubled from 15,000 to 30,000 meters due to positive results.
Negative Points
- The total cash cost for the quarter was $17.85, which is higher than historical levels, indicating increased operational expenses.
- The company is still reliant on stockpiles, with 309,000 tonnes of ore on the ROM pad, which may indicate potential challenges in maintaining consistent mining rates.
- There are ongoing uncertainties related to the exploration and development of new targets, which could impact future production timelines and costs.
- The company faces challenges in water management, a critical issue in Morocco, which could affect future operations and expansions.
- Aya Gold & Silver Inc (AYASF) has significant payables outstanding, which could impact cash flow and financial flexibility in the near term.
Q & A Highlights
Q: Can you elaborate on the geophysics at Boumadine and the timeline for drilling the new conductive anomaly to the west?
A: David Lalonde, VP of Exploration, explained that they are waiting for the full inversion results from the geophysical survey to narrow down potential conductive corridors. They expect to receive these results by the end of August and plan to start drilling by late September or early October. They will use hyperspectral surveys and detailed mapping to refine their drilling targets.
Q: What is the status of vertical development at Zgounder, and how does it impact ramp-up rates?
A: Benoit La Salle, President and CEO, stated that as of the end of July, they completed the last ventilation raise, and all vertical development is now complete. This completion supports their ramp-up plans, with full mining rates expected by mid-2025.
Q: With the new conductive anomaly at Boumadine, will you embark on a multi-year drilling program before considering a PEA?
A: Benoit La Salle confirmed that the drilling to the west could be a game changer, and they are focusing on understanding the project's size before finalizing a PEA. They have started work on water management, electricity, and tailings, but the PEA will be dynamic based on drilling results.
Q: How are you planning to manage debt reduction next year with the Zgounder expansion nearing completion?
A: Benoit La Salle mentioned that debt repayment will depend on exploration demands. They have a flexible repayment schedule with EBRD starting in 2026. If excess cash is available, it will be used to pay down debt, but exploration remains a priority due to its value creation potential.
Q: How are unit costs tracking against expectations, particularly for open-pit mining?
A: Benoit La Salle reported that open-pit mining costs are as expected, with no surprises in drilling, blasting, or haulage. Inflation in Morocco has been low, and they are pleased with the performance and cost of their contract miner.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
