Aya Gold & Silver Inc. (TSX: AYA) (OTCQX: AYASF) 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 drilling on Zgounder Regional properties
• Completed 12.7 kilometers 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

“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

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:

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.

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.

Figure 1 – Erecting structural steelwork for the leach tanks at the new Zgounder processing plant (CNW Group/Aya Gold & Silver Inc)