Strong Start to 2023 with Expanded Exploration Program
Aya Gold & Silver Inc. (TSX: AYA) (OTCQX: AYASF) 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
2023 Outlook and Year So Far
|(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 $200 million in funds in Q1-2023, deliver record results, begin the Zgounder Mine expansion, double the Boumadine drill program, and be recognized as a top-performing stock in Canada for a second consecutive year. We are especially proud of our sustainability progress: the ESG-linked project financing package; the significant steps towards decarbonizing our expanded operations; and the development of a program to align our operations with the goals of the Paris Agreement.
We entered 2023 in a robust financial position and with a strengthened project pipeline that shows significant potential to deliver value for all stakeholders. Our confidence is underpinned by advancement of Zgounder development, a strong balance sheet, alongside increasing sustainability-driven innovation. Together with our committed team, we are well-positioned for continued excellence in execution throughout this buildout year.”
2022 Operational and Financial Highlights
|Key Performance Metrics||2022||2021||Variation
’22 vs ’21
|Ore Processed (tonnes)||254,976||224,515||14 %|
|Ore Mined (tonnes)||276,013||213,504||29 %|
|Mill Average Feed Grade (g/t Ag)||265||269||(1.5 %)|
|Mill Recovery (%)||86.6 %||82.1 %||4.5 %|
|Silver Ingots Produced (oz)||855,351||692,392||24 %|
|Silver in Concentrate Produced (oz)||1,025,356||908,254||13 %|
|Total Silver Produced (oz)||1,880,707||1,600,646||18 %|
|Silver Ingots Sold (oz)||921,242||640,499||44 %|
|Silver in Concentrate Sold (oz)||1,013,912||874,057||16 %|
|Total Silver Sales (oz)||1,935,154||1,514,556||28 %|
|Avg. Net Realized Silver ($/oz)||19.76||22.65||(13 %)|
|Cash Costs per Silver Ounce Sold (¹)||12.63||11.95||5.7 %|
|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 %)|
|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
Fourth Quarter 2022 Financial & Operational Highlights
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%.
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.
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):
2022 Successful Exploration Program
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.
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.
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.
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, 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 maximizing shareholder value by anchoring sustainability at the heart of its operations, governance, and financial growth plans.
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