Release Date: March 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aya Gold & Silver Inc (AYASF, Financial) completed the Zgounder mine expansion on budget, which is rare in the industry.
- The company ended 2024 with USD 49 million in cash and restricted cash, indicating strong financial health.
- Aya Gold & Silver Inc (AYASF) announced an exploration budget of $25 million to $30 million for 2025, covering Zgounder and Boumadine.
- The company achieved commercial production at the new mill by the end of 2024, reaching steady state capacity in early 2025.
- Aya Gold & Silver Inc (AYASF) expanded its exploration footprint significantly, adding 15 permits and increasing the Boumadine exploration area to over 200 square kilometers.
Negative Points
- Silver production in 2024 was 16% lower compared to 2023, primarily due to processing lower grade ore.
- The company reported a significant decrease in profit from $15 million in 2023 to $382,000 in 2024.
- Aya Gold & Silver Inc (AYASF) took a $27 million write-off related to the Tijirit project, impacting financial results.
- The average grade of ore processed in 2024 was lower at 171 grams per tonne compared to 250 grams per tonne in 2023.
- Mill recovery rates decreased from 86-87% in 2023 to 84% in 2024, affecting overall efficiency.
Q & A Highlights
Q: Benoit, as you mentioned, you're transitioning to one-third underground, two-thirds open pit. Is that only for 2025? Are we talking longer term as well?
A: Benoit La Salle, President and CEO: This transition is not just for one year but for a minimum of six to seven years. The open pit was initially a test, but due to its success and lower costs compared to underground mining, we decided to adopt this strategy long-term. We are working on a new mine plan and resource update, which will likely extend this approach beyond six years.
Q: Is there any potential impact on mine life due to the transition to more open pit mining?
A: Benoit La Salle, President and CEO: There will be no negative impact on mine life. In fact, it may increase due to new structures being identified. The open pit allows us to access ore that was previously inaccessible, and the grade is excellent, which supports this transition.
Q: With more contribution from the open pit, is there any potential impact on recovery due to processing more oxidized ore?
A: Raphaël Beaudoin, Vice-President, Operations: While the upper sections of the open pit may contain more oxidized ore, which can impact recovery, this ore would not have been accessible underground. We expect to blend this with fresh rock to minimize recovery impact. Long-term recovery is not expected to be affected.
Q: Regarding the $27 million write-down at Tijirit, was the entire amount expensed in Q4? How should it be adjusted for earnings?
A: Ugo Landry-Tolszczuk, Chief Financial Officer: Yes, the entire $27 million was expensed in 2024, and our book value for Tijirit is now zero. For adjusted earnings, you should back out the entire amount as it does not affect our operations in Morocco.
Q: Could you provide guidance on cash costs and adjusted cash costs for 2025?
A: Ugo Landry-Tolszczuk, Chief Financial Officer: We do not expect to report adjusted cash costs moving forward now that commercial production has been declared. The cash costs will be more reflective of ongoing operations without adjustments related to ramp-up expenses.
Q: Can you provide more details on the ramp-up and production expectations for 2025?
A: Benoit La Salle, President and CEO: We are targeting between 5 and 5.3 million ounces of silver production for 2025. The ramp-up is progressing well, and we expect higher run rates and lower cash costs by Q3 and Q4. The average cash cost for the year is expected to be between $15 and $17.5 per ounce.
Q: What are the exploration plans for Zgounder and Boumadine in 2025?
A: Benoit La Salle, President and CEO: We plan to drill between 150,000 and 200,000 meters across Zgounder, Zgounder Regional, and Boumadine. This includes both infill and exploration drilling to expand resources and identify new mineralization zones.
Q: What is the expected capital expenditure for 2025?
A: Benoit La Salle, President and CEO: The capital expenditure for 2025 is budgeted at $7 million, which includes sustaining capital outside of cash cost guidance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
