MONTREAL, QC, March 30, 2022 /PRNewswire/ - Aya Gold & Silver Inc. (TSX: AYA)
("Aya" or the "Corporation") is pleased to report financial and
operational results for the fourth quarter and year ended
December 31, 2021. All amounts are in
US dollars unless otherwise stated.
2021 Annual Highlights
- Record year in terms of silver ("Ag") production, revenues, and
operating cash flow
- Achieved acceptable operating standard at Zgounder which the
Corporation can now optimize
-
- Throughput averaged 609 tonnes per day ("tpd") during the year,
exceeding design capacity in Q4-2021 by reaching 716 tpd
- Combined mill recovery averaged 83%
- Global availability of 86% and 90.5% for the flotation and
cyanidation plants, respectively
- Successful drill program at Zgounder
-
- Increased measured and indicated ("M&I") mineral resources
by 116% to 96 million ounces ("Moz") of Ag. Inferred resources grew
to 6Moz Ag.
- 42,000 meters ("m") campaign returned 37 of Zgounder's top 50
best intercepts
- Zgounder expansion feasibility study ("FS") advanced to plan in
2021, the results of which were released in February 2022
- Initial fieldwork from Imiter bis identified a 4km potential
strike and five priority drill targets
-
- Scout drilling confirmed the presence of gold ("Au") and Ag in
several discovery holes
- Successfully completed a CA$70 million (US$55 million) bought deal public offering
- Robust financial position with $84.2
million of cash, cash equivalents and restricted cash
- Launched ESG program and inaugural sustainability
reporting
- Acquired Algold and completed 85% of the Tijirit Project FS by
year-end
- Expanded total land positions by 40% in the Zgounder Regional
and Azegour areas.
- Ranked #12 on the 2021 TSX30 as a top-performing stock, with a
3-year share appreciation of +253%
2022 Outlook & Year So Far
- Delivered a maiden reserve estimate of 8,590 K tonnes of Ag averaging 257 g/t for 70,876
Ag oz
- Completed a robust Zgounder 2,000 tpd expansion FS that extends
the mine life to 11 years and quadruples post-expansion annual
production to 7 Moz Ag
- Guidance of between 1.65 and 1.8 Moz production at cash cost of
$12/oz
- Received environment impact assessment approval for expansion
of Zgounder
- Launched a 5-year community investment and entrepreneurship
program
- Clear pathway to zero Scope 2 emissions at Zgounder by 2024
through interconnection agreement with ONEE and intent to sign a
renewable power purchase agreement
"2021 was a fantastic year for Aya, which is a testament to the
team's hard work and focus to deliver on our commitments," said
Benoit La Salle, President &
CEO. "We reported record production, revenue, cash, and cash flow
growth, all while turning around operations and launching an
inaugural ESG program and GRI-compliant sustainability report. We
also drilled 60,000 meters, delivering significant resource growth
through the drill bit and a high-grade maiden reserve at
Zgounder."
"Our year-end results, combined with the strong project
economics generated by Zgounder's expansion feasibility study,
daylight a path for significant growth in 2022 and beyond. We are
growing our land package and re-investing capital at Zgounder and
in exploration as well as the local community to strengthen our
position in country and sustainably deliver returns for all
stakeholders. We look to the future with confidence and
optimism."
2021 Operational and Financial Highlights
Key Performance
Metrics
|
2021
|
2020
|
Variation '21 vs '20
|
Operational
|
|
|
|
Ore Processed
(tonnes)
|
224,515
|
128,923
|
74%
|
Average Grade (g/t
Ag)
|
269
|
255
|
5%
|
Mill Recovery
(%)
|
82.1%
|
68.7%
|
13%
|
Silver Ingots
Produced (oz)
|
692,392
|
439,448
|
58%
|
Silver in Concentrate
Produced (oz)
|
908,254
|
286,871
|
217%
|
Total Silver
Produced (oz)
|
1,600,646
|
726,319
|
120%
|
Silver Ingots Sold
(oz)
|
640,499
|
395,489
|
62%
|
Silver in Concentrate
Sold (oz)
|
874,057
|
266,079
|
228%
|
Total Silver Sales
(oz)
|
1,514,556
|
661,567
|
129%
|
Avg. Net Realized
Silver ($/oz)
|
22.65
|
20.89
|
8%
|
Avg. Silver
Production Cost ($/oz)
|
11.43
|
13.46
|
(15)%
|
Financial
|
|
|
|
Revenues
|
34,301,914
|
13,822,709
|
148%
|
Cost of
Sales
|
18,292,185
|
9,779,055
|
87%
|
Gross
Margin
|
16,009,729
|
4,043,654
|
296%
|
Operating Income
(Loss)
|
5,879,000
|
(1,692,329)
|
447%
|
Net Earnings
(Loss)
|
1,272,142
|
(1,779,590)
|
171%
|
Operating Cash
Flows
|
17,540,535
|
1,353,451
|
1,196%
|
Cash and Restricted
Cash
|
84,185,219
|
33,291,691
|
153%
|
|
|
|
|
Shareholders
|
|
|
|
Earnings (Loss) per
Share – basic
|
0.013
|
(0.021)
|
|
Earnings (Loss) per
Share – diluted
|
0.012
|
(0.021)
|
|
2021 Annual Financial & Operational Highlights
- Record Ag production of 1,600,646 oz, a 120% year-over-year
increase attributable to the operational efficiencies achieved
under our turnaround plan
- Operating cash flow of $17,540,535 in 2021, a 1,196% increase compared
to 2020
- Revenue from Ag sales of $34,301,914 compared to $13,822,709 in 2020, an increase of 148%. The
average realized price in 2021 was $22.65/oz (2020: $20.89/oz)
-
- Revenue was impacted by the Corporation's decision to hold
higher ingot inventory of $1,464,523
in consignment ($63,811 in Q4-2020)
due to lower Ag prices at year-end.
- These ingots were sold in Q1-2022
- The Corporation had cash, cash equivalents and restricted cash
of $84,185,219 as at December 31, 2021 compared to $33,291,691 as at December
31, 2020
- Net income of $1,272,142 in 2021,
compared to a net loss of $(1,779,590) in 2020, driven by an important
increase in production and Ag sales
-
- The Corporation was charged a temporary 5% COVID-related tax of
$811,555 by the Moroccan tax
authorities
- Milling averaged 609 tpd throughput the year with both plants
were operating at or above their nameplate capacities by
year-end
Fourth Quarter 2021 Financial & Operational
Highlights
- Total Ag production of 433,742 oz in Q4-2021, a 6% increase
compared to Q4-2020
- Total Ag sales of 338,591 oz in Q4-2021, a decrease of 24%
compared to the same period in 2020
- Cost of sales of $4,634,254
(Q4-2020 – $4,991,686) with an
average cost per oz of $10.68/oz
compared to $12.23/oz in Q4-2020
- Revenue from Ag sales totalled $8,025,122, a 16% decrease compared to Q4-2020,
representing an average realized price of $25.69/oz (Q4-2020-$21.44/oz)
-
- Revenue was impacted by the Corporation's decision to hold
higher ingot inventory of $1,464,523
in consignment ($63,811 in Q4-2020)
due to lower Ag prices at year-end
- These ingots were sold in Q1-2022
- Operating cash flow of $2,088,055
in Q4-2021, a 40% decrease compared to $3,484,673 in Q4-2020
- Ore processed of 65,855 tonnes in Q4-2021, an increase of 26%
compared to the same period in 2020
- Milling operations reached 716 tpd, surpassing design
capacity
2021 Operations Review
This year was dedicated to sustaining the operational
improvements, methods, and capabilities realized during 2020. A
number of new hires occurred during 2021, boosting the Zgounder
workforce by more than 30%. Procedures, processes, mining and work
methods continued to be refined and resulted in an average
throughput of 716 tpd in Q4-2021, higher than the 670 tpd nameplate
capacity of the two combined processing plants. Silver production
in Q4-2021 reached 433,742 oz. For the year, the Corporation
produced a record total of 1,600,646 Ag oz, a 120% increase from
2020.
The Corporation significantly changed its mining operations at
Zgounder by moving from a shrinkage-stope mining method to a
cut-and-fill method. Furthermore, increased mechanization began in
2021 with the introduction of the mine's first jumbo. The focus at
the mine is on training employees in the new methods, equipment and
tools as the Corporation scales up towards 2,700 tpd to support the
planned expansion.
Capital Projects
Many capital infrastructure projects were completed in 2021
including a complete overhaul of the on-site roads, base camp,
administrative buildings, electrical grid, on-site communications,
surface water management, water retention and tailings facilities.
A new assay lab was built and fitted with modern equipment,
allowing the Corporation to double analysis capacity. Construction
of the 60,000m3 water
retention basin was completed, and filling of the basin began in
March 2022.
The year also saw the completion of multiple mine and mill
capital projects including refurbishment of the cyanidation plant,
construction of a new underground explosive depot and the
construction of two new mine portals. During Q4-2021, a new cone
crusher at the flotation plant was installed and commissioned,
which generated a 15% increase in throughput and a global milling
rate of 716 tpd for the quarter.
Positive Feasibility Study for Zgounder
We announced a positive FS in February
2022 to expand the Zgounder Silver Mine from 700 tpd to
2,700 tpd capacity.
Highlights of the 2,000 tpd Expansion FS:
- Robust project economics (base case at $22/oz Ag):
-
- Before-tax 5% net present value ("NPV"): $471 million
- Before-tax internal rate of return ("IRR"): 57%
- After-tax 5% NPV: $373
million
- After-tax IRR: 48%
- Payback period: 1.7 years
- Initial life of mine of 11 years
- Increased throughput expected to drive annual Ag production to
7.9Moz by 2024
- Annual revenue expected to increase from $34 million in 2021 to $172 million by 2024
- LOM all-in sustaining cost ("AISC")1 of $9.58/oz
- Low initial capital expenditures: $139.4
million, including $16.6
million in contingency cost
- First Ag pour planned in Q1-2024
- Further optimisation opportunities:
-
- Exploration along strike and at depth
- Potential to optimise the flow sheet during the front-end
engineering design and the mine plan as part of the underground
expansion
- Enhanced ESG plan: Reduction in water consumption and carbon
emissions intensity
Zgounder Milestones
- Complete front-end engineering design in Q2-2022
- Construction start-up in Q3-2022
- New plant first Ag pour by Q1-2024
- Ongoing exploration with the aim of increasing reserves and
resources and enhancing economics
2021 Successful Exploration Program
Zgounder
In 2021, a total of 55,449m of
drilling was completed at Zgounder. The 2021 drill program had two
objectives: increase the confidence level of the exploration target
area identified in March 2021, and
further extend mineralization in the eastern part of the deposit.
The Corporation succeeded on both counts, extending the mineralized
east-west strike from 775m to
1,100m in length and at depth. In
December 2021 the Corporation
published a resource update for the Zgounder deposit. Zgounder
remains open with potential to expand existing resources at depth
to the granite and through strike extensions to the east.
Additional work will be completed to determine possible extensions
to the west.
The updated mineral resource estimate incorporated 516 new drill
holes (surface and underground combined) for 41,932m carried out on Zgounder between January
and September 10, 2021. The mineral
resource estimate formed the basis of the Corporation's maiden
mineral reserve estimate in conjunction with the FS for the
expansion of the Zgounder from 700 tpd to 2,700 tpd.
Further to the updated resource estimate, the FS reported by the
Corporation in February 2022,
included inaugural mineral reserves that were estimated by DRA
Global Limited ("DRA") in accordance with the CIM Definition
Standards for National Instrument 43-101 reporting. The Inferred
material within the pit design was treated as waste.
1 AISC is
a non-IFRS measure and is calculated in accordance with the
standard adopted by the World Gold Council.
|
Table 1 - Mineral Reserves and Resource
for Zgounder
|
Tonnes
(k)
|
Grade (Ag g/t)
|
Content (Ag k oz)
|
Proven
reserves
|
3,100
|
288
|
28,748
|
Probable
reserves
|
5,490
|
239
|
42,128
|
P&P
reserves
|
8,590
|
257
|
70,876
|
|
|
|
|
Measured resources
(incl. reserves)
|
3,511
|
347
|
39,183
|
Indicated resources
(incl. reserves)
|
6,254
|
283
|
56,874
|
M&I resources
(incl. reserves)
|
9,765
|
306
|
96,057
|
Inferred
resources
|
196
|
367
|
6,400
|
For more information, please refer to the Corporation's press
release published on February 22,
2022, titled "Aya Gold &
Silver Announces Robust Expansion Feasibility Study for Zgounder;
Pre-Tax IRR of 57%, Payback Period of 1.7 Years".
Imiter bis
In 2021, the Corporation's initial fieldwork program on the
Imiter bis project identified a north-south structure extending
over four kilometers long. A drill exploration program was
subsequently carried out consisting of 33 diamond drill ("DDH") for
a total of 4,381m over four target
areas (South Zone, Middle Zone, Northeast Zone, and Central
Zone).
The geology and preliminary results indicate the presence of a
low to neutral sulphidation Au-Ag epithermal system. The vein
system of the main 4km structure is located close to a major
contact between granodiorite and a wide mafic dyke. The 2021 drill
exploration program confirmed continuity at depth with increasing
widths in the Middle Zone. Preliminary results confirm the presence
of both Au and Ag in the system. Hole IM-DD21-014 intercepted 1.8
g/t Au and 40.0 g/t Ag over 2.2m
(part of a wider vein system intercepting 0.9 g/t Au and 19.6 g/t
Ag over 8.8m). This intersection is
located on the northern-most section drilled in the Middle
Zone.
2022 Expanded Exploration Program
An initial exploration program of $14
million has been set for 2022 for a total of 72,500m of drilling. Of these 72,500m, 22,500m of
DDH will be completed on the Zgounder mining permit and
7,500m of RC drilling will be
conducted on the Zgounder regional permits. The 22,500m drilling program will focus on designed
to expand existing resources at depth and test strike extensions to
the east.
The 10,000m DDH program scheduled
at Imiter bis in 2022 will test new prospective areas defined by
the airborne survey and follow-up on the Q4-2021 drill results.
At Boumadine, an initial 7,500m
drill exploration program has been established to test priority
areas identified by the spectral survey and historical drilling.
These areas will be enhanced by targets generated by the upcoming
airborne geophysics.
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 "growth",
"optimize", "outlook", "guidance", "growth", "path", "enhance",
"indicate", "potential", "expand", "drive", "expected", "increase",
"plan", "opportunities", "optimize", "decrease", "extend",
"indications", 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, 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 2020 Annual Information Form dated March 31, 2021, 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.
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