Aya Gold & Silver Reports Record Quarterly Production of 459,061 Ounces
(1) The Corporation reports non-GAAP measures, which include cash costs per silver ounce, 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 Co rporation to calculate
such measures may differ from methods used by other companies with similar descriptions. See “Non-GAAP Measures” on page 13
and 14 of the Corporation’s Q2-2022 MD&A for a reconciliation of non-GAAP to GAAP measures.
PRESS RELEASE
Aya Gold & Silver Reports Record Quarterly Production of 459,061 Ounces
Montreal, Quebec, August 12, 2022 - Aya Gold & Silver Inc. (TSX: AYA, OTCQX: AYASF) (“Aya” or the
“Corporation”) is pleased to report interim financial and operational results for the second quarter ended
June 30, 2022. All amounts are in US dollars unless otherwise stated.
Highlights
• Record operations in terms of silver ounces produced, mined, and recovered
o Produced 459,061 ounces (“oz”) of silver (“Ag”), a 5% increase from Q2 -2021 and a
49% increase from the previous quarter
o Mined 63,817 tonnes (“t”) (701 tons per day (“tpd”)) during the quarter including
monthly record production of 809 tpd in June 2022
o Combined mill recovery of 87.9%, a 7% increase from Q2-2021
• Silver sales of 439,080 oz, a 5% increase from Q2-2021
• Revenue of $8.6 million, a 13% decrease from Q2-2021
• Operating cash flow for the period of $1.1 million, compared with $5.5 million in Q2-2021
• Cash costs per silver ounce sold (1) of $11.35 compared with $11.61 in Q2-2021
• Successful exploration program at Zgounder:
o Extended eastern zone and further defined the upper underground mine workings
o Returned Zgounder’s best-ever intersection in terms of grade-thickness
o Completed geophysical airborne survey on Zgounder Regional together with mapping
and sampling
• Exploration of rich regional portfolio located along the South Atlas Fault:
o Drilled 4,210 meters (“m”) at Boumadine following completion of geophysical airborne
survey
o Conducted a 624m diamond drill hole (“DDH”) program on Imiter bis with full assay
results expected in Q3-2022
• Advanced Zgounder production expansion on time and on budget:
o Completed 1,130m of lateral development work
o Delivered the front-end engineering design (“FEED”) on schedule
o Received quotations for 21 mechanical equipment packages, including all key long -
lead items
o Received over 90% (in value) of the mechanical equipment procurement offers, which
re-confirm the process plant CAPEX and OPEX estimated in the feasibility study (“FS”)
o Selected a supplier for the ball mill package
• Community initiatives with long-life impact
o Began s upporting the local saffron -growing industry through plans for a garden
nursery and educational farm
o Funded and conducted two mobile health clinics benefiting adults and children
• Increased board diversity through appointment of two independent directors from the
Canadian mining and European banking sectors, respectively
• Robust financial position with $67.9 million of cash and restricted cash
“Congratulations to the operations team for delivering a standout second quarter with record -setting
production, which benefited from strong recoveries and best-ever throughput. As expected, Zgounder
saw meaningful improvement in grade as we accessed richer ore and achieved greater mining capacity,
positioning us well to achieve our full -year production guidance . We enjoyed additional exploration
success this quarter with further resource delineation at Zgounder and the completion of airborne
geophysical surveys on Zgounder Regional, Boumadine and Imiter bis. Considerable progress was also
made on the Zgounder Expansion Project with the on-schedule delivery of the FEED, the first of our
construction milestones,” said Benoit La Salle, President and CEO.
“Last, but not least, I'm very proud of the progress we are making and the impact that we are having with
our sustainability goals and initiatives. Specifically, we have increased board diversity, launched our first
larger-scale community project, and demonstrate d leadership in regard to local employment and
procurement."
Q2-2022 Operational and Financial Highlights
Key Performance Metrics Q2-2022 Q2-2021 Variation
’22 vs ’21
Operational
Ore Processed (tonnes) 59,995 56,318 7%
Average Grade (g/t Ag) 273 297 (8%)
Mill Recovery (%) 87.9% 82.0% 7%
Silver Ingots Produced (oz) 219,762 174,786 26%
Silver in Concentrate Produced (oz) 239,299 264,363 (9%)
Total Silver Produced (oz) 459,061 439,149 5%
Silver Ingots Sold (oz) 196,556 163,499 20%
Silver in Concentrate Sold (oz) 242,524 256,498 (5%)
Total Silver Sales (oz) 439,080 419,997 5%
Avg. Net Realized Silver ($/oz) 19.53 23.51 (17%)
Cash Costs per Silver Ounce Sold (2) 11.35 11.61 (2%)
Financial
Revenues 8,573,549 9,873,276 (13%)
Cost of Sales 5,780,483 4,922,434 17%
Gross Margin 2,793,066 4,950,842 (44%)
Operating (Loss) Income 505,093 1,993,848 (75%)
Net (Loss) Income 724,319 250,693 189%
Operating Cash Flows 1,100,810 5,493,640 (80%)
Cash and Restricted Cash 67,944,805 36,874,048 84%
Shareholders
Earnings (Loss) per Share – basic 0.007 0.003 NM
Earnings (Loss) per Share – diluted 0.007 0.003 NM
(2) See footnote (1) on first page.
Q2-2022 Operations Review
The focus in the second quarter of 2022 was on accelerating development of the underground mine
infrastructure to support the mine expansion. A total of 765 m of permanent lateral infrastructure was
completed in Q2-2022, for a total of 1,130m year to date, in line with the planned ramp-up. New mining
equipment was received during the quarter to sustain production efforts and to accelerate ground
support.
Due to the implementation of effective water measures, there was no water -related impact on
production despite an exceptionally dry season compared to last year.
As part of the preparations for the expansion, detailed engineering of the tailings storage facility (“TSF”)
began and the plant FEED was completed by Lycopod ium. The construction team was fully mobilised
on site as earthworks are planned to start mid -Q3-2022. Negotiations are ongoing for the engineering
procurement construction (“EPC”) contract for the plant.
Mine & Milling Operations
During the second quarter, a production record of 459,061 oz was reached at a global silver recovery of
87.9%, another record for Zgounder. The cyanidation plant operated at 97.1% availability, and the
flotation plant at 83.9% due to crusher maintenance, resulting in a total milling rate of 659 tpd. A total
of 59,995t were milled at a grade of 273 g/t Ag. Silver grade significantly increased on a quarter -over-
quarter basis as new stopes prepared during the first quarter came into operation.
During the second quarter, a mining production record of 63,817t was achieved, at a grade of 278 g/t
for a production rate of 701 tpd including a monthly record of 809 tpd in June. This was primarily due
to stope planning in the previous quarter and to a lesser degree, to the delivery of new mining equipment.
Capital Projects
The bulk of capital projects completed this quarter related to mine production. Two scoops, a dumper,
two scissor lift platforms and jackhammers were delivered in Q2-2022 and incorporated into production.
A temporary explosive storage facility was completed and commissioned to ensure timely
commencement of the new mill’s earthworks in Q3-2022. A platform was constructed for mobilisation
of the CMAC mining contractor, responsible for ve rtical mine infrastructure. Commissioning of the
cyanidation tailings thickener commenced, with its full impact on improving water and silver recoveries
expected in Q3-2022.
The construction pace for mining infrastructure continues to closely track the pla nned development
ramp-up: out of the 1,130m of infrastructure completed year-to-date, 765m were advanced in Q2-2022,
double the amount of the first quarter. This is expected to continue to increase throughout the year.
In Q2, an on -site independent third -party sample preparation room was commissioned by African
Laboratory for Mining and the Environment that will accelerate the turnover time of our sample analysis.
Zgounder Development
On February 22, 2022, Aya completed an expansion FS to grow Zgounder production from 700 tpd to
2,700 tpd capacity (see press release dated February 22, 2022) that includes a maiden reserve estimate
of 8.59 Mt at an average grade of 257 g/t for 70.9 Moz silver. The initial estimated capital expenditures
are $139.4 million, and the first silver pour is planned in Q1-2024. Post-expansion, the mine is expected
to produce 7.9 Moz silver for an initial life of mine of 11 years at an all-in sustaining cost (“AISC”) of
$9.58/oz. Project economics, using a silver price of $22 per oz, indicate an after -tax 5% present value
(“NPV”) of $373 million and an after-tax Internal Rate of Return (“IRR”) of 48%.
In the second quarter, Aya continued advancing the Zgounder Expansion Project towards a projected
construction start-up by Q3-2022, notably by achieving the following items:
• Mine underground development on schedule and aligned with the FS at quarter-end:
o A total of 1,130m of lateral underground mine development completed to date
o Mobilised CMAC -Thyssen in July 2022 and start of vertical mine development in
August 2022
• Completed the FEED on schedule in the quarter
• Simplified the general flowsheet of the process plant through additional metallurgical test work:
o The new, whole -ore-leach process plant flowsheet is designed to allow for better
process water management and recycling. Furthermore, the counter -current
decantation circuit aims to offer greater operational flexibility and leverage existing
operating expertise
o Revised and optimized the process design criteria, mass and water balances, and the
process flow diagrams
o Drafted the Initial piping and instrumentation diagrams and issued a preliminary
process control philosophy document
• Received quotations for 21 mechanical equipment packages, including all key long -lead items,
from a pre-approved list of vendors:
o More than 90% (in value) of the mechanical equipment procurement offers for the new
process plant have been received and re-confirm the process plant CAPEX and OPEX
estimated in the FS
o Selected a supplier for the ball mill package, and negotiations of final terms and
conditions are ongoing. A purchase order is expected shortly.
o Awarded a contract for the earthworks for the new process plant and the new haulage
road to a major Moroccan contractor
o Opened discussions with two engineering an d project delivery companies regarding
construction of the processing plant and received their offers in July 2022.
o Awarded the contract for the detailed design of the new TSF to a local Moroccan civil
engineering firm
o Awarded the Engineer of Record (“EoR” ) mandate to a well-known South African civil
engineering company. The companies have begun to collaborate on the detailed
design of the first phase of the new TSF.
o Completed hiring for the internal construction team.
Zgounder Expansion Projected Timeline (as of June 30, 2022)
Q2-2022 Exploration
Zgounder
The second quarter saw the Corporation return high -grade DDH results that continued to expand the
eastern zone and further defined the upper areas of the Zgounder Mine underground workings. During
the period, three surface drills targeted the surface exten sions of the eastern zones and the central
portion of the Zgounder deposit. The objective was to increase the resources in the far eastern portion
of the deposit for the proposed open pit designation. Several holes were also designed to confirm the
vertical and lateral continuity of known mineralized envelopes.
Notably, near-surface hole TD28-22-2030-042 returned the thickest high -grade silver intercept publicly
recorded on the property and significantly extended the work area by delineating a new area between
two mineralized zones. Hole ZG- 22-47 confirmed the northern extension of mineralized body 8y1965 -
2110. Hole ZG-22-47 returned 47.9m (from 126.5m to 174.4m) of mineralization with several strikes of
native silver (plating in joints and passages in dissemination) and sulfide (blend with mostly pyrite and
galena in traces).
Zgounder Regional
The geophysical airborne survey of the Zgounder Regional permits was completed in June comprising
a total of 8,543-line kilometers (“km”). Results will be combined with those from the mapping program
and the hyperspectral data to generate targets for a drilling program planned to start in Q3 -2022.
Mapping and prospecting continued in the quarter. A total of 609 grab samples have been taken year to
date, and several geological targets are already emerging.
Boumadine
A 349-line km airborne geophysical survey was completed in April comprising magnetic, radiometric,
and electromagnetic surveys. The 7,500m DDH program commenced in May on the Central Zone, with
a total of 4,210m completed by quarter-end. Massive sulphide mineralized zones have been intersected
in many holes, confirming the extension of the Boumadine structures. Results are expected in the third
quarter.
Imiter bis
Phase I of drilling at Imiter bis was completed in April 2022, with 624m of diamond drilling in Q2-2022,
bringing the 2022 total to 4,754m. Assay results are expected to be fully received by early Q3-2022 and
will inform Phase II which is scheduled for Q4-2022.
The airborne geophysical survey comprising magnetic, radiometric, and electromagnetic o ver 554km
linear kilometers was completed in April.
The technical information relating to the Zgounder, Boumadine and Imiter bis Project s 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 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.
Or contact:
Benoit La Salle, FCPA FCA
President & CEO
Alex Ball
VP, Corporate Development & IR
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 “will”, “achieve”, “plan”, “expect”, “continue”, “increase”, “accelerate”,
“projected”, “designed to”, “aims to”, “objective”, “guidance”, extend”, “growth”, “advance”, “expected”,
“increase”, 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, executing on the planned
expansion at the Zgounder mine, 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 wha t 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 fina ncing, 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, fut ure 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 i nclude, 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 uncertaintie s which are more fully
described in Aya's 2021 Annual Information Form dated June 16, 2022, 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 solicit ation to buy or sell Aya securities. All references to Aya
include its subsidiaries unless the context requires otherwise.