Aya Gold & Silver Increases Operating Cash Flow by 1,196% to $17.5M in 2021 Establishes Solid Platform for Growth
PRESS RELEASE
Aya Gold & Silver Increases Operating Cash Flow by 1,196% to $17.5M in 2021
Establishes Solid Platform for Growth
Montreal, Quebec, March 30, 2022 - 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
o Throughput averaged 609 tonnes per day ("tpd") during the year, exceeding design
capacity in Q4-2021 by reaching 716 tpd
o Combined mill recovery averaged 83%
o Global availability of 86% and 90.5% for the flotation and cyanidation plants, respectively
• Successful drill program at Zgounder
o Increased measured and indicated (“M&I”) mineral res ources by 116% to 96 million
ounces (“Moz”) of Ag. Inferred resources grew to 6Moz Ag.
o 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
o 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 $12/oz
• Received environment impact assessment approval for expansion of Zgounder
• Launched a 5-year community investment and entrepreneurship program
• Clear pathway to zero Scope 2 e missions at Zgounder by 2024 through interconnection
agreement with ONEE and intent to sign a renewable power purchase agreement
“2021 was a fantastic year for Aya , which is a testament to the team’s hard work and focus to deliver
on our commitments,” said Benoit La Salle, President & CEO. “We reported record production, revenue,
cash, and cash flow growth, all while turning around operations and launching an inaugural ESG program
and GRI-compliant sustainability report. We also drilled 60,000 meters, delivering significant resource
growth through the drill bit and a high-grade maiden reserve at Zgounder.“
“Our year-end results, combined with the strong project economics generated by Zgounder’s expansion
feasibility study, daylight a path for significant growth in 2022 and beyond . We are growing our land
package and re -investing capital at Zgounder and in exploration as well as the local community to
strengthen our position in country and sustainably deliver returns for all stakeholders. We look to the
future with confidence and optimism.”
2021 Operational and Financial Highlights
Key Performance Metrics 2021 2020 Variation
’21 vs ’20
Operational
Ore Processed (tonnes) 224,515 128,923 74%
Average Grade (g/t Ag) 269 255 5%
Mill Recovery (%) 82.1% 68.7% 13%
Silver Ingots Produced (oz) 692,392 439,448 58%
Silver in Concentrate Produced (oz) 908,254 286,871 217%
Total Silver Produced (oz) 1,600,646 726,319 120%
Silver Ingots Sold (oz) 640,499 395,489 62%
Silver in Concentrate Sold (oz) 874,057 266,079 228%
Total Silver Sales (oz) 1,514,556 661,567 129%
Avg. Net Realized Silver ($/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)
o 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.
o 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
o 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 abo ve 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)
o 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
o 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 produc tion 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 60,000m 3 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.
1 AISC is a non-IFRS measure and is calculated in accordance with the standard adopted by the World Gold Council.
Highlights of the 2,000 tpd Expansion FS:
• Robust project economics (base case at $22/oz Ag):
o Before-tax 5% net present value (“NPV”): $471 million
o Before-tax internal rate of return (“IRR”): 57%
o After-tax 5% NPV: $373 million
o After-tax IRR: 48%
o Payback period: 1.7 years
o 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:
o Exploration along strike and at depth
o 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 t o 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 incorporate d 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.
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.
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 “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 “li kely” 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 connecti on 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 assumptio ns, 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 gover nmental 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 esti mates 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 t o, 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.