Aya Gold & Silver Inc. ((TSE:AYA)) has held its Q4 earnings call. Read on for the main highlights of the call.
Aya Gold & Silver Inc.’s recent earnings call presented a balanced mix of optimism and caution. The company celebrated the successful completion of the Zgounder expansion and projected a significant increase in production for 2025. However, challenges such as decreased production and revenue, lower ore grades, and a substantial write-off were also highlighted. Despite these hurdles, Aya’s strong cash position and exploration achievements offer a positive outlook, though operational challenges and increased costs remain a concern.
Zgounder Expansion Completion
The Zgounder expansion plant was completed on budget, marking a notable achievement in the industry. The new mill reached commercial production by the end of 2024, setting a strong foundation for future growth.
Increased Production Capacity
Aya Gold & Silver plans to significantly boost its silver production from 1.6 million ounces in 2024 to between 5 million and 5.3 million ounces in 2025, demonstrating a robust growth trajectory.
Exploration Success at Boumadine
The company drilled over 107,000 meters, extending the main mineralization trend to 5.4 kilometers. This effort resulted in a new mineral resource estimate of 452 million ounces of silver, underscoring Aya’s exploration success.
Strong Financial Position
Aya ended 2024 with $49 million in cash and restricted cash, with no capital repayment on the $100 million EBRD debt due in 2025, highlighting its solid financial footing.
ESG Advancements
The completion of an electrical line powered by renewable energy and progress on ESG priorities reflect Aya’s commitment to sustainable practices.
Decrease in Silver Production and Revenue
Silver production decreased by 16% in 2024 compared to 2023, with revenue dropping to $39.1 million from $42 million, indicating challenges in maintaining production levels.
Lower Ore Grade and Mill Recovery
The average ore grade fell from 250 grams per ton in 2023 to 171 grams per ton in 2024, with mill recovery rates also declining, impacting overall efficiency.
Significant Write-Off
A $27 million write-off related to the Mauritania asset, Tijirit project, significantly impacted Aya’s financial results for 2024.
Increased Cash Costs
The adjusted cash cost per silver ounce rose to $19 in 2024 from $12 in 2023, attributed to ramp-up activities and overstaffing, posing a challenge to cost management.
Forward-Looking Guidance
Looking ahead, Aya aims to ramp up production to between 5 million and 5.3 million ounces of silver in 2025, with an exploration budget set between $25 million and $30 million. The company projects the average silver cash cost to range between $15 and $18 per ounce, with recovery rates expected to average between 84% and 88%.
In conclusion, Aya Gold & Silver Inc.’s earnings call painted a picture of both achievement and challenge. While the successful Zgounder expansion and exploration successes are promising, the company must navigate decreased production, increased costs, and significant write-offs. Investors will be keenly watching how Aya manages these challenges while pursuing its ambitious production goals for 2025.