AYA earnings call summary

Prepared Highlights

• Q1 2025 silver production 1,069,000 ounces, a significant increase from Q1 2024 (prepared).
• Open pit ore mined reached ~68% of total ore mined in Q1, versus 70% target split (prepared).
• Stockpile reduced from 300,000 tonnes at start of year to 281,290 tonnes at quarter end (prepared).
• Throughput exceeds nameplate capacity; mill availability in the high 90s (prepared).
• Recoveries at 82% vs. feasibility study target of 89%; issue linked to oxygen plant, now being fixed (CEO).
• Revenue Q1 2025: $33 million; gross profit $10 million; operating income $3.3 million; net income ~$7 million; operating cash flow $7.9 million (prepared).
• Cash and restricted cash post-quarter: ~$37 million; plus $11 million accounts receivable (collected days after quarter end) (CEO).
• EBRD credit facility of $25 million approved and being finalized; total liquidity ~$73 million (CEO).
• Exploration: 46,000 meters drilled at Boumadine in Q1 (program 100,000–140,000 meters); 3,000 meters at Zgounder main structure, 1,000 meters at Zgounder Regional (prepared).
• Boumadine mineral resource update added 100 million silver equivalent ounces (prepared).
• April 2025 production showed continued progress in plant availability, throughput, and mine throughput, with recovery still being worked on (CEO).
• Mx2 spin-out closed with $16 million financing; Aya retains 42% ownership (prepared).
• Drilling costs: $125–160 per meter in Morocco, depending on method and project (CEO).
• EBRD indicated willingness to support Boumadine and other Moroccan initiatives (CEO).

Official guidance (confirmed, same as March 2025):

• Silver production: 5.0–5.3 million ounces for full year 2025, exiting Q4 at 1.5 million ounces per quarter (CEO).
• Cash cost: $15–$17.5 per ounce; AISC adds ~$1–$1.5 (CEO).
• Recoveries: 84–88% (feasibility study target 91%) (CEO).
• Grade: 170–200 g/t globally (CEO).
• Exploration budget: $25–$30 million; 160,000–180,000 meters drilling (CEO).

Mgmt quotes:

• "It's only three months. We know that in our industry, ramp ups can go above one year. Here, we're in the first quarter of the ramp up." (CEO)
• "This is — it's a unique project with tremendous potential." (CEO, on Boumadine)
• "The plant was built on budget. It was commissioned on time." (CEO)
• "Q1 2025 ... a robust quarter in a first quarter ramp up. This is running well above nameplate." (CEO)
• "EBRD is our long term financial partner in Morocco. They support the country. They support Aya." (CEO)

Prepared Metrics

AYA Q1 2025 Call Q&A Batch (1-4 of 4)

Q1 — Cosmos Chiu

• Topic: Accounts receivable, credit facility, and grade guidance
• Key points:
  • $11.6M receivable sold in Q1 but cash received in early Q2; treated as cash.
  • $25M EBRD corporate loan approved, documentation to be completed by end of Q2; terms: 2-year bullet, SOFR + 5%, same as construction loan.
  • Q1 average grade 163 g/t; April grade dipped. Full-year guidance remains 170–200 g/t. Target: ~200 g/t open pit and ~170 g/t underground by Q4.
  • Recovery target 84%–88%; Q1 was 80% due to oxygen plant issues.
• Mgmt stance: Bullish on financial flexibility (loan secured, cash flow improving) and grade improvement (deposit quality confirmed, operational fixes underway).

Q2 — Bryce Adams

• Topic: Cash balance, restricted cash, and open-pit mining costs
• Key points:
  • Cash balance as of mid-May is "similar to" end-of-March plus a few million.
  • Restricted cash remains restricted until loan maturity (debt service reserve); not available for operations.
  • Open-pit contract rates: ~$2/t waste, ~$4/t ore (all-in, including drilling/blasting/hauling). Costs expected to improve with fleet scale.
  • Fleet size details not provided on call; mgmt offered to share later.
• Mgmt stance: Neutral on cash (restricted cash clarified as unavailable); bullish on cost improvement from contractor economies of scale.

Q3 — Don DeMarco

• Topic: Throughput, recovery, and free cash flow inflection
• Key points:
  • Throughput hit 3,025 t/d in April (above 2,700 t/d nameplate); mgmt expects to sustain ~3,200 t/d. Plant built with 50% expansion capacity (add ball mill + tanks).
  • Recovery issue is mechanical (oxygen plant), not metallurgical. No throughput impact from recovery fixes.
  • No CapEx for open-pit expansion (contractor-funded). Sustaining CapEx ~$8M this year for underground development.
  • Free cash flow already positive in Q1 and expected in Q2.
• Mgmt stance: Bullish on plant performance (robust, overbuilt) and free cash flow generation; neutral on recovery (fixing oxygen plant, no EPC honeymoon).

Q4 — Ovais Habib

• Topic: Cash cost trajectory and underground grade improvement
• Key points:
  • Cash costs decreased ~30% QoQ in Q1. Full-year guidance 15%–17.5%. Further step-downs expected in Q2, Q3, Q4 (dependent on grade/recovery denominator).
  • Per-ton costs are below budget; cost control is tight.
  • Underground improvement: no mining method change. Focus on more definition drilling (reduce dilution, improve grade). Open pit will supply 70% of tonnage to relieve pressure on underground.
  • EPC recourse under consideration for oxygen plant delays; mgmt expects compensation in next 1–2 quarters.
• Mgmt stance: Bullish on cost reduction (denominator-driven, per-ton costs good); neutral on underground (requires more drilling discipline); cautious-but-optimistic on EPC recourse (assertive legal stance).