Aya Gold & Silver (TSX: AYA) has completed the feasibility study for a proposed expansion at its flagship Zgrounder Silver Mine in Morocco. From a high level, the expansion appears to be a major positive, with a pre-tax internal rate of return of 57%, and a payback period of just 1.7 years.
The proposed expansion would see the company expand its current operation at the mine by 2,000 tonnes per day, growing production to 2,700 tpd in total. The expansion itself is expected to cost just $139.4 million in initial capital expenditures.
The proposed expansion is expected to result in an increase in silver production by 394%, which equates to 7.9 million ounces in annual silver production. The proposed expansion is expected to be completed by 2024, with the first silver pour expected in Q1 2024. Revenues meanwhile are expected to climb from $37.0 million in 2021 to $172 million in 2024, if the expansion is implemented.
The analysis was conducted based on an 11 year life of mine for the project, using a base case price of $22.00 per ounce silver. All in sustaining costs are estimated at $9.58 per ounce, with cash costs at $7.36 per ounce.
The mine development is said to already be underway.
Aya Gold & Silver last traded at $9.74 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.