Aya Gold & Silver gains on record quarter

Aya Gold & Silver (TSX: AYA; OTCQX: AYASF) shares soared on Tuesday after the Canadian miner posted a record-breaking quarter, as well as new funding to support its growth in Morocco.

During the first quarter of 2025, silver production from the company’s Zgounder mine reached 1.07 million oz., its highest ever and a three-fold increase over last year. Throughput levels also tripled to hit a record of 249,743 tonnes, resulting in an 82% increase in mine production to 194,661 tonnes.

The first quarter production helped to generate a record-high revenue of $33.8 million (C$47.2 million), a 566% increase year-over-year, with an average net realized silver price of $31.87 per ounce. Net income also improved to $6.9 million, from a net loss of $2.6 million in the same 2024 period.

Shares of Aya Gold & Silver rose by 12% to C$11.27 apiece by market close Tuesday, but were down 4.7% on Wednesday morning in Toronto at C$10.71 each for a market capitalization of C$1.47 billion. The stock traded between C$8.52 and C$19.56 over the past 52 weeks.

‘Scarce value’

Aya ramped up the new plant at Zgounder following its commissioning in December. Both throughput and mill availability were at or above target during the three-month period, the company reported. 

“Our open-pit ramp up continues as planned, contributing to record plant throughput and supporting an increase in revenue and cash flow year-over-year,” stated CEO Benoit La Salle in a news release on Tuesday.

SCP Research mining analyst Justin Chang says Aya represents “scarce value” among silver miners. This week’s $2.1-billion deal of Pan American Silver (TSX, NYSE: PAAS) agreeing to buy MAG Silver (TSX, NYSE: MAG) bodes well for Aya, Chang wrote in a note on Tuesday.

“Aya is now trading at half this valuation, they will deliver a similar production profile within six months, and Boumadine is essentially included for free,” he said, referring to the company’s polymetallic project in Morocco. 

“Today’s results should ameliorate market concern over cash flow/liquidity,” the analyst said. “We expect Aya to be cash flow positive inclusive of Boumadine exploration for the remainder of the year. Thus, peak pessimism should be behind us as operations open up higher grade areas.”

$25M loan

The stock rally follows Aya’s announcement on Monday that the miner has been approved for a $25 million credit facility from the European Bank for Reconstruction and Development (EBR, its current lender on the Zgounder expansion project.

The proceeds will support Aya’s development of the Boumadine, part of its growth strategy in Morocco. During the first quarter, the company increased its landholding on the property through the acquisition of four mining licenses, extending its land package to 272 square kilometres. 

The funding for Boumadine represents “a strong endorsement of our leadership position in Morocco and the trusted partnerships we’ve built,” CEO La Salle said.

In February, Aya also released an updated resource estimate for Boumadine, comprising 29.2 million inferred tonnes grading 82 grams silver per tonne, 2.63 grams gold, 2.11% zinc and 0.82% lead, and 5.2 million indicated tonnes grading 91 grams silver, 2.78 grams gold, 2.8% zinc and 0.85% lead. The contained metal, in silver-equivalent terms, is about 452 million ounces.

“Since our last project finance facility in 2023, Aya has made steady progress at Zgounder and advanced the potential of Boumadine,” Natalia Lacorzana, the European bank’s head of natural resources, said in the same release. “This new facility reflects our confidence in the company’s leadership and our continued support for responsible mining in Morocco.”