Q4 2023 Aya Gold & Silver Inc Earnings Call
Yeah.
Operator: Good day. Thank you for standing by. Welcome to Aya Gold & Silver's Q4 and Year-End 2023 Results Conference Call. Ms. Hanna, you may begin your conference.
None: Good day, and thank you for standing by welcome to IL Golden Silver's fourth quarter and year end 2023 results conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
None: To ask a question during the session you will need to press star one one on your telephone.
None: You will then hear an automated message advising your hand is raised to withdraw your question. Please press star one one again please.
None: Please be advised that today's conference is being recorded.
None: MS. Hannah you May begin your conference.
Ruth Hanna: Thank you, operator. Good morning, everyone, and welcome to Aya's Q4 2023 results conference call. My name is Ruth Hanna, and I'm the IR and communications manager dialing in with some of the Aya team in Montreal and Morocco this morning. On the call today, we have Benoit LaSalle, President and CEO, Ugo Landry-Tolszczuk, Chief Financial Officer, Raphaël Beaudoin, Vice President, Operations, and David Lalonde, Head of Exploration. We'll finish today's event with a Q&A session with the team. Please contact our IR team directly with any follow-up questions that are not addressed during the call. Before we begin, I'd like to remind listeners that today's event will contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.
Hannah: Thank you operator, good morning, everyone and welcome to <unk> fourth quarter 2023 results Conference call. My name is Rick Hill, I outlined the IR communications manager dialing in with some of the IR team in Montreal on Morocco. This morning on the call today, we have been all about president and CEO.
Speaker Change: Hey, good laundry called sick Chief Financial Officer.
Speaker Change: My elbow Dwyer, Vice President of operations and debit law law that head of exploration.
Speaker Change: We finished today's event with a Q&A session with the team. Please contact our IR team directly with any follow up questions that are not addressed during the call.
Speaker Change: Before we begin I'd like to remind listeners that today's event will contain forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements.
Ruth Hanna: Details of the forward-looking statements are contained in today's news release, as well as on SEDAR+ and at www.ayagoldsilver.com. With that, I would like to turn the conference over to Aya's President and CEO, Benoit La Salle. Benoit, please go ahead.
Speaker Change: Details of all of the forward looking statements are contained in today's news release as well as on SEDAR and at Www IR gold silver Dot com.
None: With that I would like to turn the conference over to <unk>, President and CEO open while also.
Benoit La Salle: Thank you, Ruth. Hello, everyone. We can summarize the year as saying that 2023 was an exceptional year for Aya. We've delivered a very strong year with record revenue, record earnings, and record cash flow. We generated CAD 42.8 million in revenue, we generated CAD 21.2 million of cash flow. The net profit of CAD 5.3 million is a 281% increase year over year. Furthermore, we have low total cash costs at CAD 12.50 per ounce sold. We are also on track to deliver our plant expansion, the 2,700 tonne per day Zgounder mine expansion. We are today on time and on budget for commissioning in Q2 2024. To start the commissioning, we have a stockpile of 250,000 tonne of ore at year-end for commissioning of the new mill, we also have a combined mining rate underground and open pit of 2,300 tonne per day at year-end.
None: Please go ahead.
None: Thank you Hello, everyone.
None: We can summarize the year, let's say that 2023 was an exceptional year for <unk> we.
None: We've delivered a very strong year with record revenue record earnings and record cash flow, we generated $42 8 million in revenue.
None: And we generated $21 2 million if cash flow. The net profit of $5 3 million is that 281% increase year over year. Furthermore, we have low total cash cost at $12.50 per <unk>.
None: Islands sold.
None: Sure.
None: We're also on track to deliver our plant expansion. The 2007 hundred tons per day is good their mine expansion.
None: We are today on time and on budget for commissioning in Q2 2024.
None: Start the commissioning we have a stockpile of 250000 tonne of ore at year end for commissioning of the new mill and we've also combined mining rate underground and open pit of 2003 hundred tonne per day at year end.
Benoit La Salle: You remember that we need to be at 2,700 tonnes when we will achieve nameplate capacity. We're fully funded, we have a really healthy balance sheet. The cash at the close of the quarter stands at $70.3 million, that does not include the CAD 57 million bought deal in Canadian dollars, CAD 77.6 million that was done in Q1 2024. We've also delivered the milestones on the EBRD CTF financing loan, hence the reason why they have disbursed so far as per the schedule. We've continued to invest in our growth opportunities. You remember that last year we doubled the Boumadine budget, extending the strike length of the structure to 4.2 km and discovering new types of mineralization. We've also signed a 20-year renewable PPA, and we will be connected to the grid shortly.
None: Remember that we need to be at 2700 done when we will achieve nameplate capacity.
We're fully funded and we haven't.
None: Really healthy balance sheet.
None: The cash at the close of the quarter stands at $73 million.
None: U S.
None: And that does not include the $57 million bought deal and <unk> 77, 6 million that was done in Q1 of 2024. We've also delivered the milestones on the BRD CTF financing loans and the reason why it would be.
None: We have disbursed so far.
None: <unk>.
None: As per the schedule.
None: So we've continued to invest to invest in our growth opportunities you remember that last year, we doubled the <unk> budget extending the strike length of the structure to for two kilometer and discovering new types of mineralization. We've also signed a 20 year renewable.
None: Which will be connected to that which we will be and we will be connected to the grid shortly.
Benoit La Salle: That has also an effect of reducing the cost of energy for the new project. We've increased our land position by 20% at Zgounder and by 200% at Boumadine. This will take me to the next page, if you're following on the slide, to page four. Just to review quickly the actual production versus the guidance, because we know it's extremely important. For the year 2023, our guidance was between 1.7 to 1.9, and we've achieved 1,970,000 ounces. Beating our production guidance. Our cash cost in the guidance was estimated at CAD 14.40, and we ended the year at CAD 12.50. We all know that this is in the low quartile of our sector. The average grade processed, our guidance was 264, we were at 250, which is in line.
None: And that as also an effect of reducing the cost of energy for the new project.
None: We've increased our land position by 20% is with that and by 200% at Bluebird.
None: So this will take me to the next page if you're following on the slide to page four.
None: Just to review quickly the actual production versus the guidance because we know its extremely important so.
None: For the year 2023, our guidance was between one seven to one nine and we've achieved 1000 970000 ounces, so beating our production guidance our cash cost.
None: The guidance was around was estimated at $40 <unk> and we ended the year at 12 50, and we all know that this is in the low quartile of our sector. The average grade process. Our guidance was $2 64, we were at $2 50, which is in line in the mid recovery so that J P.
Benoit La Salle: The mill recovery, so the KPIs for the mill, the mill recoveries, the mill availabilities were all good. The mill recovery is 86%, and the guidance was 86%. We've done extremely well, and in the total tons processed, we were budgeting 245,000 for the year, and we did 281,000. The plants have worked above nameplate capacity throughout the year. As you know, the nameplate capacity is 700 tons per day, and the average for the year is 772 tons per day. We've done extremely well. Going to page five, just a quick summary of the last five years. You see the production growth when we took over in 2020 to 2023. Obviously 2024 and further, there'll be a major change as the new plant will be commissioned and in production.
None: <unk> for the minerals and metal recoveries the elevated annuities, we're all good that mill recoveries of 86% and the guidance was 86%. So we've done extremely well.
None: The total ton process, we were budgeting 245000 for the year and we did 281000 and so at the plant I've worked above nameplate capacity throughout the year. We as you know the nameplate capacity of 700 tonne per day and the average for the year is 770.
None: You too.
None: <unk> per day, so we've done extremely extremely well.
None: Going to page five just a quick summary of the last five years you see the the production growth. When we took over in 2022, 2023, obviously 2024 and further there'll be a major change as the new plant will be commissioned in it.
Benoit La Salle: You see the silver grade processed as well at the bottom from 2019 to 2023, being constant between 225 and 250. The recoveries, when we arrived, were around 60, and now we are more towards the 86%, 87%, which is excellent. The ore processed, as discussed, that is based on the availability of the plant. We now are extremely good with the availability of the plant, and that's why we have the ore processed at 281,000 tonne for the year. Moving on to page six of the presentation. On a cash flow basis, it is quite interesting to see that today for 2023, we are looking at CAD 21 million of operating cash flow compared to the previous year. It is a record year. On gross margin, we are also on a record year, as you can see on page six.
None: Production. So you see the silver grade process as well at the bottom from 2019 to 2023.
None: Constant between $225 250.
None: The recoveries when we arrived we're around 60 and now we are more towards the 80, 687%, which is excellent and the ore process as discussed at that is based on the availability of the plant. We now are extremely good in light of the availability of the plant and.
None: That's why we have the ore process at 281000 tons for the year moving on to page six of the presentation.
None: On a cash flow basis, it's quite interesting to see that today for 2023, we're looking at $21 million of operating cash flow compared to the previous year. It is a record year on gross margin.
None: We are also on a record year as you can see on page five on page six sorry.
Benoit La Salle: Cost of sales is a function, of course, of our cash costs and all costs. It's quite aligned with where we should be at CAD 25 million of cost of sales. The cash cost is, as I said, extremely good, being at CAD 12.50 per silver ounce sold. Page seven is just the picture of the new construction. I know we give you a video every month that you watch carefully, but it's coming very well. Again, we can say that this project is coming on time and on budget. There are a couple of weeks left, and we will start commissioning towards the end of Q2. On page eight, you have this Zgounder expansion. We have some statistics. We are on budget. We have incurred CAD 110 million so far, and we have the other CAD 38 million committed.
None: Cost of sales as a function of course of our cash cost and all cost it's quite aligned with where we should be at $25.
None: 25, billions RF cost of sale and the cash cost is as I said extremely good.
None: Being at 12 and a half.
None: $1 50 per.
None: <unk> silver ounces sold.
None: So page.
None: Sure.
None: <unk> is just that.
None: The picture of the new construction I know, we can give you a video every month that you watch carefully, but it's coming very well.
None: And again and we can say that this project is coming on time and on budget. So it's there are a couple of weeks left in <unk>.
None: It's it will be.
None: So we will start commissioning towards the end of Q2 so.
None: So on page eight you have theres good their expansion we have some statistics. So we are on budget, we have incurred $110 million, so far and we have the other $38 billion committed so we are within.
Benoit La Salle: We are within budget and the CapEx that we had identified in 2022. The underground development is on track. That is doing extremely well. 90% of the lateral development is done, 80% of the vertical development is done. If you recall, the most sensitive item of the project expansion was to make sure that the mining was going to be at 2,700 tons a day. That is on track and developing extremely well. The plant is all on-site, so now it's a question of assembly. The power line, the substation, the Merrill-Crowe, the silver room, the ball mill, obviously, all of that is on-site. It's just a matter now of putting it all together.
None: Budget and the Capex that we had identified in 2022.
None: The underground development is on track that is it.
None: <unk> is doing extremely well, 90% of the lateral development is done 80% of the vertical development is done and if you recall the most sensitive item.
None: The project expansion was to make sure that the mining was going to be at 2700 tons. A day. So that is on track and developing extremely well.
None: The plant is all on site. So now it's a question of assembly. So the power line the substation the Merrill Crowe.
None: Silver room.
None: <unk>, obviously all of that is on site and.
None: It's just a matter of now of putting it altogether. So we gave you a little progress chart of the processing plant in the underground and the open pit mine the daily the water management, the electrical infrastructure in the onsite infrastructure, so again moving smoothly.
Benoit La Salle: We gave you a little progress chart of the processing plant, the underground, and the open pit mine, the tailings, the water management, the electrical infrastructure, and the on-site infrastructure. Again, moving smoothly, all this being done with our team and with our EPC contractor. You have here a picture of a brand-new water reservoir and tailings dam. Now you know that our CAD 100 million loan with EBRD is ESG-driven, so those elements were extremely important. They come to site every quarter, they review the work that's been done, and as you can see, this is state-of-the-art execution for the water reservoir, the water basin, and the tailings dam. The pylons are 90% up. We have a few left to go. The cables have been pulled, and the station has arrived on-site.
None: All of this being done.
None: With our team and with our EPC contractor.
None: So you have here a picture of a.
None: Brand, new water reservoir and tailings dam now you know that.
None: $100 million loan with <unk>.
None: Is ESG driven so those elements were extremely extremely important and.
None: I think anthracite every quarter. They review the work that's been done and as you can see this is as state of the art execution afford that water reservoir and the water basin and the tailings dam.
The pylons are 90% up where we have a few left to go the cables are have been pulled and the station as arrived on site.
None: Okay.
Benoit La Salle: The exploration program is always a major focus because, as you all know, we create value by increasing the ounces in the ground and by finding new deposits. For 2024, and we've put that in the press release of this morning, at Zgounder, at the main mine, we will be drilling 15,000 meters minimum, because often, as you know, over the years, once we've been through the budget, we looked at what needs to be done, and we increase it. At Boumadine, we've completed last year 76,000 meters. This year, we are going to do 120,000 meters. That's the budgeted amount of drilling, which is 60,000 meters on the known structure, which we refer to as the 4.2-kilometer strike, which we follow with geophysics on 6 kilometers.
None: The.
None: Exploration program is always a major focus because as you as you all know we create value by increasing the ounces in the ground and by finding new deposits. So for 2024.
None: We've put that in the in the press release of this morning.
None: At <unk> we.
We will be drilling at the main mine, we will be drilling 15000 meters minimum because often as you know over that over the years at once we've been through the budget, we looked at what needs to be done and we increase it.
None: Boumediene.
None: We've completed last year.
None: <unk> 6000 meters. This year, we are going to do 120000 meter that's the budgeted amount of drilling which is 60000 meters on that on the the loan structure, which we refer to as the $4 two kilometer <unk>.
None: <unk>, which we follow with geophysics on six kilometer and we will also do 60000 meters to test new targets because the team has identified parallel targets that are within our permits the reason for us to augment the number of permits that we have so we will divide that out.
Benoit La Salle: We will also do 60,000 meters to test new targets, because the team has identified parallel targets that are within our permits. The reason for us to augment the number of permits that we have. We will divide that half and half. Obviously, the second half, the 60,000 meters, is something that will move based on what we find with geophysics, and that's something extremely important. We are doing the geophysics right now. It's really generating targets and it's ongoing. Zgounder Regional, also a very important aspect of our strategy as we're looking for an additional mine or deposit to feed the three plants that we have at Zgounder, or that we will have. The budget there is 10,000 meters. We're looking for similar mineralization that we have at Zgounder, which is silver.
None: Obviously, the second half of the 60000 meters is something that will move based on what we find with geophysics and thats something extremely important and we are doing the geophysics right now.
None: It's.
None: It's really generating targets and it's ongoing.
None: Joel.
None: It was good there regional also a very important aspect of our strategy as we're looking for and additional mine ore deposit to feed the three plants that we have as they are that we will.
None: So the budget there is 10000 meters. We're looking for similar mineralization that we have as good at which is the silver but we also are doing the geophysics at dividend and that we know was a copper silver mine historically, we know that they're there.
Benoit La Salle: We also are doing the geophysics at Tirzzit, and that we know was a copper-silver mine historically. We know that there is a structure there. Is it just a structure for artisanal mining or can it be a structure for us? We will find that out with the geophysics, geochem, and of course, drilling throughout the year. Now, there's a new project where we're going to do a little bit of work called Amizmiz. It's a project that's been in our portfolio for a long time. It was actually one of the first projects that this company acquired in 2010. It was a gold mine. Historically, it's a very high-grade mine. The team have looked at it and believe that it's worth a bit of work, not a lot of work, but to go and find out what is really the size of this deposit.
None: It is a structure there is it just a structure for our digital mining or get into the structure for us we will find that out with the geophysics geochemical and of course drilling throughout the year.
None: Now there is a new project, where we're going to do a little bit of work called <unk>. It's a project that's been in our portfolio for a long time.
None: Was actually one of the first project that this company acquired in 2010.
None: It's it was a gold mine that historically, it's a very high grade mine.
None: And the team.
None: I've looked at it and believe that it's worth a bit of work not a lot of work, but to go and find out what is really the size of this deposit so thats something to look forward to as we as the year goes by.
Benoit La Salle: That's something to look forward to as the year goes by. On page 11, you have Zgounder, the main structure that we refer to every time we make a presentation. We've been drilling this. We're a little late on our drilling. Last year, we were supposed to do 20,000 meters. We didn't do it because we focused more on the development of the underground for the mine, and we did not have access to the lower level to drill. We know that we were a little late, but we're making it up right now. Something very interesting happened in the past month, and as we found that the rhyolite, which is the footwall of the deposit, we found that the rhyolite was carrying mineralization. One of the drill holes that went into the rhyolite gave us 1,089 gram per ton over 13.5 meters.
None: On page 11, you have as good then the main structure.
None: That we referred to.
None: Every time, we make a presentation and we've been drilling days were a little late on our drilling. So last year. We were supposed to do 20000 meters. We didn't do it because we focus more on the development of the underground for the mine and we did not have access to the lower level to drill. So we know that we were.
None: A little late but we're making it up right now something very interesting happened in the past month and there is we found that the real light, which is the footwall of the deposit we found that the realized was carried mineralization and wanted to drill a hole that went into the realized.
None: Gave us a 1080 <unk> 89 gram per tonne over $13 five meters. So that was quite a surprise.
Benoit La Salle: That was quite a surprise. Of course, David and the team immediately went back to the core shack, pulled out all the drill logs and all the core that went into the rhyolite to reassess it. It was, at least locally and with everybody on site, that the rhyolite was not mineralized until we then got those results and found out that it could be mineralized. That's a very interesting development. Now, on page 12, you have the results of the work that has been done by the team on site in identifying another Zgounder lookalike, because that's what we're looking for, to debug a little bit the Zgounder mine. When I say debug, it's because it's going to be very busy. At 2,700 ton a day, that is the traffic capacity of that deposit.
None: <unk>, David and the team immediately went back to the core shack pulled out all the drill logs and all of the core that went into the realized to reassess. It. It was a relief locally and with everybody on side that the <unk> was not mineralized until we then got those results.
None: And found out that it could be mineralized. So that's a very interesting development now.
None: Now on page 12, you have.
None: The result of the work that has been done by the team on site in identifying and another is good there because thats what were looking for.
None: <unk> debug, a little bit those good their mind and not.
None: When I say debug is because there's a lot it's going to be very busy at 2700 ton a day that is the traffic capacity of that deposit I mean, there'll be many trucks up and down and so we would like to find another pit and other underground structure, where we could and autonomous.
Benoit La Salle: It'll be many trucks up and down, we would like to find another pit, another underground structure where we could have autonomous mining that could also feed the plant. The team have identified similar structures to Zgounder on the far east, and we are currently drilling the one to the far east, and there's one to the south as well, which we are currently drilling right now. We are looking forward for these results. The team is very positive. It's the same geological sequence that we have at Zgounder. As we know, historically, Managem at Imiter, which is a kind of a lookalike, not identical, but pure silver mine, they have discovered around their main pit and their main underground mine, many satellite deposits. That's what we are looking with this work that we're doing. Coming to Boumadine, which is on page 13.
None: Mining that could also feed the plant. So the team has identified similar structures to is good there.
None: On the far East and we are currently drilling.
None: One to the far east and Theres, one to the south as well, which we are currently drilling.
None: Right now so we are looking forward for these results.
Team is very positive it's the same geological sequence.
None: That we haven't gone there and.
None: As we know historically manager at.
None: At <unk>, which is a kind of a look alikes not identical but pure silver mine. They have discovered around their main pit and their main underground mines, mainly satellite deposits and Thats, what we are looking with this.
None: Work that we're doing.
None: Now coming to <unk>, which is on page 13, <unk> is a very very interesting project as you know.
Benoit La Salle: Boumadine is a very interesting project, as you know. We've talked about it. We've had very good results, very good drill results. We raised the money in Q1 because we've announced that we're going to put that money to work at Boumadine. We have budgeted, as we said, 120,000 meters this year. Again, 60 on the main zone, 60,000 meters on these new targets that are being generated, which some we already have, others will come from the ongoing geophysics. It's really interesting. Now, you've also seen that we're adding permits. At year-end, we had added four new permits. We announced more permits last week, and there'll be more coming. We are in the process of hopefully controlling the whole district, as we did at Zgounder, by the way.
None: We've talked about it we've had very good results very good drill results.
None: We raised the money in Q1, because we've announced that we're going to put that money to work at <unk>. So we have budgeted as we said 120000 meters. This year.
None: Again, <unk> 60 on the main zone 60000 meters.
None: These new targets that are being generated which we are some we already have others that will come from the ongoing geophysics.
None: It's really really interesting now you also see that we're adding permits so at year end. We have added four new permits we announce them more permits last week and there'll be more coming.
None: Or in the process of.
None: Hopefully controlling the whole district as we did at from there by the way.
Benoit La Salle: When we arrived at Zgounder, we had not a lot of ground, and now we have close to 400 square kilometers of ground, and we have most of the permits that we want to have at Zgounder. We want to do the same thing at Boumadine. Our land position, which originally at the very beginning was very small. It was 36 square kilometers, the original mining permit. Now we are at 141 square kilometer, and that will keep growing. Last year, we did some metallurgical testing because it is always a question that we all have, is how are we going to treat this material? The initial tests gave us mid-80s to high-80s recovery using different methods. We have not yet decided on the flow sheet. We have looked at four methods.
None: But it is good there we have done a lot of ground and now we have close to 400 square kilometers of ground and we have.
None: Most most of the permits that we want to have as good there. We wanted to do the same thing at Bluebird. So our land position, which originally was at the very beginning was very small.
It was 36 square kilometers the original mining permit.
None: Now we are at 141 square kilometers and that is we will keep growing.
None: Last year, we did some metallurgical testing because it.
None: It's always a question that we all have is how are we going to treat this material.
None: The initial test gave us.
None: Mid <unk> to high <unk> recovery using different methods, we have not yet decided on the flow sheet. We've looked at for methods. We are continuing and I fell as a team on this and we are continuing to work through to have the optimal.
Benoit La Salle: We are continuing, Raphaël, as a team on this, and we are continuing to work to have the optimal flow sheet and method that we will be using. Obviously, it's a function of the ore, and David is finding different types of ore to the north or to the south. All of that will be taken into account. Ultimately, Boumadine is now becoming a tier 1 project in size, in grade, and we will be spending a lot of money and a lot of time on this project. On page 14, you have the geophysics that we've been using and some of the hits that we've had over the year 2023. You see that the grade is 1,000 gram per ton over 23.5 meters. It's a very good grade project. It's gold, silver, lead, and zinc, and a little bit of copper.
None: The flow sheet and method that we will be using obviously, it's a function of the ore and debit is finding different types of ore to the north or to the south. So all of that will be taken into account, but ultimately <unk> is now becoming a tier one project.
None: In size and grade and we.
None: We will be spending a lot of money and a lot of time on this project.
None: On page 14, you have the geophysics that we've been using and some of the hits that we've had over the over the year 2023. So you see that the grade is 1000 gram per tonne over 23.5 meters. I mean, it is it's a very good grade project is gold.
None: Silver lead and zinc and a little bit of copper.
Benoit La Salle: It really is well set, as you can see with the geophysics, in the pyrite structure. Furthermore, if you look at the press release where we announced results, there was figure three, was showing some grab sample towards the north where copper was really present, 6% to 12% copper. Those were grab samples, so obviously we know what they mean, but it's also interesting to see that there's copper in this system. Amizmiz, again, I don't want to take much more time, but it's a small project yet, but we think that with the gold price and currently, the historical mining and the historical resource, which is not ours, it was there way before our time. They were looking at about 13 gram per ton. It's an underground system.
None: And it's it's really is is well set in this.
None: As you can see with the geophysics in the pyrite structure now. Furthermore, if you look at as the press release, where we are.
None: Announce a result, there was figure number three we're showing some grab sample towards the north where copper was really really present.
None: 6% to 12% copper so those were grab samples. So obviously, we know what they mean, but it's also interesting to see that there's copper in the system.
None: I mean again I wanted to take much more time, but but it's a small project yet, but we say that with the gold price and this currently the historical mining in these historical resource, which is it's not ours. It was their way before our time they were.
None: King at about 13 Gram per ton, it's an underground system, but we're going to take the work that was done historically, we will review it we will do a little bit of work and we'll see what's out there before we you know we do a corporate transaction on it or we would.
Benoit La Salle: We're going to take the work that was done historically, we will review it, we will do a little bit of work, and we'll see what's out there before we do a corporate transaction on it. We need to know what's there before we make a decision. Now, to close, of course, the ESG is extremely important in this world of mining. For us, it's always been. It will continue to be, to the point where we teamed up with EBRD for a CAD 100 million facility. The ESG component is extremely important. On health and safety, we've done quite well. We had very few lost days. We had a lot of training, 10,000 hours of training. We had no fatalities, which is something you never want to have. 2023 has been a big year of transition, of training. We are pleased with the results.
None: We need to know what's there before we do we make a decision.
Now to close.
None: Of course, the ESG is extremely important in this world of mining.
None: For us it's always been it will continue to be to the point, where we teamed up with <unk> for $100 million facility.
None: So the ESG component is extremely extremely important so.
None: On health and safety, we've done quite well we had.
None: Very few lost days, we had a lot of training 10000 hours of training, we had no fatalities, which is something you would never want to have.
None: So it's 2023 has been a big year of transition of training, but.
None: But we are pleased with the results. Obviously 2024 is a more delicate here because we are increasing the number of employees, we're increasing the throughput we have more production. So we have to be extremely careful and we know that and we're acting accordingly.
Benoit La Salle: Obviously, 2024 is a more delicate year because we're increasing the number of employees, we're increasing the throughput, we have more production. We have to be extremely careful, and we know that, and we're acting accordingly. The clean technology fund, the milestones were achieved this year, milestone number 1. That reduced our rate on the CTF tranches to 6.98%. Excuse me. We have other milestones to meet over the years, and as we meet them, the rates are going to be coming down even further. On the community highlights, something of great importance to all of us, education. We organize classes and online classes for the schools in our community. Health, we have mobile clinics, and our mine doctor is also available for the community. Water access, we help villages in securing water access, and we do that for all the communities where we are.
None: So the clean technology fund the milestones were achieved this year milestone number one so that reduce our rate on the CTF tranches to 698%.
None: Excuse me, we have other milestones to meet over the year and as we meet them the rates are going to be coming down even further.
None: On the community alike.
None: Something of great importance to all of us.
None: Education, we organized classes in online classes.
None: Schools, and our community health, we have mobile clean clinics.
None: Our mind Doctor is also available for the community.
None: Water access.
None: We have villages in securing water access and we do that for all of the communities, where we are and as well we have.
Benoit La Salle: As well, we have the economic project, which creating of sustainable development. We launch a saffron farm, and we've had our first harvest. You may know that, Morocco is a saffron producer like Iran and countries in the Middle East, and the quality of the saffron is extremely high. To conclude, our year, it was a very good year for Aya in 2023. Silver production and cost guidance, done. The milestone for the Zgounder silver mine expansion, not totally done, but almost done. Again, you're following it with the videos that we put out all the time. The Zgounder underground and regional drilling, that's ongoing. We did some. It's ongoing this year to complete all the drilling that we want to do. The Boumadine resource estimate is just about ready.
The economic project, which creating of sustainable development and we launch a SaaS <unk> farm and we've had our first harvest.
None: You may know that but Morocco.
None: Safran producer like Iran, and the countries in the middle East and the quality of the Safran is extremely extremely high.
So to conclude.
None: It was a very very good year for 2000 and for <unk> in 2023, silver production and cost guidance done.
None: Yeah.
None: The milestone on the FERC has gotten their silver mine expansion not totally done, but all done and again you were following it with our the videos that we put out all the time.
None: He is good there underground and regional drilling that's ongoing we did some it's ongoing this year.
None: To complete all the drilling that we want to do that.
None: <unk> been in the resource estimate is just about ready it will come out in two weeks plus or minus a few days, we're just about ready.
Benoit La Salle: It will come out in two weeks, ± a few days. We're just about ready. It's an ongoing process. The drilling is ongoing. Out of the 120,000 meters that we wanted to do this year, we're already past 12,000 meters already, so we're 10% done. It's ongoing. We will have, or we have, it's a question of days, seven drills turning. On the ESG front, which is again, a major component, we did meet all the milestones. EBRD has disbursed CAD 85 million of the CAD 100 million. EBRD is going to site in a couple of weeks with the team. They will review again all their questionnaires regarding the loan. We will draw on that CAD 15 million, that last CAD 15 million, in the month of May, June.
None: It's an ongoing process, but the drilling is ongoing.
None: The 120000 meters that we wanted to do this year, we're already past 12000 meters already so we're 10% done and it is ongoing we will have or we have I mean, it's a question on day seven drills turning.
None: On the ESG front, which is again a major major component. We did meet all of the milestones E. BRD as disbursed $85 million of the 100 million <unk> going to site and a couple of weeks with the team and they will review again.
None: The questionnaires regarding alone and we will draw on that $50 million that last $50 million.
None: In the month.
None: <unk>.
None: April.
None: Major major major hits our imager.
Benoit La Salle: Operator, this concludes the official portion of the presentation, and we will open the floor to questions.
None: So operator. This concludes the official portion of the presentation and now we will open the floor to two questions.
Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Puneet Singh from Eight Capital.
None: Thank you as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again please.
None: Please stand by while we compile the Q&A roster.
None: Our first question comes from the line of Puneet sang from eight capital.
Puneet Singh: Thanks. Good morning, Benoit and team. A couple questions for me. You guys have a habit of beating guidance to better again this year on production cost, P2. I know this is an expansion year, so probably better to err on the side of caution, but just wondering how much conservatism you're baking into those numbers, especially on the grades, because I remember the tech report was calling for you to mine some of that 300 gram per ton material up front. Just asking, how conservative are you being there? Because it'll be a cost driver. Do you think you could be into some of that higher grade material by the end of the year if things go well?
Puneet Sang: Hi, Thanks, good morning been watching them a couple of questions for me you guys have the habit of beating guidance the better again.
Sure on production cost be too I know this is an expansion here, so probably better to err on the side of caution, but just just wondering how much conservatism you're baking into those numbers, especially on the grades because I remember the Tech report was calling for you to mind some of that 300 gram per tonne material upfront. So just asking how conservative are you being there because it'll be a cost.
Puneet Sang: Driver and do you think you could be into some of the higher grade material by the end of the year if things go well.
Benoit La Salle: Good evening. I'll pass this over to Raphaël, who runs this on a daily basis.
Puneet Sang: I'll pass this over to Raphael who runs this on a daily basis.
Raphaël Beaudoin: Hi, this is Raphaël. The grade of Zgounder is obviously the driver of this mine, and also quite a challenge considering the geology of the deposit. As we increase tonnage, obviously to keep the grade stable is our focus. In 2024, there are many things coming up to play. We are once again almost doubling our mining rate. We need to commission the new plant. We also will include the open pit ore within the new mill as we'll commission it. Throughout 2023, we've kept the grade fairly high during production, which ensured us very good production in 2023. We have stockpiled, let's say, lower grade, to ensure a smooth commissioning and not wasting any ounce. That's a classical strategy that we're certainly not inventing.
Rafael: Hi, This is rafael.
Raphael: The greater goodbye or obviously.
Raphael: The driver of this mine and also quite a challenge comes during the Georgia.
Raphael: Of the deposit.
Raphael: And as we increased tonnage obviously to keep the grades payable.
Raphael: Our focus.
Raphael: In 2024, there are many things coming up to play.
Raphael: We are once again, almost doubling our mining rate.
Raphael: Yeah.
Raphael: We need to commission the new plant.
Raphael: And we also will include the open pit ore within the within the New Mill Ethanol Commission it.
Raphael: Throughout 2023, we've kept the grade fairly high.
Raphael: During production, which ensured us very good production in 2023, and we have stockpile, let's say lower grade to ensure a smooth commissioning and not wasting any hours and hours.
Raphael: Classical classical our strategy.
Raphaël Beaudoin: That being said, we really need to focus on commissioning the mill, making sure to bring availability up, to bring recovery up, to make this mill run at main place. Only then we will slowly increase the grade to the mill. Does that answer your question?
Raphael: Certainly not inventing.
Raphael: That being said, we really need to focus on commissioning the mill, making sure to bring availability up to bring recovery up to make this mill run at nameplate.
Raphael: And only then and only then will we will slowly increase the grade to the mill.
None: Does that answer to your question.
Puneet Singh: Yeah, that makes sense. Thanks. I had one more question on exploration. If David is on the line, I'd like to hear maybe the expanded take on that rhyolite, because it looks like it could be a game changer for you guys. My final question is, it's been a couple of years now since you've updated the Zgounder resource. When do you think you'll update the market next on that? Because you've been hitting some great intercepts, so just wondering when you'll look to update the market on that. Thanks.
None: Yeah that makes sense. Thanks.
None: I had one more question on exploration. It debuted on the line I'd like to hear maybe the expanded take all that ray of light.
None: Because it looks like it could be a game changer for you guys and and my final question is it's been a couple of years now since you've updated that go into a resource when do you think you'll update the market next on that because you've been hitting some great intercepts. So just wondering when you're when you look to update the market on that thanks.
David Lalonde: Hi, David Lalonde speaking. Concerning the rhyolite, yes, we believe it can be a game changer. It's still early to fully understand it. So far the take is related to flat faults through the rhyolite that most likely could have served as a conduit to bring the mineralization in. It definitely change our approach in the coming drilling program. As Benoit mentioned, we are also re-logging, resampling all the rhyolite intervals that was historically not sampled because believed barren. That's one thing. Concerning the resource update, we are in the progress of making them. We expected to make it earlier, but the underground development was slow and the drilling last year was slow. Currently this year we're already 58% complete with our underground drilling program, so we expect by beginning of H2 to be able to update the market on the resource at Zgounder.
None: Hi, David speaking concerning the rhyolite, yes, we believe it can be a game changer.
David: Early to fully understand this.
David: But part of it related to flat fall through the Orion Moe.
David: Most likely could have to serve as a conduit to bring them in the organization.
David: It definitely change.
David: Our approach in.
David: <unk> drilling program.
David: And Thats been one mentioned we are also re logging re sampling all the rhyolite intervals that was historically not sample because believe barron.
David: That's one thing.
David: Turning the resource update we are in.
David: We are in the progress of making them.
David: We expected to make it earlier.
David: On the globe was slow and the drilling last year was small but currency. This year we're already.
David: 58% complete with our underground drilling program. So we expect by <unk>.
David: Beginning of HD to be able to update the market on the resource.
David: Goodbye.
Puneet Singh: Okay. Sorry. The H2 of this year you'll look to update.
None: Okay. So sorry, so the second half of this year, you'll look to update you at the beginning of the second half.
David Lalonde: Yeah, the beginning of H2, hopefully.
Puneet Singh: Okay. Sounds good, David. Thanks very much.
None: Okay.
None: Sounds good David Thanks, very much.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Eleanor Magdzinski from SCP Resource Finance.
None: Thank you one moment far next question.
Speaker Change: Our next question comes from the line of LNR magazine ski from STP resource Finance.
Eleanor Magdzinski: Good morning, everyone. Great work putting together the last quarter and year-end results for all of us today. As always, a great presentation. I had a couple questions. First, on the underground versus open pit splits of tons and grade for the quarter. I didn't see that when I was looking through, and I was just curious what.
Speaker Change: Good morning, everyone.
Speaker Change: And great thing I didn't hear that last quarter.
Speaker Change: Hey.
Speaker Change: That's always a great presentation.
Speaker Change: I had a couple of questions.
Speaker Change: First on the underground versus open pit splits of tonnes and grade for the quarter.
Speaker Change: I didn't see that.
Speaker Change: Looking forward I was just curious.
Raphaël Beaudoin: Eleanor, can you speak up a little bit, please?
Speaker Change: LNR.
None: LNR can you speak up a little bit please.
Eleanor Magdzinski: Yeah, absolutely. Sorry, I think it was my headphones. Is this better?
LNR: Yes, absolutely.
LNR: So I think.
Raphaël Beaudoin: Yeah.
It better.
LNR: Yep.
Eleanor Magdzinski: Is this better? Sorry.
Raphaël Beaudoin: Yeah.
None: Okay sorry.
Eleanor Magdzinski: Okay, wonderful. Yeah, I just had a question, the first one on splits between underground and open pit for tons and grade. I see the totals were reported, but I was just curious of the breakdown on that first.
None: Yes.
None: Okay wonderful.
None: Uh huh.
None: Yeah I just had a question the first one on split between underground and open pit.
None: Tonnes and grade.
None: I see the totals were reported but I was just kind of curious a breakdown on that first.
Raphaël Beaudoin: The open pit, you mean for Q4 2023?
None: The open pit you mean for the last quarter of 2023.
Eleanor Magdzinski: That's right, yeah.
Raphaël Beaudoin: We mine on the underground 114,000 tons at 210 grams per ton for the underground, and the open pit was 60,000 tons at 186. The open pit obviously has the strip. We mine on the mountain side and we will have quarters at 180, and we will have quarters at 280. The split right now, we mine the open pit at a rate of between 500 and 1,000 tons per day. The underground, more around 1,000 to 1,500 tons per day. We can expect over the next two, three years the open pit to feed the mill to about 25% to 35% of the mill feed.
None: Yes.
None: So so we mine we mined on the underground 114000 ton.
None: 207 Gram per tonne for the underground and the open pit with 60000 ton at 186. So the open pit obviously has a has the strip we mine on the mountainside.
None: And we will have we will have quarter up a 180, and we will have quarters at two.
None: 280.
None: So the flip right now remind remind the open pit at a rate of between 501000 tonnes per day.
None: And beyond.
None: Beyond the underground more around 1000 to 1500 tonnes per day.
None: And we can expect we can expect over the next two to three years the open pit to feed the mill.
25, 25% to 35% of the mill feed.
Eleanor Magdzinski: Okay, awesome. Thank you very much. My second question, I guess has to do with the ramp-up schedule. I know there was the range of guidance, but in terms of how things are expected in your view with commissioning towards the end of Q2. Do you feel in Q4 that would be the major step up in terms of things being commissioned and getting to nameplate? Or is it a six-month process to get there? I know obviously you're set up well with the stockpiles and everything, and finalizing the process plant and things like that, but just curious on the timelines in the ramp-up schedule.
None: Okay awesome. Thank you very much.
None: Second question.
None: I guess has to do with the ramp up schedule I know.
None: There was.
None: The range of guidance, but in terms of how things.
None: Our expected in your view with commissioning towards the end of Q2.
None: Do you feel you know in the fourth quarter.
None: The major kind of step up and in terms of like things being commissioned and getting the name plate.
None: Or is it a six month kind of process to get there I know obviously you.
None: We're set up well with the stockpiles and everything.
None: Kind of finalizing the process plant and things like that but just curious on kind of the timelines.
None: And the ramp up schedule.
Raphaël Beaudoin: We look at commissioning the plan towards the end of Q2, like Benoit said. Now we are towards the end of construction, talking about electrical and piping and quite in a construction crunch right now. Things are good. Ramp up is never hit or miss, but it's never quite smooth either. We can expect there's a sequence, obviously there's a sequence. There's nothing new in that. It's the cold commissioning or verification, cold commissioning, hot commissioning, and so on. We'll start that around June, and then we'll need a couple of months to bring that up to a certain rate, which we hope to be close to 80% to 90% capacity. We'll stabilize the production towards the end of Q3 and hopefully have a very good Q4. That's the plan.
None: So when we look our commissioning plan towards the end of Q2 <unk>.
None: Malware or towards.
None: At the end of construction talking about electrical and piping and quite under construction Crunch right now.
None: Things are good.
None: Ramp up it's always.
None: Ramp up is never hit or Miss but it's never quite smooth either so we can we can expect there is a sequence. Obviously there is a sequencing the nothing new investments.
None: The coal commissioning, while verification coal commissioning hot commissioning and so on so we'll start that around June and then we will need.
None: A couple of months to bring that up to a certain rate, which we hope to be close to 80% to 90% capacity and then we will stabilize the production towards towards the end of Q3 and.
None: Hopefully have a very good Q4, so that was the plan.
Raphaël Beaudoin: About the guidance, as you can imagine, if we push back commissioning by 2 or 3 weeks, or we front it by 2 or 3 weeks, it has huge difference on production, because the new plant will carry the bulk of production as soon as it is started. Hence the spread into the guidance for 2024.
None: And about the guidance.
None: As you can imagine if we if we push if we pushed back commissioning by two or three weeks are we frankly by doing two or three weeks and has huge difference on production because of the new plant will carry the bulk the bulk of production outside of its target.
None: Hence havent Scott.
None: The spread into the into that guidance for 2024.
Eleanor Magdzinski: Awesome. Makes perfect sense. Thanks very much for that. I just had one more question related to the expansion, or actually maybe two more, but just quick ones. Just a question on infrastructure progress. Every quarter you've been reporting how things are going. It seems, in my view anyways, maybe that's probably not as critical path as some of the other ones. I was just wondering what's included in the onsite infrastructure development that's still required. That's aside from obviously the process plant and electrical commissioning, which obviously they're pretty big-ticket items. For the remainder onsite infrastructure, I'm just curious what's included in that type of stuff.
None: Awesome.
None: Perfect sense.
None: Thanks, very much for that I, just had one more question related to the expansion or actually maybe two more quick ones.
None: A question on infrastructure progress.
None: Every quarter you have been reporting how things are going it seems in my view anyway, maybe that's probably not as critical path as some of the other ones.
None: And I was just wondering kind of what's included in the on site infrastructure.
None: Development that is still required.
None: Aside from obviously, the Pirquitas plant and electrical commissioning.
None: I mean, obviously, they're pretty big ticket items, but for the remainder.
None: Infrastructure, just just curious kind of whats included in that type of stuff.
Raphaël Beaudoin: Onsite infrastructure includes essentially everything else. We're talking about here some housing for extra workers, some small roads we need to finalize. I can think also of different pipe works that we need to do between water basins and plant, and many other things of which are not necessarily critical for the commissioning of the new plant or the ramp-up of the mine, but has to get done at one point or another. For example, our underground garage, who's been dragging along a bit, but we have a surface garage, so it's not as critical as the rest. Sometimes it falls on second priority, but it will get done, and it's on a critical path. That's what explains the other onsite infrastructures that might be at the slower as opposed to everything else.
None: So on plant infrastructure includes essentially everything else. So we're talking about here is Tom.
None: Somehow thing for extra workers, some small road, we need to finalize.
None: I can think also of different pipe works that we need to do between water basin and plant and many many other things of which are not necessarily critical for the commissioning of the new plant or the ramp up of the mine, but it has to get done at one point or another.
None: For example, our underground garage.
None: He has been who has been dragging along a bit but we have a we have a surface <unk>. So it's not as near as not ours.
As critical as the rest so sometimes it falls on second priority, but it will get done and it's not a critical path. So that's what explains the other onsite infrastructure that might be a bit slower as opposed to everything else.
Eleanor Magdzinski: Okay, awesome. Yeah, that's what I figured. It just seems obviously you prioritize anything that could be more critical path in terms of the commissioning and then, like you said, those are just things that need to get done. They'll eventually get done and get tacked on, and it's a lot of smaller jobs, let's say. I guess my last question, I'm cognizant I've been hogging the line here, so this will be my last one. Just in terms of the anticipated spend, if you take the budgeted CapEx of CAD 159 million, there's still about CAD 49 million total of spend.
None: Okay Awesome, Yeah, that's kind of what I figured it just seems obviously you'd prioritize anything that could be more critical path in terms of the commissioning and then like you said those are just things that need to get done but.
None: Yes. It is kind of dull eventually got it done and get tacked on and its not as it is.
None: A lot of smaller jobs, let's say.
None: I guess my last question I'm cognizant of been hogging. The line here supposed to be my last one.
None: But just in terms of the anticipated spend.
None: If you take the budgeted capex of 200.
None: 59 million, they're still about $49 million total.
Eleanor Magdzinski: That in addition to the $36 million of exploration spend allocated for this year, I was just curious on if there is a timeline or an expected timeline of spend for that total over the next, whatever, I guess the 3 quarters at this point now, or 4 quarters, if you could speak retrospectively a little bit.
None: Spend.
None: In addition to the $36 million of exploration.
None: Spend allocated for this year.
None: Just kind of curious on if there is a timeline or expected timeline of spend for that ofer.
None: Of that total over the next.
None: Whatever I guess three quarters at this point now or four quarters, if you could kind of speak.
None: Retrospectively a little bit.
Raphaël Beaudoin: Sure.
Eleanor Magdzinski: Yeah.
Raphaël Beaudoin: Yeah. On exploration, you can see that pretty evenly split a little bit back H2. You can see here we had a limit or a number of meters done at Boumadine. It's a little bit pushed towards H2, but exploration is pretty linear. You can divide it by four or take 60% or 65% H2 versus H1. In terms of construction, I would say it's the reverse. It's probably 75% of that, 80% of that in H1 and the remainder in H2.
None: Sure.
None: Yes, so on exploration.
None: You can kind of see that pretty evenly split a little bit back.
None: Age to age two and you can see here.
We had an imager or number of meters done at <unk>, So it's a little bit.
None: Push towards <unk>, but exploration is pretty linear you can divide it by four it takes 60% or 65%.
None: Two versus each one.
None: And in terms of construction I would say, it's the reverse its probably 75% of that.
None: 80% of that in each one and the remainder in HQ.
Eleanor Magdzinski: Okay, awesome. Thank you so much. Appreciate all of the feedback.
None: Okay.
None: Thank you so much I appreciate all of your feedback.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Don DeMarco from National Bank Financial.
None: Okay.
None: Thank you one moment far next question.
None: Our next question comes from the line of Don Demarco from National Bank financial.
Don DeMarco: Thank you, operator. Benoit, congratulations on the guidance beat in 2023, and hopefully you have a guidance beat in 2024. For 2024, clearly it's going to be a back-end loaded year. Can you give us some color on the grades and costs quarter by quarter? What costs would you expect in Q4 when the plant's fully ramped up?
None: Okay.
Don Demarco: Thank you operator and.
Don Demarco: Well congratulations on the the guidance beat in 2023, and hopefully you have a guidance beat 2004.
Don Demarco: For 24, clearly, it's going to be backend loaded year can you give us some color on the grades and cost quarter by quarter and what costs would you expect in Q4 when the plant fully.
Don Demarco: We ramped up.
Benoit La Salle: Don, it's a bit fortune-telling. We're not going to guide quarter by quarter, I think. We've known, I think the history of the company has shown here in the last few years, there's some good quarters and there's some less good quarters, that's a function of the grade that's at the mill. We're ramping up mine production. We're in commissioning. I think for us, we're going to stick to an annual guidance here.
Don Demarco: Okay.
Don Demarco: Yeah.
None: It's a bit fortune, telling them, we're not going to guide quarter by quarter I think we've known in the history of the company as shown here in the last three years like there's some good quarters and there is some less good quarters, that's a function of the grade.
None: At the mill, we're wrapping up mine production we're in commissioning.
None: I think for US, we're going to stick to annual guidance here.
Don DeMarco: Okay, fair enough. What's the grade of the stockpiles? Maybe you can tell us how you plan to use the stockpile throughout the commissioning, and maybe as a percentage of total feed.
None: Okay fair enough whats the greater the stockpiles, maybe you can tell us like how do you plan to use the stockpile throughout the commissioning and maybe as a percentage of total fee.
Raphaël Beaudoin: Well, we've been mining in 2023, about 215 grams per ton, and we've processed 250 grams per ton. Obviously the stockpile is quite a bit lower in the range of 160, and we have about 250,000 tons of it. That will be the sole feed for the, say, couple of months of commissioning, and then we'll slowly include our high-grade on the open pit, or that will follow, and we will bring up the grade as we stabilize production. Our key target here is not to waste ounces, essentially. There's no good or bad ounces, but there's lower and higher-grade ore. We want to make sure commissioning is done with the lowest stockpile. As soon as recovery gets up, we will diminish the blend of the stockpile in the feed of the plant, and we will bring up the grade.
None: Well so we've been mining we've been mining in 2023 about 215 Gram per tonne and we've processed 150 gram per ton. So obviously, the stockpiled with quite a bit lower in the range of 160, and we have about 250000 ton of it.
None: That will be there.
None: The sole theme for just a couple of months of commissioning and then it will slowly include our high grade on the open pit.
None: Our high grade on the open pit ore that will follow and we will bring up will bring up the grade.
None: As we stabilized production are key target here is not to waste ounces essentially.
None: So there is no good or bad answer, but there is lower or higher grade ore.
None: And we want to make sure commissioning is done with the lowest stockpile and as soon as the recovery gets up we will diminish the blend of the stockpile and the feel of the feed of the plan and we will bring up the grade.
Don DeMarco: Okay. That sounds reasonable. For my last question, shifting to Boumadine. David, you've got a large airborne geophysics campaign planned to be flown over Boumadine in the area. What do you expect to find from this, and when do you expect to release results?
None: Okay.
None: Okay that sounds reasonable and then for my last question.
None: Shifting to Boumediene, So <unk> got a large airborne geophysics campaign plants being flown over boumediene in the area. What do you expect to find from this.
None: And when do you expect to release results.
Benoit La Salle: Okay.
Benoit La Salle: David, you had it.
None: Okay.
David Lalonde: Sorry?
None: You bet.
Benoit La Salle: Go ahead.
None: Sorry.
David Lalonde: Yeah. The geophysical survey right now is about 70% complete. We like the results so much that we are planning to extend it. The idea of the survey is we wanted to cover the new license, of course, but took the chance as well to take a different technology that will allow us to measure conductivity all the way down to 1 kilometer of depth, and resistivity to 2,000 meters or 2 kilometers of depth. When we had the original survey at Boumadine, the depth coverage was about 600 meters, if you can recall. The idea is to look for deep roots of the system, eventually start looking for porphyry-type mineralization. Of course, to identify any massive sulfides that we could find in the new areas. Hopefully the survey will be completed in May, with final reports and data process probably late H1.
None: Yes.
None: Yes.
None: The Geophysical survey right now is about 70% complete.
None: We like the results so much that we are planning to extend it.
None: The idea.
None: Surveys, we wanted to cover the new license of course.
None: But took the chance as well to take a different technology that will allow us to naturally conductivity, all the way down to one kilometer of debt.
None: And the resistance.
None: Two 2000 meters with two kilometer of depth.
None: We are the original survey Andrew Madden the depth coverage was about 600 meters. If you can recall.
None: The idea is to look for deep.
Routes of the system eventually starts looking for porphyry type mineralization.
None: And of course to identify any massive sulfides that we could find in the new areas.
None: So hopefully the survey will be completed in May.
None: With final reports and that's a process probably late H one.
David Lalonde: As soon as we have nice colorful maps, I'm sure we'll have lots of pressure to feed the market with good news. We're quite confident about it.
None: And as soon as we have a call. It a nice colorful mob side I'm sure we'll have lots of pressure to feed the market with good news.
None: And we are quite confident about them.
Don DeMarco: Okay. That's all from me. Good luck with the ramp-up and commissioning of Zgounder.
None: Okay.
None: That's all for me good luck with the.
None: The ramp up of commissioning of <unk>.
None: <unk>.
Benoit La Salle: Thanks, Don.
None: Thanks, Don.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Justin Chan from SCP Resource Finance.
Don Demarco: Thank you one moment far next question.
Don Demarco: Our next question comes from the line of Justin Chan from SCP resource Finance.
Justin Chan: Hi guys. Congratulations. Believe it or not, we have a couple more questions. Maybe just the first one on Boumadine and the exploration budget. In the past, you've expanded budgets later in the year. I guess how much potential is there for that? Then, in terms of the timeline from the first resource onward, should we expect a scoping study or would the next update be another resource update before you start wrapping economics on it?
Justin Chan: Hi, guys congratulation as flavor at all we have we have a couple.
Justin Chan: All of our questions.
Justin Chan: And maybe just the first one on coumadin and the exploration budget.
Justin Chan: In the past you've expanded budgets later in the year I guess, how much potentially back for that.
Justin Chan: And then in terms of the timeline from the first resource onward, I should we expect a scoping study are or what the next update would be another resource update before you start wrapping economics on it.
Benoit La Salle: Yeah. On the exploration budget, I think at Boumadine, we've taken quite a big bite here to move from 76,000 to 120,000 meters. A lot of it is greenfield as well, we're going to have to see what those results of that greenfield exploration gives us, and that, like in the past, has driven what we'll do in the future. David already mentioned the results of our regional geophysics has been exciting, and we've already extended that a little bit. At Zgounder, again, I think there's quite a few targets, especially in the regional, that are interesting, and that'll really depend on what we find and follow-ups on that. In the past, we've had a lot of targets established, and there was a lot of things that we wanted to do. Now last year, the team generated several targets.
None: Yeah, so on the exploration budget.
None: I think that momentum that we've taken in quite a bit by tier two move from 76000 to 120000 meters.
None: A lot of it is greenfield as well and so we're going to have to see we're going to have to see kind of what those results of that.
None: That greenfield exploration gives us in that like like in the past has driven what we'll do in the future David already mentioned the results of our regional geopolitics has been exciting and we've already extended out a little bit.
None: At <unk>.
None: Again, I think there is quite a few targets, especially in the regional.
None: That are interesting and that will really depend on what we find and follow ups on that so it's because it is such a really like in the past. We've had we've had a lot of targets kind of established and that was one of the things that we wanted to do an hour and now were in last year. The team generated several targets we've budgeted to two.
Benoit La Salle: We've budgeted to follow on of those targets. Now it really depends on results. It's hard to project forward, are we going to modify it or not? The results will dictate that. We have the capital if we wanted to extend it. To extend it, the results have to be there. On what's next for Boumadine after the resource estimate, I think a lot of that will be driven. We've done some work where we've budgeted some engineering work this year. It's still a new project. We haven't been working on it for a very long time. Hopefully there's still a lot of nice surprises associated to Boumadine. We think there are. I think we'll do a scoping study when we're confident that the resource we have is a good representation of what Boumadine is as a project.
None: Follow on of those targets and then now it really depends on results. So it's hard to say at the project forward. Okay. How are we going to modify it or not the results will dictate that.
None: The capital if we wanted to extend it to two extended the results have to be there.
None: What's next for <unk> after the the the resource estimate.
None: Again, I think a lot of that will be driven we've done some work where we budgeted some some some engineering work this year.
None: But it is so new project, we haven't been working on it for a very long time so.
Hopefully there is still a lot of nice surprises associated to <unk>, we think there are and so.
None: I think we will do a scoping study when we're confident that the resource. We have is a good representation of what <unk> is is a project so.
Benoit La Salle: It's an ongoing thing. I think Raphaël's team on the engineering side is following closely to make sure that when we want to do a scoping study, a lot of the field work that needs to be done, which is the long part of doing the study, is executed. We have to make sure that the deposit and the resources that we present are a good representation of the project.
None: It's an ongoing it's an ongoing thing I think.
None: Rafael team on the engineering side is following closely.
None: To make sure that when we wanted to do a scoping study.
None: A lot of field work that needs to be done which is the long part of doing the study is executed.
None: But we have to make sure that the deposits and the resources that we that we present are a good representation of the project.
Justin Chan: Okay, got you. Probably, just reading between the lines, it's probably that scoping study would be less likely this year, more likely next year, given that you have a lot of results to come in that could determine whether or not you think the resource is where it is or it can be grown.
None: Okay got you so probably.
None: Just reading between the lines is probably that scoping study would be less likely this year more likely next year given that you have a lot of.
None: A lot of results to come and I couldnt determine.
None: Whether or not you think the resources is where it is or can be Brian.
Benoit La Salle: It seems like a reasonable hypothesis to me, Justin.
None: It seems like a reasonable.
None: It seems like a reasonable hypothesis to media Justin.
Justin Chan: Okay, great. Thanks. Then, just a question on the mine sequence at Zgounder. If the ramp-up is going quite well and the recoveries are where you want them, I know, Raphaël, you mentioned that the open pit will be contributing high grade first once you go through low grade stockpiles, I'm just curious on the underground sequence. Is there much high grade planned this year in the mine sequence that you could blend in, if you're happy with how the plant is performing, or is that mostly coming in maybe next year?
Justin Chan: Okay, great. Thanks, and then on.
None: Just a question on the mine sequence.
None: <unk>.
If the ramp up is going quite well and the recoveries are where you want them.
None: Well I know Ralph you mentioned that the open pit will be contributing augment before.
None: First one once you go through a low grade stockpiles, but I'm just curious on the underground sequence.
None: Do you have is there much high grade plan this year and the mine sequence.
None: That you could blend it.
None: If the if you're happy with how the client is performing or is that mostly coming in maybe next year.
Raphaël Beaudoin: I think in 2024, the high grade of the mill is certainly not the priority. As we've been going down the level, what we want is also to switch our mining method to include some long hole stoping. I think once we'll be ready with long hole stope, we will attack some of those high grade pillars in the lower levels to 1925 and 1900. That being said, because we worked on the infrastructure for quite a while, we have done many stope access over the last two or three months. We do have a stockpile management plan. We do stockpile the high grade, especially of the open pit. The rest has been fed more or less to the mill over the last couple of years of what we've been mining.
None: I think I think in 2012 reported a higher grade of the mill is certainly not their priority.
None: We've been going down the level.
None: We wanted also to switch our mining methods to include some long haul stopes and I think once we will be ready with long haul stope, who will attack some of those high grade pillars.
None: Low and the lowest level to $19 25, and <unk> hundred.
None: That being said.
None: Because we work on the infrastructure for quite a while we have done many stope access over the last over the last two or three months.
None: So I mean, we do have a stockpile management plan.
None: We do stockpile to high grade.
None: Specially if the open pit the rep has been more or less to the mail rollout of all years of what we've been mined so right now the.
Raphaël Beaudoin: Right now, the focus of the underground mining team is to prepare a stope access, and we will mine those high-grade stopes as the mill needs them and as we are ready for the stopes that require long hole stoping.
None: The focus of the underground mining team is to prepare a stope access and we will mine both high grade stopes as we are as the mill need them and also we already put us towards that require long haul long haul stoping.
Justin Chan: Okay, thanks. That's really good color. Appreciate it.
None: Okay. Thanks, that's very good color I appreciate it.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Steven Souk from Stifel.
None: Thank you.
None: One moment for our next question.
None: Our next question comes from the line of Stephen <unk> from Stifel.
Steven Souk: Thanks, operator. Hi, Aya Gold & Silver team. Congrats on a great 2023. Just a few quick ones from me here. First one is around reconciliation of the underground, specifically. How has it been reconciling versus your, call it, year look ahead porphyry ore body geologic model? Again, just focused on the grade guidance here for 2024. Wondering if there's any longer term implications or if that's just a function of the ramp up. Thanks.
Stephen: Thanks, Operator, hi been one team congrats on a great 2023, just a few quick ones for me here.
Stephen: First one is around a reconciliation of the underground specifically I know I know, it's a difficult kind of party ore body.
Stephen: But how has it been reconciling versus your call. It year ahead. You look ahead geologic model again, just kind of focused on the grade guidance here for 2024 and wondering if there's any any kind of longer term implications are fastest a function of the ramp up thanks.
Raphaël Beaudoin: Reconciliation at Goudaou is an ongoing battle, an ongoing technical fun. I don't know how else to put it. What we see at Goudaou is historical stopes, they always give more than we hope for, which is very good. On the new stopes, when we do things right, we tend to get things right. Now it's excessively variable. We've seen the quarters we got. We got quarters in the upper 300, we got quarters in the lower 200, and the long-term trend is somewhere in between. What we see at Goudaou is when we take a whole quarter and we reconcile it, we're not far off on the grade side, but stope by stope, it can vary five times the grade or 20% of the grade when we look on a stope by stope basis.
Stephen: Okay.
Stephen: So reconciliation I was gone by of our ongoing ongoing battle and ongoing technical.
Stephen: Sure.
Stephen: Technical fund I don't know how else to put it.
Stephen: <unk> historical stopes.
Stephen: <unk> give more than we than we hope for so which is very good on the new stopes when do we do things right, we tend to get things right.
Stephen: No.
Stephen: I simply variable I mean, we've seen the quarters, we got we got quarters and the upper 300, we've got quarters in the lower 200, and the long term trend is somewhere in between.
Stephen: What we said goodbye, everyone would take a whole quarter and we reconcile it we're not far off on the grade side, but stope by stope. It can vary like five times, the grade or 20% of the grade when we look on a store by store basis.
Raphaël Beaudoin: We always have more than 20 stopes operating at the same time as Zgounder, out of which sometimes 80% of our production comes from two or three stopes. Yeah, if you miss one of them, grade goes sideways very fast, on the good side sometimes, and obviously on the bad side sometimes. The key here of reconciliation of Zgounder is to have many stopes open, to make sure to scan everything right, and to make sure to be ahead in definition. That's what we've been working on. What I can say in a nutshell on reconciliation is when we look at the big scheme of things at Zgounder, things do reconcile not too bad. When we go stope by stope, sometimes it's a mess.
We have more than 20 stopes, that's operating at the same farmers wounds are out of which sometimes 80% of our production comes from two or three stopes.
Stephen: Yes, if you Miss one of them Great goes sideways very fast on the good side, sometimes and obviously on the bulk side, sometimes so the key here is the reconciliation of gondola is to have many stopes open to make sure to scan everything right and to make sure. It can be a hadn't definition, that's what we've been working on so what I.
Stephen: What I can say in a nutshell on reconciliation is when we look at the Big scheme of thing of Goodbye things do reconcile not too bad when we go stope by stope, sometimes sometimes it's.
Stephen: Yes, sometimes it.
Raphaël Beaudoin: The key to solve that is to prepare the stope access a long time before we need them, and this is what we've been doing last three months. What is comforting, though, is when we look at it quarter by quarter and we put the stopes together, we're not too far off.
Stephen: So the.
The key the key to solve that is to have is to prepare to stope access long long long time before we need them and this is what we've been doing last three months.
Stephen: And what is copper thing, though is when we look at it.
Stephen: Quarter by quarter, and we put the folks together.
Steven Souk: Yeah, it makes sense. I know it makes it tough to plan around, but good to hear that overall, shaking out where expected in the big picture. Appreciate that. The last one from me here is just on the Boumadine resource. I think this was originally guided to come out mid-February. Can you provide any more color on the delay here now that we're looking at mid-April for potential release?
Stephen: We're not too far off.
None: Yes, it makes sense around what makes it tough to plan around for good to hear that overall kind of shaking out.
None: Were expected in the Big picture.
None: I appreciate that.
None: And the last one for me here is just on the Boumediene resource I think this was originally kind of guided to come out mid February. So can you provide any more color on kind of the delay here now that we're looking at kind of mid April for a potential release.
Benoit La Salle: Steven, when we decided to push it out a little bit, it was really a question of making sure we were able to negotiate permits around our 2 mining permits, or 1 mining permit. Now it's 1 permit. You saw that we've added probably close to 10 permits so far, 4 last year, I think 6 this year. We're in negotiation on probably 5 or 6 more. We wanted to do this because we think that once we put out the resource, it'll be a bit more difficult. We are very happy where we are right now. We have targets or permits that we target and we want to have. That being said, the geophysics that we're doing covers all the ground that we want to have and that we have. We're in a very good position.
None: Yes, David.
None: And we decided to push that out a little bit. It was really a question of making sure we were able to negotiate permits around our <unk>.
None: Mining permits are one mining permit now its one permit.
None: <unk>.
None: So you saw that we've added probably close to 10 permits so far for last year I think six this year, we're in negotiation on probably five or six more and we wanted to do this because we think that once we put up the resource there'll be a bit more difficult. So we are very happy where we are.
None: Right now we are we have targets or permits that we target and we want that.
None: And.
None: But that being said.
The geophysics that we're doing covers all of the ground that we want to have and that we have so we're in a very good position, we have good information and and it was the reason for pushing it out a bit and we're almost there now.
Benoit La Salle: We have good information, hence it was the reason for pushing it out a bit. We're almost there now. The early April, probably the second week of April, we'll be done acquiring what we want to acquire. Others may not be done, we will wait for them for a little bit later. The resource will be coming out as we explain on that main structure, 4.2km long, and that will be the resource that we will present.
None: The early April probably the second week of April we will be.
None: <unk> Macquarie we want.
None: Others may not be done but.
None: We will wait for them.
None: For a little bit later and in the resource will be coming out on the as.
None: As we are.
None: As we explained on that main structure for two kilometer long and that will be the resource that we will present.
Steven Souk: Perfect. Appreciate it. That's all from me, guys. Thanks again.
Perfect I appreciate it that's that's all from me guys. Thanks again.
Operator: Thank you. At this time, I would now like to turn the conference back over to Benoit La Salle, CEO and President, for closing remarks.
None: Thank you.
This time I would now like to turn the conference back over to Ben One Lasalle CEO and president for closing remarks.
Benoit La Salle: Thank you very much. Thank you all of you for assisting today. 2023 was a stellar year. It was a very good year production-wise, construction, exploration, ESG. We had a very good year. We will continue on this trend. I think 2024 will also be a very good year for Aya. I know some of you were looking at a bit of a higher guidance on production, but you know we've always been very conservative, and that's something we maintain and we will maintain. It's discipline. Raphaël is going to site next week for a couple of weeks or a couple of months as we're getting into commissioning. We're confident that this will continue to deliver. We're certainly confident that the geology will continue to deliver at Zgounder and at Boumadine. We will follow with our ESG program as well, which is extremely important.
Speaker Change: Thank you very much. Thank you all of you for assisting today.
None: 2023 was a stellar year it was a very very good year production wise construction.
None: Exploration ESG, we had a very very good year.
None: The.
None: We will continue.
None: On this trend I think 2024 will also be a very very good year for aes.
None: I know some of you were looking at.
None: Bit of a higher guidance on production, but you know we've always been very conservative and Thats, something we will maintain and we will maintain.
None: It's discipline.
None: The FAA is going to site next week for <unk>.
None: Couple of weeks, so a couple of months as we're getting into commissioning so it's.
None: We're confident that this will continue to deliver we're certainly confident that the geology will continue to deliver as good and at.
None: <unk> and <unk>.
And we will follow with the.
None: Our ESG program as well, which is extremely important so thank you for being there and thank you for following us and we are always available for comments and discussions and then we really will probably be talking to you in the next few weeks.
Benoit La Salle: Thank you for being there. Thank you for following us, and we are always available for comments and discussions. We really will probably be talking to you in the next few weeks on a Boumadine update call with you separately or maybe some of you we'll do it all together, but it's coming in the next few weeks. Thank you very much. Again, we had a great 2023. The team is motivated, and we're continuing on the same trajectory for 2024.
None: We made an update.
None: Call with you separately or maybe some of you will do it altogether, but it will it's coming in the next few weeks. So thank you very much and again, we had a great 2023. The team is motivated and we're continuing on the same.
None: <unk> trajectory for 2024.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
None: This concludes today's conference call. Thank you for participating you may now disconnect.
None: Okay.
None: [music].
None: Hum.
None: Okay.
