The president and CEO of Aya Gold & Silver Inc. says the Montreal-based company, which operates primarily in Morocco, had a strong first quarter as it ramped up production at a newly expanded silver mine.
“We have a very unique deposit which is pure, native silver,” Benoit La Salle told BNN Bloomberg in a Wednesday interview, referring to the company’s Zgounder mine project.
“We’ve been in construction now for the past two years… we declared commercial production on Dec. 29, so think of it like a 747 on the runway, and Q1 was our ramp-up quarter, so we were starting all the systems and all the equipment, and we had a very, very strong quarter.”
The company said in its first quarter earnings release on Tuesday that it achieved record quarterly silver production of over one million ounces, a 192 per cent increase compared to the same period last year. Aya also brought in a record US$33.8 million in revenue, the release said.
“Until we get to cruising speed, which is coming in Q3 or Q4 where our production is going to be higher and our costs are going to be lower, even in that first quarter of ramp up, we did generate $7 million of profit, $8 million of free cash flow, and that’s just going to improve,” La Salle said.
He added that by the fourth quarter of this year, Aya hopes to be producing around 1.5 million ounces of silver from the Zgounder mine quarterly, working out to between six million and 6.5 million ounces produced each year.
“After that it’ll be tweaking, adjusting the plant, and just increasing production and reducing costs because cash flow is the name here,” La Salle said.
La Salle also praised Morocco for its mining-friendly attitude, with low costs and quick permitting time, which he said has been a big tailwind for the company.
“The first criteria for investing in a mining company is jurisdiction… especially in a growing commodity price environment,” he said.
“And Morocco, it’s in the top five jurisdictions in the world; political stability, security, very good infrastructure, we have power at site, green energy, solar and wind… so the jurisdiction as a mining jurisdiction is one of the best.”
The “key element” in first assessing whether the country was a good place to set up a mining operation was time to permit, La Salle explained.
“How many years do you need to get your mining permit? We know in North America it can be between seven and 10 years, sometimes up to 20 years,” he said. “In Morocco you count that in months.”
