On Thursday, Aya Gold & Silver (TSX:AYA) discussed third-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Aya Gold & Silver reported record Q3 2026 financial performance, with revenues up 90% year over year to $103 million and net income up 182% to $35 million.
The company achieved significant operational milestones, including record production at Zgounder and Boumadine, while reducing cash costs despite increased oil prices.
Aya Gold & Silver increased its 2026 production guidance for Zgounder, reflecting strong execution and operational efficiencies.
Strategically, the company is advancing its Boumadine project through extensive drilling and feasibility studies and expanding its footprint in Morocco through acquisitions.
Management highlighted a strong balance sheet with a cash position of $184 million and discussed ongoing cost management and production optimization efforts.
Full Transcript
OPERATOR
Good morning, everyone. I’ll now turn the call over to Elizabeth Hamoi, Aya Gold & Silver’s Director of Corporate and Financial Communications. Please go ahead.
Elizabeth Hamoi (Director of Corporate and Financial Communications)
Thank you, Operator. And welcome to Aya’s third quarter 2026 earnings conference call. Joining us today are Benoit La Salle, President and CEO; Hugo Landry Tolczak, Chief Financial Officer; Elias Elias, Chief Legal and Sustainability Officer; Rafael Baudoin, Executive Vice President of Operations; and David Lalonde, Executive Vice President of Exploration. We will refer to a presentation available via the webcast and on our website as we will be making forward-looking statements during the call. Please refer to the cautionary notes in the presentation, news release, and MD&A, as well as the risk factors in our annual information form. Technical information in the presentation has been reviewed and approved by Rafael Baudoin, Executive Vice President of Operations, and David Lalonde, Executive Vice President of Exploration, both qualified persons as defined under National Instrument 43-101 Standards of Disclosure for Mineral Projects.
And following the presentation we will have a Q&A session. I would now like to turn the call over to Benoit La Salle. Benoit.
Benoit La Salle (President and Chief Executive Officer)
Elizabeth, thank you. Welcome, everybody, to our Q3 2026 call. Q3 was another record quarter for Aya Gold & Silver, with Zgounder and the Boumadine reclaim operation each achieving the highest production to date. Our operational initiatives are paying off, delivering more scale, lower cash costs, and solid cash flow in the quarter. We’ve also provided you with an updated PEA on our Boumadine project showing stronger economics and a longer mine life.
Further, we also presented two acquisitions where we’ve added new permits to the portfolio. So let me take you to the PowerPoint presentation that you have. Slide number five, as we do every quarter, just to review quickly the KPIs and the operation for the third quarter. If you go to slide number five, you see that we had an excellent quarter where revenues are up 90% year over year from $54 million last year to $103 million this quarter in 2026. Net income went from $12 million last year to $35 million, an increase of 182%. Operating cash flow went from $22 million last year up to $48 million this year, an increase of 115%.
On the right-hand side you see the production profile: Q3 last year we were at 1.3 million; Q2 of 2026 we were at 1.7 million; and in Q3, previously announced, we are at 2.03 million ounces for the quarter. So the production is up 51% year over year or 11% at Zgounder and 21% on a consolidated production profile. So a very strong quarter financially, and we will come to that. But, as I indicated at the beginning, we are managing costs and costs are coming down regardless of the increase in oil.
Currently our costs for Q3 were lower than our costs in Q2. Moving to slide page 6. This is the following slide of key KPIs that we’ve been following from the beginning. From the ramp up of the mine in 2025, we’ve been following the mining tonnage and we’ve also been following the milling rate. So mining tonnage were steady currently, as you can see, at 4,700 tonnes a day. And coming from the open pit, the open pit had a record performance this quarter with 3,500 tonnes per day. That is really a record performance for the quarter.
And we do have a lot of leeway because we now have a run-of-mine stockpile of 435,000 tonnes. So that is 100 days of processing. On the right-hand side you see the milling rate: in Q3 it was 4,100 tonnes a day. You know that our objective is to go towards 4,200–4,300 tonnes per day. But for Q3 of 2026 we were at 4,100 tonnes a day average. So when you have a stockpile of 435,000 tonnes, that says that we have 100 days of milling feed already mined beside the crusher and ready to be processed.
So this is a beautiful inventory that is there, which is a security buffer. Not that we expect anything, but we know that next year we’ll have to do some underground development. There’s a pushback to be done for the open pit. But, that being said, we have a full supply of ore available that’s already been pre-mined. On top of that, we have 1 million tonnes of lower-grade material which is just on standby. Going to slide number seven. Always very interesting is the average selling price. So at Zgounder, where we produced 1.5 million, you see that the average selling price for Q3 was in line with Q2 at $69.32. We all know that towards the end of Q3 it was a little bit lower. It was better at the beginning of Q3, but we did average for Zgounder an average selling price of $69.32. And we were able to reduce our costs to $17.46 cash cost. You know that for an AISC you add about $3.
But we’re extremely pleased with all the initiatives of cost reduction. And really, as we are, as I always say, at cruising speed now at Zgounder, if you go back to the NI 43-101 report, Zgounder will be producing approximately 6 million ounces of silver per year for the next 11 years. And the life-of-mine cash cost is $16.26. So, you know, we’re still above life-of-mine cash cost. We expected that because we know that the cash cost will be reducing towards the later years.
So we have a strong operation at Zgounder. It’s running extremely well. We are working on cost management and cost reduction. While we know that on a going-forward basis, we are at 6 million ounces per year of silver production. Going to Slide 8, the Boumadine pyrite reclaim operation. You recall that we were looking at about 2 million ounces of production over two years: last quarter of 2025, all of 2026, and probably three quarters in 2027. We had to move 240,000 tonnes of ore that was mineralized. And Q3 was an excellent quarter. Q1, Q2 were a little bit lower because of weather-related incidents. But Q3 was an excellent quarter. And we did move 50,000 tonnes, up 191% quarter over quarter.
This is kind of now a run rate assuming good weather. Obviously, we also have utilized a bulk shipment to ship the tailings to Asia. And that worked very, very well. And so we are on track to meet our guidance. On the right-hand side, you see that the silver equivalent production for the quarter was 536,000 ounces. Sales are at 492,000 ounces. So, of course, there’s always a little bit of lag between the shipment and the sale. But an extremely profitable operation.
The realized price per ounce of silver equivalent is $34 because we do get a payability of 50%. Don’t forget those are tailings with nasty elements, and we’re shipping them to Asia to a smelter. So the payability is 50%. You recall that the payability at Boumadine when we will be in the full operation with the pyrite is more like 83%. But for the tailings the payability is 50%. And the cash cost is around $10. So an extremely profitable operation as we’re cleaning the site, because these tailings are right over one of the structures that we will be mining starting in 2030.
On slide number nine, you see over the year of 2026 how cash has changed. We started the year with a cash position of $136 million. We’re finishing the quarter, because it’s the third quarter, with a cash position of $184 million. And that does not take into account the restricted cash that we have with EBRD of $16 million. But you see the waterfall of where the money came from. We generated $163 million of cash flow, which also included $54 million from Q3.
Then we had some working capital changes. We have investment, which we all know is in exploration. A little bit of sustaining capex, but mainly exploration of Boumadine. And financing is the repayment of EBRD, which we are accelerating—the repayment of EBRD. We paid down $15 million in Q2 2026. And so we have now a net position of $184 million. We have a very strong balance sheet. We have very strong ratios. When you look at our balance sheet, total assets of about $700 million and equity of $500 million.
So it’s a very pristine balance sheet, strong to be positioned to develop Boumadine with our own liquidity. The year to date on slide number 10 is very interesting. You see the operational performance. We have a consolidated production of 5.2 million ounces and a consolidated cash cost of $16.82, which is excellent. Production is completely aligned with our guidance. Cash cost is a little bit lower than our guidance. So we are aligned with what was presented to you at the beginning of the year. Zgounder is at 4.3 million currently and $17.97 on its cash cost.
And Boumadine is at 0.9. You know that our guidance was 1 million. So we’re at 0.91 million. So we’re very close, with a cash cost of $10.56. So year-to-date revenue, we’re looking at $317 million, where you have a net income after tax of $119 million. So it’s an extremely good business when your net income after tax is one third, plus or minus—so it’s a 33% net profit margin. Extremely, extremely good business. And operating cash flow for the first nine months at $167 million.
So it’s extremely strong. And I need to point out to you something which you saw when you read the press release: at the end of the quarter we had in inventory 383,000 ounces of silver that was ready to be shipped that was not yet shipped for processing in Switzerland. It just got shipped immediately thereafter. And so it’s a very small time difference. But those 383,000 of finished goods have not been accounted for in revenue. They’re at cost on the balance sheet.
So it’s something that was sold immediately thereafter. It was not that we were holding on. It was a matter of shipment and some changes in the procedures. And so it’s something that got done at the beginning of Q4. So obviously you can now imagine that the revenue for Q3 were excellent. But now it was sold in Q4. So you can expect Q4 to be a regular quarter and 300,000 ounces of production that came from Q3 that is now—or was—sold in Q4. And coming to the guidance. Well, we know where we are today. We know what we’re going to be doing in the fourth quarter. So we’ve upgraded our guidance and we are increasing the lower end of the guidance. At Zgounder, at the beginning of the year, we told you that the guidance should be between 5.2 and 5.8. Today we’re extremely comfortable to say that now the guidance is between 5.6 and 5.8. We are really progressing very well to be right in the upper part of our guidance.
And that’s why we’ve made a change to the guidance at Zgounder. At Boumadine, we’re leaving it at 1 million, though we’re currently at 900,000 ounces. We’re leaving it at 1 million. And the same thing with the cash cost—we’re not upgrading that, though we are right on guidance for Boumadine and a little bit below guidance for Zgounder, but we’re not upgrading that. The sustaining growth is similar and the exploration expenditure program is similar.
So you have now a new guidance which is a little bit tighter due to the fact that we’re in the 11th month of production. So we have a much tighter guidance between 6.6 and 6.8 million ounces for the year 2026. So, coming to slide number 10, what are our strategic priorities at the moment? Well, in the recent press release we indicated to you that we have completed the 2026 draft drill program at Boumadine. We’ve drilled in 10 months—and I have to say congratulations to the team that has done this—we’ve drilled 181,000 meters of a 180,000-meter program. And we’ve done that in less than 10 months because we didn’t start in January precisely on day one.
So it’s been a fantastic accomplishment. Now we’re not slowing down the drilling. We’re keeping the 16 drills—I think there’s even another one coming—so we’re keeping the drills turning and we will probably finish the year approaching 220,000 meters of drilling at Boumadine. You know that the Boumadine program was planned over two years at 360,000 meters, which is all the infill drilling of the three main zones that we know that are included in the PEA.
And so those three main zones are being infill drilled so that we can move the resource from inferred to M&I, so that in the feasibility study that we’re working on, we do have M&I in the feasibility study. So that is ongoing. Furthermore, in the feasibility study, things are progressing extremely well. The water pipeline—where it’s going to go—is all done. We’re working now on finishing the detail. Same thing with the power line—that’s done and we are working with the government on the construction of this power line. We have to finish the detailed engineering. Same thing with the water pipeline. The power line is ongoing. We have secured the land for the village and the buildings that we’re going to be building.
So all of that is done and progressing. We have identified where the tailings dam is going to be. So that’s also something that’s being done. And at the beginning of next year, we will be updating you on detailed engineering, selection of contractor for open pit mining, selection of EPC contractor, and all of that. So it is ongoing, the feasibility study. Every chapter is ongoing and it’s progressing as quickly as we can. I know often in meetings when we present to you, shareholders or to our analysts say, how can you accelerate?
Can you go faster? When can you start ordering the long-lead items? We are at maximum speed. There’s a sequence of finishing each chapter in the feasibility study, getting detailed engineering done so we have the proper sizing of the equipment. You know that the PEA was done on 8,000 tonnes per day. The feasibility is being done on 10,000 tonnes per day. So we will be increasing the capacity of the plant. And, as we did at Zgounder when we did a nameplate of 2,700, you know that today we’re operating at 4,100, hopefully going to 4,300.
Our construction philosophy is going to be the same. It’s a much bigger project. But, you know, we are always building thinking that we could get bigger. At Zgounder, the priorities are executing the plan. We have the NI 43-101 plan that’s been filed and it’s just now increasing the throughput with a tertiary crusher that is being installed and will be finished by Q1 of next year. The open pit development, the pushback, the underground development—all of that is being done. We’ve completed the work on our tailings dam to increase its capacity. So Zgounder is an aircraft at 35,000 ft—it’s cruising, it’s minimizing its cost, it’s optimizing production, and going extremely, extremely well.
We’re also adding a lot of ground at Zgounder. We’re using also AI on geological interpretation and we’re also adding a lot of ground at Boumadine. So all of that is the two main items where we’re working currently: really the optimization of Zgounder and the development of Boumadine. Now talking of Boumadine, we updated the PEA. We’ve presented that to you over and over again. Slide 13 summarizes it. It’s a Tier 1 asset. The PEA takes into account only three years of drilling. Yes, we have drilled 180,000 meters, but that’s not in the PEA. The drilling that we’ve done so far is going to come next year when we do the feasibility study. So the PEA is done on three years of drilling. It’s a Tier 1 asset. It’s got fantastic economics because it’s a low capex.
We can build this project for less than $500 million. It has a payback which is extremely quick. It’s low risk because it’s very simple: three payable concentrates, one zinc, one lead, and one pyrite. You recall it’s got 43% sulfur in the ore, which is what is needed for sulfuric acid. So it’s a low-risk standalone model. We can fund this ourselves through cash flow. And we do have debt that is available with our bank EBRD, with our off-takers. So money is available to complete the funding if there is a funding gap, and that is based on the price of silver going forward over the next three years.
Proven track record in the region: we built Zgounder on time and on budget. Zgounder is a showcase. It’s a beautiful success. And the last item, which we all know can be crucial, is permitting. And we have the permit in hand for this project. This is why the investment decision is made—this is why before the feasibility is done—because we have the permit, we have the money, we have the geology, we have the mine plan. Now we’re heading into detailed engineering, but we are going ahead with this project.
On slide 14, you have the key financial elements, with an after-tax NPV at a 5% discount rate of $3.5 billion and an after-tax IRR of 93%, which is extremely rare in our industry. Knowing that this is only three years of drilling, this is the beginning. This is three years of drilling. You know, the average time to start the construction of a project is normally like 15 years. In a polymetallic project, after three years we’re starting construction; after seven years it will be in operation, which normally is 20 years. So you have very strong economics, very low initial capex, fantastic capital efficiency ratio of 7.6. And that is at the base case. It will produce, for the first five years, 350,000 ounces of gold equivalent. It has a 14-year mine life and will generate close to $5 billion of free cash.
When you look at slide 15, you have it at a different scenario. The break-even of that project is $1,700 gold and $24 silver. At the base case we saw the results: it’s extremely strong. And even if you go down 25% to $2,600 gold and $38 silver, you still have 57% IRR. And if you go up 25% to $4,400 gold and $67 silver, then your IRR is 128%. That was the spot price at the time when we did this study. So you see, it’s a very unique, very robust project with fantastic economics to be built in an area that, on an ESG front, is extremely hospitable, easy to build, no population to move.
So it’s quite straightforward. We are permitted and in-country you have the manpower to do this. And we’re going to be using many of the same subcontractors that we used before. And one thing we’ve been saying on page 16 is we will be expanding our footprint in Morocco. We believe, and I believe, that Morocco is a Tier 1 jurisdiction for mining. It’s extremely hospitable. The mining code is very good. The government is supporting the mining sector. You have employees that are available. You have power from the grid. You have water from either underground water or from the local communities. It is infrastructure. I joke often saying it’s a bit better than Canada.
You have bullet trains, you have great international airports. And so we are increasing our footprint. So we have made acquisitions where we bought some permits from families that had those for years, did a little bit of work, but did not have enough financial strength to do more work and also did not have all the tools that we have with technology and satellite imaging and spectral geophysics, AI. So all of that now we’re applying to all these new permits: Guelmim-Zagora, Agadir, Melul, Tiz.
And these are new permits. We’ve announced last week that Azegour, we sold it to an existing company called Sama Resources, whereby we will own 19% of Sama once the transaction closes. So we are managing our portfolio extremely well. We sold Azegour because it’s a copper and tungsten—something we do not want to get in. But we’re very happy to have a subsidiary now at 19% that will be a copper-tungsten subsidiary. So we’re extremely happy with this transaction and we are continuing to add to the portfolio.
We will be announcing more permits in the coming few weeks and few months. We are continuing to add to the portfolio because people are now realizing that Morocco is a Tier 1 jurisdiction. It has Tier 1 geology, it has Tier 1 employees, Tier 1 mining code. And therefore, in this world of mining with rare earth and energy metals, it’s definitely a place to be. So this concludes my presentation. I will now turn it over to the operator for the Q&A period. Thank you.
OPERATOR
Thank you. At this time, we’ll conduct the question-and-answer session. As a reminder, to ask a question, you’ll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question comes from the line of Donald Markham, National Bank. Your line is now open.
Don Markham (Analyst at National Bank)
Thank you, operator, and good morning, Benoit. Team Benoit, thanks for all the additional color on the quarter. You know, looking at the sequencing that you mentioned, how much of that 400 plus thousand ounces on the stockpile do you expect to draw on in ’27? And, you know, given this, should investors expect 2027 silver production to remain near the current life average, or could this sequencing create a temporary step down?
Benoit La Salle (President and Chief Executive Officer)
Thank you, Don. Thank you for your comment. Don, we have the whole team here. We’re in Morocco. We had our Q3 board meeting in Casablanca, and Rafael is with us. And as you know, Rafael oversees the operation with the team here in Morocco, is our Executive VP, Operations. I would turn it over to you for Don’s question on the stockpile.
Rafael Baudouin (Executive Vice President, Operations)
Yes, happy to talk about it. We have over 400,000 tons of ore already in stock. The plan for 2027 is to keep the stockpile stable. It might go down momentarily to go back up again. The idea is to keep it stable throughout the year. We have a pushback in the open pit that will lower the ore mining rate through several months, about three months, and the stockpile will diminish through that time, which is okay. That’s why we have it well in place. But throughout the year, we don’t expect the stockpile to go down, really.
Don Markham (Analyst at National Bank)
Okay, okay. And then in follow up, then, do you expect production in 2027 to remain consistent with life-of-mine averages, or would it be—given that the stockpile grade’s a little bit lower—do you expect just a temporary step down in ’27 as you work through this sequencing?
Benoit La Salle (President and Chief Executive Officer)
No, we expect production to remain as current state. We are on track to deliver essentially the 43-101 we published last year, and I would defer to that. We’re executing it quite well. Things are going to plan, and I don’t foresee a drop in production in 2027.
Don Markham (Analyst at National Bank)
Okay, great. And then just final question: you know, costs have been very strong year to date, you know, well below the guidance range. Is there anything in Q4—maybe stripping, inventory, maintenance items—that could raise the unit cost quarter to quarter versus Q3, or, you know, what we’ve seen year to date?
Rafael Baudouin (Executive Vice President, Operations)
So our stripping ratio—the low cost throughout the year—has been partially driven by the quite low stripping ratio that we had, around 11, throughout the last quarter of this year. We have a planned increase in the stripping to around 14. So it might bring costs slightly higher for the fourth quarter, but not significantly proportionally to the slight increase in stripping for the last quarter.
Don Markham (Analyst at National Bank)
Okay, that’s helpful. That’s all for me. Good luck the rest of the year.
Benoit La Salle (President and Chief Executive Officer)
Thank you, Don. And yeah, thanks. For the rest of the year is a month and a half, so we’re ready.
OPERATOR
Thank you. One moment for our next question. Again, as a reminder, to ask a question, you’ll need to press star 11 on your telephone. Our next question comes from the line of Omit Singh of SCP Resource Finance. Your line is now open.
Omit Singh (Analyst at SCP Resource Finance)
Hi there. Thanks, Benoit, just for sharing about the quarter. I just had a quick question on Zgounder costs. You spoke to it a little bit earlier. Maybe if you could share a bit more on the drivers of costs coming down significantly, and how do you see that into 2027—borrowing strip, of course, which was just talked about? But yeah, just curious to hear a bit more about Zgounder costs.
Rafael Baudouin (Executive Vice President, Operations)
We’re having quite a good year at Zgounder. As I mentioned, the lower costs so far year to date were mostly driven by the open-pit strip. The long-term plan for stripping is around 13 in the open pit, and that’s what we’ve been converging to at Zgounder. The last six months have been lower than that. We expect next year to be above that—above the current strip. Next year is probably more around, like, 16 or 17, which is well in plan to our cost structure, again, that we’ve showed quite transparently in our 43-101.
So we expect the cost to stay close to that $17 to $20 bracket.
Omit Singh (Analyst at SCP Resource Finance)
Thank you. Appreciate it.
Rafael Baudouin (Executive Vice President, Operations)
Thank you.
OPERATOR
Thank you, ladies and gentlemen. That concludes our Q&A period. I’ll now turn the call back over to Benoit La Salle for closing remarks.
Benoit La Salle (President and Chief Executive Officer)
Yes, thank you very much. Thank you, everyone, for participating today at our Q3 conference call. Look, it was a fantastic quarter. We’re on site. We are in Casablanca. The whole team is here, and we’re very pleased with the outcome. Obviously, we understand that the push over of the inventory has affected a little bit the earnings per share because we have close to $30 million of earnings in inventory, which is just delayed by a couple of weeks or days.
But, of course, we do manage on a yearly basis, and that will have a direct effect on our Q4. So we are extreme pleased with the quarter, pleased with the operation. Ralph commented on the cost. There’s been a tremendous amount of work to, as I say, to streamline costs as we are now in cruising speed, and we’re extremely, extremely good at it. We have also moved quite a few individuals from the Zgounder operation to Boumadine because Boumadine is kicking in into real development. So some of the previous managers who were at Zgounder are now running the Boumadine project. So look, we had a great first nine months. We did the U.S. listing and that is done, and it’s really an important part of the volume and the appreciation. The Boumadine PEA—that was a big milestone that was done in the quarter.
The technical report, you’ve seen it. We do have drill results coming in. David is with us, and he knows that every month we have one press release from—one press release from Boumadine. The results are always stellar. You see them. We will push even more next year on step-out drilling. David had a major task in doing the infill drilling. It is more than spectacular. It’s done in 11, 10, 10 months, and we’re continuing the pace; we’re not slowing it down, which will probably allow us next year to even do a lot more step-out drilling, and that will continue.
So Zgounder exploration is continuing, Boumadine exploration is continuing. We have great results on both. So we look forward to a strong finish. We look forward to a great year, and we’re very pleased with the operation as they are, and we’re very pleased with Boumadine and the acquisitions that we’ve made. And you know what, the more ground we acquire, the more ground gets presented to us. So stay tuned because we are looking at ground around Zgounder, around Boumadine that is presented to us, I would say, almost on a monthly basis.
So thank you again. And I’ll conclude in saying, I always say there’s three things about success in mining. First one is geology. You know we have it, and that’s slide page 19. The geology of Morocco is absolutely fantastic. The people—well, we have a great group of employees, motivated shareholders, and they are aligned with the objectives of the shareholders—and we’ll close on jurisdiction. Morocco is a tier-one jurisdiction in mining. We all know it’s getting very difficult in some countries, and in Morocco it’s a tier one, and mining is a top priority.
So when you have the three pillars of success—geology, people, and jurisdiction—all we need is a good silver market and a good gold market at our end. We’ll keep delivering a strong quarter next quarter and a strong year. So thank you very much. See you in March, because that’s when we have the next call, when we’ll have the year-end financial statement. In the meantime, we’ll see you—some this weekend in Frankfurt, others we’ll see you in Geneva, in Zurich at the end of next week, in London the week after. So we are on the road, leading shareholders. Thank you very much, and we’ll talk to you very soon. Thank you.
OPERATOR
Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.