Zgounder Silver Mine Faces Setbacks, but Aya Gold Signals Turnaround Ahead

Production Guidance Adjusted Amid Operational Hurdles

According to CEO Benoit La Salle, Aya Gold experienced unexpected challenges at the Zgounder mine, such as issues with the commissioning of the ball mill. These setbacks have postponed some operational milestones to the fourth quarter, leading to a revised 2024 production guidance of 1.6 to 1.8 million ounces of silver.

Looking Forward: Commercial Production on Track

La Salle expressed optimism, stating, “These temporary setbacks are now behind us, and our team is on track to deliver commercial production at Zgounder before year-end.” He emphasized that the mine will play a crucial role in the company’s growth over the coming years.

Zgounder’s Significance in Morocco’s Silver Market

Located in the central Anti-Atlas mountains, Zgounder ranks as Morocco’s second most vital silver producer. The mine is estimated to hold approximately 8.6 million tonnes of reserves with a silver grade of 257 grams per tonne, equivalent to 70.9 million ounces.

Expansion Plans and Progress

Since achieving commercial production in January 2019, Aya Gold has aimed to expand Zgounder’s capacity from 700 tonnes per day to 2,700 tonnes. This expansion is set to increase annual silver production from 1.7 million ounces to about 6.8 million ounces. The first pour from the expanded mine was realized in July of this year.

Q3 Results and Stock Performance

In its Q3 results release, the Canadian company highlighted that the expansion project is nearly complete at 99%, up from over 95% at the end of Q2. The project has remained on budget, with about $159 million spent on growth and sustaining capital expenditures, expecting an additional $7 million to finalize the project.

By 11:20 a.m. EDT, shares of Aya Gold rose by 13.7% to C$13.42, despite missing Q3 projections. This increase boosted the company’s market capitalization to C$1.76 billion, equivalent to $1.25 billion.