Aya Gold & Silver Inc. [AYA-TSX] shares rallied Wednesday after the company released high-grade silver results from step out drilling at its Zgounder Silver Mine in Morocco.
â€œOverall, results continue to support Zgounderâ€™s near-term expansion potential, providing additional support four our updated resource statement later this year,â€ said Benoit La Salle, President and CEO of Aya Gold.
On Wednesday, the company released results from 82 holes, including 14 surface holes, six underground, 50 T28 and 12 YAK (T28 and Yak: percussion drilling using air-compressed hammer) holes.
Highlights include a follow-up of mineralized slopes with DZG-SF-22-07 at the 1,975 level, which intercepted 1,748 g/t silver over 8.5 metres, including 14,720 g/t silver over 1.5 metres.
Aya shares advanced on the news, rising 6.8% or 48 cents to $7.51 on volume of 110,820. The shares are currently trading in a 52-week range of $11.85 and $5.69.
Aya operates mining and milling facilities at its Zgounder Silver Mine, an 85%/15% joint venture between an Aya subsidiary and the Office National de Hydrocarbures et des Mines of the Kingdom of Morocco (ONHYM).
The companyâ€™s mining portfolio also includes the Boumadine polymetallic deposit, which is located in the Anti-Atlas Mountains of Eastern Morocco. This project is also held in a joint venture with ONHYM, with Aya retaining an 85% ownership stake.
On February 22, 2022, Aya announced positive results from a feasibility study which examined a proposed expansion of Zgounder from 700 to 2,700 tonnes per day. The expansion outlines a combined open pit and underground mining operation over the projected 11-year life of mine period.
The study envisaged a 394% increase in annual silver production to 7.9 million ounces by 2024, driving revenue up 364% to US$172 million by 2024 from US$37 million in 2021. With capital expenditures pegged at US$139.4 million, the first gold pour resulting from the expansion is expected by the first quarter of 2024.
The company said the study was supported by an initial proven and probable reserve estimate of 8.59 million tonnes grading 257 g/t silver or 71 million ounces. That material positions Zgounder among the highest-grade silver projects globally, the company has said.
When the study was released, Aya said significant upside potential exits within and surrounding the Zgounder mineralized system, which remains open at depth to the granite. In the short term, Aya said it aims to expand resources at depth and along strike in addition to discovering regional resources within trucking distance of the mine.
In keeping with that goal, an initial budget of $6.4 million was assigned to the 2022 exploration program, which was expected to consist of 22,500 metres of diamond drilling proximal to the mine and 7,500 metres of regional diamond and reverse circulation drilling. The company said results would be released on an ongoing basis.