Aya Gold & Silver Inc. [AYA-TSX] is raising $70 million from a bought deal financing, with proceeds earmarked for the expansion of its Zgounder Silver Mine in Morocco, and for the advancement of other properties.
The company said an underwriting syndicate has agreed to purchase, on a bought deal basis, 6.8 million shares of Aya Gold for $10.25 per share. The underwriters have been granted an over-allotment option to purchase up to an additional 15% of the offering for a period of up to 30 days after the closing date, likely on September 13, 2021.
Details of the financing were announced after the close of trading on August 23, 2021.
Aya shares were active on the news, easing 11% or $1.25 to $10.18 on volume of 686,810. The shares are currently trading in a 52-week range of $11.85 and $2.10.
Aya Gold & Silver is a rapidly growing Canada-based silver producer with operations in the Kingdom of Morocco.
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 company’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.
In 2020, Aya reported record silver production of 726,319 ounces, marking an increase of 61% from 452,416 ounces in 2019.
According to an updated estimate released on March 1, 2021, Zgounder hosts a measured and indicated resource of 44.4 million ounces of silver in 4.9 million tonnes of grade 282 g/t silver, an increase of 340% from an earlier estimate released in February, 2018.
In mid-July, 2020, the company announced a 15,000-meter exploration drilling program at Zgounder. The aim was to increase and further define resources within the east zone of the deposit and confirm and define mineralization below the current underground mine.
Given the strength of the initial exploration results, the program was expanded to 19,000 metres. This year, the company plans to drill 41,000 metres at Zgounder, including 35,000 metres on the mine permit and 6,000 metres regionally.
Aya produced 439,149 ounces of silver in the second quarter ended June 30, 2021, marking an increase of 219% in comparison to the second quarter of 2020.
Revenue of $9.9 million in the second quarter marked a 384% increase from the same period last year.
The company currently as eight drill rigs turning at Zgounder with a resource goal of 100 million ounces of silver by the end of 2021.