Aya Gold & Silver Inc. [AYA-TSX] said Thursday it has expanded the 2021 drilling program at its Zgounder Silver Mine in Morocco after releasing more spectacular high grade assays.
The company said drilling has been expanded from 35,000 metres to 42,000 metres into year-end with the aim of testing new target areas, including the newly discovered eastern zone. It said 39,000 metres of combined surface and underground drilling has been completed to date.
The announcement comes after Aya recently closed a $70 million bought deal public offering consisting of 6.83 million common shares priced at $10.25 per share. Part of the proceeds are earmarked for the expansion of the Zgounder Mine, which produced 439,149 ounces in the second quarter of 2021, an increase of 219% from the same period in 2020.
On Thursday, Aya Gold shares eased 3% or 29 cents to $9.23 on volume of 794,830. The shares are currently trading in a 52-week range of $11.85 and $2.27.
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.
During the third quarter of 2020, the operation dealt with a number of operational challenges that have since been fixed, including a temporary ball mill shut down at the flotation plant for five weeks. A new operational management team arrived at the site in September, 2020. The on-site team is implemented new human resources, operations, health and safety and maintenance plans.
However, with eight drill rigs turning at Zgounder, the company is working on a feasibility study for an expansion of the Zgounder mine and has set a resource goal of 100 million ounces of silver by the end of 2021.
Meanwhile, on Thursday, the company tabled results from 54 holes that continue to extend high-grade silver mineralization along strike to the east and below the current resource. Drilling highlights include hole ZG-21-36, which returned 1,298 g/t silver over 9.5 metres, including 10,753 g/t silver over 0.5 metres.
“Today’s positive results continue to expand known mineralized systems, such as hole ZG-21-36 which confirms the up-dip and on-strike continuity east of the newly discovered eastern zone,’’ the company said.
“The latest results also advance the understanding and mineral potential of the on-strike underground mineralization, particularly at depth to the granite contact,” it said. “These extensions of mineralized intersections underscore the potential for expanding the mineralized footprint.’’
It is why the company has elected to expand the drilling program by 20% to 42,000 metres into year-end.