Aya Gold & Silver Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 12, 2023

There are 11 speakers on the call.

Operator

Good morning, ladies and gentlemen, and welcome to the AYA Gold and Silver's First Quarter 2023 Results Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Friday, May 12, 2023. I would now like to turn the conference over to Ruth Hanna.

Operator

Ms. Hanna, you may begin your conference.

Speaker 1

Thank you, operator. Good morning, everyone, and welcome to AYA's Q1 2023 results conference call. My name is Ruth Hama, and I'm the Investor Relations and Communications Manager dialing in with some of the AYA team from sunny Montreal and Rockwell this morning. On the call today, we have Benoit Lassalle, President and Chief Executive Officer Hugo Landry Tulchuk, Chief Financial Officer Rafael Baudoin, Vice President, Operations and David Lalonde, Head of Exploration. We will finish today's event with a Q and A session with the team.

Speaker 1

Please contact our Investor Relations team directly with any follow-up questions that are not addressed during the call. Before we begin, I'd like to remind listeners that today's event will contain forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Details of the forward looking statements are contained in our May 12th news release as well as on SEDAR and at www.ayagoldsilver.com. With that, I would like to turn the conference over to AYA's President and CEO, Benoit LaSalle. Benoit, please go ahead.

Speaker 2

Thank you, Ruud. Good morning, everyone. Thank you for being there today for the first conference call. I would ask you to go to Page 3 of the PowerPoint, which is on our site and on the site for the conference call. If you go to Page 3, we have the key highlights of our Q1.

Speaker 2

The first highlight is our production at 474,813 ounces of silver, 2nd highest quarterly production, you recall that our highest quarterly production was in Q4 of 2022, which was an exceptional quarter due to a very high grade zone. The total cash cost for Q1 is $14.56 Per ounce sold, which is aligned as well with our guidance. And as you know, Q1 is always for the more difficult quarter due to the weather and hence at $4.56 per ounce In Q1 of 2023, we're completely aligned with our guidance. Another highlight is we generated $10,400,000 of revenue and $4,100,000 in operating cash flow for the quarter. Also in the quarter, we closed an oversubscribed equity bought deal for $92,000,000 and we exited the quarter with $91,000,000 in cash and cash equivalent.

Speaker 2

We are fully funded for the task ahead, for the plant expansion, for the exploration program. And hence, this is why in Q1 of 2023, we did this financing to have a fully funded company for the years to come. The overall construction progress is assessed at 32%, and we'll come back to that later on in some of the slides. One of the highlight was in exploration, the extension of the Boumoudin open ended strike to 3.4 kilometer, you recall originally we were around below 1 kilometer. And now with the last results that we presented, the strike is at 3.4 kilometers.

Speaker 2

And also it was the discovery of the new stockwork mineralization. David Lalon is on the call we'll be there to answer some of your questions. Going to Slide number 4, a very interesting slide because we have the guidance for all of the KPIs and we have the Q1 results. So the guidance on silver production, our guidance was 1,700,000 to 1,900,000 ounces for the year and we are at 474 1,000 ounces for Q1. So you see that we are on guidance and especially that Q1 is always a more difficult quarter.

Speaker 2

The cash cost at $14.56 is aligned with that guidance at $14.40 I'll come back to the cash cost for a minute. Let's not forget that we're running the company today not on minimizing cash costs and maximizing profit, but in being ready for the planned expansion of next year. So if we ran the company today knowing that there's no planned expansion, Of course, we would have probably less people and we'd be not managing it the same way. But our goal is for next year to grow our production with the new plant starting, and hence we're building the team and organizing the site so that we have a very smooth commissioning next year. The average grade is for the quarter 2.35 gram per ton.

Speaker 2

The guidance is at 2.64 And I'll come back to that in the next slide. But due to the nature of this deposit, we do have a small and sometimes large fluctuation in the grade. The mill recovery was very good at 87.1%. Our guidance was 86 And the ton process, very strong quarter at 72,737 The guidance for the year was $2.45 so we're way here ahead of guidance. So going to Slide 5, you have some charts that are quite interesting.

Speaker 2

The first one on the left hand side is showing the production and you see that at 474,000 for Q1, it compares extremely well to Q1 of last year. Of course, besides Q4, it's a little bit lower, But you recall that you see it on the chart below on the grade. The grade at 235 is aligned with what we saw in Q3 of last year. Q4 was an exceptional year. But this is the nature of this deposit is at times, we're going to be in 235, 240 and at times, we're going to be at 300 and more Mining higher grade parts of the deposit.

Speaker 2

What's important for us is to mine this deposit in its logical sequence and really to maximize the number of ounces that we will take over the mine life. So for the quarter, we were at $2.35 which is a bit lower than the guidance for the year. On the right hand side, the average recovery at 87.1 percent is totally aligned with where we want this company to be. We had almost 90% in Q4, but it was an exceptional quarter. And on the ore process at 72,000 737 ton, well, that's a record.

Speaker 2

So this is very, very strong quarter for ton process and that's what you see on the right hand side, the bottom chart. Moving to the next one. What's interesting, again, on the left hand side is the cash flow. And if you look at Q3 2022, Q4 and Q1, we generated like $13,000,000 of operating cash flow in the last three quarters. So the mine the KPIs are all good that we're operating well.

Speaker 2

It's generating cash. And obviously, we all know that this is coming from the 2 smaller plants, the leaching plant and the concentration plant. And once the 3rd plant is up and running, all these numbers are going to change in a dramatic way. The gross margin at $2,100,000 for the Q1, that's aligned with it's also a function of our selling price, which was around $22 an ounce. Obviously, historically, we had a better selling price than that, but that's the reality of our industry.

Speaker 2

The cash cost, the cost of sales at $8,400,000 is also aligned with our production numbers. And you saw that our cash cost is at $14,500,000 and our AISC is 14.9 So we have a very, very good quarter. So the cash cost, as I said, on the right hand side of 14.56 Well, it's aligned with guidance, very similar to what we've had in the previous quarters, obviously, except for Q4, where the grade was 3 50 gram per ton. So financially, we had a very strong quarter. We have a very strong cash position and which as I mentioned and I'm saying it again, we're fully, fully funded for the years to come.

Speaker 2

And before we go into geology and operation, I'll just cover sustainability. It's a very, very important part of our values. And we do have, as you know, dollars 100,000,000 loan with EBRD, which is really And ESG loan, which has all kinds of KPIs. So we have rolled out in Q1 our programs in health and safety. Now health and safety is an area that did not exist when or a concept that did not exist when we arrived 3 years ago, we're pleased to say that in Q1 of this year, it was our best quarter ever it is no accident, no fatalities, no LTI, so no long term disability were recorded.

Speaker 2

We also gave over 1,000 hours of training. So this is a momentum a situation where you really have to bring health and safety as part of the value and it's coming And we're doing very much better, should I say, than when we arrived, and we're pleased with the results of the Q1. Also on ESG, we're advancing the construction of the power line at the 90 kilometer power line And that's important because we are we will be receiving renewable grid power, green energy And the Skunder mine will once up and running on that power line will be one of very few mines in the world running off green power. The ongoing water testing and the launch of the air and noise monitoring system, that's also an important Elements of Mining and we're doing this. We're implementing the task force on climate related Financial disclosure, we're about 60% completed and we're 31% completed on EBRD's environmental and social action plan.

Speaker 2

So these are very strict KPIs that we have. We have it's part of our goals, it's part of our values, it's part of our strategies And it's also all of that is part of our remuneration package, it's part of our KPIs. So the ESG aspect our business is seriously embedded in everything that we do. And we have the rollout of the community programs and we always Talk about that and that's something that we communicate with you on a regular basis. It's something that is extremely important And we have it for our medical program that exists there.

Speaker 2

We support education. We also have implemented a stakeholder engagement plan. So this, again, a very strong Q1 on the ESG front. Now talking about the construction, and that's taking you to the next slide. Very interesting, you saw the video that we put out at the beginning of the week.

Speaker 2

As of today, the video has been seen 36,500 times. So it's a YouTube success. So it's the video is showing great progress. You have a picture here that shows the site. It's very interesting and the construction as we indicated is 30% completed.

Speaker 2

You have that on the next slide on Slide number 9. We have a bit of a detail on the process plant. It's completed at 26%, of course, because the erection of the steel has not yet started to build the plant, but the underground and the open pit is done at 29%, tailings and water management is at 41%, electrical infrastructure is at 18%, which is normal because it lags behind other infrastructure And on-site infrastructure is at 53%. Rafael is on the call. He just came back last night from site.

Speaker 2

He's in Montreal and he came back one day ahead of his schedule to participate on this call. So if you have questions On construction, completion and all of that, Rafael is with us. What's important is the laterite development is we have 5,000 meters done on 11,000 meter program. Cement is being poured, engineering is about 80% completed, earthwork is near completion, The advancement of the new tailings and water facility, you saw that on the video that's going very, very well. The EPC is progressing with the critical items that's going well.

Speaker 2

So today out of our budget, we're about $15,000,000 contracted across all the capital cost categories. We've at year end, we had incurred at year end sorry, at quarter end, we had incurred about €26,000,000 Obviously, now it's a bit more. So we say That we are on budget and we are on budget, and Rafael will be able to comment on this. Going to Page 10 of the small PowerPoint, you have a few pictures showing you the earthwork, how we're advancing And the installation of the ore silos has already started. So you see a couple of pictures, But the best, of course, is from the video that is available on our website.

Speaker 2

Now going to exploration, which is A central part of what we do, the exploration programs are going extremely well in Morocco. As you know, we have 3 large programs. We have Zunder on the main zone where our budget is 26,000 meters. We have Zundeir Regional, where our budget is 6,700 meters for the year. Then we have Boumedin, where our budget is 36,000 meters.

Speaker 2

So that's on Page 11 of the PowerPoint that you have. So coming to the going to Page 12, that is Gundair, the main zone. So we are at 3,200 meters drilled so far. It is aligned with our expectation. It's because the budget, the 26,000 was not divided 25% per quarter because we needed to complete a lateral development at the bottom of the current mine, so that we could start the underground drilling from this new gallery, bring in water, bring in electricity and start drilling.

Speaker 2

So you see on that slide, Page 12, all the blue lines are drilled or potential or expected proposed drill targets And because our intention is to have drilled the full structure for year end in order to include all of the result into our resource calculation for Gundair main zone. So that's extremely, extremely important. We are also focusing on Gundair Regional, where we have a budget of 6,700 meters. That is, of course, is a little bit different because that's not systematic drilling, it's more exploration drilling. So David, with the team are looking at targets.

Speaker 2

We have many, many targets and there they are doing more exploration drilling To the north, on the 2 permits that we have there, and there's also a permit Southeast that has some very, very good targets. The next project, which is of great interest is Boumedin. Boumedin, in the quarter, we've announced some very good results. The most important one was 192 gram per tonne of silver equivalent Over 129 meters, but that was also extending the strike length of the structure the 3.4 kilometer, it was also showing that it was opening up to the south. As you all know now, we're drilling 400 meter south again to go even further or 600 meter south it's called Section 5,600 and we're looking this is being drilled as we speak, Obviously, to understand the opening of the stock work that we saw in Section 6,000.

Speaker 2

So it's a very, very interesting program. We are not all done, but we're more than 20,000 meters done. We will have a complete review of the results over the coming few months, and then we're going to be making some decisions during the summer on what's next. But Boumedin is really looking very, very good. There's some infill drilling as well going on in the central zone and in the north, and that's very important.

Speaker 2

On Slide 14, you have a section which shows the mineralization, which is clearly open at depth. It's open to the north. It's open to the south, but it's also clearly, clearly open at depth. So it shows you the strength of the mineralization. You recall the central zone It was well mineralized, giving us silver equivalent grade that were very, very good.

Speaker 2

And now we have to understand what we have and that's why we intend to put in many thousands of meters of drilling. The slide on Page 15 is showing this last drill hole where you see the 5 veins, if I can call them like that, that were mineralized historically and to the north, when you had veins in between, there was no mineralization. The stock work was not mineralized. But in this case, at that level, when we've hit these 5 veins that you see on slide on Page 15 is the stock work is also mineralized. And showing the potential to be much closer to the heat source or the beginning of this mineralization.

Speaker 2

So very strong quarter. Q1 was great at the mine. The operation went very well. The financing was very well done. The exploration is going on, and it's been very successful.

Speaker 2

And on the ESG front, it's going very well. So you have it on Page 16. You have the takeaways of the Q1, Very good production, good cash cost, aligned with our guidance. We're delivering the key milestones for the 2,700 tonne per day Gundair plant expansion, the start of construction of the tailings dam, the water reservoir is done in Q2, complete the detailed engineering and the beginning of the open pit operation. Rafael can comment on that.

Speaker 2

On Q3 delivery of the ball mill, that today is aligned and it's not confirmed because we can't say confirmed, But we see that, that will happen in Q3, completion of all the water storage basins. And for Q3, that all of that will be done. The drilling at Susgunder is going well and will be completed for year end. The drilling at Boumadin will be completed by mid year and we'll review then what we will do. The And the same for TGRIT.

Speaker 2

We don't talk about TGRIT a lot, but the drill program is complete. The feasibility will be completed in a couple of months. And the so it's following its critical path. The ESG milestone for 2023 are extremely important because they are aligned with the EBRD loan agreement. We're following this closely.

Speaker 2

And there, as we mentioned, we are again there. On the ESG implementation, we are on time And there's no budget, but we are on time as per our agreement. And we will continue the year Focusing on health and safety, it's part of our value and it is extremely important. So operator, that completes the formal presentation for Q1, I will turn it back to you for question and answers.

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer session. You will hear a 3 tone prompt acknowledging your request and your questions will be pulled in the order they are received. Your first question comes from Puneet Singh with 8 Capital. Please go ahead.

Speaker 3

Hi, good morning Benoit. I just had a couple of questions on exploration related to Boumedin. It's Nice to see you guys continually grow the strike length there. I thought the last batch of drilling was a very interesting development. Maybe just run through Guiding the deep drilling there and how you think the new mineralization style could grow the project even further?

Speaker 2

Yes. Thank you for that question, Puneet. David, are you online? Because David is calling from Marrakesh, And sometimes the line is not perfect. But David, are you online and can you answer this?

Speaker 4

Yes. I'm online. Can you hear me well? Yes. Yes.

Speaker 4

So what's guiding the exploration of that? Well, the geophysics is one of the best tool to help us. The airborne survey was done last year with the electromagnetic allows us to follow the footprint of the mineralization depth. So that's one of the greatest tool. Otherwise, we just keep on step drilling outside of the Northern area.

Speaker 4

And slowly with all the indicator, it can be molybdenum, the temperature in phthalerite, we start seeing an increase in temperature that kind of tells us we're getting closer to a source towards the south and that's how we discovered this new stop works zones towards the south. So, yes, we had In the North, we have the Stock Works, so there was basically just very, very small anomalies in there, no Economical grades or whatsoever. And while we move to the South, more we start to see significant metals associated with the stock work. So yes, we hope that grade will still increase in the stock work, but it just it brings us closer to the source. So the South is big key to the future success of Oumadin.

Speaker 4

And in parallel, we keep on infill drilling in the

Speaker 2

So David, maybe okay, go ahead, Buddhi.

Speaker 3

No, no, go ahead, Silwan.

Speaker 2

No, I was just saying to David because your question said, how do you see this changing the size of the project? And I know that was part of your question, so I just was going to ask David to maybe to comment if he has a comment.

Speaker 4

Well, change the size, I mean, switching from 4 meters, 10 meters wide mineralization, 200 meter wide mineralization, it simply increased the volume by it's very early to see what's the full implication of it. We're still in the exploration process,

Speaker 3

Okay, got it. And then just my second question was on I know you guys are conducting the surface mapping right now. Maybe just run up through your efforts there. What do you think the data will help you do once you get that back? Thanks.

Speaker 4

The surface mapping will help us understand the structure because we start to understand the model. We have a main structure that is north south. This is caused by some other late age faults. Some of them seems to be bringing an With spodalite and Galena and Silver in the system. So that will help us tracking those areas, so the richer polymetallic it will also help us discovering new parallel zones And other systems.

Speaker 4

So it's all part of the global understanding of the deposit. It's a major help and we will also be able to use this data to brief Geophysics and special surveys we've done over the last year. So it's nothing there. We're almost completed the detailed mapping at the old embedded area.

Speaker 3

Okay. Thanks, David. Thanks, Benoit. Those are all my questions.

Speaker 5

Thank you.

Operator

The next question comes from Justin Chan with SEP Resource Finance. Please go ahead.

Speaker 6

Hi, Benoit, David Ras and team, Alex, thanks so much for hosting us. I just have one on the development rate. I'm just curious, is the 1500 meters or 5,100 meters that you quoted, is that a number for Today or was that the number at the end of March, just for our calculations on your daily advance rate?

Speaker 2

The 5,100 meter of development on the 11, is that at the end of March? Or is that as of today?

Speaker 5

That would be at the end of Q1. That's at the end of Q1, so as per March 31. And Our development rate is relatively steady at 500 meter per month.

Speaker 6

Okay, excellent. Yes, because when we did the calculations this morning, That put us pretty much exactly for the end of Q1 next year, which ties very well for your production ramp up. So it sounds like The math checks out with what you think as well?

Speaker 5

Correct.

Speaker 6

Okay, perfect. And thanks for that one. And just on the budget, similar question. So we calculated roughly, There's about $90,000,000 or so left to spend, just when you take your 32% completion And your $139,000,000 initial budget and that sort of ties to your numbers today, which I think don't include contingency. I just want to check that those numbers are also correct.

Speaker 7

Yes. So at the end of Q1, we were at $26,500,000 spent. We have to be a bit careful that we don't just divide the dollar spent divided by the total amount to spend and that gives us the if you will, the percent complete. Our percent complete, we calculate Based on a large WBS or a large worksheet that's based on effective work and not so much on dollar spent. And so those won't track So today at March 31, we were at $26,500,000 spent, about $119,000,000 committed.

Speaker 7

And so far that's tracking with what we're expecting.

Speaker 6

Got you. Perfect. Thanks. Well, it sounds like the build is tracking well. I mean, this quarter was, I think, Staying online as well.

Speaker 6

So that's all very good. Maybe if I could do one last one, I'll free up the line. Just pivoting to could you talk us through the mythology of the Stockwork zone and how that might influence how you plan the circuit versus the high grade zones?

Speaker 5

Sure. So, Boumadin's metallurgy is something that we've been working on for quite a while. Boomedin is a polymetallic metal for which we understand relatively well at this point. It's refractory, this is no news to anyone. And then my answer to this is going to be the same.

Speaker 5

We can unlock the value of every metal on Boomin and then depends on the grade and depends on the tonnage that we will find. We have evaluated several processing options that technically work all rather well, Whether it's Albion from Glencore, whether it's pressure oxidation, whether it's even roasting, all known method to process refractory ore, gold ore have worked rather well, meaning over, say, 80 continue our exploration campaign to answer this important question. So what we can expect from vumadin on the long run it's a conventional flotation for lead, zinc and a portion of the gold and silver. And then to extract the rest of the value of the ore would have to be some sort of oxidation method for to oxidize the remainder of the pyrite to unlock the gold and the silver. So on a purely technical basis, Boumadin Metallurgy is relatively well understood and there is obviously room for improvement.

Speaker 5

Now which method will be used, which tonnage the project will be, what mining method, what processing method, we keep our options open until we have a much broader understanding of what the potential of the deposit is.

Speaker 7

Yes, I think it's

Speaker 8

important. Thanks.

Speaker 6

Thank you. Just on that, right,

Speaker 7

I think, look, we're about 50,000 meters in Tubumaz is in exploration and every drill hole that it does, something new comes out. So we need some time here to discover this, to find out exactly what we have. And based on that, we continue to follow it, but we're a little bit early in the game here, I think To say, oh, this zone will do this, this zone will do that. We're on it. Rafael's team is working on that.

Speaker 7

And as the process moves and as we discover more and more about Bumadin, we'll be tackling those at the same time.

Speaker 6

Perfect. Thanks guys. Really appreciate that. So thanks. That's it for me, but just one request.

Speaker 6

We'd love to come visit Wimbledon. A lot of our research team will be in London in various parts of June, July. So Just putting that request out there,

Speaker 9

but I'll free up the line. Thanks very

Speaker 6

much guys. Congrats on the Q1.

Speaker 2

Well noted, Justin. Well noted. We will It's a very nice trip to go to Bouvazin. Alex likes it very much. So I'm sure he's putting that in his agenda.

Speaker 6

Thanks, Dan. Well, I'm sure we would too. Thank you.

Operator

Your next question comes from Don DeMarco with National Bank Financial. Please go ahead.

Speaker 9

Thank you, operator, and good morning, Benoit and team. Congratulations on a solid quarter. So my first question has to do with the mining rates. So we've seen the mining rates trending higher and you got a nice another little jump In Q1, I think the average is just over 900, but it seemed like you're in the month of March, you're hitting over 1,000. You've received some new equipment.

Speaker 9

So Is that rate of just over $1,000 at the end of March, is that indicative of what we can expect for Q2? And And then second part of that is what is your target for year end? Is it actually 1200 tons per day? Or is that something beyond year end this year? Thank you.

Speaker 9

Okay.

Speaker 5

So 2023 is obviously a ramp up year for us underground. And what drives that is to have a healthy stockpile before commissioning the plant. That being said, yes, we had good mining rates in Q1 and we do expect to continue to ramp this up in Q2 and we're so far going to plan. And to answer your second question is by year end, we want to have a 500 ton per day at the open pit 1200 ton per day underground. So this is our target.

Speaker 5

And yes, that's going to plan.

Speaker 9

Okay. Thank you. And then just shifting to milling rates. So we see in Q1 that you're running over 800 tonnes per day. This is above nameplate.

Speaker 9

What can we expect for the rest of the year? I mean, this also has been increasing. What is driving that increase? And do you expect to even crest a bit higher than the 800 we

Speaker 6

saw in Q1?

Speaker 5

No, we don't expect to go above that. This is 800 tons per day has been a very good quarter in Q1. Sure, it's above nameplate of 700, But we are simply continuously improving the just the 2 small mills we have. Over the last 2 years of Gundyr, we continuously improved the recovery, availability and throughput. And as we Attract more and more talent to join the team to help us out for commissioning the new plant.

Speaker 5

The same guys defined new opportunities to improve things. So Q1 has been a very good quarter for throughput and we're not planning to continue to improve it further than that. But 700 tonnes per day remains already in place, and we can expect to see good quarters at 800. But our focus is the expansion and to be ready for the expansion and that remains true.

Speaker 9

Okay. Thank you very much. That's very helpful. Good luck with Q2. That's all for me.

Speaker 9

Thank you.

Speaker 2

Thank you. Thanks, Ana.

Operator

Your next question comes from Steven Sook with Stifel. Please go ahead.

Speaker 8

Hi, Benoit and team. Thanks so much and congrats on another great quarter. Just two questions on my side from the 2,000 tonne per day construction. Any indication of how much of the contingency has been used now that you guys are about a third of the way the overall project. And maybe if you can talk a little bit about the progress of critical path items and how those are going?

Speaker 5

Okay. So on contingency, some days we save on the contingency, some days we lose on the contingency. It's quite it's dynamic as a construction goes. And what I can say about that is today not all contingency has been allocated for. So we remain confident to be on the budget.

Speaker 5

And it's all I have to say about that at this point. As per the critical path, today the pressure is on engineering, is on pouring concrete And it's to finish earthwork. So we are still at this stage in construction. So procurement is going well. All long lead items have been ordered in the last 12 months or so.

Speaker 5

And engineering is also progressing well. So pressure remains on engineering and procurement. Critical path is stay on long lead item. And As any construction, we need to continuously put pressure on engineering and to follow-up on our long lead. And construction is still on time, depending on all the different lots, Whether it's the electrical line, the TSF, the plants, the underground mine, so all things are progressing according to plans and we cannot let go of the pressure and that's what the team is doing.

Speaker 8

Great. No, it sounds like things are moving well there and we'll stay tuned as that progresses. Switching track a little bit, and I know you talked to this to some degree over to boomedine. I mean, it's obviously expanding rapidly and you mentioned it's a little bit early in the game for metallurgy. But do you have any indication of when we might expect to see kind of formal results of metallurgical testing in order to get a little bit more clarity on expected recoveries or even just metallurgical zones that are being defined and starting to be investigated?

Speaker 5

So I think Hugo answered that and to be maybe more clear on basis. We have enough work on metallurgy to justify ourselves to continue drilling Boumadin. That Boumadin is a good opportunity for us. So that being said, we won't put more effort into metallurgy until we see more clearly what pumadin is. So the work that we wanted to do, we have done it.

Speaker 5

Now it's time to drill it. And I think we can expect within the next 6 to 12 months to continue working on metallurgy, but now our focus is on drilling it.

Speaker 8

Okay. Yes, understood. It seems with 5 rigs there, it's clearly worth pursuing, I guess, to see From our side, the results of that metallurgy work publicly.

Speaker 6

Yes. I think for now you guys are going to have

Speaker 7

to trust that we're not spending money unwisely.

Speaker 8

Fair enough. Great. No, that's all for me. Thanks so much for taking my questions today.

Speaker 6

Thank you. Thanks, Steve.

Operator

Your next question comes from John Slodnick with Desjardins. Please go ahead.

Speaker 10

Thanks guys. And yes, yes, Richard. I think all my questions have been asked. A lot of good ones so far. I'll just go with The standard inflationary pressures one and just seeing if you're seeing any on the CapEx budget and whether you're experiencing offset there with the weaker Moroccan Durham than was budgeted.

Speaker 7

Yes. So I think hi, John. So I think on inflationary pressures, look, a lot of our capital freight construction is already committed and we're actually seeing a lot of the inflationary pressures, I think maybe that we're seeing In North America, for us, we don't feel them as much. The Doram for sure helps us. And so for us, it hasn't been a point where it's affecting budget.

Speaker 7

And so far for us, It hasn't been an issue to the point where it is affecting budget today.

Speaker 10

Okay. No, that's great. And great to see a solid And looking forward to more updates from Boumedin and the Schoonter expansion. Thanks guys.

Speaker 2

Thank you.

Operator

There are no further questions at this time. Please proceed.

Speaker 2

Well, thank you very much all of you for attending our first conference. We will be back at the end of Q2, so in August. Otherwise, have a great summer, and we will continue to work. And as you know, we will be putting out a video once a month. We'll be putting out drill results on Zguindre and on Boumoudin in the coming weeks.

Speaker 2

So you will be kept informed of our development.

Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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Earnings Conference Call
Aya Gold & Silver Q1 2023
00:00 / 00:00
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