Aya Gold & Silver Inc.

Good morning. I will now turn the call over to Elizabeth Hamawi. I am Gold and Silver's Director of Corporate and Financial Communication. Please go ahead.

Thank you, operator, and welcome everyone to IELTS Second Quarter 2025 Earnings Conference Call. Here with me today are Benoit Lassalle, President and CEO, Hugo Landry-Tolschuk, Chief Financial Officer, Elias Elias, Chief Legal and Sustainability Officer, Raphael Beaudoin, Vice President of Operations, and David Lalonde, Vice President of Exploration. We will be referring to a presentation on this conference call, which will be available via the webcast and is also posted on our website. We will be making forward-looking statements during the call. Please refer to the cautionary notes included in the presentation, news release and MD&A, as well as the risk factors included in our annual information form. Technical information in this presentation has been reviewed and approved by Raphael Beaudoin, IAL's Vice President of Operations, and David Lalonde, IAL's Vice President of Exploration, both of whom are IAS qualified persons as defined under National Instrument 43-101, Standards of Disclosure for Minimal Projects. I would also like to remind everyone that our presentation will be followed by a Q&A session. With that, I will turn the call over to Benoit Lassane. Benoit?

Thank you, Elizabeth. Welcome, everybody, to our Q2 2025 earnings call. Before I start the presentation, I would like to tell you and announce that we have reached the 10 million ounce of silver production last week and since we took over as management in April of 2020. So we did produce, now we are over 10 million ounces of pure native silver in the last five years. I thought it's worth mentioning. There is a presentation that you, where you can follow my comments. You have the forward-looking statement on page two and three, and then we will start on page four. The Q2 highlights, it is a very strong quarter, a very good quarter. We've delivered across all the key pillars of our strategy. First, the production. 1,042,000 ounces in Q2, very similar to Q1. Gold and silver, but in our case it's silver revenue of 38.6 million U.S. dollars, we report in U.S. dollars. Cash flow from operation in Q2, 8 million. And I'd like to point that we are now at 15 million after Q1 and Q2 of cash flow from operation. remembering that this is a ramp-up period. We commissioned the plant at the end of December last year. We started the ramp-up in January of 2025. We are now completing the ramp-up as we will see while we're evaluating our KPIs at the end of Q2. So during ramp-up, during the first six months of ramp-up, we did produce 15 million of cash flow from operation. At the end of the quarter, our balance sheet is strong. We have $114 million in cash in our bank. We have a line of credit of $25 million, and we have a very strong working capital position. So reviewing some of the key milestones on production, you know, we've had a very good quarter. solid operational KPIs that I will review with you and we did reach a million ounces of production. On the exploration front, drilling programs are on track. We are, you know, we have many drills starting both at Gounder and Boumadine and we are continuously giving you results that are positive. We've also have been acquiring new permits at Secondaire and at Boumadzine, which is part of our strategy. We really do take advantage of the fact that, you know, we're first in country, and we add a lot of ground every quarter at Secondaire and at Boumadzine. On the development of our second asset, which is Boumadzine, the work supporting the upcoming Boumadzine PEA is going extremely well and according to plan. on the ESG front in the quarter we published our 2024 sustainability report we are always focusing on health and safety and we had a clean quarter in Q2 2025 no incidents nothing and we always strengthen our community engagement. We actually, in Q2, have accepted 26 new initiatives that were presented to us by local communities. They actually presented 18 initiatives. We selected in Q2 26 that we will be implementing. So strengthening our community engagement is part of our core value. Financing position, cash from operation, as I mentioned, $8 million. 15 after two quarters, extremely pleased with this number. We've completed an equity raise in June of $140 million Canadian, so let's say $100 million U.S., hence giving us a very, very strong balance sheet. Taking you to slide number five, we're going to go through the KPIs. You recall I always say in the ramp-up we have five KPIs that we need to manage. The first three, ore process and milling rate, well, as you can see, in Q1 2025, we were at 2.8 tons per day. In Q2 2025, we're at 3,000 tons per day. So we are moving up the ladder. Remember that the main plate capacity when we build the plant was 2,700 tons per day. By the end of Q1, we're at 2,800. By the end of Q2, we're at 3,000, and we are now approaching, for Q3, 3,500 tons per day. So this KPI is well managed, well under control, and exceeds nameplate capacity by more than 20%. Recovery rate has always been something extremely delicate. We know that metallurgy is an important element of a good mine. And currently in Q2, the average was 86.5%. We have reached 92% recovery in June. You recall that at the beginning of the ramp-up, the oxygen plant was creating the main issue. That's been solved and working according to plan. And we are now above 90% recovery, which is better than what we had in the feasibility study. The availability of the plant, this is another key KPI. And for Q2 2025, we were at 98%. We wrote exceeding industry standard. I've been in this business more than 30 years, and I've rarely seen plant availability better than 95, sometimes 96%. And here we are at 98%. The operational KPIs are sustainable into H2. We expect that the ramp-up is near completion. We're going to be at cruising speed at 3,500 ton a day, good recovery, and good availability. Moving on to slide number six, the Gounder ramp-up phase. on ore mine well so when you look at the ore mine the tonnage is there in q1 we did 195 000 ton which is 2 100 ton a day and and our you recall we started at 900 10 a day when we had the two smaller plants we our goal is to go to 3 500 10 a day we were at 2100 in q1 we're at 2600 now in q2 And this is increasing as we're ramping up the open pit in Q3. In Q2, we were preparing the open pit. We did a lot of stripping. We'll continue to do that in Q3 for our objective to go to 3,500, which is equal. So the mining will be equal to the processing. So another KPI that is green that we manage very well and is according to plan. The only KPI where, you know, we've talked about in the previous quarter that we're still, you know, working on and that we need to improve is the average grade. And the issue here in the ramp up as we move from 900 ton a day to 3,000 ton a day and 3,500 ton a day, It's not a metallurgical or a metal issue. It's not a metal issue. The metal is there. What we need to address is dilution. So it's the way we mine it, the way we mine the underground and the way we mine the open pit. I mean, historically, we were doing a lot of selective mining and we had the time because we were mining originally 200 ton a day, then 500 ton a day, 900 ton a day. So, the dilution was not a big problem, but currently with the speed of execution, the dilution is becoming our number one enemy. We know this. We are all focusing on improving or reducing, should I say, the dilution. We're improving mining selectivity. We're improving operational control. We have hired more people. We have hired more senior underground managers. So the last KPI of the five that we need to address in the ramp-up is really the dilution of the grade from the mining. uh on the open pit we need to monitor better blast movement because we see where the grade is we blast it then it moves and then we dilute it again too much and the ground is definitely even more difficult so all of that is something we understand it's something we we is our it's our key priority right now is you know we to stabilize the mining rate reduce the dilution, control the ore, and send all the ore to the plant and all the waste to the waste dump. Going to slide number seven, which is the financial highlights. Of course, on the revenue side, it's a record quarter, $38.6 million of revenue. obviously driven by the ramp up and the higher silver price. So we've moved from 33 million in Q1 to 38 million in Q2. The average selling price is excellent, and that is even getting better now in Q3. On the left side of the slide, you see the average net realized silver price, and when you compare that to the cash cost, just to show you the margin, we do have a $12 margin. we had a $12 margin in Q1 as well. And we expect that margin to increase in the coming quarters as the selling price is higher than what it is right now. And really, as we're completing the ramp-up phase and as we're improving the grade or reducing the dilution of the grade, you can expect the cost to come down, the selling price to go up, and the margin, therefore, to increase. Slide number eight shows that we have a very strong balance sheet, and that's something extremely important as we are really stepping up now the boom ads in development. So this quarter, we discussed this, we had $8 million of cash from operation, 15 after two quarters. CAPEX and exploration in line with our budget of $13 million. We spent about $3.5 to $4 million per quarter on exploration. As you know, we have two large drill programs. The cash position is extremely important at $114 million as we plan to increase the drilling at Boumadine and really get into a more detailed feasibility study next year. So that cash position is instrumental. And when we raised the money in June, it was clearly identified that it was for the boom in development. So strong cash flow, you know, capex completely under control. And a recent development, some of you saw that, that we did receive two weeks ago now or a week and a half ago, $8 million payment in compensation for the EPC contractual breach. You recall that, you know, last October, the plant was delivered to us with a delay. And you recall that, you know, we had a fixed date for plant delivery. We had obtained in the EPC contract some contractual obligation, which there was a breach. And because of this breach, we were able and have received $8 million in compensation. So that, of course, is not accounted for right now in the cash position because that came after the quarter end. But it just now tells us that we've built this new plant at Zgoundan. We've built it. It was already on budget, but now it's $8 million below budget. And the on-time of delivery was late. And you recall we explained that in Q3 of last year. But the commissioning was very quick, much quicker than expected, and we did the commissioning in three weeks. So the commercial production was declared in December, and that was aligned with the plan. So to conclude, the balance sheet portion, strong balance sheet, enough balance sheet to really develop Boumaddin and continue with the exploration at Gounder and at Boumaddin. On page nine, just we gave you a few pictures. I know many of you have been to site. It's beautiful. There's no more snow on the top of the mountains as last week. It was 48 degrees, so a little bit warmer than Canada, but not that much. And so you can see all of those pictures. Now, talking about exploration, because as you know, we are a producing company. We have a beautiful, pure silver mine at Zgoundan. But the exploration portion of Aya is extremely important. The exploration at Gunder at the mine and the exploration at Gunder regional. So at Gunder at the mine, we've drilled 4,700 meter. And that drill is in the structure. You remember our structure is 1.4 kilometer long, about 700 meter deep, 20 meter thick. And we've been drilling the bottom left of the structure. I mean, we've been drilling everywhere. But, you know, in the bottom left, the drill results, you know, outline significant down plunge extension there. which we show you when we put out a press release, with good thickness, very good grade, and it confirmed the continuity of the high-grade mineralization beyond the current resource boundary. Extremely important because it is a major system. It's very well understood, but we're seeing extension. To the west, at depth, we've also seen extension to the east in the open pit because we've shown you new results in the open pit over time. So the Zgounder main zone is still growing. Zgounder regional, which I'll show you a slide in one minute, we've drilled 1,000 meters there. It's more exploration drilling. So we have an area called Far East permits that we've obtained and that we've done the work in Q2. We have identified many very interesting targets through, you know, geochemistry, through satellite imaging and spectral imaging. And we are drilling some of those targets now. The drills are turning. We're drilling some of those targets. So, as I said, detailed geology is being done, and it's being carried at Tushkan, at Gunder, Far East, and we'll see this on the next slide. So, you see, the next slide is showing you where the mine is, which is the permit right in the middle. And then you have the 10 kilometer, 20 kilometer, 30 kilometer, and we are focusing on finding a new structure which is you know a distance that we can truck to the plant to either increase plant capacity to maybe depending what we find to use you know we have three plants a small leaching plant a flotation plant and the bigger plant that we just completed so we're looking at different things we have identified structures that are goal bearing we've identified structures that are silver copper and enhanced We're really working to find that other structure, which we believe is there, and we're also using AI. Probably in the next quarter, we'll be able to tell you what a massive AI program has done in reviewing all the data that we have, all the data, geophysics, geochem, satellite, spectral, stream sediment, and we're using AI now to do the work of many, many geos that would do in a number of years, and that's being done in a couple of months. The next project, as we all know, is Boumadzine. Boumadzine is our Tier 1 asset. We've completed 33,000 meters of drilling in Q2. You know that 33,000 meters, for most companies is they don't even do that in one year. This is what we've done in one quarter. We are at 79,000 meters after two quarters and there's more coming. There's more coming because we're finding new structures. So this time we've done a lot of drilling on the main trend. on the TZ trend and on the Imari-Rennes trend, which are all parallel. So those are the parallel structure to the main trend. And we've confirmed continuity and extension. The PEA is only on these three structures, the TZ, Imari-Rennes, and the main trend. Everything else that we're looking at is not going to be included in the PEA. It's going to come in a second step, as we are developing, you know, other satellite deposits at Boumadine. But the main trend, TZ and Imari-Rennes have enough quantity of ore N-grade to become a Tier 1 producing asset. In addition to the surface work, we have identified a new zone, which you're going to hear over the next couple of weeks and months, called ACIREM. which is a permit that we knew because we had done the geophysics that we were able to acquire because, as I say, we do acquire permits every quarter. David and his team are picking up additional ground based on additional information. So we have acquired this permit. It has a nine-kilometer traceable structure. where we discovered gold and copper. So gold at three gram per ton, copper at 4%, and we can see it on nine kilometers. So this is the, you can see the color, you can see the anomaly. This is what you see on the northwest corner. You see this elongated structure. We are covering it on nine kilometer. We're also buying additional ground to the north. but that is a geochem and a geophysics anomaly, and where we are very positive about the grab sample, what we're seeing, and we will be drilling that in the coming few weeks. So, Boumadzine is, again, a world-class asset. You've seen that slide many times. We have done a lot of work on the main trend, on the parallel trend. We are doing work now on the west structure and over the next few quarters, we're also going to be doing work to the south on these very long geochem and geophysics anomalies. That completes the geology. David will be on the call with us if you have questions. Also, on the outlook, we're confirming what we've put out in the past. We're, you know, really motivated to meet all of this guidance. The production guidance is between 5 and 5.3 million ounces, and we are committed to meet this production number. So, as a summary, and before we get into the question period, you know, the catalyst for 2025 were and are commenced the drill program and of course we have done that. We have commenced and are way into 140,000 meters of drilling at Boumadzin and 25-30,000 meters of drilling at Zgunde. Our second catalyst was to commence the Boumadzin PA, that was for 2025. We are way into this boom as in PEA. As indicated, we expect that this will be released in Q4 of 2025. We wanted to reach 3,000 ton per day of processing at the new plant. It was part of the ramp-up plan. We have reached that throughout the quarter of Q2. And we are 15% above this already in Q3. So the ramp up is following a steady state on the plant. I would say the ramp up is complete. On the infrastructure, it's complete. And the only KPI left, and we're fully aware of this, is the dilution at the mine. And that's something that we're addressing. Provide update on Bumazin, metallurgy, and PEA. And it's mainly metallurgy because that's been kind of a question mark for many shareholders. And there will be a complete update on the metallurgy. The studies are coming to an end, and we will have a full update for you in Q4 of 2025. And publishing the updated Gounder Technical Report, we are working on this. The beauty of it is we keep adding beautiful structures and beautiful grade and new extension, but we are on it right now and want to have that done before year end or in Q4 of 2025. So this completes the official presentation. We are open for business and for questions. So this concludes my formal remarks. I would like to now hand the call back to the operators for a Q&A session. Thank you.