Aya Gold & Silver Inc.

Good morning, everyone. I will now turn the call over to Elizabeth Hemawi, IA Gold and Silver's Director of Corporate and Financial Communications. Please go ahead.

Thank you, Operator, and welcome to everyone who has joined IA's first quarter 2026 Earnings Conference Call. Here with me today, I have Benoit Lassalle, President and CEO, Yvon Lambritostra, Chief Financial Officer, Elias Elias, Chief Legal and Sustainability Officer, Rafael Boudouin, Vice President of Operations, and David Lalonde, Vice President of Exploration. We will be referring to a presentation on this conference call, which is available via the webcast and is also posted on our website. As 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, IAS Vice President of Operations, and David Lalonde, IAS Vice President of Exploration, both of whom are IAS qualified persons as defined under National Instruments 43-101 Standards of Disclosure for Mineral Projects. I would also like to remind everyone that our presentation will be followed by a Q&A session. With that, I would now like to turn the call over to Benoit Lassalle.

Thank you, Elisabeth. Good morning, everyone. Thank you for assisting this Q1 2026 conference call. Let me summarize the quarter before we get through the presentation. I think it's we need to summarize this as Q1 is an exceptional quarter for AYA. It's an exceptional quarter knowing that Q1 is always the most difficult quarter for the company as we are at 2,200 meters above sea level in the mountains with lots of snow and rain and wind. So this year, due to the fact that we lost five days of operation due to weather-related situation, we still delivered an outstanding quarter. I had delivered record revenue, record cash flow, expanding margin, rising silver price, and lower cash costs. So we had a very strong Q1. And when you compare it to Q4 of last year with Q1 of this year, on a per-day basis, the production per day is very similar, approaching 15,000 ounces. The reason the production is a little bit lower in Q1 is due to the fact that we lost an equivalent of about five days of production. But when you look at the highlights, it's record revenue of $117 million. It's record cash flow of $17 million. It's a record net income after tax of $49 million. It's a cash balance at the end of the quarter balance. unrestricted cash of $172 million. It's a production of almost 1.5 million ounces for the quarter with record mining rates, you know, really strong quarter. And as we have a record mining rates, we've also increased our stockpiles. So taking you to our presentation that we use, showing you some, you know, graphics, If we go to page four after the forward-looking statement, you see exactly what I just said. The record revenue in Q1 2026 at $117 million compared to last year at $34 million. The net income of $49 million compared to last year of $7 million with an EPS of $33 fully diluted. $34.33, sorry, fully diluted, and $34 on a non-diluted basis. And when you look at Q1 of operating cash flow this year at $70 million compared to last year, $8 million. So very strong quarter. You see it on the right-hand side. We'll show you the production profile as increased from Q1 2025, where we produced a million ounces of silver, to Q1 of 2026. where we're at 1,490,000 ounces. Of course, a little bit lower than Q4 of last year because Q4 of last year had no weather-related event, whereas Q1 of this year had approximately five days of weather-related events. Moving on to the page, to page five of the presentation, very interesting on the left-hand side, the quarterly mining tonnage. You know, we've always been saying that the mining has to follow the plant. The plant's production profile has been, you know, 30 to 40% above main plate capacity. But the mine also, you know, needs to follow the plant. And the mine is actually now exceeding the plant. So, you see on the left-hand side, Last year, you know, we were running at 2,200 ton a day. In Q4, we were at 4,200 ton a day. And now by Q1 this quarter, we were running at 4,600 ton a day. So absolutely stellar performance from the mine, from the open pit, and from the underground mine. The grade is also, you know, steady and improving. So we're pleased. with the outcome of the mining and the grade and the throughput. And then on the right-hand side, you look at the plant. Well, in Q4, the plant was running at 3,800 ton a day. In Q1, the plant's running as well, and it's not sometimes higher, but as indicated, because of the lost days. And if some of you have followed the weather in Morocco, it was extremely rare, like they had two times the historical average rainfall and snowfall in all of Morocco. I was there two weeks ago, and the week before that, there was snow in Marrakech, which is absolutely, you know, rare. So this is, in one way, it was a little bit difficult on the actual production, but we now have more than... 15 months of inventory of water at site, and the rivers are still running. So, you know, being a little difficult on the production was a great situation for water management and for us and for all the country. Now, all the water reservoirs have been filled. Some of the reservoirs that had not seen water in many, many, many years are now full. So the water situation globally for the country was extremely good. Moving on to slide number six, a quick word on Boumadzine. You know, at Boumadzine, we are reframing the pyrite. The operation is going extremely well. We produced 127,000 ounces of silver and 1,757 ounces of gold. a little bit lower than what we wanted it to be. Again, weather-related, because, of course, the bad weather of Zimbabwe was also, you know, weather-related at Boumadine. And the other situation with Boumadine is because we are exporting the pyrite tonnage. The ports in Morocco were shut down for one month because of weather, because of floods. So, of course, that's why, you know, the silver equivalent sold, if when you look at page six, you see the silver equivalent produced of 227,000 ounces and only 50,000 ounces sold. One reason, exporting, is, you know, we produce it, we ship it to port, and then it stayed there because we could not ship it just because of very, very difficult weather. All of that is behind us. It's probably now going to rain next time in November or December. It's all behind us. But the reality was that even at Boumadine, we were a little bit affected, especially on the shipment of the concentrate to Asia. But the Boumadine project is really an add-on to Zimbabwe. It's minimal capex, you know, very, very low cash cost. It's positive cash flow. The grade reconciliation is actually better. We have the gold grade is a little bit better. The silver grade is better than what we had in our model. So globally, it's a very profitable model. project, which is at the same time an ESG project, because we're cleaning all of the historical waste that was left there for many, many years. So it's still going on, and it's accelerating now in Q2, Q3, and Q4. We are accelerating the reclamation of the Boumediene Pyramid. Going to page seven of the presentation, this, again, coming back to last quarter, this is the most important slide. The one on the left is the margin. Look at the margins from Q1 2025 to Q1 2026. You know, we were working with a $12 margin in Q1 last year and staying at $12 in Q2 of last year, and then margins started going up to $20 in Q3. And then you saw to about $40 in Q4. And now margins right now are like $63 in Q1 of 2026. And obviously, you are following the silver price. And we're seeing that this is, you know, it's a very strong silver price at the moment. And our costs are stable. We are not affected greatly. by the war and the increase in fuel price. We are. Cyanide went up a little bit. We're going to see that in Q2. But it's marginal. The main reason is our electricity is from the grid, and it's solar and wind. So, like, most companies are affected because they need to generate their own power at Zbunder, and it will be the same at Boumadzine. The power is solar and wind. So, we do not expect cost to increase more than, you know, maybe $1 a And now, if they do, if they increase by that much, and the reason is really because of the source of energy. On the right-hand side, you see the growth of revenue. And obviously, as I said, Q1 at $117 million revenue with a net income after tax of $49 million. This is a very strong performance. of revenue increasing. Of course, it's due to the silver price, as, you know, we understand what the production profile is. But the silver price was extremely good in Q1. Our highest selling unit or selling price in Q1 at one point, we were able to sell close to $120 an ounce. So it's showing, and now the average of 82, as we speak right now, the silver price is higher than the average of 2-1-2026. And the net income, well, net income after tax of $49 million with an EPS of $33. Very, and taking us to page 8, a very strong balance sheet. We finished the quarter with $172 million U.S. in the bank. And on top of that, we have the restricted cash that we have for the EBRD loan of $16 million U.S. So when you look at this, it's a very, very strong cash position, a strong balance sheet, only one debt with EBRD, which is now below $100 million, and which, you know, we could pay, but... It's a very good and not so expensive loan with EBRD, so there's no point in pushing the repayment of that debt. When you look at cash from operation at $70 million, our capital expenditure program is $4 million. The expiration and evaluation, expiration mainly is $14 million. We had a very good quarter on expiration, and I'll talk about the drilling. But so all in all, when you look at this with an $18 cash cost and, you know, all the capital expenditure behind us, it's a very, very profitable quarter. Moving to page nine, which is our guidance. So our guidance is, was presented to you at the beginning of the 2026. We are maintaining our guidance. Though we are a little bit below where we want it to be, in our production guidance, we knew that Q1 is always a little bit weaker than the rest of the year because of seasonality. And we knew that, so that was part of our planning. And we're very comfortable with our guidance of 6.2 to 6.8 million ounces. The Zgunder production between 5.2 and 5.8. The Boubadine at 1 million ounces of silver equivalent. We're very comfortable with that. Now, when you look at the Zgunder cash cost at 21.50, I understand that we were at 18 this quarter, but, you know, it's a question of the strip ratio. And we know that, you know, over time, we're going to be a little bit higher than this. So we're comfortable to say that on the guidance at 2150 is where it should be. The boom at cash costs at 1010 in Q4, it was 6. In Q1 of this year, it's more like 11. We're very close. We are also going to ramp up on quantity, and in ramping up on quantity, obviously, the cash cost per ounce will come down a little bit. On the sustaining and growth capital, sustaining is about half, 18, and growth capital is 18 for a total of 36. the main growth capital is really we're pushing the ramp down all the way down to the granite so that we can go and reach those lower levels where we see high-grade silver. And on the exploration expenditure, well, the budget is $60 million. As you know, as a company, we plan to drill close to 240,000 meters this year. This is ongoing. We have always between... 14 and 18 drills starting. David has a team of almost 400 people in exploration, including all the drillers. So, it's a large program, but we need that program to convert the resource at Boumadzine from inferred to measured and indicated for the feasibility study of next year. Taking you to slide number 10. Where are we going this year? What are the priorities? Well, look, Boom Add-In is a top priority. We're very happy and very, you know, in an extremely good position that we can do Boom Add-In with no outside debt, no equity financing. We have the money available to push on Boom Add-In. So we are pushing on the feasibility study. which we want to be ready for next year, 2027, and also the updated PEA, which will be ready by the end of June, beginning of July. And so we have, you know, we are stepping up on every aspect. I always say every chapter of the study, make it water, ESS, energy, flow sheet, logistics, every chapter is being worked on And as soon as it's ready, it's being executed. So the feasibility study is ongoing. We have identified the contractors for the open pit. We have identified... the contractors for the flow sheet. We will be going into detail engineering shortly. I mean, we are working with our partners on logistics. All of that is moving towards completion of the feasibility next year and beginning of construction. On the drilling front at Boumadine, we drilled in Q1, obviously, 42,000 meters. And, you know, this was the ramp-up Plus, it was the one month of Ramadan, which we, for during Ramadan, sometimes we do not drill as much. And we do have a week off at the end of Ramadan. So, at 421, we've drilled 42,000 meters. We're stepping up there because the objective is 180,000 meters. for the main structure and an additional 20,000 meters on the regional plate. So, that is being done, and we will be delivering on that. At the plan is, well, just, you know, be more efficient, control your costs, make sure that, you know, we maximize our revenue, that the mining is very precise, that there's no dilution. And the key thing at $80 or $90 silver is let's not leave an ounce behind and sterilize those ounces. We take it out. If it's between 50 and 80 gram per ton, we stockpile it. We don't, you know, we expense it. It's in the cash cost, but we stockpile it. And if it is between 80 and, you know, the deposit grade, we put it through. We have a stockpile, and then we put it through the plant. So, it's extremely important for us to maximize what we're mining, the houses that we're mining, and that's why we're running way above 4,000 ton per day and controlling costs. We've also been working on the tailings facility because originally the tailing was planned for 2,800 ton a day. We're now running close to 4,000 ton a day. So, we've decided to do the first phase of the tailings construction to increase the tailings capacity, and that will be done at this summer. We will be all done over the summer. So, when you look on page 11 of where we are, we have Zgunder that will be producing life of mine, 6 million ounces a year, life of mine cash costs at $16, ASIC around $19, life of mine Extremely profitable, and that is only from one structure. You will see in the coming weeks some more exploration results coming out of Gounder, because, of course, at Gounder, we would like to increase the life of mine from 11 years, hopefully, to 15 years, and, if possible, even increase the throughput. Our development asset, Boumadine, well, that is the PEA is being reviewed. The resource update will come with the PEA. As of the end of 2024, we were looking at 450 million ounces of silver equivalent. That will be updated because we've drilled more than one year at the structure, so that will be updated, and it will be included in the new PEA. But on the right-hand side, to me, that's the most important strategic view of AYA, is we are currently a 6 million ounce producer at $19 all-in life of mine at Gunder. We will add to that by 2029 37 million ounces of silver production equivalent at an all-in cost of $14, making us a 43 million ounce producer, of course, silver equivalent And that will have an average ASIC when you look at 20 or 19 for Zgundaher and 14 for Boumadine. You're looking at mid-teen for an ASIC. Depending what silver price you want to assume, you can do the math. On top of that, Alia is a major exploration place. We have two districts. We have the Bumadzin district, and we have the Zgunder district. So, not only do you have two projects, you have two mines. You have the Zgunder mine, and you have the Bumadzin in-development mine. You have the Bumadzin regional plate, and that is an extremely large plate. We have 800 square kilometers. We will be drilling there 20,000 meters on the regional play. Of course, the 180 on the main zone that is infilled, though we are finding new zones. You saw in the last threshold, we had identified a new zone. But we will be pushing the drilling on the main zone, of course, up to 180,000 meters. And on the exploration on the regional, as he's telling the team, You know, as soon as you have another structure where you want to really drill it out, just come back to the committee and to the management committee, and we will give you more budget. So Boumadine as an exploration play is very unique. It's got big systems. The main zone is over 5.4 kilometers. You have also ACM, which is an 8-kilometer long structure. I mean, we have very, very, very strong zones. Kizgi is a parallel zone, and it's also 5.4 kilometers long. So Boumadrine is a major regional plate. And Zgounder, well, Zgounder is – we've done a lot of work. We've done a lot of geological work. We've used AI. We have many targets. We have new theories and new geological concepts beyond Zgounder that we're going to be testing this year. So it is also a very interesting place. geological play. So, in AIEA, you have all the geological upside of a major, major exploration company drilling 230,000, 240,000 ounces, 240,000 meters of exploration drilling coming in 2026, and then you have the production coming from Gounder, and you have the development at Boumanzou. So, again, to conclude and to go into the Q&A period, very strong quarter. In our weakest quarter, as planned, we are pleased with the production. We are confirming our guidance, and we look forward to a stronger Q2 and much stronger Q4 and Q5 to close the year again. And based on the silver price, it should be an extremely profitable year. So thank you, and I will turn it back to the operator for the Q&A period.