BMO maintains Outperform on Aya Gold & Silver, target Cdn$22.50

On Wednesday, BMO Capital Markets maintained a positive stance on Aya Gold & Silver Inc (AYA:CN) (OTC: MYAGF), with analyst Kevin O’Halloran reiterating an Outperform rating and a price target of Cdn$22.50. O’Halloran’s update followed the company’s report of its February silver production figures from its Zgounder mine, which saw a decline month-over-month due to a planned five-day mill shutdown. Despite this, the company experienced an increase in throughput rates for each operating hour.

The mining rates at Zgounder showed a significant month-over-month improvement, jumping by 39%. However, silver recoveries dipped to 83% compared to 87% in January, which the analyst attributed to the mill shutdown and the processing of oxidized ore. As a result of these developments, BMO Capital has slightly adjusted its forecast for Aya Gold & Silver’s first-quarter production, now expecting 1,162koz, which implies an anticipated production of 421koz in March.

Aya Gold & Silver’s performance in February was impacted by operational scheduling, which included a brief halt in mill operations for maintenance. This planned downtime is part of the company’s strategy to ensure long-term operational efficiency and was factored into the annual production guidance. The increase in mining rates suggests that the company is scaling up its operations effectively, which could translate to higher production levels once the mill is back to running at full capacity.

Investors and stakeholders in Aya Gold & Silver may find reassurance in BMO Capital’s continued support for the company’s stock. The Outperform rating indicates that the firm believes Aya Gold & Silver shares will likely perform better than other companies in the sector over a set period. The price target of Cdn$22.50 set by BMO Capital reflects their confidence in the company’s potential for growth and profitability.

Aya Gold & Silver Inc is focused on the exploration, development, and operation of silver mining properties. The Zgounder mine, in particular, is a key asset in the company’s portfolio, contributing significantly to its silver production. The latest production update, along with the analysis provided by BMO Capital, offers insights into the operational challenges and successes at Zgounder, which are critical factors for the company’s performance in the mining industry.

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