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Introduction & Market Context
Aya Gold & Silver Inc. (TSX:AYA | OTCQX:AYASF) presented its Q2 2025 earnings results on August 14, showing continued operational progress at its flagship Zgounder mine in Morocco, despite missing analyst revenue expectations. The company’s stock has recovered from its initial post-earnings dip, currently trading at $12.39, up 3.08% but still well below its 52-week high of $19.56.
The silver producer reported Q2 revenue of $38.6 million, falling short of the $40.35 million forecast, with earnings per share of $0.06 slightly missing the expected $0.0601. Despite these misses, the company highlighted substantial year-over-year growth and maintained its production guidance for the year.
Quarterly Performance Highlights
Aya’s Q2 2025 results demonstrated significant operational improvements, with silver production reaching 1,042 thousand ounces. Revenue increased 182% year-over-year and 14% quarter-over-quarter, driven by both higher production volumes and improved silver prices.
As shown in the following operational performance chart:
The company achieved notable gains in processing efficiency, with ore processed increasing more than three-fold year-over-year and 10% quarter-over-quarter. Mill recovery improved to 86.5% in Q2 from 82.4% in Q1, while mill availability reached an impressive 98.0%, exceeding industry standards.
However, mining operations faced challenges with grade dilution, as illustrated in this mining performance data:
While ore mined increased 112% year-over-year and 24% quarter-over-quarter to 241,000 tonnes, the average silver grade declined to 138 g/t from 176 g/t in the prior-year period. Management attributed this to operational issues rather than metallurgical problems, noting efforts to improve mining selectivity and operational control.
Detailed Financial Analysis
The company’s financial performance showed strength despite missing analyst expectations. The following chart illustrates key financial metrics:
Aya benefited from rising silver prices, with average realized silver price reaching $33.86 per ounce in Q2 2025, up from $26.20 in Q2 2024. However, cash costs also increased to $21.26 per ounce from $17.85 in the prior year, trending above the company’s guidance range during the first half of 2025.
Net income reached $8.6 million, which included a one-time gain of $5.8 million from the Mx2 transaction. Even excluding this gain, the company maintained positive profitability.
The balance sheet remains robust, as detailed in this financial overview:
Cash from operations totaled $8 million for the quarter, a 41% increase year-over-year. The company ended Q2 with $114 million in cash, bolstered by a $100 million equity raise, and maintains an undrawn facility of $25 million. This strong financial position provides flexibility to advance development projects, particularly the Boumadine asset.
Strategic Initiatives
Aya continues to expand its footprint in Morocco through strategic exploration and development programs. The company is executing drilling programs at both the Zgounder and Boumadine projects, with significant progress reported in Q2.
The company’s exploration strategy at Zgounder is illustrated in this regional map:
At Zgounder, Aya completed 4,704 meters of drilling on near-mine targets during Q2 (7,619 meters year-to-date), with results confirming significant down-plunge extensions. The company also acquired six new exploration permits, expanding its regional land position by approximately 12% to 452.7 km².
Similarly, at Boumadine, exploration activities are advancing rapidly:
The Boumadine program completed 33,510 meters of drilling in Q2 (79,716 meters year-to-date), confirming mineralization continuity across multiple zones. Surface work identified a new prospective gold-copper zone called Asirem, and the company acquired four new licenses, increasing the Boumadine land package to 314.5 km².
Forward-Looking Statements
Despite the challenges in Q2, Aya maintained its 2025 production guidance and outlined several upcoming catalysts:
The company remains committed to achieving its 2025 objectives, including silver production of 5.0-5.3 million ounces at a cash cost of $15.00-17.50 per ounce. Management expects milling throughput to remain strong and anticipates improvement in cash costs during the second half of the year.
Key upcoming milestones include:
Aya has already reached its 3,000 tonnes per day processing capacity at Zgounder and is ramping up to steady state. The company plans to provide a mid-year update on Boumadine metallurgy, with a Preliminary Economic Assessment expected in the second half of 2025. An updated Zgounder technical report is scheduled for Q4 2025.
CEO Benoit Lassalle emphasized the company’s commitment to meeting production targets during the earnings call, describing Boumadine as a "Tier one asset" with transformational potential. He also highlighted the milestone of producing 10 million ounces of silver over the past five years.
While Aya faces ongoing challenges with grade dilution and rising costs, its operational improvements, strong balance sheet, and expanding exploration footprint position the company for continued growth in the Moroccan silver market.
Full presentation:
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