Aya Gold & Silver Stock

Good morning, everyone. I will now turn the call over to Elisabeth Hamaoui, Aya Gold & Silver's Director of Corporate and Financial Communications. Please go ahead.

Thank you, operator, and welcome to Aya's Second Quarter 2026 Earnings Conference Call. Joining me today are Benoit La Salle, President and CEO; Ugo Landry-Tolszczuk, 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 refer to a presentation available via the webcast and on our website.

As we will be making forward-looking statements during the call, please refer to the cautionary notes in the presentation news release and MD&A as well as the risk factors in our annual information form. Technical information in the presentation has been reviewed and approved by fall Raphael, Vice President of Operations; and David Dalong, IA's Vice President of Exploration, both qualified persons as defined under National Instruments 43-101 standards of disclosure for mineral projects. And following the presentation, we will have a Q&A session.

I would now like to turn the call over to Benoit. Benoit?

Welcome, everyone to our Q2 2026 conference call. It is another very strong quarter for Aya, have prereleased the production results for the quarter. You recall that the production for Q2 is 1.7 million ounces of silver equivalent which is a 61% increase year-over-year, and it's a 12% increase quarter-over-quarter. That translated into very strong financial results. So our revenue for the second quarter of 2026, stands at $97 million, which is an increase of 150% year-over-year.

Our net income for Q2 is at $35 million, which is also a very strong increase from the previous year. And our cash flow is at USD 48 million, which is a 522% increase from the previous year Q2. So we have a very strong quarter in revenue, strong quarter in profit, strong quarter in cash flow. And this, as we all know, due to the seasonality in Morocco, Q1 is always a little bit lighter because of the weather. Q2 comes out of the winter and is a stronger quarter. Q3 is stronger than Q3 than Q2, sorry, and Q4 has been historically our strongest quarter.

So we're very pleased with the first half of the year as we will review some of the numbers. Now for the KPI, the key performance indicator of the mine -- the Zgounder mine has performed extremely well. The mining rate continues to improve, and it's up 7% quarter-over-quarter -- and I'm pleased to say that the mining rate on a daily basis achieved 4,900 tonnes a day. You recall that the plant was designed for 2,700 tonne a day and one of the key element was to make sure that the mining rate was going to be aligned with the nameplate of the plant, which was supposed to be 2,700. We know now it's a lot higher but the mining rate is at 4,000 tonnes a day.

We had record performance achieved from the underground and the open pit. So we're extremely pleased with the outcome, the grade through the plan was 141-gram per tonne, which is right where we wanted it to be. And another element which is important is because we're mining more than we're processing, we have an ore stockpile of 374,000 tonnes that is extremely important. It's the buffer that is there. If we reduce mining rates or more development, especially on the underground, where we want to go to the lower levels we have 374,000 tonnes or stockpile.

At the plant, we have record milling rate in Q2, which again reflects our strong execution, Q2 average is 3,900 tonnes a day compared to the previous quarter at 3,600 tonnes a day, and to last year, same quarter-over-quarter was 3,000 tonnes a day. And that we know the nameplate was 2,700. So we've moved in the ramp-up from 2,700 to 3,000 last year, started the year this year at 3,600 tonnes a day and are now at 3,900 tonnes a day and expect this to grow up a little bit again for Q3 and Q4. Strong recoveries as well as the plant and other KPIs above 90% recoveries and above 90% availability.

So all of our KPIs are green. We manage them on a daily basis, on a weekly basis, on a monthly basis, currently, everything is in the green. We've also brought in a temporary crushing contractor to improve the throughput, and we're adding a new crushing section to the plant, and that should be ready by the beginning of 2027.

Moving to the next slide, which is the selling price throughout the quarter. You recall that Q1 was exceptional as silver really per ounce in January. Of course, since then, we've seen a strong correction. So for is Zgounder, the average selling price for Q2 2026 is $68.29, so it's $15 less than Q1. And -- but it's very close to the average of the quarter, you understand that the average of the quarter is very hard to meet in a decreasing price environment because you don't sell every day.

So in a decreasing price environment, you're a little bit below the average. The average for the quarter is a little bit above $70, and we're at $68.29, we were above the average in Q1 because it was it was increasing at the time. So that was a little bit easier to be above the average, but it's still an extremely good selling price knowing that Q4 last year, we were all very happy with $59.23. So again, a strong selling price in Q2, first under -- and actually, the selling price at Bodine for some just reason was a little bit better at $70 an ounce, but we have a payability there of 50%.

So the selling price was net at 35% because you remember, Boumadine we're selling taste, which has a lot of difficult elements. So when you look at the cash cost we were expecting cash costs to come down as Gunter because we are now on a steady rate increasing actually the throughput, but on a steady rate. And yes, we're very pleased that for Q2 2026, the cash cost at Zgounder is at $17.69 and that's something coming from 18.4% in the previous quarter and $20 in Q4 of 2025.

So again, these are small detail, better efficiency, and we are working on cash costs. But at $17.69 knowing that this is a brand-new plant, the development cost, the additional cost, sustaining costs are extremely low as Zgounder. It's probably $3 an ounce maximum not even that in Q1 and in Q2. So you're looking at a cash cost of $17.69, which is a very, very good position to be in. To the next slide, at Boumadine, just quickly, Business a bit of an add-on to Sundar. We're processing the old tailings. It's a relation operation. It has no CapEx very low cash cost at $10.58 an ounce. It just generates cash flow.

We're a little bit lower on the production front, and we knew Q1 again, that -- when you have a lot of rain in tailings, of course, it's a bit more complicated because it's flushy. So Q1 and Q2 were a little bit lower. We knew Q3, Q4 are going to be a lot higher. But we still managed to produce 187,000 ounces of silver equivalent and we made a margin of $20. As I said, we sold it for $35 an ounce. Our cash costs at Boumadine is $10.58. We made $20 an ounce, so 20x 185,000 ounces of production it's still $3.6 million of free cash flow coming to Boman to pay for the operation and for the drilling it's a very nice add-on to Uzwunda, which we have in operation and accelerating in Q3 and Q4.

Looking at the next slide is the cash position at quarter end. We started the year in January 1, we had $136 million in the bank of free cash. We always have $16 million of restricted cash, which is part of the EBRD loan package. We started with $136 and in the first months of the year, we generated $190 million of operating cash flow. So $136 million, we added that $119 million of operating cash flow. We have $38 million of exploration and sustaining CapEx, $38 million.We paid down $33 million of EBRD in the first 6 months. We had one payment, and we also paid down a $15 million short-term debt that we took last year on Boumadine just it was available, and we took it on. That was paid back.

So we paid $33 million back. We've invested $38 million in exploration and sustaining CapEx and we finished the quarter with $183 million. Of course, we report in U.S. dollars. So $183 million, and we have $16 million in restricted cash, which technically gets applied to the EBRD loan at the end if we want that. So we had a strong cash flow in H1. We have limited CapEx as we know. We have a large exploration program, but that's part of our value creation strategy. We did an early repayment of the $15 million to EBRD and we're left with $183 million that is ready to go to the development of Boumadine, which will start towards the end of this year. So very, very strong quarter.

On the next slide, just a summary of the first 6 months. If you look at the operational performance, as a company, we produced 3.2 million ounces of silver equivalent at a consolidated cash cost for silver equivalent of $17.59, Zgounder did $2.8 million and Boumadine did $0.5 million. So -- and we will talk about the guidance, but we're already half year and half the way to the guidance. So we are totally aligned with the guidance that we presented to you at the beginning of the year. We're totally aligned with the guidance. Zgounder has a cash cost for the first 6 months of $1.18. Bodzin has a cash cost of 18 -- sorry, $10.85 per ounce -- so we're fully aligned and we'll review the guidance in a minute, but we're half to way into the year, and we're half the way into our guidance.

The revenue for 6 months stands at USD 205 million. The net income is USD 84 million. The basic EPS is at $0.58 and the operating cash flow for 6 months stands at USD 119 million. The guidance, which you have on the next slide was presented to you at the beginning of the year. Our production guidance is 5.2% to 5.8% at Zgounder. And at midyear, as Zgounder was at 2.8 million -- so you see that we're tracking right on our under production guidance. Boumadine is at $1 million. We're at $0.5 million right now, $400,000, but we know that Q3 and Q4 for Boumadine are going to be a lot easier, no rain and much, much, much easier, warm weather Boumadine currently is between 40 and 50 degrees some days. So it's very dry, so easy to work on tailings.

Zgounder under average cash cost, we had guided at $21.50. We knew that Q1, Q2 would be a bit lower because of the strip in the pit and the strip as a direct effect on our cash costs. So we're not changing our guidance there. On Boumadine, we were at $10.10, we're at $10.40. So we're very, very close. The sustaining and growth CapEx is at $36 million. it's about half and half the sustaining assets growth, new crusher, new installation, an ore sorter, the different things that we're putting in, which are really growth CapEx and sustaining the development of the underground and exploration expenditure is at $60 million. That hasn't changed. Maybe a little bit more due to the new assets that we've acquired, the new permits, which I'll review in 1 minute.

So the guidance is confirmed. We're well into it at the midyear point, and we continue to be very positive about what's coming in Q3 and Q4. So going forward, the strategy and the operational priorities at Boumadine, which is the main now leg of value creation for a all the independent consultant firms have been engaged on all key feasibility work stream. So metallurgy, energy, water supply, logistics, TSF location, feasibility study. All of that is now ongoing and will be ready next year, a feasibility study. At the same time, the updated PEA is being completed as we speak, and we'll be ready for publication early in September as we all come back to Labor Day weekend. So we're into it right now. We are into the mine plan.

We are into the financial model for the PA review. At the same time, feasibility is being completed and we've already started the RFP process on mining, on construction, on electricity. So all of that is ongoing. So the investment decision has been made. The project is extremely profitable. We will also confirm CapEx in the revised PEA, which will be available in 1 month. And so Boumadine is a strategic project for us, and we're working on this thoroughly and to come with the revised PA in September. At Zgounder, you saw its optimization of the Zgounder mine. It's working well, the open pit, the underground, the grade control, all of that is going extremely well.

We've put in additional ventilation. We've put in additional safety equipment. We had to complete the first phase of the TSF because we were putting through more material in the tailings due to the fact that we went from 2,700 tonne per day plant in the feasibility study to today 3,900 tonnes a day, even 4,000 tonne a day. So of course, the direct effect of that is that TSF gets filled much sooner than expected. We've completed the first phase of a new -- the new TSF, which is the same one but just with bigger capacity. That's been done. We actually did it on time and below budget.

And the new crusher expansion is being installed it's going to get commissioned this fall, and it will be ready for early 2027. On the exploration front, and that's Slide 12. On the exploration front, we do spend USD 60 million a year. We are drilling 200,000 meters at Boumadine. We're drilling 30,000 meters at Gudang. As of now, the drilling at Boumadine is at 93,000 meters. We know that the first half of the year, again, winter, Ramadan, a little bit slower. We have a third contractor coming in with 3 machines or 3 drills. We are going to be up to 15, 16 drills turning at Boumadine, and we expect to complete the 200,000 meter program as we have.

And if everything goes well, maybe a little bit more. The big highlight of the quarter was the new zone that we discovered parallel to the main zone where we had an intercept of 51 meters at 890-gram per tonne silver equivalent. That is clearly not currently in the resource model. There's additional drilling that will be done this year on this, but this is a significant discovery parallel to the main zone. We've also continued to drill the main zone and the TC zone, and we've increased the length of the structure now to 5.4 kilometer, so that keeps increasing.

And we're -- we have many other targets where we're doing in, we're doing prospecting to support future drilling program on the Boumadine large project, which is over 1,000 square kilometers of ground under the exploration license and the Jacana soft license of 600 square kilometers. So we have a very large package at Boumadine, and we keep increasing the land package. At Zgounder, there's 30,000 meters. As of now, we've done 10,000 meters. You saw some results in June, there will be more results coming out in September. As Zgounder is steady state, drilling is giving us always very good results. We continue to see the high-grade mineralization.

The structure is much wider than originally anticipated. So when we came in, we thought it was a 20-meter wide structure. It isn't it's much wider. We're now pushing to the West to see under the fault. We are going to be drilling there in the next few weeks, few months to see if it's continued under the West fall. We're also drilling to the Northeast. So it's a very, very strong project, geology is getting to be better understood. We are using AI extensively to understand the regional play and there will be some regional drilling ongoing this fall, and we're going to be looking, hopefully, for some very positive results.

And to close, I'd just like to talk about the acquisition that we've announced last week. We've announced the acquisition of 259 square kilometers. We've already always been saying that in Morocco, there's tremendous potential. Some families have ground, some families have many projects and they have done very little exploration. They've walked the ground a little bit, done very little exploration, mainly have done a lot of the infrastructure work, but did not have the expertise to do the exploration work. So we were able to acquire from 2 families, a 259-kilometer portfolio a district called Zagora, which has the potential for copper, lead, zinc and silver.

Agadir-Melloul, which is copper, silver and gold and some probably rare earth as well and Goulmim, which has led copper, lead, copper, gold and silver. Those are very, very good projects. you should know that we look at projects every week. People come to us, show us ground. We're very selective -- very, very selective because we already have over 1,000 square kilometers of ground between Zgounder and Boumadine. But this is something when we showed that to the team, they said this is very, very interesting, and we should move and acquire this. We have acquired this for [indiscernible] so USD 1 million.

And the budget is about $800,000 this year to do what we always do, which is satellite imagery, spectral stream sentiment. We'll see if we do some geophysics a bit later. But this is low-cost acquisition, low-cost exploration. We have a team -- there was already a team, and we have -- some of our team is available to do this. We're not taking anybody away from Zgounder or anybody away from Boumadine because we'll have in total 18 to 20 drills turning. We will be producing 240,000 samples. So it's something that we're not taking away from these 2 assets to go and do the exploration on this new ground. This will have its own team.

It reinforces our first-mover advantage in Morocco. We are with Manage and of course [indiscernible], the largest player in the country. These are all district scale exploration footprint. They're all put together a very large packages of permits. And for us, it just creates a pipeline of opportunities for the future. You will see us acquire additional ground, very similar some close to Zgounder, other close to Boumadine, but we are always looking at assets because we really believe that Morocco is underexplored. We know it is under explored. We believe that there's more Zgounder. There's more Boumadine.

There's more emit, which is owned by Managem, which is a world-class silver asset. There's more of that there's copper deposits, there's more silver deposits, and we have our first mover advantage and you will see us continue making small acquisitions like very small but some very, very good ground that we liked. So this completes the formal part of the presentation.

I will turn it over to you, operator, for the Q&A period.

Our first question comes from the line of Bryce Adams.

I just wanted to ask a couple of questions on the Zgounder outlook. In the disclosure, it talks to increased strip ratios in the back half of this year. So the question is, what do you think the strip ratios increased to -- for Q3 and Q4. And then the same question for next year as well for 2027, is that an accelerated stripping campaign next year? And then just similar on some of the outlook, you talked to slower mining rates in the underground. What are the expectations there?

Yes. Thank you, Bryce. Ralph is with us this morning. And as you know, -- he's our VP of Operations. So I will let him answer this. The strip ratio for quarter 3 and 4, a life of mine strip ratio and why we believe it will be a slower throughput in the underground over the next few quarters. Raph?

Yes, happy to comment on that. Let's start with the open pit on the year-to-date in the open pit, we're around a strip of 10. And we're quite aligned with our 43-101 in the long term we expect the strip to increase to around 16 in the next 6 months, and we expect to end the year closer to 13, which is quite aligned with our long-term expectation for the open pit. As for the pushback, we have several pushback planned through the life of mine for the open pit. And we have one coming towards end of the year. that is in our mine plan this year. We might push it earlier next year. We're taking our time to assess what's the best path forward.

So the open pit is quite under control to the point that we have options. We can do it this year, we can do it a bit later at the start of next year. That is yet to be to be finalized depending on how things continue to progress. So the open pit on long term, we expect a 13 strip ratio, some months closer to 8 we had in the beginning of the year. some months closer to 16, depending on where we're at and what's the best way to mine it as we go on the detailed planning on our rolling 3-month plan.

As for the underground, I want a nuance that is that we are focusing on new zones, and we want to really focus on considering to develop the infrastructure for the lower levels we're on plan. We are closer to the 1750 level as we speak and we need to go all the way down to 16.25. We have a healthy stockpile. We're mobilizing extra crushing capacity that -- for the meantime, it's compensated by a crushing contractor. So we have -- we want to be comfortable on the ground. We are right now comfortable. We worked a lot in the last 2 years to get to that point, and we want to keep it. We want to keep it like that.

So right now, on the ground, we have about like 1,200 to 1,500 tonnes per day rate. which is fine. The reason why we prefer to slow it down is because we have that option in hand, and we want to really focus sublevels to open more soaps and to be in this comfortable position. So as the open pit continues to sustain essentially a solid portion of the mill throughput with extra crushing coming on hand. We have an ore sorter also coming that we want to commission later this year. So on the underground, it's not so much that we will reduce the throughput a little bit, yes. But it's really sustained and even, I would say, accelerate the infrastructure development for sub levels.

And I understand that you're still putting together the 2027 open pit mine plan. At the minute, my model has a strip ratio of 2:1 for next year. Like do you think that, that is too conservative?

Yes. We're not planning for a 20:1 strip ratio for next year.

All right. Thanks. Yes. We can adjust for that. That should help our numbers. And then last question for me is just on silver sales. Sales lagged production a little bit in Q2. So Benoit, is that a catch up for Q3? Has it already been caught up in July? And do you think that that's a tailwind for the next set of financial results?

Yes. Thanks, Bryce, for this question because I think that was something that the market was kind of puzzled with is the selling price. I'll let you go run treasury and sales with the team answer is with us because I think the market needs to have a clear understanding of why our selling price for some of you was a bit lower. And maybe, [indiscernible], do you want to go at it.

Yes, sure. So the average sale price of solve, if you will. The LBMA average sale price for the quarter was $73. We were a bit over $68 at Zgounder. We also have to look at the timing if you look at June, specifically, price fell quite precipitously over $70 to below $60 at the end of the quarter. And when we produce -- we have to produce and then sell. So for sure, third of our quarterly production was sold quite low compared to the average of the quarter. So that impacted the revenue slightly. We're 6.4% under on average of the LBMA average price.

And then on volumes, there's a few things. Zgounder, we had a little bit of inventory and we can see it and we consider an inventory. And on Boumadine we sold less than if you take about 1 million ounces and you divide that by 4 quarters, we sold less in Q2, but that's definitely going to be caught up here in Q3 and Q4. Things are going very, very well. And then the remaining of the inventory that we had at under has been sold in July. And so yes, I think Q3 is looking good, especially at Bomen we'll see a significant catch-up from the first half. Just we're learning. It's our first time doing this reclaim, but I think now we've hit the wins at our sales now. So I think that will be caught up here in Q3 and Q4.

And maybe I can add, as what go just said is we can see the whole sector did not like the price in June. So like there was a lot of weighting and because we looked at other companies the way they've done it, and we all kind of got caught with that very quick deceleration or reduction of price and enhance the average selling at 68 as Zgounder 70 at Boumadine is like -- is a little bit below the average of the quarter. But in a decreasing market, it's very difficult to be on the average because you keep coming down as you sell, and it's much easier to be up the average on an increasing market.

So -- it's -- but again, as I mentioned in my little presentation, we're very happy with 68 and 70. We prefer 1 -- but with the cash cost at 18 or 16 and ASIC plus 3 or 4, I mean, we're still very happy. And look, in 6 months, we generated $119 million of operating cash flow. So we're -- we like the silver price. We like where it is. We will prefer it in Q3 and Q4 to be much higher. But look, time will tell.

Yes, for sure. Thanks, Dan. Great color. Now we're focused on the details here, but by level, it's a very heart and strong results from.

Our next question comes from Justin Chan with SCP Resource Finance.

Congratulations. It's good to see the cash flow, especially compared to what the initial CapEx was. My first one is on -- you mentioned adding it across at Zgounder. Just curious if you think that in the long run, like what type of throughput that could enable? Or is it more just to maintain upper 3s to 4,000 tonnes a day?

Thanks, Justin, and I'm going to pass it over to Ralph, but I just want to highlight your comment, you're absolutely right -- or sorry, $119 million of operating cash flow on a CapEx of $140 million. I forgot to mention that in the presentation. Thank you so much. I think we have the best return on investment of the whole industry and Boumadine is going to look similar. So thank you for highlighting this. I appreciate it.

Justin, this is Rafael. Happy to have a word on the crusher. So to be clear, to start, we're not missing a cross out Zgounder, right? The main place is 2,700 plant as well as I. Now we're pushing it. The easiest way to push it is to add some crushing capacity because that can be done afterwards and it's quite different from another ball mill, for example. We often have a bit of rain in the beginning of the year, which makes it difficult to push the mill as high as it can go.

Now if we go back to our 43-101 published, we committed to increase throughput from, say, 3,600 to 3,800 and we're already there with the help of the mobile contractor. The idea with the crusher addition is to be independent. Now we have the health of a contractor. He is doing a great job. Costs are very reasonable for the gain we get from it. The idea is to add a tertiary crusher to sustain our current throughput and who knows, maybe even increase it a bit. That's to be seen quarter-on-quarter, almost every quarter, except for one over the last 6 quarter we've increased throughput on mill.

I don't think we're at the end of that, but we're certainly getting a bit close. And the next 2 quarters will tell us up to where we continue to push it. We see the comfortably above 4,000, that hasn't materialized yet in average over the quarter. We're trying to get there. Hopefully, we'll get there. But to be -- to answer your question directly, the tertiary crusher was part of our commitment to stabilize the mill at 3,850 tonnes per day, and we're already there. So I don't think it's a stretch to think we can beat that, and that's what we're trying to do.

Got you. And then looking ahead to the Boumadine updated PEA, are there any changes in scope that you're considering, perhaps on the throughput side on the open pit underground split side of things? Or is it primarily an updated CapEx estimate and maybe we'll see changes on payabilities ?

So the updated PA is what it is. It's an updated PA. So we have a new resource -- there's new ways to calculate the NSR they're payable that are changing. But materially, the project remains quite a bit the same. There's some -- I would expect some changes on the open pit side, on the underground side. We've done quite a bit of drilling since our previous resource but the PEA is mostly focused on the resource Justin. And any other large change if there would be, would be closer to the -- in the physicality study.

Okay. Got you. And just one last one. I think we had a big rainy season or I guess, wet season this year. I guess that positions us really well for the second half in terms of water supply. Just kind of clarifying given -- well, Europe it's been very dry, but I think this year was good in Morocco.

We're already in August. We're getting -- we're halfway or even past the halfway point of the dry season or water reservoirs are full. So we're very comfortable in that end. And we just completed the Phase 2 of our tailings facility, which also allows for a little bit of water storage. So as we speak, the river close of Zgounder and we are continuing to fill a bit -- or to keep full, I should say, our water storage. Yes, I mean, water is not something we are concerned with in the short and the medium term.

Ladies and gentlemen, that concludes our Q&A period. I would now like to turn the call back over to Benoit for closing remarks.

Thank you, operator. Thank you for all the questions. Look, it was a very strong quarter. We're very pleased with Zgounder, with the team. Boumadine, as Ralph indicated, the study will be ready in a couple of weeks. It's mainly a new resource model and introduction of the new payability of the metal. Some people were questioning historically metallurgy. Well, there's no metallurgy issue as we are sending all of the concentrate to a smelter. So metallurgy is not an issue. Payability is important, and we will have the new payability numbers the PEA.

So big catalysts coming -- or the catalyst that arrived in Q2, we didn't mention this, but the U.S. listing has been a tremendous success. The NASDAQ listing, it did increase our G&A this quarter. Some of you may have seen it. It was a little bump in the road of our G&A, but that's been taken care of, but the U.S. listing in Q2 is a major, major success. Our volume has gone up. New funds became shareholders. Some became shareholders between 5% and 8% of the company. It has really changed our distribution and our shareholder list.

So we're very pleased with the listing and so that was a major catalyst in Q2. Of course, drilling was -- we had great results in Q2. But what to expect going forward is the Boumadine study, which will be in early September, that is important because that's also the base for the feasibility study that will be done for H1 of next year. But at the end, we are starting Boumadine. We're going to break ground at the end of the year for electricity, the power line for water, for the camp, for location and all that.

So it is an ongoing construction project. Ralph has built the team in Canada. We have a team in Morocco, that's also been put together, the construction team and all of that. So it is really shaping up to be the big project for 2027, 2028 for us, and it's continuing to grow. The drilling is ongoing as Zgounder. The drilling is ongoing at Boumadine. David will have updated results available in September and we're going to see many of you at Beaver Creek or at the Denver Gold Show, they did results from Boumadine and from Zgounder.

Also, you can expect more acquisition of ground. Morocco is becoming -- is becoming a very, very good jurisdiction. -- when you compare that to a lot of Africa and South America, Morocco is a key jurisdiction for mining. And we do see some people coming in, but we have a first-mover advantage. We're buying -- we will be acquiring more ground and ground that David and his team like and believe that there's tremendous potential.

So just on closing, you remember, we always talk about the 3 pillars of the organization, geology, people and jurisdiction. I think every quarter that we see, every increase in commodity price, it just tells us that we are in the right jurisdiction with the right mining code, with the right people, with the right government supporting mining. The geology is exceptional, absolutely exceptional. And we will continue to show you that there's more Zgounder and more Boumadine and more Mita in Morocco.

And the talent pool that we have is just expanding at all time, and people are very happy to come and join in Canada or in Morocco. So it's a recipe for success. We've done very well so far. I mean, since we took over 6 years ago, this has been a tremendous success. But we believe that there's a lot more to come. I would say the best is yet to come.

And that's a lot of pressure on David and in geology, but I think the best is yet to come. Jurisdiction is great. And look, we will see you for the Q3 call. We'll see you all -- many of you before, in Denver. But look, we're really looking forward to a strong third quarter, very good geological results and production results and financial results in Q3. Thank you very much. Thank you for being there today and your support, and we'll see you in a few weeks in Colorado. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, everyone. I will now turn the call over to Elisabeth Hamaoui, Aya Gold & Silver's Director of Corporate and Financial Communications. Please go ahead.

Thank you, operator, and welcome to everyone who has joined Aya's First Quarter 2026 Earnings Conference Call. Here with me today, I have Benoit La Salle, President and CEO; Ugo Landry-Tolszczuk, 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 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, Aya's Vice President of Operations; and David Lalonde, Aya's Vice President of Exploration, both of whom are Aya's qualified persons as defined under National Instrument 43-101 - Standards of Disclosure for Minerals 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 La Salle.

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 5 days of operation due to weather-related situation, we still delivered an outstanding quarter. Aya delivered record revenue, record cash flow, expanding margin, rising silver price and lower cash costs. So we have 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 5 days of production. But when you look at the highlights, it's record revenue of $117 million. It's record cash flow of $70 million. It's a record net income after tax of $49 million. It's a cash balance at the end of the quarter of unrestricted cash of $172 million. It's a production of almost 1.5 million ounces for the quarter with record mining rates, really strong quarter. And as we have a record mining rate, we've also increased our stockpile.

So taking you to our presentation that we use, showing you some graphics, if we go to Page 4 after the forward-looking statement, you see exactly what I've just said. The record revenue in Q1 2026 at $117 million, compare that 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 -- $0.33, sorry, fully diluted and $0.34 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 a very strong quarter.

You see it on the right-hand side, we'll show you the production profile has increased from Q1 2025, where we produced 1 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 events, whereas Q1 of this year had approximately 5 days of weather-related events.

Moving on to Page 5 of the presentation, very interesting on the left-hand side, the quarterly mining tonnage. We've always been saying that the mining has to follow the plant. The plant -- the plant's production profile has been 30% to 40% above nameplate capacity, but the mine also needs to follow the plant. And the mine is actually now exceeding the plant.

So you see on the left-hand side, last year, we were running at 2,200 tonnes a day. In Q4, we were at 4,200 tonnes a day. And now by Q1 this quarter, we were running at 4,600 tonnes a day. So absolutely stellar performance from the mine, from the open pit and from the underground mine. The grade is also 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 tonnes a day. In Q1, the plant is running as well and if 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 2x the historical average rainfall and snowfall in all of Morocco. I was there 2 weeks ago. And the week before that, there was snow in Marrakesh, which is absolutely 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 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 have 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 #6, a quick word on Boumadine. At Boumadine, we are reclaiming 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 Zgounder was also weather-related in -- 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 the silver equivalent sold, when you look at Page 6, you see the silver equivalent produced of 227,000 ounces and only 50,000 ounces sold. One reason, exporting, is 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 Zgounder. It's minimal CapEx, 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 project and 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 Boumadine pyrite.

Going to Page 7 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. 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 very, very -- 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 Zgounder, and it will be the same at Boumadine, the power is solar and wind. So we do not expect cost to increase more than maybe $1 an ounce 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 USD 117 million of 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 we understand what the production profile is, but that 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 Q1 2026. And the net income, well, net income after tax of $49 million with an EPS of $33 (sic) [ $0.33 ].

Very -- and taking us to Page 8, a very strong balance sheet. We finished the quarter with USD 172 million in the bank. And on top of that, we have the restricted cash that we have for the EBRD loan of USD 16 million. 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 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 exploration and evaluation, exploration mainly is $14 million. We had a very good quarter on exploration, and I'll talk about the drilling. But -- so all in all, when you look at this with an $18 cash cost and all the capital expenditure behind us, it's a very, very profitable quarter.

Moving to Page 9, which is our guidance. So our guidance is -- was presented to you at the beginning of 2026. We are maintaining our guidance. We -- though we are a little bit below where we wanted 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 million to 6.8 million ounces. The Zgounder production between 5.2 million and 5.8 million, the Boumadine at 1 million ounces of silver equivalent, we're very comfortable with that.

Now when you look at the Zgounder cash cost at $21.50, I understand that we were at $18 this quarter, but it's a question of the strip ratio. And we know that over time, we're going to be a little bit higher than this. So we're comfortable to say that on the guidance at $21.50 is where it should be. The Boumadine cash cost at $10.10, 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 Boumadine from inferred to measured and indicated for the feasibility study of next year.

Taking you to Slide #10. Where are we going this year? What are the priorities? Well, look, Boumadine is a top priority. We are very happy and very -- in an extremely good position that we can do Boumadine with no outside debt, no equity financing. We have the money available to push on Boumadine. 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 -- 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 are -- we have identified the contractors for the open pit. We have identified the contractors for the flow sheet. We will be going into detailed 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 this was the ramp-up, plus it was the one month of Ramadan, which we -- during Ramadan, sometimes we do not drill as much, and we do have a week off at the end of Ramadan. So for Q1, 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 play. So that is being done, and we will be delivering on that.

At Zgounder, the plan is, well, just be more efficient, control your costs, make sure that 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 tonne, we stockpile it. We don't -- we expense it. It's in the cash cost, but we stockpile it. And if it is between 80 and 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 ounces that we're mining, and that's why we're running way above 4,000 tonnes per day and controlling costs.

We've also been working on the tailings facility because originally, the tailing was planned for 2,800 tonnes a day. We're now running close to 4,000 tonnes 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 this summer. We will be all done over the summer.

So when you look on Page 11 of where we are, we have Zgounder that will be producing life of mine, 6 million ounces a year, life of mine cash costs at $16, AISC 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 Zgounder because, of course, at Zgounder, 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 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 Zgounder. 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 AISC when you look at 20 or 19 for Zgounder and 14 for Boumadine, you're looking at mid-teens for an AISC. Depending on what silver price you want to assume, you can do the math.

On top of that, Aya is a major exploration play. We have 2 districts. We have the Boumadine district, and we have the Zgounder district. So not only do you have 2 projects, you have 2 mines, you have the Zgounder mine and you have the Boumadine in development mine, you have the Boumadine regional play. And that is an extremely large play. We have 800 square kilometers. We will be drilling there 20,000 meters on the regional play. Of course, the 180,000 meters on the main zone that is infill, though we are finding new zones. You saw in the last press release, we had identified new zones, 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 we keep telling the team, 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 kilometer. You have also Asirem, which is an 8-kilometer long structure. I mean we have very, very, very strong zone. Tizi is a parallel zone, and it's also 5.4 kilometer long. So Boumadine is a major regional play.

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 theory and new geological concept behind Zgounder that we're going to be testing this year. So it is also a very interesting geological play. So in Aya, 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 Zgounder and you have the development at Boumadine.

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 (sic) [ Q3] and [ Q5 ] (sic) [ Q4] 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.

[Operator Instructions] Our first question comes from the line of Larry Liu with CIBC.

I guess I'll start off asking about the severe weather conditions. So Benoit, can you tell us what are some of the precautionary measures now that the team have taken? I know you mentioned that this is a very rare event, but are there any precautionary measures you've taken to prevent any further impact to your current operations? And I guess second part of that question is your stockpile did increase by 44% or 15 months' worth of production. Is there an optimal kind of size of stockpile you're looking for? Or should we start to see it gradually decline as the milling throughput comes back up again?

Yes. Thank you for your question. I'll pass it over to Raph, who was at site for all of that period, and will tell you what we have done to mitigate the risk of weather-related events and what it does to our production profile, which is only in Q1, by the way, because after that, it's sunshine for the rest of the year.

So we're in the mountain and as a good mountain climate when it rains, it pours. So that essentially results into stickiness of the ore and decreases throughput of the crushing circuit. To catch up, and it's something we've been working on for a while to increase the crushing throughput, which is the actual bottleneck in the plant. We did in Q1 3,633 tonnes per day on average in Q1. And as soon as sunshine came back in April, we're back on track at 4,000 right there in April. So the worst is behind us for the rest of the year essentially.

But to answer your question, to mitigate that, we gave a small contract to a contractor, a crushing contractor that is up in operation now a bit as a contingency for weather and also to help debottleneck the plant a bit on the crushing side. So this contractor will stay there as long as we need it. And we're also contemplating to increase our own crushing capacity within Zgounder plant, and that's something under study that we should be able to make a decision on that soon. But bottom line is we have a contractor that helps us out since maybe a bit less than a month now that can compensate for a bit lower crushing capacity to make sure the plant remained saturated.

And the stockpile?

Yes, sorry. So the stockpile, we sit about 300,000 tonnes right now. It's close to a 3 months' worth of production. It's a buffer that I'm personally comfortable with. We've been really pushing over the last year to bring the open pit to steady state. Now we're producing comfortably over 3,000 tonnes per day in the open pit with peaks much above that. It gives us time to do the pushback if we want to later on this year. It gives us time to shut down upper levels in the underground that will be mined in the open pit. So it's the flexibility that we always believed in that helped us out in many ways.

So to answer your question, 300,000 tonnes is probably where we want to be. It gives us the flexibility we need for future pushback and the flexibility to maximize, again, the ore recovery by the open pit. So now that we've reached this capacity and this flexibility, we will look to continue optimizing the underground development, especially on the sublevels. So we can focus now more our efforts into the lower levels and keep the stockpile around 300,000. I wouldn't be surprised to see it go down a bit through the year, which is fine that's why it's there, sort of push back in the open pit towards the end of the year.

Perfect. Sounds good. I guess kind of shifting gears away from Zgounder now and walking back to Boumadine. This quarter, there was some commercialization of the pyrite concentrate. We see the cost come in at $11.86 per ounce of silver equivalent. How should we look at it? I know it excludes mining, but how does that compare to your PEA, for example? And would this be a good read-through in terms of cost we should see within the feasibility study coming up?

Well, for the current pyrite reclaim, we essentially dig a pyrite stockpile, we crush it and we send it in trucks. So our costs are really low. Our costs will remain for the rest of the operation, but it's tough to make a parallel with that with our future Boumadine project. It has nothing to do. This is a small project. It's going to be reclaimed over the next 2 years. It gives good cash flow. It's a good exercise to start building a small operating team at Boumadine and to have more presence on our Boumadine site as we go from PEA to feasibility to construction. But one is not comparable with another.

Our next question comes from Justin Chan with SCP Resource Finance.

Congrats on a good quarter. My first one is just on -- I guess, on the mine plan for the rest of the year. I guess, compared to Q1, how should we think about strip for the open pit? And then I saw the underground really pushed tonnes quite hard. Do you expect that to continue? Or I think you were foreshadowing maybe you're shifting more to development and into the lower levels. So should we expect tonnes mined to come down a little bit from that high pace in Q1 from the underground?

Justin, yes, good question. Actually. It's -- we've been -- as you all know, we've been pushing tonnage both in the underground, the open pit. We had -- we really wanted to bring back the stockpile [indiscernible], show everybody we could have a good throughput at Zgounder, both in the open pit in the underground, in the plant. And I think those discussions are behind us now. So we have full team underground. The open pit has showed it can deliver. Now the open pit is wide open. We have room to work.

So first, for your strip ratio, we expect the long-term strip ratio to be what we published in our latest 43-101. So this strip ratio of 9, it's temporary. We will have months at 8 or 9 like we have now, and we will have months at 20 like we had in the past. Overall, it's between 13 and 16, and this is what we expect on the longer term.

Can you hear me, Justin?

Yes, I can hear you well. Thanks, Raph.

Okay. And so for the underground, absolutely, we've been at a rate of over 1,500 tonnes per day underground. And we have some of these levels that we want to shut them down because we want to increase the maximum ore recovery through the open pit. So to answer your question, yes, there will be a shift in focus in Q2 moving on for the rest of the year to accelerate the ramp down and to transfer some of this production power into stope development and sublevel development. We're comfortable at the underground rate at around 1,000 tonnes per day is something we're comfortable with because the open pit is well established now. So you can expect moving on to have the rate of the underground to slightly decrease 1,000 to 1,200 to 1,300 tonnes per day is probably the sweet spot we need to really focus on those sublevels for which we also know we have pretty good grade going down.

Okay. Got you. That's great color. And on the plant, do you think you'll keep the mobile crushers around even when it gets dry? And what would your throughput potential be if that's the case?

So again, we -- what we published in our feasibility is above 3,600 this year and 3,850 next year. Internally, we're trying to beat that. We have -- like our best days right now are around 4,300 tonnes per day. Those are punctual like best daily performance. I think, Justin, around 3,800 is probably where we'll be comfortably at in the near future. And that will -- like we're really pushing this plant, as you know, nameplate is 2,700. Now we're near 4,000. It's difficult for me to speculate above that because we need to go bottleneck after bottleneck. I think there's a bit of juice left in the plant, but we need extra crushing capacity for that. So 3,800 is probably where we would be. Some good months above that, some bad months around that. But to answer your question, 3,800, including the mobile crusher that we'll keep as long as we need.

Okay. Perfect. And I'm not sure who's the best person to ask this question to. But on Boumadine, the I guess, the ounces that weren't sold this quarter, do you expect to sell them in Q2? Or should that become spread through the rest of the year? And also, just given the world being pretty short of sulfur, will there be any noticeable increase in payability, do you think for Q2 and 3? Or is it too early to say that?

Justin, it's Ugo. Yes, for sales of Boumadine, it's not that the clients don't want it. I think we get called every week and they say, "Can we get more material." So especially with what's happening in the sulfur market today. So we are -- logistics by truck, like we're learning it. So it's going to be spread out throughout the year, and we're trying to modify things a little bit to send larger shipments. And so that on that, I think, is going to be through the year, but the 1 million ounces of silver equivalent is still what we're on track to do.

And in terms of payability, it's not going to change because it's old material that has been there for a long time, the sulfur quantity is a lot less than fresh rock from Boumadine. And so the payabilities aren't going to -- and the volumes are small on the 200,000 to 240,000 tonnes total. And so that we've agreed on a price and on a contract for -- with our traders. And so that's not going to change throughout that stockpile.

So Justin, if I can add on payability, the payability is changing on the bigger project because that has 45% sulfur. As Ugo said, the tailings is a bit worn out. So it's got very good gold and silver content. Pyrite is a bit higher. So it's not changing on the small project. But on the bigger project, it is changing in an important way.

Our next question comes from Mike Kozak with Cantor Fitzgerald.

A few questions from me. First one, Q1, it was the fourth quarter in a row where unit costs at Zgounder on a per tonne basis have trended down. I mean a portion of that is obviously more and more open pit material. But I mean you settled in around $80 a tonne in Q1, you were north of $100 a tonne a few quarters ago. Is that $80 a tonne a good number going forward? Do you think it's going to continue trending down? Or where do you expect to settle out?

I can comment a bit on the ounce unit costs. Our costs have been going down, and we're happy about that. Throughput has been going up and production has been stabilizing in the open pit and the underground. Now a lot of that unit cost saving comes from the underground unit cost per tonne as well as the open pit unit cost per tonne. And we've also had gains in the plants as we process more throughput and stabilized cyanide consumption. So we've been winning on all fronts, including site services and surface and utilities as we're toward being a more mature operation, and we're happy to see that.

Now that being said, there is a lot of cost fluctuation at Zgounder based on the open pit strip ratio, as you can imagine. So depending on the sequencing, we have months -- this quarter strip ratio was around 9, which is quite exceptional. The overall strip ratio of the open pit gets better through the life of mine. And again, we've made that quite clear in our latest 43-101, but it will increase slightly this year towards -- especially towards the end of the year, we'll have a bit higher strip ratio in the open pit. And I expect our strip ratio for the year to sit between 13 and 16.

So we'll continue to improve our overall cost. But inherently, the open pit will be more expensive in terms of cost per tonne because we'll converge more towards the 13 to 16 strip ratio as opposed to 9. And let's not forget underground, we need to develop new stopes. Now we have lower levels around 1925 that are operating, that costs are good. But on the long term, the underground cost of the Zgounder mine will slowly creep up as we go deeper and deeper, which is also normal and captured in our projections.

Okay. That's good color. Secondly, what do you expect your average -- now that you're making so much money, what do you expect your average income tax expense rate to be this year?

Ugo?

Yes, so income tax rate. So I think 5 years ago, the government of Morocco when we were back at 20%, had put out a new law and said that it was going to increase to 35%, in 2026 of 35%. Then during COVID, they added a 5% COVID tax, which got converted into a 5% solidarity tax, which is supposed to be temporary, okay? It's been 3 years now and going on a fourth year of that tax being in existence. We are one of 187 companies in Morocco that pay that tax rate. Everybody else that makes less than MAD 100 million of profit pays 20%.

We know there's the World Cup coming. I think the government, like all governments needs money. But more and more, we're starting to see companies like ourselves within the 127 that are saying, hey, 40% income tax is simply not competitive. And so our -- I would expect that '27 moving on, at least that 5% falls away, and then we'll see what happens with the additional tax rate. But yes, it's our biggest cost today.

Yes. Got it. And then one more, if you don't mind. Cash obviously building at a fast pace. Do you have any options available to you to accelerate repayment of the remaining EBRD debt?

Yes. So we -- if we want to repay like all debt, we have a -- there's prepayment penalties. We do have a slight out is that we can do cash sweeps out of the country back to head office and we have a cash sweep of 30%. And with that comes no prepayment. So we have to do that at specific timings when we pay -- when we repay capital in January and July. So assuming things continue like this, I think we're going to be using that option to cash sweep money out of the country and then force a cash sweep and prepay some like that. That's the expectation. But capital cost and cash has to keep going up. But assuming it does, I think that's an option we'll use.

Our next question comes from Eric Winmill with Scotiabank.

Just want to ask quickly about the tailings. I know you're increasing capacity there. Can you just remind us how long that's going to get you, how much runway you'll have once that expansion is done?

Sure. So we -- the first phase was obviously a short one to keep capital cost throughout the initial construction. Phase 2 is our biggest phase. So we have about 2.5 years of storage in it. Obviously, it went down because throughput went up quite a bit. So we have over 2.5 years, after which we have another phase planned.

Okay. And maybe just on the Boumadine. So you're coming out with the new PEA, you said sort of May, June -- or excuse me, June, July time frame. Any views on CapEx there? Should we expect meaningful changes from the last study that you put out?

Well, Raph is with us today, and he's in charge of the team that's overseeing the Boumadine study. So I guess it's the right time to ask him.

So in the PEA, we had a CapEx with a healthy contingency for that level of the study. And at that point, as we're advancing through this updated PEA and also the feasibility study, we will have some extra costs as we define and detail the project, but we'll also reduce the contingency as the project is well defined. So right now, we sit at -- we don't expect capital to go higher than the PEA or sit in the same range.

Okay. Great. That's really helpful. Appreciate it. Maybe just one more on Zgounder as well. So you're looking to increase the crushing capacity there. Any updates in terms of ordering of long lead time items or critical path items we should be looking at or maybe updates on the status, please?

Well, the good news is we already have the process unit, the cone crusher, we have it. So that's a relief. And once we decide to go ahead with that expansion, we're probably looking to a 9-month expansion. So yes, it's something that can be done within -- probably within a year. And it's not really important because in the meantime, we have the crushing contractor then bridge that gap.

Ladies and gentlemen, that concludes our Q&A period. I would now like to turn the call back over to Benoit La Salle for closing remarks.

Thank you, operator. Thank you for all the questions. Look, what is coming for us now, as I mentioned it, we'll have some exploration results coming in the next few weeks. We'll have a Boumadine exploration press release. In the next week or 2, we'll have the same as Zgounder. We also are looking at in-country consolidation of ground because Morocco is very interesting. It's got fantastic geology, and we have a first-mover advantage, and we will -- we are taking advantage of this. So you can expect some -- more news from us.

You can -- we will be on the road for the coming 2 months meeting some of our shareholders in the United States and in Europe. As you're fully aware, we started trading a week ago on -- or 10 days ago on NASDAQ. It's going extremely well. We're getting a lot of positive feedback. So we're really pleased with the NASDAQ listing.

So globally, and again, I will close on this, you have -- Aya is a company that is in Morocco, focusing in Morocco, where the geology is exceptional. You can see it on our discovery costs. There were some slides that were put together by a competitor recently on discovery costs, and we have the lowest discovery cost in our industry because of the geology. The jurisdiction is probably one of the best in the world with the permitting, with the employees, with the people. We are in a country that does not just tolerate mining, but in a country where mining is part of their strategic plan, and they want it to be very successful. And we have a team at Aya now, which has built many, many mines and has shown geological expertise.

So you have a very strong growth profile with Boumadine being developed and starting to be built in the next few quarters towards a 37 million ounces of annual production of silver equivalent coming at Boumadine, which is just from only one structure. So you have a beautiful growth profile in the company. You have core assets with 2 districts, the Boumadine district and the Zgounder district. And you have a company that will spend USD 60 million in exploration drilling over 200,000 meters and over 230,000 meters this year. So major geological upside, strong cash flow, great core assets in one of the best jurisdictions in the world.

So look, we will be coming back to follow Morocco in the World Cup of soccer or what they call football because they have an amazing team, and that will be the topic of all the news flow coming out of Morocco for the next couple of months.

So again, thank you so much for participating in this conference call. We look forward to seeing you at the Q2 call. And for many of you, we will be seeing you in all the conferences that are starting next week in Vegas and continuing to London the week after and on and on for the rest till the Rick Rule Conference in July in Boca Raton and then we should take a few weeks off for the summer. So thank you very much. We'll see you in the coming weeks. And otherwise, we'll see you at the Q2 conference call in August. Thank you.

Thank you for your participation. You may now disconnect. Everyone, have a great day.

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

Thank you, operator, and welcome, everyone, to Aya's Fourth Quarter and Full Year 2025 Earnings Conference Call. Here with me today, I have Benoit La Salle, President and CEO; Ugo Landry-Tolszczuk, 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 call, which is available via the webcast and is also posted on our website.

We will be making forward-looking statements during the call. Please refer to our cautionary notes included in the presentation, news release and MD&A as well as the risk factors included in our AIF. Technical information in this presentation has been reviewed and approved by Raphael Beaudoin, Aya's VP of Operations; and David Lalonde, Aya's VP of Exploration, both of whom are Aya's qualified persons as defined under National Instrument 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 La Salle. Benoit?

Elizabeth, thank you. Welcome, everybody, to this Q4 2025 presentation and full year 2025 as well. I would like to remind everybody that for Aya, the year 2025 is a ramp-up year. That's when we started the -- after the commissioning, which was in December of 2024, we did the commissioning of the new plant and then we went into the ramp-up year. So obviously, each quarter saw some improvement. And today, we're pleased to report that the fourth quarter was an excellent quarter and that the year overall is finishing very, very strong.

So in the presentation that you have, I would ask you to go to Page 4 and you see here that we have record revenue, record net income and operating cash flow. So for the year 2025, our revenues are at $202 million, always reporting in U.S. dollars. So $202 million compared to $39 million for the previous year. Our net income stands at $46 million after tax and compared to a loss of $26 million in 2024. I also would like to point out that the $46 million is after more than $14 million of stock-based compensation, which is our 3-year option program for senior management, which is being expensed.

So when you look at it on an earnings per share basis, at $46 million after tax, it's an earnings per share of $0.32 or $0.33 per share. But when you look at it on before stock-based compensation, you need to add $0.10 to the earnings per share basis. The cash flow is very strong. We had a cash flow of -- operating cash flow of $72 million compared to $9 million negative on the previous year. So we have a very strong position. And we're ending the year with a cash balance unrestricted of $136 million. And to that, you need to include $16 million of restricted cash, which is in an account for EBRD just as part of our long-term $100 million loan that we've obtained from EBRD for the construction of Zgounder. So globally, a very strong Q4 and a very strong year, knowing that it's a ramp-up year.

Moving to Slide #5, which is where the KPIs are, which I've been telling you about and how we manage starting on the left-hand side on the mining tonnage. If you see in Q4, we've mined more tonnes than we've processed, which is a great sign, meaning that now the mine is putting through more ore than we need at the plant. Therefore, we are increasing our stockpiles. So you recall that in Q1, Q2 and Q3, we were processing more than we were mining.

Now in Q4, we are mining more than we're processing. If you look at it on a yearly basis, you can see that we mined 1 million tonne and we processed 1.1 million tonnes. So for the year, we did eat up a little bit of our ROM pad. But for the quarter, we have changed the trend and we're now building ROM pad, which is excellent. The total mining came 62% from the open pit. Our goal is to be 70%-30%. We're getting there. But for the year 2025, we are at 62% from the open pit.

The milling rate, which is in the middle on Page 5 is, you see the milling rate, how interesting it is. If you look at Q4 of last year, we were at 1,200 tonnes a day. You recall that historically, we were at 700 tonnes a day. We were just commissioning the new plant. By the end of Q1, we were at 2,800 tonnes a day nameplate capacity. So it took 1 quarter and we were at nameplate capacity. And then you see Q2, we were at 3,000 tonnes a day. Q3, we were at 3,300. And now Q4, we are at 3,800 tonnes a day average.

So by 1 year of ramp-up, we're 1,000 tonnes a day above the nameplate of 2,700. So it's about 40% higher than nameplate. Exceptional plant, very well built. And if you go to the right and you look at the recoveries and the availability, well, that tells you everything.

So not only are we operating 40% above nameplate is the recovery for the year is at 88.4% but the recovery for Q4 is at 91%. Again, you recall that in Q1 2025, we had issues with the oxygen plant. The recoveries were in the low 80%. We told you we would fix that. It was under designed during the construction and the planning, we corrected it. And now you have a recovery rate of 91.2% in Q4, which is exceptional. It's actually above the design when we did the feasibility study. Our average was supposed to be around 88%, and now we're exceeding that by 3 to 4 points.

Plant availability, you see it on the right-hand side of the slide, Page 5. Plant availability in Q4 is 99%. I don't think you can beat that. It's extremely high. For the year, we're at 96%. Obviously, it's a brand-new plant. So we're comfortable with this. But all in all, what this is telling us is the plant is absolutely running well. It was built, you recall, a little bit under budget. We commissioned it on time. We ramped it up in 1 year or in 3 quarters and now we're running above nameplate.

So it's a very robust plan that we have. We produced in Q4 1,547,000 ounces, some of which came from Boumadine because you know that Boumadine, we're processing stockpile. So globally, it was a very strong quarter.

Going to Page 6, I think that is the summary of our industry. On the left-hand side, you see it's all about now margin. It's all about margin. Q4 2024, the margin was at the time because we were in ramp-up and in commissioning even -- so the margins were very, very small. And then you see to Q1, we get into a margin of $13. Q2, we have well, $13 margin. And then in Q3, the margin becomes almost $20.

Now the margin is $38 in Q4 and the margin for Q1 because we're now done Q1, we know that the average realized price for the period of Q1 is more like $80. So we're about $20 above Q4. But that is everything. This is what our industry is all about right now is the margin. So the margin is very high. It's something that helps us manage the mining, the grade, the cutoff, but also is showing us and is creating a lot of liquidity.

So on the right-hand side of the slide, you see the revenue from Q1 at $34 million to all the way up to Q4 at $75 million. And that Q4 at $75 million is based on a net realized silver price of $58. So you can imagine that going forward, we are a believer in the silver price. I mean, it's just going to get better. If you look at the net income, Q1 in the ramp-up, and I said that in the previous quarters, how many times you see net income in a ramp-up period.

So net income of $7 million in Q1 of $9 million in Q2, $12 million in Q3 and $18 million in Q4. So very strong Q4 again and within Q4 with an earnings per share of $0.12 and for the year of $0.32. Again, and this is after $0.10 of stock-based compensation. So a very strong quarter. The plant is running well. The profitability is there. The margins are there, and we have enough cash, and that what takes us to Slide #7 is we have a very strong balance sheet with $136 million in cash.

In Q4 of this year, we generated before working cap, $68 million of cash flow before working cap changes, $68 million for Q4, it was $35 million. So $68 million for the year, $35 million for the quarter. That pays for all of our expenses. So the CapEx, the capital expenditure for the year was $33 million. The exploration was $42 million. That's for 2025.

Now for 2026, capital and exploration are similar, a bit higher on exploration, but you can see that the cash flow generated covers more than the capital expenditure and the exploration expense. So very strong year again. The cash position unrestricted is at $136 million. And we also have a little credit facility of $10 million available with EBRD. It's a $25 million. We did draw on $15 million on it just because we have it and we did not want the credit facility to end and -- but we still have $10 million readily available.

So these are the results, but we're looking at the year 2025. So we just talked about the financial results, the operation, the fact that the mine is producing more than what the mill needs. So the mine is running well. The underground is running where we want it to be. The open pit is running where we want it to be. The open pit needs to increase a little bit its throughput, but it's -- we're exceeding what we need at the plant. What we did as well in 2025 was a new resource, a reserve resource update at Zgounder.

So we reviewed the mine plan. We've reviewed all the geological model. We've changed the mining approach going from selective, very restrictive mining where we would take the high-grade zone, and we went to more of a bulk mining scenario. And the reason is, is because Zgounder is very unique geologically it's not a vein system. You're not following a vein like most silver mines where you mine what you see and you mine the vein and you have most of the time, silver, a little bit of gold, some have lead and zinc. Here, it's not the case.

Here, the Zgounder mine is a loaf of bread. It's 200-meter wide, it's 1.4 kilometer long. It's 700 meter deep and it's mineralized. In there, you have some structures where the fluids went by and those structures are extremely high grade. But globally, the envelope is mineralized. So we've changed the approach, we've reviewed what was there. Of course, with the new silver price, it's extremely important to understand the geology because we do not want to leave behind pockets of 100 gram per tonne silver, though they're not in the model or they were deemed to be noneconomical 4 years ago. Today, this is absolutely economical.

So what we have is we now mine the entire structure. We have created stockpiles, so a lower grade stockpile between 40 and 80 grams, which is set aside for later. We have the regular stockpile, which we quantify. Of that, we have 250,000 tonnes on the regular stockpile and we follow the mining based on our mine model. But what we are mining is not, again, not a vein, but a really a mineralized loaf of bread, which is we've gone from selective mining to bulk mining, makes a big difference.

And you see it on Page 9. So on Page 9, you have the new mine plan. The new mine plan accounts for 6 million ounces of production per year for 11 years. It has an average cash cost for the period of $16.26 and AISC of around $19. And if you look at the mine plan in the 43-101 document, you see that for 2026, we're forecasting in that mine plan 5.8 million ounces per year with a cash cost of around $21. And the reason is because of the strip is we're at the beginning of the open pit. We have a lot of strip, strip ratio is between 13x and 15x. So we have a lot of strip and hence, that increases the cash cost in the first few years, and it reduces -- the cash cost will reduce in the later years as the strip is going to be coming down seriously.

So today's Zgounder is done. It's built, it's debugged. It's running smoothly. It has its own team. It's accountable, and we know and it's predictable. So it will be 6 million ounces right now based on what we know in geology because, of course, we're always looking for more. But what we know, it's 6 million ounces per year for 11 years with an all-in -- with a cash cost of $16.26.

Also this year and going to Page 10, this year being 2025, we've completed the PEA on Boumadine. Now that's been in the making for a couple of years. We've done a lot of drilling. We knew that this was a very robust project and we did it on the 2024 resource, which was available at the beginning of 2025 and we did a very thorough PEA with a lot of the work done to -- higher than the PEA level. And what this is showing us the highlight of the PEA is the low initial CapEx. That's the highlight of the PEA, $446 million of CapEx to build a company or a project that will be producing per year for the first 5 years, 400,000 ounces of gold equivalent or 37.5 million ounces of silver equivalent.

Now we're showing it to you on 1 to 5 years because year 6 and after will be compensated by putting in the 2025 drill program, which was not put in at the time, and we are doing this as we speak, and that will be ready for the end of June, beginning of July. And that's going to change the mine plan, and it's going to change the production profile in the later years. But based on the 2024 results, we do have a project using $2,800 gold and $30 silver, you have a project on a pretax basis that gives us $2.2 billion of net present value. It's got a CapEx efficiency ratio of 5:1, CapEx to NPV and internal rate of return of 69% and a payback of 1.3 years, and that is using $2,800 gold and $30 silver.

So you can imagine that at the current price and with the production that's going to be updated, this project is even more robust than what we're seeing. And all of that for year 1 to 5, the AISC on a gold equivalent production will be around $920. So where do you have that kind of a project that can produce 400,000 ounces of gold equivalent on an AISC of low $900 and a CapEx of $446 million, extremely unique, extremely rare in a great jurisdiction, and that's what Boumadine is all about.

So when we look at Boumadine on Page 21 -- on page -- sorry, 11, it's a district scale project with low initial CapEx, extremely rare, extremely unique. It has a strong production profile with high-grade material. The mining permit is in hand. Strong economics based on production of 3 marketable concentrate. Now that's very important is you have a lead concentrate, you have a zinc concentrate and then you have a pyrite concentrate. And out of the 3 concentrate, we will recover silver or gold, silver, lead and zinc.

Now the pyrite concentrate, which historically people thought was a problem, well, it's actually now an asset because following the war and following what's been happening in the Middle East, sulfur has gone from $100 a tonne to $500 a tonne and is expected to go as high as $800 a tonne. Sulfur comes from the pyrite concentrate because we have sulfur in the pyrite concentrate. So the value of our concentrate has never been as good as it is right now and is expected to continue.

So historically, when people were saying projects like that are complicated and all that, sure, if you have low-grade material, it can be more complicated. But in this case, with a project where the -- on a silver equivalent basis, you're at 450 gram per tonne or on a gold equivalent basis, you're almost 5 gram per tonne. You're in an open pit situation and underground and you have 45% sulfur in your pyrite concentrate, this is really a valuable concentrate. So we're fast tracking this. We're pushing now on the revised PEA which to show you exactly how profitable this project is going to be once we've inputed the new resource, reserve resource model and some of the new data that we have, especially on the marketing side of the concentrate.

Again, to close the year 2025, we did a lot of drilling. As I always say, Aya is an exploration company, but it has one project in operation, one project in development, and we do a lot of drilling. So at Zgounder this year, we completed 28,000 meters of drilling. The budget was 25,000 meters and the average cost of meter is $144.

So extremely good cost, very -- this is all core drilling. It's all diamond drilling, giving us a lot of information. We have many new targets. We have discovered extension to the Zgounder main project, and we also have many new targets that we will be drilling this year. At Boumadine, we've drilled 150,000 meters this year, this year being 2025. The target was 140,000 meters. We exceeded the target. Our cost of drilling is also similar at $144 a meter diamond drilling. We have discovered or we have discovered extension to the zones, the 3 mineralized zones that we have, and we've also discovered new zones in the Boumadine complex.

Boumadine is a very large piece of land. It's a district. We have -- this year, we've added 10 new permits. We have a footprint that is in excess of 300 square kilometers under the exploration permit and we have an additional 500 square kilometer under a [indiscernible] permit, which is an exploration permit, but not yet turned into the exploration permit that gets transferred into a mining permit. So it's different steps in how they approach exploration in Morocco.

So we had a fantastic year drilling almost 180,000 meters in 2025 with beautiful results at Zgounder and at Boumadine. Moving just to the guidance. This is already public. We told you that this year, we expect to produce between 6.2 million ounces and 6.8 million ounces. We know that in the mine plan at Zgounder, it's based for 5.8 million ounces. Again, just to be conservative, we've given a guidance of 5.2 million ounces to 5.8 million ounces. And we've put in 1 million ounces of silver equivalent at Boumadine, where we're treating tailings. The cash cost at Zgounder is as per the mine plan. Again, I would refer to you to the 43-101 document of $21.50 and Boumadine is at $10. That is extremely conservative. You'll see that in Q4, we were a lot lower than this.

Sustaining and growth capital for the year is at $36 million, which is at Zgounder mainly is to push the ramp down to the granite to the contact of the granite where we see high-grade mineralization. So we're going to be pushing this all the way down. We will also be putting in an ore sorter, and we are working on increasing throughput capacity, though we are at 3,800 tonnes per day. We're putting a little bit of work to bring our throughput capacity to exceed 4,000 tonnes per day.

So very reasonable capital to be spent this year and the exploration program, of course, the $60 million in exploration program, and that is mainly 200,000 meters at Boumadine, which we really hope to exceed. And I have to say that as of now, we are ahead of schedule there on our drilling, and we will be drilling 20,000 meters at Zgounder as well.

So going forward, for 2026, the guidance is straightforward. The costs are well under control as we are now in cruising speed at Zgounder. So just to close, what's the focus and where are we going? So the focus is to accelerate Boumadine. We do not need debt financing. We don't need new equity financing. We can do Boumadine with our own cash. We totally have $130 million in cash. If everything stays where we are right now, we could be generating net-net of all expenses, $200 million this year. So we can fast track the feasibility study in which we are fast-tracking feasibility study, all the work that needs to be done, every chapter in the feasibility study is being worked on right now. And we will start the construction of every element that is completed in this feasibility study as quickly as possible.

The drilling, as I've mentioned, is ongoing, 180,000 meters of infill drilling on the main structures, which is to convert inferred resource into measured and indicated. And regional is really depending on what we see and what we find, but currently budgeted at 20,000 meters but again, this is completely open as we're drilling some very high priority targets on the Boumadine regional play.

At Zgounder, we will continue to optimize mining operation. As I said, we want to increase the open pit a little bit more. We want to better control the grade in the open pit. We still need to work on that. Of all the KPIs, the only one left is to really control the grade in the open pit a little bit better. The underground is done. The throughput is done with the underground. So we will continue to optimize mining operation.

We have steady-state production. Of course, our goal is to take the 3,700 tonnes per day and push it up to 4,000 tonnes per day. And we always look at other means to increase plant capacity. So the story is very simple is you have an asset that's in production, that's built, that's debugged, that has 100 million ounces of measured and indicated resource that will give you 6 million ounces a year at an AISC of $19, let's put it, $16 cash cost plus about $3. So let's say, $20. So you have 6 million ounces with a $20 all-in cash cost or cost, not cash, cost. And with that, it generates enough money to build the second asset, which is currently in development, which is called Boumadine.

Boumadine today stands at 450 million ounces of silver equivalent, but that is being updated because that did not take into account the 2025 drill results. That's being put in as we speak. We'll have the revised PEA available for you in a couple of months.

But on Page 15, to the right, that, to me, is the future of Aya is you look at Aya and what kind of strength it has, well, it has a project that will produce 6 million ounces called Zgounder. And it has a second project, which is discovered, geology done, metallurgy done, flow sheet done, water identified, power from the grid, people available. We're taking the same construction team, many suppliers are the same. And that project, once built, will produce 37 million ounces per year of silver equivalent.

So as a company, we will be approximately 43 million ounces silver equivalent as a company. So when you look at this and you compare this level to others, we're clearly the up-and-coming silver producer with these 2 assets, not taking into account Zgounder Regional, Boumadine Regional and the other assets that we have.

So going to Page 16 to close is I always say that to be successful, you need 3 things, and these are the 3 -- the end of each of the triangle is you need geology, which we have in Morocco. You need jurisdiction, which we have in Morocco because it is absolutely one of the best jurisdiction in the world. And you need the people that have done it, that have built mines, have developed mines, have made discoveries, and we have that.

So if you have geology, you have jurisdiction, you have people and you are disciplined in not issuing too many shares, this is the success to have the best return on equity, meaning you have strong production and we have here. So if you look at our triangle, geology is at the top, strong growth profile, absolutely moving from 6 million ounces to 43 million ounces of silver equivalent.

Core asset strength. We have 2 districts, and we're adding more districts to the story as we're putting in more permits. Exploration track record, I think we have the best in the industry, having discovered 550 million ounces of silver equivalent in the last 5 years. So you have a tight capital structure with only 141 million shares outstanding. No need to increase that number. We have cash in the bank. We are generating cash, and we're building a Tier 1 asset, which is Boumadine that will add 37 million ounces of silver equivalent as soon as it's ready to get into production.

So when you look at this triangle, this is the -- why you want to be with us in Aya because you have the 3 elements that really create success. So this completes the formal part of the presentation.

I will now, operator, open it up for questions.

[Operator Instructions]

And our first question comes from the line of Justin Chan of SCP Resource Finance.

Congrats on a big year. And yes, my first question is just you touched on sulfur today. I was just curious, I guess, maybe on both the positive and negative aspects of current events. Could you talk us through -- are you seeing any changes in terms of fuel pricing? And I guess, how do you plan ahead for that this year? And then on sulfur, for the updated PEA, could you give us a sense of how the payabilities might look? I realize like today's terms might not be what you've modeled long term, but I'm just curious if you can kind of give us a quantum on the payabilities for the prior PEA.

Yes. Thanks, Justin. It's a very, very good question and very current question. We're on that on a regular basis. I'll turn this over to Ugo and Ugo and Ralph are managing that part, you can imagine of the PEA. So Ugo, do you want to go ahead?

Yes. So on sulfur, there's a few things. Obviously, sulfur pricing has gone from, call it, $150 when we did our PEA to close to $700 today. And also gold and silver prices have significantly increased since our PEA.

The second thing is that because we're selling our tailings, we also have a much better idea of the market. We actually have some guys in China right now meeting with some of our clients. And so we expect that the payabilities that we have in our PEA to go up pretty substantially. Will we get paid for sulfur? I don't think we're going to have that as a base case in our update, but we are looking at some stuff in Morocco.

We do have one of the largest purchasers of sulfur in the world in the OCP and with current price environments, obviously, us exporting a pyrite, which is very high sulfur content, I think they'd like to have some of that. So we're looking at that as well, but I think that's going to be kind of a separate thing from the main project.

But Justin, just in the PEA, the payability was established at 73%. Since then, they had revised their offer to 75% payability, and there's no long-term agreement yet signed because they're indicating to us that this will also improve, as Ugo said, considerably. So we're keeping all of the options open. We have an agreement that is signed for the Boumadine tailings because that is being exported every quarter right now to the probably similar clients or the same clients that we're going to have for the Boumadine main production in a couple of years.

[indiscernible].

Yes. So above 75% and potentially materially above that?

Exactly, yes.

Okay. Perfect. And yes, just maybe the other part of the question was just in terms of, I guess, what are you guys seeing in terms of fuel prices, consumables. I'd imagine where you are, it's not a question of availability, but just curious how do you guys -- if you have anything to manage with regards to price and protecting yourselves, I guess, in the long term?

Yes. So on that, look, for sure, what's happening right now is affecting fuel prices everywhere. Morocco is not special. Morocco's fuel prices have gone up basically $0.30 in the last -- it's by law. So the law states the fuel prices. And so they've gone up pretty substantially. So we have that. We have zinc and we have cyanide. Those are our 3 main aspects. Our procurement teams are on it. We have quite a bit of cyanide and zinc on site already. So I think on that, we're quite fine.

And then fuel, we have to manage and it's not so much a price. It's obviously going to affect cash costs like everybody else. And then on availability, we're keeping a close eye on it, and we're working with our contractors and ourselves to see if we can get more storage locally. And we have a pretty healthy stockpile as well. So even if ever we'd have to stop the mine, we don't run. We run our plant on electricity. And so we can still run for a good while even if we had -- if there was ever a constraint on fuel.

Yes, Justin, the big element here is our energy is from the grid. It's solar and wind, as we know. And unlike many other production assets in Africa where they have to buy fuel for energy, we do not have to buy fuel for energy. So our consumption is actually quite low when I compare that to what we were doing historically at SEMAFO and what we're buying right now in Aya, it's much, much lower. So the risk exposure is quite -- is much smaller. And as Ugo said, we have stockpiled, but we don't see any issues at the moment, except for a small increase in the price.

Got you. That's really helpful. And just one last one is we're almost through the first quarter now. I know it's Q4 reporting, but just curious in the -- I guess, we've almost done a quarter, I'm just curious what you're seeing in terms of mining from the open pit and underground. So in Q4, you did really well on grade from the underground, good on volume. The open pit had a tonne of volume, a little bit lower grade. I'm just curious if Q1 looks similar to Q4 or quite different actually.

Well, Raph, do you want to take this question?

Yes. Justin, so the beginning of the year went quite well. We have continued to increase our stockpile. We have continued to increase our mining rate in the open pit. As I've mentioned before, what we call the super pit and our change in mining strategy, everything is focused on ounce recovery to increase the recovery in the mine of silver, especially in this pricing environment. So this is what the team is focusing on, continue to accelerate the open pit, sustain the underground as it is and focus on ore recovery.

So if there's silver in it, we mine it. The head grade has been stable as what we've seen last year. And we continue to evaluate what's the best way, the most cost effective and the fastest way to increase and to sustain plant throughput. So this year, we have several projects on the go to sustain throughput and to even increase it further, and that's reflected in our guidance.

Now as for the grade, as you said, Q1 is almost over, and it's been quite similar, but the strip is slowly decreasing, throughput is stabilizing, and we continue to increase our stockpile. And as the year goes on, we will also continue to at least sustain the throughput and find ways to improve it.

[Operator Instructions]

And our next question comes from Don DeMarco of National Bank.

So Benoit, you mentioned that a focus is to accelerate Boumadine. And of course, we're looking forward to the updated PEA later this year. But what are the levers or potential bottlenecks that you have to fast track the FS and then even looking ahead to construction beyond that, how can you potentially expedite that? And how much wiggle room is there in the schedule in certain optimal scenarios?

Well, the fact that you don't need debt is major because, as you know, if we needed some debt, you'd have to complete the feasibility study, give it to the lenders, they would hire outside consultants that would come over for a couple of months, review the work, question the work. We'd have to answer. You're looking at 6 to 9 months of time that is needed just to put the debt facility in place as we did with when we did Zgounder with EBRD, and we went through the whole process. In this case, assuming the silver price stays where it is and is -- or increasing, we don't need that.

So the team is doing like let's take water. So water, we're putting together the strategy where the water is coming from. We probably will have to build some pipelines in between some of the villages where we're going to take gray water. We're also going to use one of the aquifer. So we as soon as that's done, the team will look at what can be done immediately, and we will start that right now.

Same thing for power. Power will come from the grid. Power is built, as you know, with the national utility company. We're not going to wait for a banker to accept the PEA and give us the depth. We will get going immediately. So every chapter that we do, we look at what we can do and how fast we can do it. So it's -- of course, it's not as nice as having a gant chart and you say we'll be ready by the mid-2027, and then we'll do the debt financing and then we'll do the construction. Our mind is let's get this done as quickly as possible.

So we are not cutting corners on technical things. We're not cutting corners on the flow sheet or because it's still an 8,000/10,000 tonne per day flotation plant. So not complicated, but you still have to build it. So we're not cutting corners. But clearly, the fact that you don't need equity or debt is -- will accelerate the construction of this project.

Okay. Yes, that's a good point. And on the debt, I mean, you've got a little bit of debt on your balance sheet right now and looking at the cash flows that are coming in, are you thinking that maybe you might delever some of that ahead of -- as the FS gets finalized and ahead of a Boumadine construction decision?

Yes, absolutely. So the debt, as you know, is with EBRD. They're very, very good financial partners. They've been great. They are important in the country. We don't want to pay them down. And if we have even small penalties to pay, which we do have as per the agreement. So we're looking at what we can do with them.

On the other hand, the fact that it's a repayment over 4 years allows us -- we think of this EBRD facility today as funding for Boumadine. We could pay it down almost today if we wanted to and be done with the debt. But we're also keeping it there while we see where the silver price goes, what's the cash flow per quarter because think of it as being utilized, whatever is generated is utilized on accelerating Boumadine. But we do have the flexibility. And yes, you will see over the next quarters and next year that the debt will be lower, knowing that if we wanted to at one point in time, in country, we could utilize Zgounder to -- if we needed some debt, which we don't, but if we needed some debt, Zgounder could be also the backbone of a special financing, balance sheet financing, not project.

Okay. That excellent color there. And then just finally, as a last question, what are your thoughts on M&A at this stage? I mean, I think over time, there's been some discussion about there might be some smaller opportunities in Morocco, whatever stage that might be, maybe even close to production. But is that part of your strategy going forward over the next few years? Or is it more singularly focused on Boumadine?

No, it is, and we do review opportunities all the time, but we're extremely, extremely disciplined. So we have something fantastic 2 district, Zgounder and Boumadine. Often people say, what after Boumadine? I say, well, there'll be Boumadine 2, Boumadine 3, Boumadine 4 because of the size of the district. So there's a lot to come. And we do look at things. And if we don't like the price because they are asking too much and we don't think it's justified, we are extremely disciplined. You're not going to see anything outside of Morocco. We have a lot of work to do.

We have a lot of potential in Morocco. So we're staying focused to this jurisdiction. We like it. We're comfortable. We have our team there. And so we are disciplined. Are we looking to buy Morocco? Absolutely, but very small transactions that's not going to affect really -- and most of that is not for share. Most of it is also for small cash payments and payment over time. So yes, we are looking to increase the portfolio. We do want to have a third and maybe a fourth district, but it will -- I'm quite comfortable that something is going to get done in 2026.

Congratulations and good luck with Q1.

Thank you.

Ladies and gentlemen, that concludes our Q&A period. I'd now like to turn the call back over to Benoit La for closing remarks.

Thank you, operator. Thanks, everybody, for being on the call today. Look, Q1 is done. It's done today. So what's coming for Aya in the coming few quarters is you will still see some Zgounder and Boumadine drill result. We have a very large program at Zgounder and an extremely large program at Boumadine. So you will see drill results on a regular basis. You will see, of course, our Q1 financial results mid-May. I believe May 15, we'll be issuing our Q1 financial results. Also, we didn't talk about this yet, but we are completing our U.S. listing. We were waiting to have our financial statements for the year 2025. Those are going to be filed with the American -- with the NASDAQ Stock Exchange. And hopefully, in a couple of weeks, we'll be able to announce that we will start trading on the NASDAQ in the States.

Coming is the Boumadine technical report, as we said, over the summer. As soon as we have that available, we will be putting this out to show you the strength of this Tier 1 asset. And as Don asked, for 2026, there's going to be in-country consolidation of new districts that we like, that we see and we believe that there's a silver component to it. Some may have silver, gold, others that we look at our silver, copper, but we definitely are looking to increase our land package with silver exposure.

So look, that is the end of this call. I believe we had a very good year 2025. The ramp-up is a ramp-up. It ended very, very well. We had a strong performance. We're getting into 2026 with a very strong view on silver, and we're very happy with our new mining method at Zgounder, where we go bulk mining because we believe that bulk mining silver is extremely rare, but it's also very appropriate when you have a strong silver price.

Thank you all of you for being there. We will see you in 45 days in May for the Q1 financial results. Thank you, and have a good day.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

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

Thank you, operator, and welcome to everyone who has joined Aya's Third Quarter 2025 Earnings Conference Call. Here with me today, I have Benoit La Salle, President and CEO; Ugo Landry-Tolszczuk, 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 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 AIF. Technical information in this presentation has been reviewed and approved by Raphael Beaudoin, Aya's Vice President of Operations; and David Lalonde, Aya's Vice President of Exploration, both of whom are Aya's qualified persons as defined under National Instrument 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 La Salle. Benoit?

Elizabeth, thank you very much. Hello, everybody, and welcome to our Q3 conference call. Q3 is a strong quarter. We're delivering across all key pillars of our strategy. On the production side, we have solid operational KPIs. We have produced for the quarter 1,347,000 ounces. The mill plant ramp-up is near complete, and we have ongoing targeted improvement to the mine plan. So for the financial results, we have $54 million of revenue in Q3 only, and we have $22 million of cash flow from operations. So it is a very strong quarter. We finished the quarter with $129 million in cash that -- the cash that's not restricted and $16 million in restricted cash with EBRD.

On the drilling program, on the exploration front, we had a very strong quarter. We'll review this. The drill programs are continuing both at Zgounder and at Boumadine. And just after the end of our quarter, we've announced the Boumadine PEA results, which I will review with you as well.

On the ESG front, we continue to progress in the strengthening of our positioning in country. We're also advancing towards an ISO 14001 environmental certification. So 14001 environmental certification is being done at the moment. Focusing on health and safety, we had another strong quarter on site at Zgounder.

So the financial position is strong. The balance sheet is strong. And we have the money to develop Zgounder to what it is right now and to continue the drilling. But most important is, we have the money to develop Boumadine. And that is extremely important as Boumadine is becoming a world-class Tier 1 asset.

Going to slide on Page #5, you -- just a couple of KPIs for you to see that we are really, really progressing. So as you know, we're look -- let's look at the plant to start, so the ore process and the milling rate. So the ore process here, you recall, the plant has been built for 2,700 tonnes a day. This is where we were at Q1 2025. Then we went up to 3,000 tonnes a day in Q2. By Q3, we were running at 3,300 tonnes a day. We've also indicated that at the end of September, we were at 3,600 tonnes. And currently, in November, we've been hitting 4,000 tonne a day. We don't believe that the 4,000 tonne a day will be sustained throughout the quarter. We're more towards 3,700 tonne, 3,800 tonne per day. But understanding that from a design and a construction of 2,700 tonne a day, this is a major success. And I recall again, we did this for $140 million, less the money we've received from the EPC contractor for the damage that -- the fact that they were late delivering to us the plant. So technically, we did this construction for about $133 million. So it's quite spectacular in the mining space.

On mill recoveries, well, the mill recoveries, you know, is always something very sensitive. In silver, mill recoveries often are more in the mid-70s, while we were in Q3 at 92.5%. And on mill availability or plant availability, let's call it this way, we were at 96%. There was a little bit of preventive maintenance in the quarter because on the previous quarter, in Q2, we were at 98% plant availability. So you see the ramp-up momentum is continuing. We are now at capacity. The ramp-up has been very smooth. And the execution is on track with a very strong plant that is processing way above the plant capacity.

For the mine, the mine is also on Slide #6. The mine is running smoothly. The underground mine at a steady state of 1,300 tonnes per day, running at 159 gram per tonne. So you recall, the KPI that was giving us a little bit of headache [indiscernible] was the grade and the dilution of the grade we are getting better every quarter with the underground mine. So that's where it started at the beginning of the year, where we were having issues. This is now really coming through, and the grade of the underground mine is better, and it's getting better every quarter.

On the open pit, we have been focusing on the Northeast stripping. We've done a lot of stripping. And this is why on the slide, when you look at the total tonnage done in the quarter, it looks like the total tonnage done is lower. It's true because that's ore, but actually, we are much higher in total ore transported because we did focus on opening up the large pit. So we are currently running on a daily basis at moving 45,000 tonnes to 50,000 tonnes of not only ore, but also of [indiscernible]. And this is because we're preparing the large pit. So we have been doing extremely well at the underground mining. The throughput is increasing. The grade is getting much better. And now, we're working on the open pit, where we do still need to improve in the open pit mining selectivity and operational control. We know, and this is of the 5 KPIs that was the last one, and now it's half of it that we still need to attend to it, but we are attending to the grade in the open pit. But the throughput of the underground and the throughput of the open pit is there. You know our objective is to be at 4,000 tonnes per day at 1,500 tonnes coming from the underground, we're there today, and 2,500 tonnes coming from the open pit. We're not there right now, but we'll be there for year-end. So of the 5 KPIs that we've been managing for the ramp-up, all the plant KPIs are done and are doing better than expected. The throughput of the mine is there, and it's only -- still we are working on the grade coming from the open pit. So it is a ramp-up process.

And this is why going to Page #7, you look at -- on the left-hand side, if you look at the cost, the cost for the quarter is a little bit higher than what we wanted it to be. The cost -- though it's lower than Q2, it's at $20. Our goal was to be more towards $18.50. And the reason for the cost -- it's not the cost per tonne. Our cost per tonne is excellent. It's the cost per ounce, and the reason is the grade coming from the open pit. Also, in 2025, the price of cyanide really went up considerably. And right now, we see it coming down. On a per tonne basis, it's coming down almost like $3 per tonne. Now we are seeing it. We are completing our purchasing for 2026, and the cost of cyanide is coming down lower than it was for 2025. But again, as we've been saying quarter-over-quarter, look at the margin on that chart. Look at the margin in Q1. We were working with $13 margin, $31 less $18. In Q2, we were working with $12, $13 margin. In Q3, we're working with almost $20 or $19 margin. And in Q4, at the moment, as we speak, silver is at $50. We've been selling in Q4 silver between $48 and $51. So you're looking at $28 margin for Q4. So yes, and the costs have to come down, and this is the objective that we have for Q4 and for 2026, but the margin is really strong and getting stronger.

So when you look on the right-hand side of that slide on Page 7, you see the growth in revenue, which is, of course, due to the increase in production, but also the increase in silver price. So the higher volume is about plus 20% and silver price is plus 18%. So for Q3, you have record revenue of $54 million, and you have record net income of $12.4 million, which when we convert that on a per share basis, it is $0.09 per share. I would like to draw your attention, when you look at the cost, we have the stock option costs that are put into each quarter, which amounts to $0.024 per share. This is a program that was put into place in 2020 and that we've repeated in 2025 -- for the year 2025. It's the retention program of the senior management team. Those options vest over time, and the cost of the option, if you look at the G&A section of the financial statement, it's $0.024. So, on an adjusted earnings per share, if you remove those which are continuing over time for quite a long period, if you look at the option package that I have or Mustapha El Ouafi has, we haven't touched those options in the past 5 years, and we don't intend to touch them in the near future, but we do take the expense on a quarterly basis. So we're looking at $0.09 per share after stock option plan or stock option cost, but before, it's more $0.114 million on a per share basis.

The actual cash flow is also very, very strong. As we've indicated, we've generated cash flow from operations. You have that on Page 8, sorry, I didn't say that earlier. On Page 8, you have cash flow from operation of $22 million. And this, again, was working with a much smaller margin in Q3 than we have in Q4. You have the CapEx and the exploration program of '22. The EPC compensation is a tribute to how well we structured the construction contract, and we were able to get a compensation of $8 million less the legal fees associated with the court case if you -- or the negotiation of that in Spain. So we had legal fees of close to $1 million. So we did receive $8 million, but we've accounted for $7 million, and that $7 million goes against the CapEx in our -- on our balance sheet. So it doesn't go against the cost. It goes against the CapEx. We have a strong cash position of USD 129 million, obviously, million. And we do have an undrawn credit facility with EBRD of $10 million.

Talking about exploration, moving to Slide #9. Again, you see Morocco. Morocco, again, is more and more now seen as a top-tier jurisdiction in the world. It's because of the speed of permitting, because of the quality of the geology. As you know, there's 3 elements that count is geology, is jurisdiction and the people who run this. In this case, jurisdiction is fantastic, geology is fantastic. So at Zgounder, our budget for the year was 20,000 to 25,000 meters of drilling. We are at quarter-end at 19,659 meters drilled. The cost of drilling all-in in Morocco is USD 150 a meter. So it's really a fraction of the price of drilling anywhere else around the world. So we've been drilling at Zgounder. We've been drilling at Zgounder at the mine and have been putting out fantastic results. We're drilling on what we call Zgounder [indiscernible], so very close to the mine and Zgounder regional as well where we do have many, many targets. So you've seen over the quarter some very good results of 1,164 gram per tonne over 3 meters, and we're continuing to have very, very good grade coming out of the drill program.

The regional as well -- and at one point, we'll have much more -- a longer presentation on the regional play at Zgounder, but we're adding permits to the region. We're doing a lot of work on the region, and we're finding a lot of very good structures that we intend to -- that we are drilling and that we intend to drill in 2026 as well. So it's continuing to be a fantastic project with a very, very strong geological potential.

The next one, the Boumadine is our bigger asset because it's got a bigger resource because we have a bigger footprint. We have a goal to drill 140,000 meters this year. By quarter-end, we were at 109,000 meters drilled, and it's continuing to -- all drills are turning. We have shown you the PEA, which requires additional drilling, but the drilling this quarter confirmed continuity of the Boumadine main zone, the Tizi zone, and we've been extending the zone continuously in the Imariren zone, as well as now a striking of 1.2 kilometers. In the PEA, we only took into account the main permit, which is 32 square kilometers out of a district that we control of about 800 square kilometers. So we took into account just these 3 zones, Boumadine, Tizi and Imariren, into the PEA. We had other very important hits on these 3 zones, but also on new satellite zones that we have discovered in the past few years and one which is called [indiscernible] which is very, very interesting because it's a gold zone. It has also a little bit of copper. It's been drilled in very wide spacing on 8 kilometers. We are seeing the mineralization on 8 kilometers, but we have now extended the anomaly on more than 20 kilometers. So it's -- and that's not in the PEA. This is a new zone, which is more gold than polymetallic, but also very interesting.

And in the quarter, we've added 2 new mining licenses, which is quite spectacular. We have many, many mining licenses in this district because you understand that we control a district. It's not just a permit or 2, it's a mining district where we are the only player in the district. We've increased our land package that's permitted to 339 square kilometers, but we also have a 600 square kilometer exploration license. So it's just showing us the footprint that we have at Boumadine is really exceptional.

So just quick on the outlook. We're confirming the outlook that you have on Page 11. That is not changing. We know that the recovery will be -- not the recovery, sorry, it will be a bit higher and the grade will be a bit lower. But globally, the production will be aligned with the guidance, most likely the lower part of the guidance, but our goal is to be within the guidance.

Continuing with the presentation, going to page -- the following page on the Boumadine PEA. Just a quick summary. It's the most, today, important project, I believe, in the mining world because of the fact that it is permitted, that the financing is spoken for with our financial partner, EBRD, with the offtaker who are going to be buying the concentrate, and the fact that we have as well liquidity, and we're bankable in country with banks in Morocco. So we -- the funding is spoken for. It's not done because obviously, we understand that the bankable feasibility is not completed. We're missing the drilling. So -- and we are launching as of now a 360,000-meter drill campaign that is going to be executed over the next 2 years. But the project at our base case at $2,800 gold and $30 silver has an NPV on a post-tax of $1.5 million. And as I said during the presentation, we're looking at both the post and the pretax because we have not yet done the tax structuring of this project, something that we've discussed today because as I'm talking to you -- I am in Casablanca. We have had meetings on Boumadine and on the tax structuring and how we want to position this project if we have time because the project needs 2 years of drilling and the feasibility study. So there is time, but it's super important that we have the proper tax structure.

The NPV to CapEx, the CapEx intensity is absolutely unique. It's between 3:1 to 5:1. And this is at the base case, the internal rate of returns between 47% and 69% and the payback between 2 years and 1.3 years. So it's a very robust project. Why? It's because of the low initial CapEx at $446 million, CapEx that we control extremely well because $50 million of it is pre-strip of the open pit. It's the water system, it's the electricity, all the things that we've just done at Zgounder, which we're going to repeat at Boumadine. And the beauty of it is it's low AISC. The AISC for the first 5 years is $928. The ASIC over the mine life is $1,021. But all of that is -- does not take into account the 140,000 meters of drilling of 2025 and all the additional drilling that we're going to be doing over the next 2 years. So why we're focusing on the first 5 years because that's where we have kind of clear visibility. After that, it's -- yes, it's what we have, but it's going to be a lot bigger than this. Like there's no doubt in our mind that this is going to be a lot bigger. So when you look at it as a silver company because we are a silver company -- this project is a silver equivalent, is adding 37.5 million ounces per year of silver production on an equivalent basis.

So moving to the next slide, why this is such a compelling story because it's a district scale land package, like we owned the Red Lake District. We own the Abitibi belt. We own all of the Carlin Trend, like it's all part of the same company. It's got exceptional economics because it's low capital because in Morocco, the cost of construction is about 1/3 the cost of construction of any other asset around the world, and it's very, very well built. So it's low capital intensity and very rapid payback. It's a low-risk project. It's based on a simple model. It's 3 concentrate, lead, zinc and pyrite concentrate. We have MOUs with 3 of them for all the concentrates. So we will then be selecting how we're going to go forward with this. Financing, I said it, it's spoken for. We just have not finalized it. We have many, many options.

The proven track record in the region because we just built Zgounder. So whoever is doing the excavation at Zgounder and the open pit mining will be bidding to do the open pit mining at Boumadine. It's 5x the size. Whoever is doing the underground development will be bidding for the underground development. So we're looking at a situation where the same suppliers are going to be coming in to work with us. We know them, they know us. We work very well together. And don't forget, all of that is possible because we've built it, because the money is available in country and because we do have a mining license in hand. So we're not waiting for the government to approve an environmental license or a mining license or, I mean, we have our mining license in hand, and we can start. We cannot start now because we need to complete the drilling on a 50-by-50-meter spacing so that we can move our resource into the measured and inferred category in order to put them into the feasibility study.

So we've covered the main point of the PEA, which we have on the next slide, the low CapEx, strong economics, revenue driven with gold, silver, lead and zinc. It's open pit and underground, but the first 2 years will be open pit. And based on the extension because you will see over the coming months, there's going to be more drill results, showing additional structures that can be attacked either through open pit or underground mining. We keep drilling, and we have been putting out results because, don't forget, all the drilling of 2025 is not in the study.

So to conclude, what are the catalysts for 2025? We're, of course, almost done. This is mid-November, but the drill programs, which you have on Slide 15, the drill programs are continuing. We will finish the year with almost 200,000 -- almost 200,000 meters of drilling. We're heading into 2026 with most likely 250,000 meters, maybe 300,000, depending on the drill contractors and how fast and we can do the drilling. But we are moving into between 250,000 and 300,000 meters. We've delivered in 2025 as we wanted the PEA on Boumadine, which is a starting PEA because it only takes the resource until the end of 2024. In our catalysts for 2025, we wanted to reach 3,000 tonne per day processing. We're actually now touching 4,000 tonne per day processing. So we are really, really showing that the plant is well built, very robust and exceeding nameplate capacity.

People were looking for an update on the Boumadine metallurgy. So that is checked. There's no metallurgy issue because we're going to be sending the concentrate to a smelter -- or to smelters, not one, but many. So the recoveries are in the high-90s. The payability is lower because we do share on the payability, but the recoveries are in the high-90s. And we also have shown you that we can also use a roaster if we want to reduce our cost of transport because if you look at the [ ASIC ] at $1,000, there's $300 of transport and process and all that. We want to remove that and we do a roaster or a smelter in country, and actually, we do. We won't do that ourselves, but with partners. We know that people are looking at this project, and there is a source of sulfuric acid in country to the country that's probably the largest buyer in the world of sulfur for the fertilizer. Well, that source of sulfur is something that's drawing a lot of attention right now because it's in country, it's available to produce sulfuric acid. It can produce power, and it would also liberate the gold and silver. So on the metallurgy Boumadine, it's done. It's -- we should never talk about that anymore. It is done. It's either going to go through a smelter in Asia or in Europe, or it will go through a smelter in Morocco or a roaster in Morocco. So it's -- I mean, it's -- that discussion is done.

The last element that we're now working on, which I said last time after we're done the PEA and where we will finish the updated Zgounder model, we are almost there. Again, something we were discussing today, we're almost there, and we will be updating the market about the new Zgounder model, the new Zgounder mine plan and going forward. And as again, as I said, Zgounder has a lot of upside potential. The geology is there. And now, it's a question of working and getting more drilling done and new structures for Zgounder to have a very long mine life. It has already a long mine life, but even a longer mine life.

So, that completes my presentation for Q3 2025. Operator, I would like to turn it over to you for the question period. Thank you.

[Operator Instructions] Our first question comes from the line of Justin Chan with SCP Resource Finance.

Congrats, Benoit, David and the rest of the team if you're on, Alex. My first question is on the open pit, I'm just curious how the next few quarters look. When I was at site in my notes, I had about 2,000 tonnes a day from the open pit and 1,000 from the underground. The underground is doing really well. You're already above that rate. I'm just curious on the open pit, when in the next few months or quarters, do you think you'll be done the stripping you want? And how many tonnes do you think is your new target for tonnes per day? Or is it still that 2,000 number?

Justin, thank you. Yes, we're very happy with the underground. Let me start with that. We've been working all very hard. We've got new stops going. We're comfortably above 1,000 tonnes per day, and grade has been sustained around 150 lately, 160 even. About the open pit, as you all know, we increased the total tonnage move per day in the open pit by essentially tenfold. We were at 4,000 tonnes per day by the beginning of the year. In October, we were close to -- in September, we're close to 40,000 tonnes per day total material moved. And now we sit at around 45,000. We will continue marginally increasing it. We had a high stripping in the third quarter. That's why the ore per day was a bit lower, but we did a lot of ways to put us comfortable, especially in the Northeast section of the open pit to have flexibility in the open pit. So everybody worked really hard, especially in Q3, to ramp up to finalize the stripping of the Northeast sector, and we now have 45,000 tonnes per day of total material move. And to answer your question, that brings us to 2,000 tonnes per day. Even on higher strip month on lower strip months, we'll reach even 3,000 tonnes per day and perhaps even a little bit more depending on the month. But we're trying to plan conservatively to make sure we always have the flexibility in the pit. And I would say at this point, the ramp-up is essentially done. The short-term stripping is also done. We have a longer-term stripping. Next year, we'll do another pushback, but that's towards the end of next year. For the year to come, we're well positioned for the open pit to sustain above 2,000 tonnes per day in the open pit.

Got you. And with the plant doing 3,700 tonnes a day now, I guess, in the long term, how do you envisage filling that mill? What's the split between open pit and underground? And could you push even beyond that 3,700 tonnes rate? And what would you need to do on the mining front?

So on the underground, we can probably push a bit at 1,500. We're not looking to go really above that. We want to take our time and do it right to make sure we control the cost. For the open pit, we'll take the rest. We have options, either we go -- either we mine faster in the open pit because we have room. We can even include -- we still have stockpile, right? Don't forget, we still have 150,000 tonnes of stockpile and it's decreasing slower now, and we want to stabilize it. And finally, we still have marginal ore. We do stockpile marginal ore. We compile it as waste and it's included in our cost, but it still has silver grade and especially at the silver price, the mill will always be full. This is not the issue here.

Okay. Got you. And on grade from the open pit, when we were on site, we talked a lot about managing dilution. Is the current grade situation more about managing dilution going forward to improve it? Or is it more of a sequencing issue where you'll get higher grades in the sequence naturally? Just curious what the -- how the path to improvement is.

So when we -- as we did stripping in the Northeast, there was still ore in it, like we did produce about 1,000 tonnes per day of ore. So those were in more sparse and disseminated region in the open pit. So it's a bit harder to control. And as we mine the open pit and we get to more bulky ore zone, dilution will be easier to control. So we're also focused on ore recovery. And as I explained a bit before, we increased the tonnage in the open pit by tenfold. So there's also a learning curve for a team. We need to stabilize the work routine, the work procedures. And the first step was to do stripping, make a nice surface area to be able to work comfortably. And now, we can focus on steady-state tonnage, and we can focus the team on grade control rather than stripping and ramping up and making room to work.

Got you. Just one last follow-up, and I'll free up the line. So modeling that grade inflection from the open pit, is that something you're hoping to do in Q4? Or is it first half of next year? Just trying to get a sense of how to model it timing-wise.

[ It's Raph ]. Justin, as you're asking when do you see grade change, grade inflection for the open pit, is it in Q4, or is it at the beginning of next year? Well, I would say at the beginning of next year, Justin. We're finalizing to tidy up the pit. There was a lot of ways to move. Now, we're slowly getting into ore and we produce ore, but the highest grade is as we go deeper in the pit. So we should see that coming more in Q1.

Our next question comes from the line of Bryce Adams with Desjardins.

Just a follow-on to those questions just asked now about the revised open pit underground split for filling the mill at 3,800 tonnes per day. I was wondering what's the base case processing rate that will be included in the new Zegunda mine plan? Is that going to be 3,000 tonnes per day and those 3,700, 3,800 tonnes per day are upside scenarios? Or is it 3,800 tonnes per day, is that the new base case that will be included in the Zgounder mine plan?

Bryce, this is Benoit. So look, the new Zgounder mine plan is going to be done in the next 2 to 3 weeks. We are still reviewing it. We're looking at all the scenario. The plant is capable to run at 3,800. We're showing it, but we haven't yet finished the new case or the new mine plan, where we're working on it at the moment. Also something very interesting is, we just have recruited somebody on the team that's working with [ Raph] and Mustapha on mining underground and open pit mining. So we are bringing in somebody with many, many years of experience to just complete the team. And so, we're working with that person and our own team to have this new mine plan available, as we always said in Q4. So look, obviously, we're not going to bring the throughput down to 2,700, but we're going to look at different scenarios, different grade, as you know, different cutoffs. So we haven't yet finalized the plan. So it's hard to comment on throughput and grade and all of that. But that will be available in a couple of weeks.

So yes, if some of those -- like that's a key input to the study. if that's still up in the air and you haven't yet settled on sizing the mine and the mill and the long-term throughput capacity, what's the chance that the Zgounder mine plan update goes into next year? Could it be a January update versus December?

Well, 99%, it's a December update. And it's not that we haven't decided on throughput on all of that as we're just going through the final reviews, the final analysis, what we have. David and his team have completed the resource. Patrick and his team have completed the new mine plan. [ Raph ] is looking at it with his team. So we're putting all of that together. So we're almost there. We've committed that it would be coming out in December, and we will try to try. We are 99% confident that we're going to meet that. But if somebody comes through and says, you know what, oh, by the way, we've just found this or there's a new sector that we should look at, I mean, it could get delayed, but I would tell you, it's very, very unlikely.

Our next question comes from the line of Ingrid Rico with Stifel.

I have a couple of follow-up questions on Zgounder and the throughput, which clearly has outperformed and now aiming to that 3,700 tonnes per day. I guess, my question is, the sustainability, you debottlenecked the buck end of the plant, but the sustainability and perhaps what are the risks that you can't really maintain that throughput rate?

So yes, thank you for the question. We've been -- it goes without saying we've been milling also a bit of oxidized ore from the top of the pit. And as we get deeper in the pit, the ore hardness also change, but we have experience with that mining from underground. So it will be a question of blending, and we also have time to continue working and adjusting the plant. That plant has been running for less than a year. We're still learning. We've done some changes over the year to get there, and we also have other ideas to get there. If we're ever to get in trouble with ore hardness as we go deeper and deeper in the open pit, I mean, we have solutions for that, relatively cheap solutions. If we must, we can add a tertiary crusher. This is something that can be done relatively fast. It's not something I'm nervous about. We have -- we can address it. We can address it. The ore has been a bit soft. So the bottleneck was more in the tailing on the refinery, and we've been working on that. So that's been the bottleneck. And we have good visibility for the near future. And as we go down the mine, if we must add another crusher, we'll just do that.

Okay. Understood. And then, just on the grade and your answer to Justin's question and seeing the open pit grade having that inflection point more into 2026, so perhaps just to understand and going back to the site visit in June that you were already kind of making some implementation on the dilution minimization, so how can we -- should we see an improvement in Q4? Or what's happening on that implementing that?

So, in the open pit at Zgounder, we focus on several aspects. Productivity: so we had to increase productivity in the mill that's done. We also started to modelize ore movement, okay, to make sure to recover every single ounce possible in that open pit. And as we go faster and our mining rate increases, we need to make sure to have good ore recovery. We also need to make sure we don't make mistakes, meaning we want to minimize external dilution as much as possible. So there's a bit of a change in philosophy whereas what we've been doing at very small tonnage versus what must be done at a higher tonnage.

Now that we mine at over 2,000 tonnes per day, which is 50,000 tonne material move, our main focus is to reduce external dilution, mine a bit larger block, make sure to mobilize it properly and then recover the whole thing. So that will result into less external dilution because we'll control the block, we'll mine bigger blocks and we'll make less mistakes. It will also include partially into an increase in internal dilution as we want to control block movement, we want to mine bigger block and make sure they have good ore recovery and reduce costs and sustain productivity. So, a bit more internal dilution and what we predict is we'll have much less external dilution, so we'll see a grade increase.

The reason why I'm seeing -- we will see that more in Q1 is there is also a learning curve. We've been implementing [indiscernible] as a software and implementing good procedure in the pit to control ore movement with blasting, also working with our contractor for blasting method. There's all sort of learning curve into that. So we're about 1 month into -- 1.5 months into implementing this, and we need to let the team to work before we start judging of the results of that. So I'm expecting results the faster we can, even maybe in Q4. But that's the reason why I say I see Q1 is to make sure that we have the time the team to really implement this fundamental change with an increase in productivity of tenfold.

Excellent. If I can just squeeze one more question and more on the sort of cash flow and looking at, you drew down $15 million on the credit facility, yet your cash balance is pretty strong and your operating cash flow was strong this quarter. So just a bit of understanding why you drew down the $15 million.

Yes, Ingrid, this is Benoit. If you recall, when we put the $25 million facility with EBRD at the time, which was at the beginning of the year 2025, many people were questioning our balance sheet because our cash position was below $50 million and as an operating company. So when we negotiated with EBRD, the $25 million line of credit, there was an undertaking that we would draw at least one time on the facility because they've put it into place and they went to credit committee, and we went to Board. And so it was just part of our undertaking. Of course, the money as we have it, is in our bank account. the difference between what we earn and what we pay is extremely small. We have very good return on our -- and we're taking no risk on our liquidity. And as you know, EBRD is on SOFR plus and SOFR has been coming down. So the little amount of the point in between what we pay and what we receive is super small, and that was part of the agreement.

Clearly, we do not need to have that money. It's -- there's still $10 million available, but that was part of the undertaking when we put the money, the debt in the company. You know that we did after that in June, a financing of USD 100 million, obviously, made the $25 million really, really not necessary, but we did have an agreement with EBRD. And EBRD is our financial partner. They gave us $100 million. They gave us $25 million when we wanted to strengthen our balance sheet. They've committed themselves to be there for Boumadine for -- to be the main lender. They are our financial partners, and we just respected our agreement. But I understand your question, it's kind of bizarre why did we draw on it, but it was part of the agreement.

[Operator Instructions] Our next question comes from the line of Don DeMarco with National Bank.

Good to see the just continued improvement in operational metrics. So [ Raph ], I think I heard you say that grades are running at 150 to 160-ish per underground, improving quarter-over-quarter. Is that the range that you're looking for, for Q4 to reach the guidance? Or would the open pit come in at the same or higher grade?

Well, I'll try not to speculate too much on future grades. Right now, we're focusing on the metric I've mentioned before. Underground, grade has been stable, even improving even with higher tonnage. And underground, when you get a good stope, you get good stope, and we have many good stopes ahead. So in underground, there'll be more volatility as we had. And now, we're in very good stope, and that's the result of the work we've been doing over the last year. So in underground, what 150, 160, and that's quite stable. Whereas the open pit, I've commented already in the open pit, we want to stabilize throughput. We want to control dilution, and we'll keep on learning to this. So I do expect grade to increase, especially early next year.

Okay. Great. And with this upcoming Zgounder mine plan, Bryce had asked about throughput. Just continuing with grade, I'm just curious about your approach for forecasting grades over the life of mine in light of the volatility that you've had and some variability stope by stope and dilution and so on. Are you feeling pretty comfortable with your ability to estimate the reserves and have that reflected in the mine plan?

So as we review our reserves and our approach to the mine plan done, it goes without saying we learned quite a bit in the last few years at Zgounder. So we'll have a more aggressive approach, just like we've been having over the last year on tonnage, mining bigger blocks and controlling dilution with bigger blocks and focusing on unit cost and focusing on tonnage and production.

Okay. Great. And then, just as a final cost question rather, Year-to-date, the costs are running above the guidance range. Are you looking for a significant improvement in Q4? I heard some comments about the consumable costs dropping and so on. Just curious about what your expectations are looking ahead to this quarter.

Look, we -- this is Benoit, Don. Definitely, we're managing the cost per ton extremely well. We just had a Board meeting. We reviewed every line item on a per ton basis. And the one that was the outlier was the cyanide, a little bit on the consumption because of the oxide material and -- but definitely on the variance on price. So there was a quantity variance, but there was mainly a price variance with cyanide. I would tell you the rest is pretty straight on budget where we want it to be. So it is coming down, though the contracts that we were referring to were mainly for 2026 because as you know, you buy these boats of cyanide ahead of time. So look, we'd love to see Q4 being below 20. There are many things that come into play, the strip ratio, a couple of expenses that we know we won't have in Q4. But the target is absolutely to bring cost down. Yes, in Q4, it is a target, but -- and it is a target for next year as well. We would like it to be lower. There's no doubt about that. No doubt. So we don't expect it to be higher in Q4. That's for sure. And our goal would be to be below [ 20 ]. But again, it's too early to tell. But in cyanide is going to kick in more in 2026 than 2025.

We have a follow-up question from the line of Justin Chan with SCP Resource Finance.

I just wanted to follow up on the underground. I mean, it improved so much. I think no one is asking about it anymore. But I guess what are the steps for getting tonnes and grade to both improve so much? I guess, going forward, is it -- was it just a matter of getting more faces open and it's majority cut and fill? Or is it -- is there still some long hold in there? Yes, [ Raph ] , can you give us a bit of color on how you improved so much this quarter? And then, what, if any, changes you expect going forward?

Well, Justin, the whole team has been working on this for a while. And we kept on saying tonnage is going to increase, grade is going to increase. As you're all aware, underground is all about planning, multiplying phases, multiplying levels. So we're still in cut and fill. The team is getting better. We have some continuity within levels. We've been opening new levels, especially at deeper levels. So this is -- I mean, this is the result of the last year's work.

And now, we also -- if you remember, initially, we're targeting more 2,000 tonnes per day underground. We've reduced that a little bit to 1,000, 1,500 tonnes per day, depending on the sequence that also allows more time for better planning, better grade control. We're also working a bit more in bulk, and we've really improved our geological control, channel sampling, remodeling the fronts, remodeling the stopes and closing the loop of planning. So that's all work that we owe to the team on site, and they've been very good at it. So now what's next for underground is to continue our mine plan and to get to the lower level to a good rate to make sure we can close the upper levels in a timely manner to leave room for the open pit.

Okay. Got you. So maybe to summarize that a bit, so you got your practices right and that's brought dilution down improved grade and maybe the faces -- getting more faces in open areas allowed you to get enough mining areas to hit the tonnes as well.

Yes, that's correct. And we've always said that like -- at Zgounder, some stopes are larger, other are smaller. The larger stopes are definitely more continuous and the smaller one have shown more challenges in the past. And now, we are in a good zone. So we continue to learn from these, and we also mine larger blocks, like I said, and lower mistakes, and we want to repeat that experience in the open pit.

Okay. Got you. Just one last one, if I may. Just on income tax, I noticed there's now tax going through the income statement line. What's the best way to model? Is it just -- is it maintained similar percentages of earnings? And then, in terms of, I guess, paying cash tax, is there any timing to be aware of?

Yes. Justin, yes, income tax is 35%. You can take that. Obviously, it's not always a perfect divider just because we pay based on our local P&L and not on a consolidated basis. But I think on an average run rate, I think it's a pretty good estimate. And we pay -- we have quarterly installments based on previous year's taxes. And so, tax are variable year-to-year, a quarterly payment is good.

Ladies and gentlemen, that concludes our Q&A period. I would now like to turn the call back over to Benoit for closing remarks.

Thank you, everyone, for today's call. Look, we had a very good quarter. The questions were excellent, and you are questioning exactly what we are questioning and attending to. But today, at Zgounder, we have 4 top priorities. I mean, we know and we've always said it, we want to reach the 500,000 ounces of production per month. That's our goal. That's our target. That's what we're aiming for as quickly as possible. And the team is all aligned with this. The grade is something that we've been managing. And as Justin pointed out, we have managed it in the underground. We are very pleased the way the team is working in the underground.

The open pit, we knew there was a learning process. We expected that. It's maybe taking a little bit longer than what we would have liked to, but it's getting better, and we know it's going to get better in Q4. And for next year, it's something that we hope will be stable. obviously because we want to do 500,000 ounces per month, and that requires a stable grade, obviously.

Cost is an element that once the ramp-up is done, once we're in steady state, we were reviewing the staff [ that Raph ] was confirming that a lot of the consultants completed their jobs this quarter. We had many expats who were there helping with programming, helping with the plant, helping with different aspects of the business and which is normal. The ramp-up team, most of them, I think, except for one, they're all gone, and we had many of them for a while. So that has a direct effect on our costs, and we are working on controlling our costs, obviously.

Now, you also know that the price of silver is $51. And clearly, when we mine and we see a marginal ore, we expense that, but we take it out. We don't leave it underground. So we -- or in the pit. We take it out. We have a pretty big pile of marginal, and it's expense. It's gone through the expense, but we have it -- we have a stockpile of marginal ore.

And the last item for Zgounder is the optimal plan. And Ingrid asked the question, and we are not limited in our thinking. We have money. We are cash flow positive. You saw that we generated a very strong $22 million last quarter. We believe that Q4 will be even stronger. So we're not limited to our thinking. We can think outside the box. But the beauty of Zgounder, and you saw the picture, some of you visited the plant, it's like open space construction. So we don't need to move the roof or to push some of the plant, it's open space. So we can add a crusher or we can add a ball mill if we want to, if the team decides that, that's the way to go. The cost of increasing throughput is not very, very high. It can be done in our open space construction. And yes, we are looking at the optimal plan, given the new silver price, given the new grade, given the new cost. So, that is taken into account. And obviously, it was part of Bryce's question and Ingrid's question on where do we go next, and we understand.

Boumadine, nobody was asking question about geology. David is right beside me. He was hoping for some very good question on geology. But Boumadine is a star asset with the main zone and all these regional zones. So that will be something that we will keep exploring and keep drilling. As we mentioned, we're looking for next year at probably over 200,000 meters of drilling, 180,000 on infill drilling and between 20,000 and 40,000 on exploration drilling on the regional play. So there's a lot of things coming from Boumadine over the next quarter and over the next year. And look, we are extremely pleased with where we are. And furthermore, the jurisdiction in Morocco is getting better for -- as an investment jurisdiction as it's -- and we're seeing it now. There will be a major event in Marrakesh in 2 weeks on mining in Morocco, and we expect to see a lot of people there. So look, we have a first-mover advantage. We do have a very large footprint. We have 2 well-understood assets. We need to work on them, and we expect to have another strong quarter in Q4. Thank you for your time. Thank you for being there, and we will see you some in Europe over the next few days or a few weeks as there are many conferences. Otherwise, we'll see you in Toronto at the Scotia Conference or others, we will see you in Toronto as we are in town to meet some of our shareholders. Thank you very much, and have a good day.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.

Good morning, everyone, and welcome to the Boumadine PEA Results Webinar. I'm Elizabeth Hamaue, Director of Corporate and Financial Communications. The IR team is excited to share the results of this important milestone.

Joining me today are Benoit La Salle, President and CEO; Raphael Beaudoin, Vice President of Operations; Patrick Perez, Director of Technical Services; Ugo Landry-Tolszczuk, Chief Financial Officer; Sebastian Humphrey, Project Manager; and David Lalonde, Vice President of Exploration.

Today's agenda is as follows: Benoit will begin with an overview of our PEA results, followed by Raphael for a deeper dive into the project development and economics. And then Patrick will end our presentation with a 3D mine design demo. We will conclude with a Q&A session with analysts. [Operator Instructions]

As a reminder, we will be making forward-looking statements during today's call. Please refer to the important information included in the presentation as well as the risk factors described in our AIF. The technical information presented today has been reviewed and approved by Raphael Beaudoin, Aya s Vice President of Operations; and David Lalonde, Aya s Vice President of Exploration, both of whom are qualified persons as defined under National Instrument 43-101 Standards of Disclosure for Mineral Projects.

Finally, please note a copy of our presentation is available for download on the current platform and will be made available shortly after the call on our website.

And with that, I'll turn it over to Benoit La Salle. Benoit?

Thank you, Elizabeth. Welcome, everybody, to this very important call this morning on the Boumadine PEA. After 3 years of work by our team, we are now pleased to present an actionable PEA, and you will see the results as we are presenting them this morning. We will come back to this, but it's extremely important to know that the cutoff of the drilling was at December 2024. So this year's drilling is not included. Raphael will talk about this. This is extremely important. As well, we're showing you pretax and post-tax, the tax optimization and structuring is not included. We will be working on this like all projects where tax structuring needs to be put in place. So we have assumed the highest tax rate in country.

And the last item is we are assuming 100% ownership of the project. You recall that the current structure, we own 85% and the government owns 15%. The 15% is participating, and they've always made that clear to us that they would not be participating. So we will put in place -- we have in place a dilution process. So this is being discussed at the moment with the government, and it will take place over the next year probably.

So let's get into the project. What we like the most is the low initial CapEx, it's something that is manageable, doable. We know exactly how to do this. The CapEx at $446 million for this project is extremely low. We also are pleased with the pro forma production. We're looking at 400,000 ounces of gold equivalent over year 1 to 5. You understand that because it's done on the resource of 2024, the production profile will change considerably as we complete the 2025 drilling and include that in the updated version of the mine plan. So -- but we're looking at a production of 400,000 ounces of gold equivalent over year 1 to 5. If you prefer in silver equivalent, we're looking at 37.5 million ounces of silver equivalent over year 1 to 5.

The net present value of the project currently with the base case at $2,800 gold and $30 silver, that the NPV of the project using a 5% discount rate is on a pretax basis, $2.2 billion. Those are all U.S. dollars, obviously, and a post-tax of $1.5 billion. The NPV to CapEx, the capital utilization is extremely interesting. On a pretax, we're at 5.1% on a post-tax at 3.1%, and that is at the base case level. The internal rate of return is on a pretax 69%, post-tax 47%, so already extremely positive internal rate of return for the investment decision. The payback is 1.3 years on a pretax and 2.1 years on a post-tax. And again, the reason we're showing you both is because we do need to work on the structuring, and we know this, and that's something that we will get to in the coming months.

Moving to the next slide. We just gave you a summary of the spot price, what the project looks like at the spot price. So at the spot price, you see that the NPV of the project moves to between $3 billion and $4 billion, depending on if you're on a pretax or post-tax, the IRR approaches 100% on a pretax basis is above 100% and 77% on a post-tax basis. The payback is very good at 0.7 years to 1.2 years, very, very quick payback. And the NPV to CapEx ratio, the CapEx efficiency is 10:1 or 7:1, which, as you know, in our industry is extremely, extremely rare. You look at the life of mine revenue currently is almost $10 billion. The EBITDA is at $6.2 billion. And the free cash flow is $5.6 billion on a pretax basis, $3.8 billion on a post-tax basis, the difference being the taxation that we would have to pay the country.

We gave you 2 upside just out of interest. You will put your own numbers in there. We know that. And I -- we were -- we assisted -- we were at the conference last week at the SCP Silver Conference, and Mr. Oliver was there, and he was making a presentation on where he sees gold in the next 2 years. We will not be in production in 2 years. It will be a bit more than this. But -- so we just put Mr. Oliver's number there at $7,000 and Pierre Lassonde's number that he gave last month and just for information purposes. We know that the spot price is where we are today and what we should be looking for in the years to come.

Now on the next slide, a summary of what we have, we have the district-scale land package, extremely large land package. And what we're using right now is a very, very small amount of the land package. It's a stand-alone project. The model is based on 3 payable concentrates. We've always said that, that we would produce 3 concentrate, and we would look further later on at treating the pyrite concentrate. But today, the model is based on 3 payable concentrate. And again, Raphael and we'll talk about this.

Now the next element, the proven track record in the region, this PEA is based on our knowledge of the cost, on our knowledge of the contractors, on our knowledge of the region, on our knowledge of the government. And we've just completed with great success at construction at Zgounder. And Raphael will come back to this, but our understanding of the construction cost and of the region is quite unique. The project has exceptional economics, low capital intensity, rapid payback, very straightforward to build the way with the 3 concentrate.

Regarding financing, I will address that, but we are in a position where the financing is spoken for. So financing spoken for and the mining license in hand. So no one will say, yes, but how long will it be for the mining license. There's no waiting time. We already have the mining license. The financing is spoken for. The contractors are identified. We are good to go. We just need to complete the drilling and to finish the additional studies.

The Slide #6 is just to show you again, and you see in the middle in red, that is the original permit that we have, which is where the PEA is done. So the PEA is done only on the red permit, that structure, which we call the Boumadine main trend. And this is where we have at the end of 2024, the ounces that we're using into this PEA. But the rest of the land package, as you know, is extremely large. We have 339 square kilometers of permitted land, and we have 600 square kilometers of exploration land, 31 permits and licenses. We're in a very good position. It is a district. And currently, we are by ourselves -- and we intend to stay like this because we are acquiring every permit possible in the region. So you see on this slide, which is the geophysics, which most of you have seen many times. It is showing additional potential targets, which we will address in a couple of minutes. But Boumadine is really just a small portion of our land package.

So why it's such an important day for us and for Aya is we're now -- we've proven in a PEA, which you will see has been signed off by all the QPs, low initial CapEx for what -- for the production that we're going to do, very strong economics based on the production of 3 marketable concentrate, revenue driven by the precious metal, which is gold and silver for above 80% of the revenue comes from gold and silver. The beauty is the grade. The high-grade deposit gives us flexibility on open pit and underground mining. So we have used both methods over the next 11 years based on 2024 geological model and mining model. And the conventional 3 concentrate flotation plant, we will address that, but that is a big breakthrough in the valuation of this project based on how much off-takers are willing to pay for the 3 concentrates.

And to close on the financing, we have the money to build this now. We are continuing to work on it. But we did a capital raise in June, and we said in the prospectus, it was for Boumadine. It is for Boumadine. We knew at that time that we could accelerate the projects, which we are doing. We have currently positive cash flow from Zgounder. You recall our Q1, Q2 numbers where we generated positive cash flow. Q3 numbers are going to be out next week and the mine at above $40 silver price is generating very good strong cash flow.

EBRD is our financial partner. You recall, they've lent us $100 million ESG loan on Zgounder. It is still in place. They even gave us a $25 million additional facility in the spring. EBRD made it very clear that they are our financial partner. Obviously, we need to give them the completion of the study and the ESG studies and all of that. But EBRD already is committing their participation in the project. Furthermore, because we are producing concentrate, well, the off-takers, as you all know, are ready for prepayment agreements if we want that, if we need that, it's something that is available. We already have a term sheet of showing interest of how we can structure all of this. So the Boumadine PEA is showing us that it's doable. It's doable quickly from the time when we started to the time when we're going to get into production, it's going to be a very short period of time when we compare that to the industry. We have a strong balance sheet to get going and put this into production in the next few years.

So I'm going to pass it over to Raphael Beaudoin. Rafael and his team have completed the PEA. They've reviewed every detail that you have in the press release. And Raphael, I turn it over to you.

Thank you very much, Benoit. I cannot stress it enough how excited we are to be here this morning and have a chance to dive into this PEA that you've all seen as of this morning. So first of all, let's talk about the mineral resource. As Benoit mentioned, we published our mineral resource update early in 2025 and the drilling -- the ongoing drilling campaign has not been part of this PEA.

Now let's get into the detail. Over the next few slides, we'll talk about the resource, our mine plan for this PEA, some metallurgy and processing and finally, the CapEx, the OpEx, the economics of the project as well as some next steps.

So in the Mineral Resource Estimate that we have for this PEA, we have about 35 million tonne of mineralized material at a head grade of about 4.5 gram per tonne of gold equivalent, which gives us about 5 million ounce of gold equivalents.

We've done a lot of work in the exploration department into the drilling, and we've managed to increase the Mineral Resource Estimate by 29% into our last update of 2025, and we can expect more updates to come in the next years as we continue to work on the exploration of Boumadine.

Very important first step of this PEA is the mine plan. We have a life of mine of about 11 years at an average mining rate of 3 million tonne per year. The good part and the very interesting part about Boumadine on the mine side is we have lots of flexibility. We have 6 open pit over a strike of about 6 kilometers, we will mine about 2/3 in open pit and 1/3 underground at a head grade of 3.85 gram per tonne of gold. The average strip ratio for the pit is 21:1, and I want to take a moment to speak about that.

We have very good open pit mining costs in Morocco, and all of the costs that we looked into this PEA has been cross checked with our real operating costs. At Zgounder, we sit around $4 per tonne for ore, $2 per tonne for waste and at 21:1 strip ratio, this is the optimal pit for both the current mineral resource estimate and the rest of it will be taken underground. So it provides flexibility for mining operation. It is the most economical outcome to mine this deposit. And we also have a potential to merge some of these pits as we continue exploration.

The sequencing of the open pit and the mine also allow for flexibility with the first 2 years of the mining operation being open pit only and then the rest of the life of mine being a mix of open pit and underground. The mine plan in the PEA includes 77% of the Mineral Resource Estimate, which is a very good step in the right direction for the -- to continue to grow the life of mine and the resource.

Here, I like this slide a lot. It shows a good visual of the life of mine with the north pit and the center pit that will start first in the north and the center region should be noted that the underground mine is independent of the open pit. So as we start the north and the center pit, we will develop the underground mines. And later in the life of mine, we'll go to the South 1 and South 2 pit. And once we finish those, we'll continue underground on the south portion of the project. So we have 6 pit overall. The underground mining method will be avoca, so essentially long-hole stoping. And the mining sequence has been designed such that we have the highest grade coming from the first 5 years and underground production starting in year 2. With all of the north and center section underground being completely independent for the open pit to provide this essential mining flexibility, especially early in the project.

Next, we'll go to the metallurgy. There's been very extensive work done on the metallurgy over the last even 5 years. Metallurgy at Boumadine has always been interesting. It's a polymetallic deposit with gold, silver, zinc and lead. Over the last 2, 3 years, especially, we're focused a lot on metallurgy as well as downstream processing and commercialization of the -- especially the pyrite concentrate. For this study, we did crushing, grinding, flotation, lock cycle test for all flotation -- for all the flotation circuit. And we come out with very good recovery over 96% for gold, 96% for silver, 75% for zinc and 82% for lead. We even pushed it further.

As we did the locked-cycle, we produced approximately 90 kilogram of pyrite concentrate on which we did roasting test work that we'll talk about a bit later, but we also sent to various potential buyers at least 6 different smelters, 3 different traders of concentrate that all showed great interest for our pyrite con and obviously, for lead and zinc concentrate, which really directed this PEA into the direct commercialization of our concentrates.

If we dive in the processing part of this PEA, it will be a conventional flotation plant with jaw crusher, SAG and ball mill, 3 different flotation circuit for lead, zinc and pyrite. We will process an average rate of 8,000 tonne per day of ore or 3 million tonne per year of ore. The annual production, as we mentioned earlier, for the first 5 years average around 400,000 ounce of gold equivalent per year. We will prioritize the high grade of the mine plan over the last -- over the first 5 years to give room for further exploration and production upside. We have a simplified flow sheet as I described. So it's conventional flotation plant that we crush and grind and then we have 3 different flotation circuits.

Here, we have a 3D overview of what the plant will look like, which will be -- which we will continue to refine over the next phases of the project. A key to this project is a strong market interest in the payable that we have. We have shared -- as I mentioned earlier, we have shared a concentrate with multiple traders, and they all have expressed firm interest in the lead and the zinc but also in the pyrite concentrate. And based on the received offer, we can see the different payable for the different metal and concentrate that we'll make. So the overall gold equivalent payable is of 73%. Gold itself is at 69%, silver 77% and then the zinc and the lead are 85% and 90% payable of all ounces and base metal produced.

Over the last 2 years, we've worked with many different local consultants as well as international consultant for the PEA. We've completed the water study. We have identified the water sources that we will use, either it's water wells and discharge water from greywater processing plant at the nearby city. We will have to build a pipeline and pumping station and quite a bit of engineering has been done for this -- for the water need for the PEA. The power supply, as you know, we've built a 90-kilometer 60-kilovolt power line of Zgounder. We know how it works. We're working for the same people for the future power line of the Boumadine is something we're quite confident and we have experience with.

Also for the logistics, logistics is an important part of this project. We will export concentrate. We also have experience into exporting concentrate as we used in the past at Zgounder. The beauty in Morocco is we have several ports we can work with. We did multiple road survey. We went to see the port. We have logistic partners in the countries that we've used for construction at Zgounder as well as for exportation of our concentrate. And we've identified several viable options since we have 3 national highways going directly to Boumadine. And the selected port facility for this PEA was the Nador-West port, which also gives future optionality if we want to extend the railway.

The tailing facility, we have quite favorable topography at Boumadine. So we have a valley that will require only one main dam, and we are continuing to develop other tailing facilities if we need in the feasibility study, but the costs are quite known, is the same engineering firms and construction firms that helped us at Zgounder. So we have high confidence in our cost. And finally, on-site construction requirements, processing plant, workshop, warehouse as we know.

Now for the CapEx, I'm very excited to talk about the CapEx of this project. It's low CapEx. It's also -- it has a healthy contingency for this PEA sitting at 27%. The initial CapEx consists mostly of the plant, the shipping infrastructures, the tailing, the water storage supply and also the stripping costs. As we can see, all of the underground mining development is in sustaining CapEx, which also derisk the projects and provide flexibility. So the total CapEx of the project sits at $446 million. And I must reiterate that many of these costs, we are quite comfortable with. We've done it already at Zgounder. It's very similar, a bit larger scale, but work with the same engineering firm. We still have most of our construction team that are now focused on Zgounder and are very excited to start working on Boumadine.

Same thing for operating costs. We worked out these operating costs from scratch, and we also cross-reference them with Zgounder. The whole technical team looked at all of them to make sure we're comfortable with. So on a per tonne milled basis, we are at on-site cost of $72 per tonne, out of which can be breakdown of $49 per tonne. It's a bit more expensive early in the project, and it goes down as we have more mines open. $49 per tonne mining cost, both for a mix of underground and the open pit. We're at $17 milling, $5 G&A for total on-site operating cost of $72, after which we must add the product shipping.

On a per tonne of ore mill basis, we are at $38. And if we look at a per tonne of concentrate basis, it includes land transport as well as freight to deliver the concentrate to the relevant client throughout the world. So the total cash cost sits at $119 and the total cost, including sustaining is $131 per tonne mill, which brings us a total AISC of $1,021 per ounce of gold equivalent produced over the life of mine. Again, these costs are very close to our Zgounder operation, although there are some different salties, and we made sure that not only we work them out on an engineering basis, but we also reference them with our own experience in the country.

This slide puts a bit of perspective on current producing asset on their AISC curve in 2025 and what would Boumadine look on an AISC basis for both gold ounce of gold equivalent. So we have ASIC for Boumadine predicted at $1,021 and then we have it for silver at $11 per ounce on an AISC basis, which is -- which sits very comfortably in the cost curve, definitely on the first quartile and on the lower end.

So Boumadine is a very robust project. I want to attract your attention on the right side of this slide. The revenue per metal, like Benoit mentioned, is driven first by gold and second, the silver, and we also have close to 20% of lead and zinc. And we also put a waterfall of the total life of mine cash flow that we can see on the bottom right-hand side of the slide. So over the life of mine, we'll have a $7 billion revenue and after tax on the base case, post-tax scenario, we have a $2 billion revenue over the life of mine.

So we've put a different price for precious metals to see the robustness of the project. And while on the base case, the project is very good on spot price even better, one thing that is important to understand is even if we look at lower commodity price, say, even $2,000 for gold and $20 per ounce for silver, which is almost half of current spot price, the payback post-tax of the project is still at 3 years, and we have a robust IRR and a robust NPV. So it just demonstrates the depth of the Boumadine project even early at this stage that it's very robust, almost independently of metal price, and it can sustain lots of variability into the mill prices.

And finally, before we go to the next step, we have the yearly cash flow. We set for the first 3 years of free cash flow of about $300 million per year for the first 5 years for a total after-tax free cash flow over the life of mine of $2 billion. The whole technical team and exploration team have worked quite a bit for this PEA, and we were supported by world-class consultants as well as trusted local firms with whom we've been working on over the last 5, 6, 7 years at Zgounder and that have been very supportive of us for this PEA. And you can see the long list of consultants who've been working with on this PEA.

Now for the next step. Now that we have the PEA in hand, we will work on 2 different tracks in parallel. We have an extensive exploration program of over 360,000 meter planned over the next 2 years to really focus on resource expansion and also conversion to increase the classification of our mineral resource. In parallel to that, we will start the prework of the feasibility study, whether it's a metallurgy mine plan, we will then have about 2 years of work for the feasibility study before we go on the front-end engineering design, long lead procurement and early work for planned construction over 2028 and 2029 for a commissioning in 2030.

So we are planning to advance the feasibility as fast as we can and in parallel to continue the exploration to increase the classification of the mineral resource. We also have started environmental and social impact assessment through the PEA that will continue over the next 2 years to be completed with the feasibility study.

I also want to take a moment to talk about the roasting update. The pyrite is a large portion of the payable of this project, and we've been working in parallel for various different solutions to have the most value out of the pyrite. The flotation route demonstrates very strong recovery, concentrate quality. We have shipped this pyrite all over the world, and we were very pleased with the response we got. There's lots of enthusiasm for the pyrite. It has gold content payable, has silver content payable. We have large volume of pyrite with very good sulfur content. And that's something that has to be taken in mind when we look at it. The sulfur content in our pyrite concentrate is comfortably above 40% -- above 45% in most years. So there is an appetite for the concentrate as is.

So for the PEA, we chose to directly commercialize the pyrite. This is the best economical outcome for this moment for the project. We have concluded over the last few years, quite extensive work on the roasting, and it shows good potential. And if we consider the lead and zinc flotation, the pyrite flotation and then roasting of the pyrite and leaching, we get up to 79% recovery in gold and 85% recovery of silver with an average recovery of 63% for gold and 80% for silver. We will continue to work on the roasting routes. We will continue to evaluate if there's an improvement on the overall project if we do downstream processing of the pyrite. The exciting part is we have optionality with the appetite on the market for all of our 3 concentrates.

As Benoit mentioned, this PEA is only on the main trend. And this is what really must be understood this morning is we are drilling -- we have drilled a lot this year, in the previous years, and we will continue to drill hundreds of thousands of meters at Boumadine. This PEA is on the main trend only on our 2 main permits. There is significant exploration upside. We have identified multiple targets for resource growth, and we also have future expansion opportunities and to also look at downstream processing, mill expansion, and we'll continue to drill to extend the resource.

So before we go to our Q&A section, I will give it to Patrick to give you an overview, and we have very good 3D modeling of the plant, of the mine design, and it will give everyone a good picture of what the life of mine looks like. Go ahead, Patrick.

Thank you, Raphael. So just before I start, I just want to mention that all the slides will be made available on the website. So even, obviously, the 3D views of the -- through the verified presentation.

So the first slide, so it shows an overview of the project with all the permits owned by Aya on the Boumadine property. Again, the Boumadine mining license is just here highlighted in red with the main trend about here. And I just want to focus, as Benoit and Raphael said, that the PEA is based only on the already known resource located on the main mining license, which represents roughly 10% of the total land package.

On the next slide, so it shows an aerial view of the current site infrastructure with the core shed, the lab, the exploration office. There is also going from the north, the access road. So it's about a 20 or 25 kilometers drive to an already established city, Tinejdad, where about 40,000 people live all year long. We can see also the different mineralization zones of the Central one, North and Tizi area.

On the next slide here, so it's a 3D view of the mine, the process plant and all the infrastructure. So we've got the South pit #2 and #1, the Central pit, the North pit here. The processing plant will be located about 700 or 800 meters away from the main Central pit. The TSF will be about the [indiscernible] away from the process plant. As we said already, so we drilled another good 130,000, 140,000 meters on top of what is already identified in the current mineral resource. We've got good potential here in the North to increase the size of the pit. Probably the 3 small pits that we can see here can demerge in the future with the next update of the mineral resource. We've also drilled extensively between the Central and the South area here and also between the South Pit 1 and South Pit 2, which -- and here again, there is a big potential to merge the 2 pits.

So on the next slide, so it shows a 3D view of the processing plant. So there is the ROM pad. So the ROM pad is sized for about 3 to 4 months Run of Mine material. So roughly 1 million tonnes of material can be sold on the ROM pad. So then there is a crushing unit. The crushed material will be stored on the stockpile. Then it goes to grinding. So we've got 2 mills, SAG and the ball mill. Then it goes to flotation with the lead flotation, zinc flotation and pyrite flotation, after flotation goes to thickening and filtration. So we'll have 2 filtration areas, one for the pyrite, one filtration unit for the lead and zinc. Also close to the plant will be a couple of water storage basins. So the ROM water storage that will be sourced from the nearby water treatment plant in the nearby cities will be here. Water storage -- processed water storage also will be located close to the plant. We've got also all the main buildings that will be needed for the operation, including the warehouse, workshop, all the different offices such as admin building, plant office and security office.

So on the next slide, it shows the pits, the open pits and the underground design or underground development. So as Raphael mentioned already the North and Central underground mine will be accessed with a decline that will be developed directly from surface and totally independent from the pits on the North and Central areas. So if we go on the next slide now, so we show a high level annual schedule of the underground. So this is just to show that starting in year 2 of the project, we start with the development of the 2 declines in the North and the Central area. And then in year 3, we start mining the North and Central underground mine. So the main reason for that to access this area first is we want to be able to access high-grade zone in the underground mine as soon as possible in the life of mine. And then we progress mining in the other part of the North and Central and then after year 6 or 7 in the South underground mine.

On the next slide, well, it's a bit busy, but we show the current mineral resource overlaid by the different pits and the underground mine. So one thing to note is that Zgounder has been filtered with all the blocks above 100 grams per tonne of silver equivalent. We can see that there is big potential to increase the size of the pit in the South, essentially in the North as well. And more importantly, this resource is open in all directions in the North, South and at [ depth ].

So if we go on the next slide. So this slide here shows the main geophysical anomaly that we have identified at Boumadine, all the pits and underground mine will be developed directly on this geophysical anomaly, which is only a small portion of the program [indiscernible].

And if we go onto the next slide, so that gives a regional view of all the Boumadine family that we own. Within the middle geophysical survey, the main mining license of the Boumadine project is here, the main trend is here. So on top of the already -- on top of the world that we saw that we've already identified, we've got lots of upside potential, lots of new zones and interesting zone. So you know the Asirem area. So it's been -- we published the press release on September 15. So the exploration team has completed a lot of drilling already, and we've been able to trace gold-rich areas over an 8 kilometer span. On top of the Asirem, we've got [indiscernible] is probably one of the most promising target. There is a major whole structure that has been identified. High alteration has been observed, a very favorable geological context and exploration team has collected already a lot of graph samples with high gold, silver and copper values. We started drilling very recently in this area, and we expect to get the first results hopefully by year-end, maybe early in the new year.

Similarly, we've got the [indiscernible] area in the South. [indiscernible] is located on a big geophysical anomaly, a major discontinuity. And again, a lot of graph samples have been collected with high value for copper, silver, zinc and lead. Drilling has been started at [indiscernible] and the first assay results are expected to arrive by year-end or maybe early in the new year as well.

So this concludes the 3D view of the mine, and I hand over to Elizabeth for the Q&A session.

Thank you, Patrick. So we are now ready to begin our Q&A session. [Operator Instructions] So our first question comes from Bryce Adams from Desjardins.

This is Bryce Adams at Desjardins. I want to ask on the payability on the metals. Where do those figures come from? Are they benchmarking other assets? Or are they figures that have been informed by market players? And then if so, can you talk to where the concentrate would potentially be exported to for further processing?

Sure. Bryce, this is Ugo. Thanks for the question. So we -- so there's a few things. As we're working on our pyrite and roaster, we decided to produce some concentrate, some pyrite concentrate, and we work with some of the traders that we worked with in the past for Zgounder because even this year up to this year, we were producing silver concentrate. And so we work with them to market, and we got 3 different offers today, and we use those payables for gold and silver, lead and zinc that we see for those offers that we used in the PEA.

In terms of where they would go, so the lead concentrate, which is gold and silver rich, represents about 40% of our total value, our total revenue. And that is a highly marketable lead and zinc concentrate would go to the similar off-takers that we had before, so lead smelters. The zinc concentrate is a pretty traditional zinc concentrate as well. So it's highly marketable. It's quite easy.

The pyrite con today is very high sulfur, and it goes mostly to copper smelters. So we've had it tested in China and in other parts of the world. And so far, it's been very, very favorable and direct clients and our traders are quite motivated and quite happy with the results. So for us, we're quite confident on being able to sell those. And just in price breakdown, as I said, 40% of our revenue comes from the lead con, about 12% comes from our zinc con and then 46% of that would come from the pyrite concentrate.

Okay. Maybe I'll ask a second question and operator, I have a few more. So if you can add me back in at the end, that would be great. But second question would be for Raphael, I think. Outside of the roaster scenario, what other trade-off studies will you be completing ahead of the feasibility study? I'm sure there are many, but maybe what are the ones with the most materiality and the most potential upside?

So for the trade-off study for the feasibility, we will continue to work on the roaster, as you mentioned. Now the plant is quite conventional with lead, zinc and pyrite. Sure, there will be small trade-offs on maybe the flow sheet on the grinding circuit, but it's not quite material for the project. It will be more internally with our different engineering firm to help on the trade-off. As the resource grow, we always balance, of course, the open pit and the underground. We make sure that each ounce is mined in the most economical way. And we also take into consideration operation flexibility, CapEx delay, the lowest investment we can do. So Boumadine at the end is just at the start. David and his team, they have lots of drilling to do. We keep it flexible. We have internal update of the resource.

So to answer your question, most of the trade-off will be on mining to make sure we have the right mining method. And like I said, that every single ounce is mined in the most efficient way. Now -- on the flotation side and on the milling side, it's quite conventional. We'll continue to advance the roaster, but the demand is so strong for the concentrate as is. We believe this is the best path forward. We'll keep our options open as we go into the FS.

Thanks, Raphael. And as a tiny follow-on to that one, like the precious metals recovery to concentrate 96% or better, like is there additional testing that you need to do on that ahead of the feasibility? Is that part of trade-off, but like additional work?

So the focus on the feasibility study, and I mentioned that a bit earlier, we've been working on the metallurgy of Boumadine since [ 2018 ]. And every campaign we've done converges. There is no surprise on the flotation. So we're very comfortable and confident with the metallurgy of Boumadine. That being said, as we extend the resource, we need to keep all the different variability test work we need to do it also. So the main focus on the feasibility study metallurgy won't be so much on flow sheet development, will be mostly on variability test work just as a sanity check to make sure we're always ahead of what the geology team, the exploration team finds for us. So mostly will be on variability.

The recovery is outstanding. We have 3 concentrate. And at the end, we float all of the sulfur. So all the gold comes in the sulfur. So whatever doesn't come in the lead and in the zinc concentrate makes its way to the pyrite concentrate. So not too worried about metallurgy. We need to get -- we just need to stay on top of the variability test work, and that will be the focus on the feasibility study.

If you have follow-ups, Bryce, you may go ahead and we have the time.

Yes, sure. Okay. I mean, Raphael, you mentioned the Zgounder mining cost of $4 per ore and $2 per waste. Are you using those numbers directly into the Boumadine model? Or are they adjusted in some ways there some differences in the projects? And can you talk to the underground mining cost per tonne?

Yes. So to answer your question is we derive these costs for Boumadine independently, okay? So we work with WSP, and we work with also the local contractor that we currently have at Zgounder, and we work the cost from scratch. Now what I mean is we also -- as a sanity check, we cross-reference them with Zgounder. There is also opportunity of economy of scale at Boumadine in terms of unit cost per tonne and waste, especially for the open pit.

Let's remind everybody that Boumadine is 3x, 4x the tonnage of Zgounder, right? So there will be economy of scale. We'll have larger fleet. We have several different pits. There's lots of optionality built in, in Boumadine. So the total cost per tonne on the mining side for open pit is around $47 with a strip ratio of 21, which is quite similar to the underground where we sit around $45 to $50 per tonne. It's a long-haul stope. And yes, we're quite comfortable with these costs. They do check quite well with Zgounder, and we also have the upside of larger economy of scale for Boumadine.

Okay. And my last one before I pass it on. You mentioned resource upside potential and the chance of merging the pits together from all the drilling you've been doing. If you were to add ounces between the North pits and the Center pit, is that the most obvious area to merge the pits? Or is that -- are they too far apart? And what would the impact on the strip ratio be? Would you be adding ounces at the same strip ratio? Or is there potential to lower the life of mine strip?

Well, let me comment a bit on the strip first. We don't consider the strip in our economic analysis to be blunt. Every tonne is mined in the most efficient way. So if the strip is higher, but it's more economical to mine it open pit, we mine it open pit. If it's more economical to mine underground, we mine it underground. So to lower -- we don't look at lowering the strip. We look at making the best NPV possible for the project. We make sure there's ore continuity. We make sure to have flexibility into the operation, and we make sure that the overall cost per ounce mine is the lowest.

So the strip ratio at 21 because our mining costs are low, it is still economical to do so. And when the tonnes that we get out in the open pit means that they were more economical to do so than underground and vice versa. It's a bit early to comment about which pit which will merge with which. When we look at the geophysics, we see the continuity of the trend, and we have lots of infill to do all between those pits. But even if we look at the current mine plan, one can speculate that the underground of the South of the 2 South pit, they get quite close as we go deeper. So with the infill, we will see. I don't know, Patrick, if you have comments on that on the mining side.

Well, just one comment to go back to what -- to go back to your question. So I think there is big potential for the 3 smaller pits in the North side to merge together. But I don't think it will merge with the Central area because it's a bit further away. And I believe we drilled between the North and the Central and we haven't found a lot of mineralization. But on the North side, definitely, there is big potential for the pits to merge together and hopefully, to look like the bigger Central pit that we've got in the main area of the deposit.

Okay. I appreciate all that. I appreciate a lot of work that's gone into this. So well done and congratulations to the team.

Thank you, Bryce.

Okay. I think Benoit would like to address an additional question we've received.

Yes, I've received a question from Ovais from Scotia. Benoit, congrats to you and your team for a robust Boumadine PEA. A few questions. You are assuming contract mining in this PEA. Are you contemplating switching to owner mining as the initial pits and underground is developed?

So we always keep our options open. So first of all, let me start with that. It's always something we reevaluate year-after-year, we look at our contract. We look at what we can do ourselves. We look at where there's more value to outsourcing. In Morocco, currently at Zgounder, we have a very good partner for the open pit. And we believe this relationship can maybe continue to translate with Boumadine. Outside of that, there's very good open pit mining contractor in West Africa, also some open pit contractor in Europe. There's a good market for open pit mining and our costs are quite satisfactory for open pit. So by going on a contractor base, we save the investment.

So if I were to look forward into this project, I would believe that the best outcome for us would go to contractor base for open pit mining. Now for underground, maybe there's a bit more of a -- there's a bit more study to go into that. Currently, as Zgounder, we have 2 different underground contractor, and we do quite a bit ourselves. So for Boumadine, I believe there's lots of work mostly for a contractor to help us in the development. [ Chances are ] we ll do production ourselves, but we're certainly not close to have a contractor also doing the underground mining in Boumadine. And that will be part of the trade-off that we'll do into the feasibility study, like I mentioned a bit earlier.

So we have the advantage in Morocco that we are quite well surrounded with especially good open pit contractors. But for the underground, there's very good know-how, especially on infrastructures and on waste development that I believe will have its place also in Boumadine.

The second part of the question in regards to 360,000 meters of drill program, is drilling expected to infill and expand the current known resource? Or do you have target outside of the current resource that you're excited to explore? I think Pat, that's exactly what maybe what you've explained.

Exactly. So the 360,000 meters drilling program is only for infill. And this is to increase the level of confidence on the already known resource on the Boumadine main trend. On top of that, we will very likely add more drilling to explore the different areas that I mentioned in the Asirem, [indiscernible] or even in the main Boumadine mining license, other areas that are not part of the Mineral Resource Estimate.

Okay. So we will take our next question from Justin Chan from SCP Resource.

Congrats. Just a couple of questions on, I guess, first, the infrastructure side of things. I saw you mentioned in the release that water will come from nearby towns and wells. Just wondering maybe to get a sense of what the split is as you scale up the operation from maybe 8,000 tonnes a day to a larger number, would that have a big influence on your design? And yes, if you could give us a sense maybe on if you do choose to go to hydromet or roaster, if that would be an impact as well. Maybe just talk through the water side of things.

And then my second one is just on the mining method. And I guess, what are your effective mining with -- did you consider cut and fill, et cetera?

Okay. Justin, yes, happy to comment on that. So for the water supply at Boumadine, we'll need about 2 million cubic meter of water per year. And there are several options available to us that we've considered for the PEA. There are 3 relatively large cities close to Boumadine that all have water treatment for their sewage water, they do primary treatment. So the idea is to have about 100... [Technical Difficulty] that all have water treatment for the sewage water, they do primary treatment. The idea is Sorry about that. So the idea is we'll have 100 kilometers of pipeline.

Okay. Maybe we'll pause here. There's an echo. We're just going to address it, and we'll pursue with that with Justin's response.

I caught the first half of that. Should I just wait on the line for the second half?

There is an echo, Justin. I think we'll just close your mic and then I can finish to answer.

Sounds better now.

Okay. Sorry about that. So 3 nearby cities, they have treated water plants. We'll build 100-kilometer pipeline through all 3 cities. And just like that, we'll bring us sufficient water. That being said, we also have contingencies built in. There are several water reservoirs in the region. okay? And we'll continue through the feasibility study to see it as a contingency, we can have water from the source. The region is also known for underground water, and we have a good hydrogeological study and campaign plan to see if we can -- to which extent we can pump water from the underground water nearby.

So the water aspect is taken seriously at Boumadine. We have experience in that regard at Zgounder also. So in a nutshell, Justin, to answer your question is we have water processing plant in 3 relatively large nearby cities. We will continue to work on the hydrology of the region to see if we can pump water underground, and we know that water exists. We need to quantify to which extent, and finally, there are large water reservoirs in the region that we will try to have as a contingency.

Regarding the roaster, it's the positioning of the roaster that

Correct. So Justin, as you can imagine, a roaster consumes a large amount of water. If we were to build a roaster, we need to evaluate where we will build it. The most economical place to put it is probably close to a port, close to the water. A roaster would produce significant amount of sulfuric acid that may be used locally or exported. So at the end of the day, if we build a roaster at Boumadine, we need to export sulfuric acid. If we build it somewhere else, then we need to truck the pyrite. Regardless of where we put the roaster, we will have transportation to do on the sulfuric acid or on the pyrite. So we might as well put it on a more sustainable water source to make sure it's not an issue. So if we are to go on the roaster route, chances are it would not be at Boumadine, but it would be somewhere else, but that has to be evaluated as we develop the project.

Got you. That was really comprehensive on that. And my second question was on just the underground mining method. I think it's longitudinal avoca mining. Just curious if you consider cut and fill or I guess, how that -- what are your mining widths and how might that evolve as you progress through DFS?

Yes. So about -- well, the open pit, that's very straightforward. But Boumadine is essentially vertical veins, okay? So we need to continue our refinement of our understanding and modelize those veins. But it's -- at this point, it seems obvious to us that the best method for Boumadine is just long-hole stoping because there are visual clear-cut veins. So I don't think -- we certainly don't think at this point that there's value to cut and fill at Boumadine. The most economical way would be by long-hole stoping and to follow the vein because they are quite vertical.

So our next question is from Don DeMarco over at National Bank.

Congratulations, Benoit and Raphael and team. Maybe I'll just continue the questioning on the underground mining. What are the underground mining rates? I mean, I see you've got an 8,000 tonne per day mill. And is this filled over the life of mine in any given year by having just a combination of both open pit and underground mining running concurrently?

Don, happy to answer this. We have a life of mine of about 11 years, out of which we'll mine 20 million tonne open pit and 11 million tonne underground. So the mining rate underground over life of mine is roughly 1 million tonne per year, but we only start at year 3 to extract ore. So it will be a bit above that. So say, 1.3 million tonne per year on the ground. And don't forget, this is over 5 different mines, not only 1 underground mine, we have 5 different mines with their own access ramp.

Okay. Great. So it sounds as though at some point in the mine life, you'll have the underground mine entirely supplying that mill.

Well, if we look in the PEA, the last 2 years of the life of mine is underground only, but that is in 11 years. We're just starting to drill this. So I think for the PEA, what's the most important is really the first 5 years of the project. This is where we have a bit more certainty, but there's definitely much more upside in the considering of the life of mine. And for the PEA, yes, the first 3 years is open pit. The last 3 years is underground. But overall, the life of mine is a mix of about 2/3, 1/3.

Okay. And about the pits, how deep are the pits? I mean, I can see in some ways, it might be advantageous to go underground sooner. You got a strip ratio contend with. But -- so how did you arrive at that balance of open pit and underground?

Okay. So it's Patrick here. So we -- the deepest pit is the central pit, and it goes down to about 350 meters in depth. The reason why it goes so deep is because in the Central area, this is where we've got the bigger number of parallel veins, which means that we've got not only the main central vein that is about 5 to 6 meters wide, but we've got also 3 to 5 other parallel veins. So it helps on the overall strip ratio of this. How we came up with the depth of those pit, it's very simple. We used standard software in the industries. We looked at several scenarios between -- an optimization between open pit and underground. And we came up with this scenario, which is, as Raphael said, the most economical way to mine the different areas of the Boumadine deposits.

Okay. Okay. Good. And then maybe just as a final question. And I mean, this is -- for those that may ask, I mean, there's been some challenges with the grade at Zgounder. And I recognize this is a completely different project, but what confidence can you give that you can achieve the grades laid out in the PEA?

Yes. Great question, Don, I understand it. The first thing to understand is the geology of Boumadine and Zgounder, they are just 2 completely different things. This is a high sulfide visual defined veins. Even in the core, you see -- if it's very dark, it's sulfides, you see the galena vein, you see the sphalerite vein, you see the pyrite vein. So it has nothing to do with it. Zgounder is not a vein deposit. Zgounder is fine structured. The continuity has to be followed very closely. This is not the case with Boumadine.

With Boumadine, we have several dozens, even 20, 30, 40 meters in-depth well-defined veins of 1, 2, 3 meters. It's visually accessible, so it has nothing to do with one another. We can modelize the vein quite clearly at Boumadine. So we're quite confident on the mining method for Boumadine.

Good luck with the next steps and moving toward the FS and other milestones.

Thank you, Don. So before we close it off, I will turn it back to Benoit for some concluding slides and closing remarks.

Thank you. Thank you, team. Thank you for all the answers. Look, this is a very unique project. It will go from beginning of exploration when we took over to production in 7 years. It has -- which is, as we know, in our industry is extremely low. It will produce 400,000 ounces of gold equivalent. When you look at the slide that we just put up, it's in silver equivalent. And -- but when you look at this in silver equivalent, it's -- we will be at pro forma 42 million ounces of silver equivalent, comparing ourselves to in between Hecla and Coeur before, obviously, the Coeur transaction, obviously.

And you can see that we're moving up the curve. As we indicated, Boumadine has got lots of upside potential. It's got many more structures. But just on the main structure, on the main trend with something that we can execute, which is permitted, which we have the money to deliver, we are now on a pro forma basis, a 40 million ounce silver equivalent producer. It's quite interesting, quite unique. And all of that, I would say, with 141 million shares outstanding.

When you look at the market cap at the top of this slide, you see that we're totally off, and we understand that. And that's something that Alex and I will need to work on. But clearly, there's a major, major rerate that needs to happen.

On the next slide, showing the efficiency of the investment, it's quite unique. When you look at the efficiency of the investment, you look at the annual production here on a gold basis on the top left, we're joining the big players with 400,000. And I know it's the first 5 years, but we've indicated clearly that that's where we have visibility after that, because of the drilling. You know that this year, at Boumadine, there's 160,000 meters at year-end that will need to be included in the model. Currently, we are at about 140,000 meters. We should be adding another 20,000 meters, maybe more for year-end. So there's 160,000 meters that's not yet in the model. And as indicated, we will add in the next 2 years, 360,000 meters and not including the regional play. So obviously, when you look at this on a 5-year basis, we look extremely well.

When you look at the bottom on CapEx to average annual production, the beauty is the low CapEx, which we are very comfortable with. You recall, we did Zgounder for $140 million, and I'm not including the compensation that we've received from the EPC contractor. We did Zgounder on budget. We were a little late because of the EPC contractor a few weeks, but we did it on budget. We're very, very comfortable with this CapEx number that we just gave you. And based on the annual production, we're going to have one of the lowest CapEx to production ratio. And if you look at it on the top right-hand side, the after-tax NPV to CapEx, well, look, this is quite unique. And as we know, this just gets bigger as we see a higher silver and gold price.

So we're in a very unique position. Now something we haven't discussed from the beginning now is jurisdiction. I mean, we see and we know that things are getting complicated in many countries. Morocco is just getting better. Morocco, if you follow what's happening on top of being the Junior World Cup Champion in soccer, I mean, it's just getting better everywhere. The investment, climate is great, the automobile industry is thriving and us in mining, we're doing extremely well. So it is quite unique as a jurisdiction, and let's never forget that.

So Boumadine, large district, very, very large district, exceptional economics based on facts that we have, that we know, it's the same team. Raphael and his team are going to be using the same contractors, the same people. Some of our employees will probably, that we have extra will go from Zgounder to go to Boumadine. Our track record in the region is second to none. We've done it on budget and a little bit off time, but almost on time. And again, I said it, but we have the mining license in hand. We're developing on our mining license, and we have the financing spoken for. So it's quite unique.

And on this last slide, when you look at this last slide, where we're showing production, again, just to show that we're up there with the bigger projects, you see Boumadine 1 to 5 on a gold equivalent basis, we're up there. But what's really important is the one at the bottom. And Raphael showed that to you is on an ASIC for year 1 to 5, we are below $1,000 for life of mine. And again, life of mine based on what we know now, we're at $1,021. So it's a low CapEx, low OpEx project in a great jurisdiction built by people who've just completed a recent bit.

So I think that we are in a very unique position. We're comfortable that with the numbers we just gave you are for us attainable, and we are really motivated to follow the calendar that's included in the press release and in this presentation. So look, again, this is just the beginning of a 7-year journey to production. We -- and the last item is the buyers are out there for the concentrate. We were pleasantly surprised by the enthusiasm of the traders and the end users to get the pyrite because it's a source of energy for the smelters. They need it, they want it. And we do have MOUs with 3 groups that are really looking to get this pyrite over to the smelters.

So look, thank you very much for your time. We are available. There will be another call next week for the Q3 financial statements. If you have questions at that time on the PEA Boumadine, we will take them. Otherwise, you can reach Alex or myself, and we will get back to you always as quickly as possible. Thank you for your time. Sorry, it was an hour and 18 minutes. It was a little long, but it's -- we felt that for Aya, this is a game-changing project, and we're very, very pleased to show you this great -- the great economics of this project. Thank you very much, and talk to you next week.