Aya Gold & Silver (ticker not provided) has reported its fourth quarter and full year 2023 financial results, showcasing a year of significant growth and development. The company achieved record revenue of $42.8 million and a substantial increase in net profit, which rose by 281% year-over-year to $5.3 million.
Aya is also preparing for the future, with its Zgounder mine expansion on schedule for commissioning in Q2 2024 and a robust balance sheet bolstered by a $57 million bought deal and cash reserves of $17.3 million.
Key Takeaways
- Record revenue of $42.8 million and net profit increase of 281% to $5.3 million.
- Zgounder mine expansion on track for Q2 2024 commissioning with a 250,000-tonne ore stockpile.
- Healthy balance sheet with $17.3 million in cash and a $57 million bought deal.
- Progress on EBRD CTF financing loan and investment in growth opportunities.
- Increased production guidance exceeded with 1,970 thousand ounces at a low cash cost.
- Exploration plans include drilling at Zgounder, Boumadine, and regional sites.
Company Outlook
- Zgounder mine expansion progressing on time and within the $148 million budget, with $110 million incurred.
- Anticipate drawing the remaining $50 million of the $100 million EBRD loan in mid-2023.
- Exploration spending to be evenly split, with a focus on Boumadine in H2.
Bearish Highlights
- Delay in drilling at Zgounder due to a focus on underground development.
- Delay in releasing the permitting resource due to negotiations for mining permits.
Bullish Highlights
- New mineralization discovered at Zgounder, with potential for significant development.
- Boumadine project showing promising results with new permits and a resource estimate expected soon.
- Company plans to beat guidance for both 2023 and 2024.
Misses
- No quarter-by-quarter guidance on grades and costs for 2024 provided.
Q&A Highlights
- CEO Benoit La Salle expressed confidence in the company's performance and a conservative approach to guidance.
- The company is negotiating for additional permits, with all necessary permits expected by early April.
- Exploration budget and plans for Boumadine will depend on the results of the greenfield exploration.
Aya Gold & Silver has navigated a year of growth while investing in future opportunities, as evidenced by the doubling of the Boumadine budget and signing a 20-year renewable Power Purchase Agreement (PPA). The company's land position has expanded significantly at both Zgounder and Boumadine, by 20% and 200% respectively, indicating a strategic move to secure more resources.
In terms of production, Aya has not only exceeded its guidance but has done so cost-effectively, with low cash costs per ounce sold. The strategic stockpiling of ore is expected to facilitate a smooth commissioning process for the new mill at Zgounder.
The company has been proactive in its exploration efforts, with plans to drill extensively across its properties. The discovery of new mineralization and the ongoing drilling to identify new pits and underground structures signal a robust exploration program.
Despite some delays in drilling and the release of permitting resources due to negotiations, the company remains on a positive trajectory. With a strong commitment to Environmental, Social, and Governance (ESG) practices and the anticipation of completing its Clean Technology Fund milestones, Aya Gold & Silver is positioning itself for sustainable growth.
The CEO's confidence in the company's performance and a conservative approach to production guidance reflect a strategic and measured approach to growth. With the commissioning of the Zgounder mine expansion on the horizon and promising developments at Boumadine, Aya Gold & Silver is poised to continue its upward trajectory in the mining sector.
Full transcript - None (AYASF) Q4 2023:
Operator: Good day, and thank you for standing by. Welcome to the Aya Gold & Silver's Fourth Quarter and Year End 2023 Results Conference Call. [Operator Instructions]. Please be advised hat today's conference is being recorded. Miss Hanna, you may begin your conference.
Ruth Hanna: Thank you, operator. Good morning, everyone, and welcome to Aya's fourth quarter 2023 results conference call. My name is Ruth Hanna, and I'm the IR and Communications Manager, dialing in with some of the Aya team in Montreal on Morocco this morning. On the call today, we have Benoit La Salle, President and Chief Executive Officer; Ugo Landry-Tolszczuk, Chief Financial Officer; Raphaël Beaudoin; Vice President Operations; and David Lalonde, Head of Exploration. We will finish today's event with a Q&A session with the team. Please contact our IR team directly with any follow-up questions that are not addressed during the call. Before we begin, I'd like to remind listeners that today's event will contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Details on the forward-looking statements are contained in today’s news release, as well as on SEDAR+ and at www.ayagoldsilver.com. With that, I would like to turn the conference over to Aya's President and CEO, Benoit La Salle. Benoit, please go ahead.
Benoit La Salle: Thank you, Ruth. Hello, everyone. We can summarize the year as saying that 2023 was an exceptional year for Aya. We've delivered a very strong year with record revenue, record earnings and record cash flow. We generated $42.8 million in revenue and we generated $21.2 million of cash flow. The net profit of $5.3 million is at a 281% increase year-over-year. Furthermore, we have low total cash costs at $12.50 per ounce sold. We are also on track to deliver our plant expansion, the 2,700 tonne per days Zgounder mine expansion. We are today on time and on budget for commissioning in Q2 2024. To start the commissioning, we have a stockpile of 250,000 tonnes of ore at year-end for commissioning of the new mill. And we've also have a combined mining rate underground and open pit of 2,300 tonne per day at year end. You remember that we need to be at 2,700 tonne when we will achieve nameplate capacity. We're fully funded and we have a really healthy balance sheet. The cash at the close of the quarter stands at US$17.3 million and that does not include the$57 million bought deal in CAD77.6 million. That was done in Q1 of 2024. We've also delivered the milestones on the EBRD CTF financing loan, hence the reason why would they have disbursed so far as a as per the schedule. So we've continued to invest in our growth opportunities. You will remember that last year we doubled the Boumadine budget extending the strike length of the structure to 4.2 kilometer and discovering new types of mineralization. We've also signed a 20-year renewable PPA, which will be connected to the – which we will be and we will be connected to the grid shortly. And that has also an effect of reducing the cost of energy for the new project. We've increased our land position by 20% Zgounder and by 200% at Boumadine. So this will take me to the next page, if you're following on the slide to Page 4 and just to review quickly the actual production versus the guidance, because we know it's extremely important. So we have for the year 2023, our guidance was between 1.7 to 1.9 and we've achieved 1,970 thousand ounces, so beating our production guidance. Our cash cost in the guidance was around was estimated at 14.40 and we ended the year at 12.50 and we all know that this is in the low quartile of our sector. The average grade process our guidance was 264. We were at 250 which is in line and the mill recovery. So the KPI for the mills and mill recovery, the mill availability were all good, the mill recovery is 86% and the guidance was 86%. So we've done extremely well. And in the total tonnes processed, we were budgeting 245,000 for the year and we did 281,000. So, at the place of work above nameplate capacity throughout the year, we actually had over the nameplate capacity of 700 ton per day and the average for the year 772 and per day. So we've done extremely well. Going to page five, just a quick summary of the last five years, you see the production growth when we took over in 2020 to 2023, obviously 2024 and further there will be a major change, as the new plant will be commissioned and in production. So you see the silver grade process as well at the bottom from 2019 to 2023 being constant between 225 and 250. The recoveries when we arrived were around 60. And now, we are more towards the 86%, 87%, which is excellent and the ore process as discussed that is based on the availability of the plan. We now are extremely good with the availability of the plan and that's why we have the ore processed at 281,000 tonnes for the year. Moving on to page six of the presentation. On a cash flow basis, it's quite interesting to see that today for 2023, we're looking at $21 million of operating cash flow compared to the previous year. It is a record year on gross margin. We are also on a record year as you can see on page five -- on page six sorry, cost of sales is a function of course of our cash costs. And our thought is quite aligned with where we should be at $25 billion cost of sale. And the cash cost is as I said extremely good being at $12.5 -- $12.50 per silver ounce sold. So page seven is just the picture of the new construction. I know we'll give you a video every month that you watch carefully, but it's coming very well. And again, we can say that this project is coming on time and on budget. So, it's there are a couple of weeks left and it will be -- we will start commissioning towards the end of Q2. So on page eight, you have Zgounder expansion. We have some statistics. So we are on budget. We have incurred $110 million so far and we have the other $38 million committed. So we are within budget and the CapEx that we had identified in 2022. The underground development is on track. That is a -- is doing extremely well. 90% of the lateral development is done, 80% of the vertical development is done. And if you recall, the most sensitive item of the project expansion was to make sure that the mining was going to be at 2,707 days. So that is on track and developing extremely well. The plant is all on site. So now it's a question of assembly. So the power line, the substation, the Merrill-Crowe, the silver room the ball mill and obviously, all of that is on site and the -- it's just a matter of now of putting it all together. So we gave you a little progress chart of the processing plan, the underground and the open pit mine, the tailings, the water management, the electrical infrastructure and the on-site infrastructure. So again moving smoothly and all this being done with our team and with our EPC contractor. So you have here a picture of a brand new water reservoir and tailings dam. Now you know that there are $100 million loan with EBRD is ESG driven. So those elements were extremely, extremely important. And at the customer site every quarter they review the work that's been done and as you can see this is his state-of-the art execution for the water reservoir and the water basin and detailing. The pylons are 90% up, whereas, we have a few left to go. The cables have been pulled and the end of this station has arrived on-site. The exploration program is always a major focus because as you as you all know, we create value by increasing the ounces in the ground and by finding new deposits. So for 2024 and we've put that in the press release of this morning. At Zgounder we will be drilling -- at the main mine, we will be drilling 15,000 meters minimum because often as you know over the years once we've been through the budget, we looked at what needs to be done and we increase it. At Boumadine, we've completed last year 76,000 meters. This year we are going to do 120,000 meter. That's the budgeted amount of drilling, which is 60,000 meters on the known structure, which we refer to as the 4.2-kilometer strike, which we follow our geophysics on six kilometers. And we will also do 60,000 meters to test new targets, because the team has identified parallel targets that are within our permits, the reason for us to unmask the number of permits that we have. So we will divide that half and half. Obviously the second half, the 60,000 meters is something that will move based on what we find with geophysics and that's something extremely important. We are doing the geophysics right now. It's really generating targets and its ongoing. It's good to have regional also a very important aspect of our strategy as we are looking for an additional mine or deposit to feed the three plants that we have at Zgounder that we will have. So the budget there is 10,000 meters. We're looking for similar mineralization that we have at Zgounder, which is the silver. But we are we also are doing the geophysics at Amizmiz, and that we know with copper, silver mine historically we know that there is a structure there is it just a structure for digital mining or can it be a structure for us, we will find that out with the geophysics, geochem and of course drilling throughout the year. Now there's a new project that we're going to do a little bit of work call Amizmiz. It’s a project that's been in our portfolio for a long time. It was actually one of the first project that this company acquired in 2010. It was a goldmine. Historically its a very high-grade mine and the team have looked at it and believe that it's worth a bit of work not a lot of work, but to go and find out what is really the size of this deposit. So that's something so look forward to as the year goes by. On page 11 you have Zgounder the main structure that we refer to every time we make a presentation and we've been drilling this. We're a little late on our drilling. So last year we were supposed to do 20,000 meters. We didn't do it because we focus more on the development of the underground for the mine and we did not have access to the lower level to drill. So we know that we were a little late, but we're making it up right now. Something very interesting happened in the past month and as we found that the rhyolite, which is the footwall of the deposit, we found that the rhyolite was carrying mineralization. And one of the drill holes that went into the realized gave us a 1,089 gram per tonne over 13.5 meters. So that was quite a surprise. Of course David and the team immediately went back to the core shack, pulled out all the drill logs and all, the core that went into the realized to reassess it. It wasn't the least locally. And with everybody on-site that they realized was that it was mineralized until we then got those resolved and found out that it is it could be mineralized. So that's a very interesting development. Now on page 12, you have the result of the work that has been done by the team on-site in identifying another Zgounder look like, because that's what we're looking for to debug a little bit this Zgounder mine and not when I say debug is because there's a lot -- it's going to be very busy at 2,700 tonne a day. That is the traffic capacity of that deposit. I mean there will be many trucks going up and down. And so we would like to find another pit and other underground structure where we could do autonomous mining that could also feed the plant. So the team has identified similar structures to Zgounder on the Far East. And we are currently drilling the one to the Far East and there's one to the South as well, which we are currently drilling right now. So we are looking forward for these results. And the team is very positive. It's the same geological sequence that we have at Zgounder. And as we know historically manager and at any time which is a kind of a look-alike identical, but pure silver mine they have discovered around their main pit and their main underground mines, many satellite deposits. And that's what we are looking with this work that we're doing. Now coming to Boumadine which is on page 13, Boumadine is a very, very interesting project. As you know, we've talked about it. We've had very good results. Very good drill result with we raised the money in Q1, because we announce that we're going to put that money to work at Boumadine. So we have budgeted as I said 120,000 meters this year. Again 60 on the main zone 60,000 meters of these new targets that are being generated which we are some we already have. Others will come from the ongoing geophysics. It's really, really interesting. Now you also see that we're adding permits. So at year end we had added four new permits. We announced more permits last week and there will be more coming. We are in the process of hopefully controlling the whole district, as we did at Zgounder by the way. What we have at Zgounder we have done a lot of ground and now we have close to 400 square kilometers of ground. And we have the middle most -- most of the permits that we want to add at Zgounder. We want to do the same thing at Boumadine. So our land position which originally was at the very beginning was very small. It's now 36 square kilometers from the original mining permit. Now we are at 141 square kilometer. And that is we'll keep growing. Last year we did some metallurgical testing, because it's always a question that we all have is, how are we going to treat this material. The initial tests gave us mid-80s to high-80s recovery using different methods. We have not yet decided on the flowsheet. We've looked at four methods. We are continuing as well as the team on this. And we are continuing to work to add to have the optimal flowsheet and methods that we will be using. Obviously it's a function of the ore and David is finding different types of ore to the North or to the South, so all of that will be taken into account. But ultimately, Boumadine is now becoming a Tier 1 project in size, in grade. We will be spending a lot of money and a lot of time on this project. On page 14, you have the geophysics that we've been using and some of the hits that we've had over the -- over the year 2023. So you see that the grade is 1,000 gram per tonne over 23.5 meters. I mean, it is -- it's a very good grade project. It's gold, silver, lead and zinc, and a little bit of copper. And it's it really is, is well set in this -- as you as you can see with the geophysics in the pyrites structure. Now, furthermore, if you look at as the press release where we announced a result, there was figure number three, was showing some grab sample towards the north, where copper was really, really present 6% to 12% copper. So those were grass samples. So obviously, we have -- we know what they mean, but it's also interesting to see that there's copper in the system. And this is again, I want to take much more time, but it's a small project yet, but we see that with the gold price and this currently at the historical mining in this historical resource, which is why it's not ours is was there way before our time, they were looking at about 13 gram per tonne. It's an underground system, but we're going to take the work that was done historically, we will review it. We will do a little bit of work and we'll see what's out there before we you know we do a corporate transaction on it, or we will we need to know what's there before we do. We make a decision. Now to close, and of course, the ESG is extremely important in this world of mining. For us, it's always been. It will continue to be to the point where we teamed up with EBRD for a $100 million facility. So the ESG component is extremely, extremely important. So on health and safety, we've done quite well. We had -- very few lost days. We had a lot of training, 10,000 hours of training. We had no fatalities, which is something you never want to have. So, 2023 has been a big year of transition, of training, but we are pleased with the results. Obviously, 2024 is a more delicate year, because we're increasing the number of employees. We're increasing the throughput. We have more production. So, we have to be extremely careful, and we know that, and we're acting accordingly. So, the Clean Technology Fund, the milestones were achieved this year, milestone number one. So that reduced our rate on the CTF tranches to 6.98%. We have other milestones to meet over the year, and as we meet them, the rates are going to be coming down even further. On the community, I like something of great importance to all of us, education we organize classes and online classes for the schools in our community Health, we have mobile clinics, and our mind doctor is also available for the community. Water access, we help villages in securing water access, and we do that for all the communities where we are. And as well, we have the economic project which creating of sustainable development, and we launch a saffron farm and we've had our first harvest. You may know that, but Morocco is a -- is a saffron producer, like Iran, and countries in the Middle East, and the quality of the Saffron is extremely, extremely high. So, to conclude our year, it was a very, very good year for Aya in 2023. Silver production and cost guidance done. The milestone for Zgounder silver mine expansion, not totally done, but almost done. And again, you're following it with the videos that we put out all the time. The Zgounder underground and regional drilling, that's ongoing. We did some. It's ongoing this year to complete all the drilling that we want to do. The boom-add-in resource estimate is just about ready. It will come out in two weeks, plus or minus a few days. We're just about ready. It's an ongoing process. But the drilling is ongoing. Out of the 120,000 meters that we wanted to do this year, we're already past 12,000 meters already. So we're 10% done. And it's ongoing. We will have or we have I mean, it's a question on day seven drill turning. And on the ESG front which is again, a major component. We didn't meet all the milestones EBRD as disbursed $85 million of the $100 million EBRD is going to site in a couple of weeks with the team. They will review again, all their questionnaires regarding the loan and we will draw on that $50 million -- that last $50 million in the month of May or June…
Ugo Landry-Tolszczuk: May June
Benoit La Salle: May, June. Sorry, May, June. So, operator this concludes the official portion of the presentation, and now we will open the floor to questions.
Operator: Thank you. [Operator Instructions] Our first question comes from the line of Puneet Singh from Eight Capital
Puneet Singh: Thanks. Good morning, Benoit and team. A couple of questions for me. Are you guys going to have a beating guidance to better again this year on production costs be to, I know this is an expansion year, so probably better to err on the side of caution. But just wondering, how much conservatism you're baking into those numbers especially on the grades, because I remember the tech report was calling for you to mine some of that 300 gram per tonne material upfront. So just asking, how conservative are you being there, because it will be a cost driver. And do you think, it could be into some of that higher-grade material by the end of the year, if things go well?
Benoit La Salle: Puneet, I'll pass this over to Raphael, who runs this on a daily basis.
Raphaël Beaudoin: Hi, this is Rafael. So, the Zgounder is obviously the driver of this mine and also quite a challenge, considering the geology of the -- of the deposit. And as we increase tonnage, obviously to keep the grade stable is our focus. In 2024, there are many things coming up to play. We are once again, almost doubling our mining rates. We need to commission the new plants and we also will include the open pit ore within the new mill as well commission it. And throughout 2023, we've kept the grade fairly high at -- during production, which ensured us very good production in 2023. And we have stockpile, let's say, lower grade to ensure a smooth commissioning and not wasting any ounce. And that was -- that's a classical strategy that we're certainly not inventing. And that being said, we really need to focus on commissioning the mill, making sure to bring availability up, to bring recovery up, to make this mill run at many place [ph] only then -- and only then we'll we will slowly increase the grade to the mill. Does that answer to your question?
Puneet Singh: Yes, that makes sense. Thanks. I had one more question on exploration. If David’s on the line, I'd like to hear maybe the expanded take on that rhyolite because it looks like it could be a game-changer for you guys. And my final question is, it's been a couple of years now since you've updated that Zgounder resource, when do you think you'll update the market next on that, because you've been hitting some great intercepts. So just wondering when you're -- when you look to update the market on that? Thanks.
David Lalonde: Hi. Its David Lalonde speaking. Concerning the rhyolite, see we believe it can be a game changer its still early to fully understand it. But so far, the take is related to flat falls to the rhyolite that’s most likely could served as a conduit to bring the mineralization in. It definitely change our approach in the coming drilling program. And as Benoit mentioned, we are also re-logging, re-sampling all the rhyolite intervals that was historically not sampled because I believe in Barron [ph] that's one thing. Concerning the resource update we are in --we are in the progress of making them. We expected to make it earlier, but the underground development was slow and the drilling last year was slow, but currently this year, we're already 58% complete with our underground drilling program, so we expect by beginning of H2 to be able to update the market on the resource.
Puneet Singh: Okay. Sorry. So, the second half of this year you'll look to update?
David Lalonde: Yes, the beginning of the second half hopefully.
Puneet Singh: Okay, sounds good David. Thanks very much.
Operator: Thank you. Our next question comes from the line of Eleanor Magdzinski from SCP Resource Finance.
Eleanor Magdzinski: Good morning everyone and great work putting together last quarter and year end results today. As always a great presentation. I had a couple of questions. First on the underground versus open pit splits of tonnes and grade for the quarter. And I didn't see that and I was kind of looking through and I was just curious kind of what--
Benoit La Salle: Eleanor, can you speak up a little bit please?
Eleanor Magdzinski: Yes absolutely. Sorry, I think it's my headphones, is it better?
Benoit La Salle: Yes.
Eleanor Magdzinski: Is it better? Sorry.
Benoit La Salle: Yes.
Eleanor Magdzinski: Okay wonderful. Yes, I just had a question the first one on split between underground and open pit for tonnes and grade. I see the totals ore reported, but I was just kind of curious of the breakdown on that first?
Raphaël Beaudoin: On the open pit -- you mean for last quarter of 2023?
Eleanor Magdzinski: That’s right, yes.
Raphaël Beaudoin: So, we mine on the underground 114,000 tons at 210 gram per ton for the underground and the open pit was 60,000 tons at 186. So, the open pit obviously has the strip, we mine on the mountain side and we will have quarter at 180 and we'll have quarters at the 280. So, the split right now we mined -- we mined the open pit at a rate of between 500 and 1,000 tonne per day and the other the underground more around 1,000 to 1,500 tonne per day. And we can expect over the next two, three years, the open pit to feed the mill to about 25% to 35% of the mill feed.
Eleanor Magdzinski: Okay awesome. Thank you very much. My second question I guess has to do with the ramp-up schedule. I know there was a you know the range of guidance, but in terms of how things are expected in your view with commissioning towards the end of Q2? Do you feel in the fourth quarter that would have the major kind of step-up and -- in terms of like things being commissioned and getting to nameplate and or is it a six-month kind of process to get there? I know obviously you're set up well with the stockpiles and everything and kind of finalizing process plant and things like that. But yes just curious on kind of the timelines and the ramp-up schedule?
Raphaël Beaudoin: So, we look at commissioning the plant towards the end of Q2, like Benoit said, now we are towards the end of construction talking about electrical and piping and quite in a construction crunch right now. Things are good. In our ramp-up, it's always -- the ramp-up is never hit or miss, but it's never quite smooth either. So, we can expect -- there is a sequence -- obviously, there's a sequence, there's nothing new in that, the cold commissioning or verification, cold commissioning, hot commissioning, and so on. So, we'll start that around June and then we'll need a couple of months to bring it up to a certain rate, which we hope to be close to 80% to 90% capacity and then we'll stabilize the production towards the end of Q3 and hopefully have a very good Q4. So, that was the plan and above the guidance as again as you can imagine, if we push back commissioning by two or three weeks or we fronted by two or three weeks, has huge difference on production because the new plant will carry the bulk of production as soon as it started, hence the spread into the guidance for 2024.
Eleanor Magdzinski: Awesome. That makes perfect sense. Thanks very much for that. I just had one more question related to the expansion or actually maybe two more but just quick ones. Just a question on infrastructure progress. Every quarter you've been reporting how things are going. It seems in my view anyways maybe that’s probably not as critical path as some of the other ones. And I was just wondering kind of what's included in the on-site infrastructure development that's still required. So that’s aside from, obviously, the purchase plant and electrical commissioning, which, I mean, obviously, they're pretty big ticket items. But for the remainder on-site infrastructure, just curious kind of what's included in that type of stuff.
Benoit La Salle: So on-site infrastructure includes essentially everything else, so we're talking about here some housing for extra workers, some small roads we need to finalize. I can think also of different pipe works that we need to do between water basins and plant, and many other things of which are not necessarily critical for the commissioning of the new plant or the ramp up of the mine, but it has to get done at one point or another. For example, our underground garage, who's been dragging along a bit but we have we have a surface garage. So it's not as near -- is not as critical as the rest. So sometimes it falls on second priority, but it will get done and it's on a critical path. So that's what explains the other on-site infrastructure that might be a bit lower as opposed to everything else.
Eleanor Magdzinski: Okay. Awesome. Yes, that's kind of what I figured. It just seems, obviously, you prioritize anything that could be more critical path in terms of the commissioning. And then like you said those are just things that need to get done, but -- yes, it’s kind of they’ll eventually get done and get tacked on, and it's not -- it's a lot of smaller jobs, let's say. I guess my last question. I'm cognizant I've been hogging the line here, so this will be my last one. But just in terms of the anticipated spend, so if you take the budgeted CapEx of $159 million, there's still about $49 million total of spend, so that in addition to the $36 million of exploration spend allocated for this year. I was just kind of curious on, if there's a time line or an expected time line of spend for that over the -- both of that total over the next, whatever, I guess three quarters at this point now or four quarters that you could kind of speak on retrospectively a little bit.
Benoit La Salle: Sure. Yes. So on exploration, you can kind of see that pretty evenly split, a little bit back H2, and you can see here, we had a major number of meters done at Boumadines [ph]. So it's a little bit of push towards H2 but exploration is pretty linear. You can divide it by four or take 60% or 65% H2 versus H1. And in terms of construction, I would say, it's the reverse. It's probably 75% of that, 80% of that in H1 and the remainder in H2.
Eleanor Magdzinski: Okay. Awesome. Thank you so much. I appreciate all of the feedback.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Don DeMarco from National Bank Financial.
Don DeMarco: Thank you, operator. And Benoit congratulations on the guidance beat in 2023, and hopefully, you have a guidance beat 2024. For 2024, clearly, it's going to be back-end loaded year. Can you give us some color on the grades and costs quarter-by-quarter? And what costs would you expect in Q4 when the plant fully ramped up?
Raphael Beaudoin: At the onset here, you’re right. It’s a bit fortune telling. We're not going to guide quarter-by-quarter. I think we've known and I think the history of the progress that company has shown here in the last few years, like there's some good quarters and there’s some less good quarters. That's a function of the grade that's at the mill. We're ramping up mine production board commissioning. I think for us, we're going to stick to an annual guidance here.
Don DeMarco: Okay. Fair enough. What's the grade of the stockpiles? Maybe you can tell us like how you plan to use the stockpile throughout the commissioning and maybe as a percentage of total fees?
Raphaël Beaudoin: Well, so we've been mining in 2023 about 215 gram per tonne. And we've processed 150 gram per tonne. So that obviously the stockpile at quite a bit lower in the range of 160. And we have about 150,000 tons of it and that that will be the sole theme for to say couple of months of commissioning. And then we'll slowly include our high-grade on the open pit that will follow and we'll bring up the grade as we stabilized production. Our key target here is not to waste ounces essentially. So there is no good or bad ounces, but there's lower higher grade ore. And we want to make sure commissioning is done with the lower stockpile. And as soon as recovery gets up, we will diminish the blend of the stockpile in the feed of the plan and we'll bring up the grade.
Don DeMarco: Okay. That sounds reasonable. And then for my last question shifting to Boumadine. So David you've got a large airborne geophysics campaign plans being flown over Boumadine in the area, would expect to find from this and when do you expect to release results?
David Lalonde: Sorry. Yes, we -- the geophysical survey right now is about 70% complete and we like the results so much that we are planning to extend it. The idea of the service we wanted to cover the new license of course, but took the chance as well to take a different technology that will allow us to measure conductivity all the way down from 1 kilometer at depth and resistivity to 2,000 meters to 2 kilometers of depth. When we had the original survey at Boumadine the depth coverage was about 600 meters if you can recall. So the idea is to look for deep roots of the system eventually start looking for porphyry type mineralization, and of course, to identify any massive sulfides that we could find in new areas. So, hopefully, the survey will be completed in May with final reports and data process probably late H1. And as soon as we have a nice colorful maps, I'm sure we'll have lots of pressure to feed the market with the needs and we're quite confident about it.
Don DeMarco: Okay. That's all from me. Good luck with the ramp-up and commissioning of Zgounder.
David Lalonde: Thanks, Don.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Justin Chan from SCP Resource Finance.
Justin Chan: Hi guys. Congratulations. Believe it or not, we have a couple of more questions. And maybe just the first one on Boumadine and the exploration budget. And in the past you've expanded budgets later in the year. I guess how much potential is there for that? And then in terms of the timeline from the first resource onward, should we expect a scoping study? Or would the next update be another resource update before you start wrapping economics on it?
Benoit La Salle: So on the exploration budget I think Boumadine, we've taken quite a bit by bite here to move from 36,000 to 120,000 meters. A lot of it is greenfield as well. And so we're going to have to see kind of what those results of that greenfield exploration gives us in that like in the past has driven what we'll do in the future. As David already mentioned, the result of our regional geophysics has been exciting and we've already extended that a little bit. At Zgounder again I think there's quite a few targets especially in the regional that are interesting and that will really depend on what we find and follow-ups on that. So it's -- because it's such early like in the past we've had a lot of targets kind of establishing that was one of the things that we wanted to do. Now we're in last year, the team generated several targets. We've budgeted to follow on those targets. And then now it really depends on results. So it's hard to say how to project forward, okay. How are we going to modify it or not the result will dictate that. We have the capital if we wanted to extend it the results have to be there. On what's next for comes in after the resource estimate. again, I think a lot of that will be driven. We've done some work where we've budgeted some engineering work this year, but it's still a new project. We haven't been working on it for a very long time. So, hopefully, there's still a lot of nice surprises associated to Boumadine. We think there are, and so I think we'll do a scoping study when we're confident that the resource we have is a good representation of what Boumadine is as a project. So, it's an ongoing thing. I think Rafael's team on the engineering side is following closely to make sure that when we want to do a scoping study, a lot of fieldwork that needs to be done, which is a long part of doing the study, is executed. So, we have to make sure that the deposit and the resources that we present are a good representation of the project.
Justin Chan: Okay, gotcha. So, probably, just reading between the lines, it's probably a scoping study would be less likely this year, more likely next year, given that you have a lot of results to come in that could determine whether or not you think the resource is where it is or it can be gone.
Benoit La Salle: Seems like a reasonable a seems like a reasonable hypothesis to me adjustment.
Justin Chan: And then just a question on the mine sequence at Zgounder. I mean, if the wrap-up is going quite well and the recovery is on where you want them, will the -- I know, Raphaël, you mentioned that the open pit will be contributing high-grade before first, once you go through low-grade stockpiles. But I'm just curious on the underground sequence. Will you have -- is there much high-grade planned this year in the mine sequence that you could blend in if you're happy with how the plant is performing or is that mostly coming in maybe next year?
Raphaël Beaudoin: I think in 2024, the high-grade of the mill is certainly not the priority. As we've been going down the level, what we want is also to switch our mining method and include some long-haul stopes. And I think once we'll be ready with long-haul stopes, we will attack some of those high-grade pillars in the lower levels to 1925 and 1900. That being said, because we worked on the infrastructure for quite a while, we have done many stope access over the last two or three months. So I mean, we do have a stockpile management plan and we do stockpile the high-grade, especially of the open pit. The rest has been fed more or less to the mill over the last couple of years of what we've been mining. So right now, the focus of the underground mining team is to prepare a stope access. And we will mine those high-grade stopes as the mill needs them and as we are ready for the stopes that require long-haul stopping.
Justin Chan: Okay. Thanks. That's all. That's really good color. Appreciate it.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Stephen Soock from Stifel.
Stephen Soock: Thanks, operator. Hi, Benoit and team. Congrats on a great 2023. Just a few quick ones for me here. The first one is around reconciliation of the underground specifically. I know it's a difficult kind of potty or body, but how has it been reconciling versus your year-ahead, year-look-ahead geologic model? Again, just kind of focused on the grade guidance here for 2024 and wondering if there's any kind of longer-term implications or if that's just a function of the ramp-up. Thanks.
Benoit La Salle: So reconciliation as Boumadine is an ongoing battle, an ongoing technical fun. I don't know how else to put it. What we see as Boumadine is historical stopes. They always give more than we hope for, which is very good. On the new stopes, when we do things right, we tend to get things right. Now it's excessively variable. I mean, we've seen the quarters we got. We got quarters in the upper 300. We got quarters in the lower 200. And the long-term trend is somewhere in between. What we see as Boumadine is when we take a whole quarter and we reconcile it, we're not far off on the grade side. But stope-by-stope, it can vary like five times the grade or 20% of the grade when we look on the stope-by-stope basis. We always have more than 20 stopes that's operating at the same time as Boumadine, out of which sometimes 80% of our production comes from two or three stopes. So yes, if you miss one of them, great goes sideways very fast, on the good side sometimes and obviously on the bus side sometimes. So the key here is reconciliation of Zgounder is to have many stopes open, to make sure to scan everything right and to make sure to be and definition that's what we've been working on. So what I can -- what I can say in a nutshell on reconciliation is when we look at the big scheme of thing as Zgounder things do reconcile not too bad. When we go stope-by-stope, sometimes it's a mess. So the key to solve that is to have -- is to prepare the stope access long time before we need them. And this is what we've been doing the last three months and what is comforting though is when we look at it quarter by quarter and we put the stopes together we're not too far.
Stephen Soock: Yes, it makes sense. I know it makes it tough to plan around, but good to hear that overall kind of shaking out, we're expected in the big picture. I appreciate that. And the last one for me here is just on the permitting resource. I think this was originally kind of guided to come out mid-February. So, can you provide any more color on kind of the delay here now that we're looking at kind of mid-April for a potential release?
Benoit La Salle: Yes. Stephen, we decided to push that out a little bit. It was really a question of making sure we were able to negotiate permits around our two mining permits or one mining permit. Now it's one permit. And so you saw that we have added probably close to 10 permits so far for last year. I think this year, we're in negotiation on probably five or six more and we wanted to do this, because we think that once we put up the resource, it will be a little bit more difficult. So, we are we are very happy where we are right now. We are -- we have targets or permits that we target and we want that. And -- but that being said, the geophysics that we're doing covered all the ground that we want to have and that we have. So, we're in a very good position. We have good information and as it was the reason for pushing it out of it and we all sat down have -- the early April probably the second week of April, we'll be done acquiring what we want to acquire. Others may not be done, but the only real way for them for a little bit later. And the resource will be coming out on -- as we explain on that main structure 4.2 kilometer long and that will be the resource that we will present.
Stephen Soock: Perfect. Appreciate it. That's all for me guys. Thanks again.
Operator: Thank you. At this time, I would now like to turn the conference back over to Benoit La Salle, CEO and President for closing remarks.
Benoit La Salle: Thank you, very much, thank you all of you for assisting today. It 2023 was a stellar year. It was a very, very good year production-wise, construction exploration, ESG, we had a very, very good year. We will continue on our on this trend. I think 2024 will also be a very, very good year for Aya. And I know some of you are looking at a bit of a higher guidance on production. But you know we've always been very conservative and that's something we will maintain and we will maintain. It's a discipline. Raphaël is going to site next week for a couple of weeks or couple of months as we're getting into commissioning. So it's -- if we're confident that this will continue to deliver. We're certainly confident that the geology will continue to deliver as good, bad and as we imagine. And we will follow with our ESG program as well which is extremely important. So thank you for being there. Thank you for following us and we are always available for comments and discussions and we really will probably be talking to you in the next few weeks on a Blue Mountain [ph] update call with you separately or maybe somebody will do it altogether. But it will. It's coming in the next few weeks. So thank you very much. And again, we had a great 20 23. The team is motivated and we're continuing on the same and then a trajectory for 2024.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
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