Aya Gold & Silver Inc. (AYA) Q3 2026 earnings review
Aya lifts its silver output target as mining costs fall
Aya Gold & Silver, the Moroccan silver miner, hit record output at both operations while unit mining costs fell. Revenue rose 90% from a year ago to $103 million and net profit nearly tripled on higher silver prices and the start of bulk pyrite shipments at Boumadine. Chief executive Benoit La Salle raised the bottom of the 2026 production outlook, which by our math leaves fourth-quarter output about 3% below last year because Boumadine has already reached 95% of its annual target.
| Revenue | $103M +90% from a year ago |
|---|---|
| Consolidated production | 2.03 Moz AgEq +51% from a year ago |
| Consolidated cash cost | $15.51/oz -25% from a year ago |
| 2026 production outlook | Raised low end 6.6–6.8 Moz AgEq (middle: +34%) |
⚖️ Verdict: 🟢 Bullish
The story got better because both operational worries from the first half — the Boumadine shipping bottleneck and a feared second-half jump in Zgounder mining costs — moved in the right direction. Bulk ocean freight cleared the port backlog and record mill speed kept Zgounder cash costs at $17.53 per ounce, well below the $21.50 full-year ceiling. One caution: Zgounder sold 255,000 fewer silver ounces than it mined, tying up cash in unsold inventory, and the new Boumadine economic study omitted the upfront construction budget.
The question now is whether cash from Zgounder can pay for building the full-scale Boumadine mine without new debt or share sales. Optimists point to $184 million in cash and wide profit margins at current silver prices, while sceptics note that the nearly 40% Moroccan tax rate and an undisclosed construction bill leave self-funding dependent on metal prices staying high. The upcoming Boumadine feasibility study and its confirmed capital budget will settle it.
🐂 Bull Case
Zgounder Mill Beats Design and Lifts Outlook
"Our optimization initiatives are paying off, delivering more scale, lower cash costs and solid cash flow," chief executive Benoit La Salle said. At Zgounder, Aya's main silver mine in Morocco, the processing plant ran at a record 4,096 tonnes of ore per day, up 23% from a year ago. The miner reached that speed by using "the additional crushing capacity provided by a contractor" while maintaining a 92.0% silver recovery rate.
- Zgounder silver produced: 1.50 million ounces, up 11% from a year ago
- Total ore mined: 4,746 tonnes per day, beating the mill's processing pace
- Surface ore stockpile: 434,538 tonnes, up 16% from last quarter
Because the mines pulled out more rock than the mill processed, the company added 60,654 tonnes to its surface stockpile by our math. That extra pile gives the plant steady feed "to sustain mill feed through planned open-pit pushbacks starting toward the end of 2026 and continuing through 2027". On that performance, management raised the bottom of its 2026 Zgounder production plan by 400,000 ounces.
What to watch: the average silver grade of processed ore in the fourth quarter. A stable grade near 146 grams per tonne as open-pit pushbacks begin would show the stockpile can feed the mill without hurting output.
Bulk Shipments Clear the Boumadine Sales Backlog
At Boumadine, Aya reclaims and sells material from a historical stockpile of pyrite, an iron sulfide rock containing gold and silver. Heavy winter weather slowed port shipments in the first half of 2026, leaving output at 415,586 silver equivalent ounces (AgEq, which combines gold and silver using relative prices) and raising the risk of a full-year miss.
The Moroccan miner introduced bulk ocean shipments alongside container freight this quarter and reclaimed 49,890 tonnes, up 191% from last quarter and well above its 30,000-tonne target. Output jumped to 536,879 AgEq ounces and sales reached 492,932 ounces, bringing pyrite revenue to $17.1 million. Year-to-date output now stands at 952,465 ounces, so by our math the operation needs just 47,535 ounces in Q4 to reach its 1.0 million ounce annual plan.
What to watch: fourth-quarter pyrite ounces sold against ounces produced. Closing the remaining 224,566-ounce year-to-date gap between production and sales would turn the rest of the first-half port backlog into cash.
Mine Efficiencies Keep Unit Costs Below Plan
Aya completed its new tailings storage facility — the engineered dam that holds leftover mill waste — early in the third quarter. That allowed trucks to resume normal waste hauling in the open pit, which was expected to push up the strip ratio (waste rock moved per tonne of ore) and lift second-half mining costs.
Instead, higher mill volume diluted fixed plant expenses, so Zgounder cash costs per ounce sold fell 16% from a year ago to $17.53. Across the whole company, cost of sales — the direct expense of mining and processing — dropped by 26.8 percentage points of revenue from a year ago to 33.9% by our math, lifting operating profit 292% to $59.5 million. Management kept its Zgounder full-year cost cap at $21.50 per ounce, which our math shows was overly cautious.
What to watch: fourth-quarter cash costs per ounce at Zgounder as open-pit pushbacks start. Holding unit costs near $18 per ounce during heavier waste stripping would prove the bigger mill permanently lowered the mine's cost floor.
🐻 Bear Case
Boumadine Study Omits the Upfront Construction Bill
"The updated MRE and PEA for Boumadine show stronger economics and a longer mine life," La Salle said. A Preliminary Economic Assessment (PEA) is an early engineering study of a mine's potential returns, and the new study outlines a 14-year life, a 93% after-tax internal rate of return, and a $3.5 billion after-tax net present value discounted at 5%.
The drilling team also finished 181,685 metres of infill drilling by October 31, beating the 180,000-metre annual target ahead of schedule. However, the earnings release does not disclose the estimated upfront capital cost required to build the Boumadine processing plants and mine, which sat at $446 million in last year's study.
That omission matters because Aya aims to fund the construction from internal cash flow while the project "remains at the exploration and evaluation stage and is not in commercial production". The release also warns that the study relies on inferred mineral resources that are too speculative to count as economically viable reserves until the feasibility study is finished.
What to watch: the initial construction capital budget in the upcoming Boumadine feasibility study. A sharp rise from last year's $446 million estimate would test whether Zgounder's cash flow can fund the build without new debt.
Unsold Silver Inventory Grows at Zgounder
While the Boumadine reclaim operation caught up on shipments, Zgounder sold 9% fewer silver ounces than a year ago even as its mill output rose 11%. The mine produced 1,497,749 ounces of silver in the third quarter, but it recorded sales of only 1,243,092 ounces.
- Zgounder silver inventory at quarter-end: 383,757 ounces, up from 212,516 ounces in Q2
- Unsmelted silver cement excluded from production: 138,100 ounces at quarter-end
- Working capital cash tie-up: $6 million in Q3, mainly across ore, circuit silver and ingots
The company attributed the 254,657-ounce gap between production and sales to the timing of shipments at the end of September. Because those ounces stayed in the vault and another 138,100 ounces of silver cement waited for smelting, Zgounder silver revenue fell 4.6% from last quarter to $86.2 million despite higher output and a slightly higher realized silver price.
What to watch: Zgounder's silver ingot inventory and smelting backlog at year-end. A drop back below 200,000 ounces in Q4 would confirm this quarter's buildup was a normal shipment cutoff rather than a refining bottleneck.
Metal Price Ratios Trim Reported Equivalent Output
Aya sells pure silver doré bars from Zgounder and gold-silver pyrite concentrate from Boumadine, leaving its revenue directly exposed to metal market swings. Its consolidated average net realized price rose 49% from a year ago to $59.50 per AgEq ounce, but fell 7% from $64.22 in the second quarter because lower-priced Boumadine concentrate made up a larger share of sales.
In addition, silver prices outperformed gold during the year, which compressed the gold-to-silver price ratio to 68:1 in Q3 against the 80:1 ratio used in the company's 2026 outlook. Because each ounce of Boumadine gold converted into fewer silver equivalent ounces, the tighter ratio cut reported Q3 production by 52,011 AgEq ounces (118,240 ounces year to date) and raised Boumadine's reported unit cost per AgEq ounce.
What to watch: the realized gold-to-silver conversion ratio in the fourth quarter. Further compression below 68:1 would continue to reduce Boumadine's reported silver equivalent volume against the 80:1 baseline in the annual plan.
Risks this quarter didn't answer
Three standing cost and duration concerns received no new resolution or detailed breakdown in the third-quarter news release.
- Corporate overhead and legal fees: general and administrative costs rose from a year ago "reflecting higher professional fees related to the previously disclosed litigation" with former contractor Duro Felguera and US listing rules, but the release table omits the exact Q3 dollar line.
- Moroccan tax burden: the implied effective tax rate sat at 36.2% in Q3 ($19.9 million in taxes on $54.9 million of pre-tax profit by our math), keeping income taxes near the company's largest cash expense.
- Finite pyrite stockpile life: management reiterated that the Boumadine reclaim operation will last only 20 to 24 months from November 2025, leaving a gap before the main Boumadine mine is built.
👓 Other Themes
Moroccan Land Deals Expand Exploration Footprint
Aya expanded its Moroccan exploration territory by about 50% to over 1,200 square kilometres by acquiring a 259 km² portfolio in the Anti-Atlas region in August and a 139 km² copper-silver package in Tizi, 35 kilometres west of Zgounder, in October. On November 4, the group also signed a term sheet to sell its non-core Azegour project and license geological data to Sama Resources in exchange for a 19.11% equity stake in Sama.
💲 Other KPIs
Operating cash flow more than doubled from $22.4 million a year ago and held steady against $48.4 million in Q2. Before a $6 million working capital buildup in silver and ore inventories, operations generated $54 million in cash. After spending $18 million on Boumadine exploration and $6 million on Zgounder capital projects, free cash flow was about $24.1 million by our math.
Cash and cash equivalents rose from $136.3 million at the end of 2025 and $129.2 million a year ago, excluding $16 million of restricted cash held in reserve. Working capital — short-term assets minus short-term liabilities — rose 60% from a year ago to $153.7 million, while long-term financial liabilities dropped 48% to $43.6 million after first-half loan repayments.
🔮 Guidance
Raised. Management lifted the bottom of the full-year range by 400,000 ounces, putting the middle of the plan at 6.7 million ounces, or 34% growth from 2025. With 5.20 million ounces already produced in the first nine months, the outlook leaves 1.50 million ounces for Q4 by our math — down 27% from Q3's 2.03 million ounces because Boumadine already met 95% of its 1.0 million ounce annual target.
Raised. The Canadian miner narrowed its Zgounder forecast by raising the low end by 400,000 ounces, pointing to 18% full-year growth at the 5.7 million ounce middle of the range. Year-to-date production stands at 4.25 million ounces, which leaves 1.45 million ounces for Q4 by our math, right in line with Q3's 1.50 million ounces and 5.6% above last year's fourth quarter.
Improved. Instead of expecting full-year unit costs to average $21.50 per ounce, the company now expects Zgounder cash costs to stay below that mark. Because unit costs averaged $17.97 per ounce across the first nine months on 3.94 million ounces sold, our math shows fourth-quarter costs would have to jump to $29.41 per ounce on the remaining 1.76 million ounces just to touch the $21.50 ceiling.
Raised. Having completed 181,685 metres of infill drilling by October 31 against the 180,000-metre full-year infill target, management now expects total 2026 Boumadine drilling to beat the original plan. By contrast, near-mine drilling at Zgounder reached 17,858 metres after nine months, or about 60% of its 30,000-metre annual target.
❓ Key Questions
What is the upfront construction budget in the Boumadine study?
The release highlights a $3.5 billion net present value and a 93% internal rate of return for Boumadine, but leaves out the initial capital cost. Investors need the build budget to test whether Zgounder's cash flow can fund construction without new debt.
Why did Zgounder hold back 383,757 ounces of silver inventory?
Zgounder produced 1.50 million ounces (plus 138,100 ounces of unsmelted silver cement) but sold only 1.24 million ounces, lifting quarter-end inventory by 171,241 ounces. Management did not say whether those delayed ounces were sold in October or delayed by smelting capacity.
How much did Duro Felguera legal fees add to overhead?
The financial review notes that general and administrative expenses rose because of US listing rules and arbitration fees with former plant contractor Duro Felguera, but the release omits the expense line. Shareholders need to know how much of the overhead increase will repeat.
Will Boumadine pyrite reclamation pause or exceed 1.0 million ounces?
After bulk shipments lifted Q3 Boumadine output to 536,879 AgEq ounces, nine-month production sits at 952,465 ounces against a 1.0 million ounce annual plan. Management kept the full-year ceiling unchanged, implying Q4 output drops by 91% unless the company beats its own target.