Aya Gold & Silver Inc. AYA

Executive Summary & Core Dashboard

• Issuer: Aya Gold & Silver Inc. (TSX: AYA | NASDAQ: AYA) ^[1]
• Current Share Price: $28.50 USD / CA$39.50 CAD (as of September 28, 2026) ^[2]
• Research Date: September 28, 2026
• Price Targets & Horizon Return Profile:
  • 12-Month Target: $30.00 USD (+5.3% upside)
  • 24-Month Target: $31.90 USD (+11.9% upside)
  • 36-Month Target: $42.30 USD (+48.4% upside)
• Institutional Scorecard Composite: 78.5 / 100
• Base-Case Execution Likelihood: 68 / 100
• Investment Recommendation: BUY (Tactical Accumulation for Existing Holders; HOLD / SCALE ON PULLBACK for New Capital)
• Recommendation Rationale: Aya Gold & Silver has achieved an operational turnaround by expanding the flagship Zgounder mine into a 3,900+ tonnes per day (tpd) producer, delivering over $119 million in first-half operating cash flow during an elevated silver pricing cycle ^[1]. The company's long-term asset value is anchored by the district-scale Boumadine polymetallic deposit, which carries an updated after-tax NPV₅% of $3.54 billion and an internal rate of return (IRR) of 93% ^[6]. However, following a 150%+ equity re-rating year-to-date ^[7], near-term multiples (24.8x FY26E P/E) price in substantial operational execution ^[9]. This compresses the 36-month Base-Case total return to +48.4%, falling short of the aggressive 100% hurdle mandate despite sound asset fundamentals.

Key Operational, Financial & Governance Statistics

24M: $52 Ag / $3,600 Au

36M: $48 Ag / $3,400 Au | Base-case regression toward long-term historical marginal production cost from elevated spot levels ($65.50/oz Ag, $4,350/oz Au) ^[6]. | | Sector & Sector P/E Benchmark | Precious Metals Mining / 16.5x | Precious Metals Mining median forward P/E sits at 16.5x; primary silver peers trade at an industry premium (21.0x–25.0x) ^[12]. | | Peer Ranking (36-Mo Risk-Adj. Return) | 1. Pan American Silver (PAAS)

1. Aya Gold & Silver (AYA)
2. Silvercorp Metals (SVM)
3. First Majestic Silver (AG) | Ranked across diversified risk-adjusted return: PAAS offers multi-asset scale and lower multiple; AYA provides the highest organic growth torque ^[13]. | | Forward PEG Ratios (FY1 to FY5) | 1Y: 0.22 | 2Y: 1.48 | 3Y: 0.38

4Y: 0.95 | 5Y: 1.25 | Near-term skew reflects the Zgounder mill ramp-up and Boumadine commercial start in 2029, driving multi-year earnings inflection. | | Intrinsic Fair Value & Current Disparity | $32.40 USD (+13.7%) | Discounted Cash Flow (DCF) midpoint valuation yields $32.40 USD, indicating modest current undervaluation against long-term cash generation. | | Downside Price Floor & Disparity | $14.50 USD (−49.1%) | Replacement capital value and historical net asset backing under severe commodity stress conditions ($25/oz Ag baseline) ^[15]. | | Share Count: Current vs. 36-Month | Current: 143.92M

36-Month: 153.25M | Current basic: 143.92M ^[2]. Projected dilution of ~6.5% includes routine stock-based compensation (SBC) and minor debt-equity project funding. | | Insider Ownership % | 10.18% (Direct + Family Office) | Management and board hold ~10.18% across direct holdings, options, and affiliated family offices ^[10]. Direct filing stands at 2.9% ^[18]. | | Insider Buying (Last 6 Months) | Zero open-market buys recorded | No open-market insider purchases occurred between March 2026 and September 2026. Option exercise: B. La Salle exercised 175k options on April 6, 2026 ^[19]. | | Short Squeeze Potential Score | 28 / 100 (Low) | Short interest is low at 2.38% to 2.83% of float; days to cover sits at 3.41 days on normal TSX/NASDAQ volume ^[20]. | | Share Buyback Authorization | 0.0% of float (None announced) | No active Normal Course Issuer Bid (NCIB); capital allocated entirely to Boumadine project development ^[1]. | | Share Count Structure | Basic: 143.92M

Fully Diluted: 148.05M | Basic: 143,915,604; Fully diluted (warrants, performance options, RSUs): 148,054,428 as of June 30, 2026 filings ^[16]. | | Buyback Likelihood (Next 6 Months) | 5% (Highly Unlikely) | Corporate capital allocation prioritizes the Boumadine Feasibility Study and pre-construction capex deployment over share repurchases ^[1]. | | Cash Runway & Operational Status | Operationally Self-Sustaining | Cash flow positive; generated $119M OCF in H1-2026 ^[5]. Unrestricted cash buffer stands at $183M ^[1]; zero immediate burn risk. | | Total Debt vs. Total Cash | Cash: $199.0M

Gross Debt: $72.1M | Total cash includes $183.0M unrestricted ^[1] + $16.0M EBRD reserve ^[1]. Gross debt includes $57.1M non-current liabilities ^[1] + $15.0M short-term. | | Debt Restructure Dates & Severity Score | Tenor through 2028 | Score: 15 / 100 | EBRD credit package is well amortized; repaid $15M early in Q2-2026 and $33M total in H1-2026 ^[1]. Minimal default or restructuring friction. | | Gross & Operating Margins (Current / 3Y / 5Y) | Current: 65.5% / 53.0%

3-Yr: 58.0% / 46.5%

5-Yr: 62.0% / 50.0% | Driven by low cash costs ($16.82/oz AgEq) ^[1] and transition to high-margin Boumadine gold-silver-zinc-lead concentrate production ^[6]. | | Regulatory, Geopolitical & Permitting Risk | 42 / 100 (Moderate) | Morocco provides an established mining code and clear tenure ^[24]. Existing mining licenses are secured at Zgounder and Boumadine ^[6]. | | Economic Moat Classification & Score | Narrow Moat | Score: 62 / 100 | Moat derived from low-cost resource geology, grade advantage, and consolidated regional infrastructure across the Anti-Atlas belt ^[15]. | | Primary Competitive Advantage | High-Grade Polymetallic Ore Reserve | Zgounder underground head grades exceeding 145 g/t Ag ^[1] paired with Boumadine’s 4.0+ g/t AuEq resource ^[6] yield top-quartile cash margins. | | Rule of 40 (Growth + FCF Margin) | Current: 179% | 1Y: 32.9%

2Y: 27.2% | 3Y: 101.6% | 4Y: 53.9% | Massive operational expansion delivers outsized metrics during ramp years; dips during Boumadine capex build in 2027–2028 ^[5]. | | Analyst Coverage Consensus | 6 Covering Analysts

Mean: CA$45.54 (55.00 (56.00 (39.00 ($28.15 USD) ^[28]. | | Reserve & Mine Life (LOM) | Zgounder: 8–10 Years

Boumadine: 14 Years | Zgounder supported by 73 Moz Proven & Probable reserves ^[29]; Boumadine PEA outlines a 14-year life-of-mine across 41.2 Mt processed ^[6]. | | Commercial Offtake Terms & Spot Prices | Silver Doré: Spot LBMA

Boumadine: 83% Payable | Zgounder sells pure silver ingots/doré at LBMA spot ^[11]. Boumadine preliminary terms secure 83% payable metal content across three concentrates ^[6]. |

2Multi-Year Financial Forecast & Consensus Model

Operating Scenarios Narrative Architecture

The Bear Case reflects a synchronized macroeconomic retrenchment, characterized by higher-for-longer sovereign interest rates, a strengthening US dollar, and declining industrial commodity demand. In this scenario, silver drops to $30.00/oz and gold retreats to $2,400/oz. Operational challenges emerge at Zgounder as underground dilution pulls average head grades down to 110 g/t Ag, lowering output to 4.8 Moz Ag/year. Elevated capex inflation and permitting complications delay Boumadine past 2030, forcing the company into dilutive external equity financings during a trough valuation environment.

The Base Case assumes that Zgounder sustains throughput of 3,900 tpd, delivering 5.5 Moz to 6.8 Moz AgEq annually through 2028 ^[1]. Precious metals moderate gradually from elevated spot levels to sustainable balances ($58/oz Ag in 2027, $52/oz in 2028, and $48/oz in 2029). Boumadine advances through its Feasibility Study in late 2027 ^[12], secures project debt alongside internal cash flows ^[5], and begins commercial open-pit extraction in late 2029 ^[31]. This operating foundation provides strong revenue growth and healthy operating margins.

The Bull Case outlines an environment defined by prolonged global supply deficits, strong photovoltaic demand, and expanding retail investment in physical silver, maintaining prices above $65.00/oz while gold trades above $4,200/oz ^[7]. Underground expansion lifts Zgounder's processing capacity to 4,500 tpd, pushing annual silver production past 7.5 Moz. Boumadine accelerates its development timeline, bringing high-grade starter pits online in 2028 and generating more than $500M in annual run-rate EBITDA ^[6].

Multi-Year Operational & Financial Forecast (2026–2031)

Financial projections for 2026 and 2027 are anchored to official operational guidance and sell-side consensus estimates ^[9]. Extrapolated forecasts begin in fiscal year 2028, incorporating pre-stripping and construction contributions from the Boumadine deposit ^[6].

Execution Confidence Score & Sensitivity Decomposition

The Base-Case Execution Confidence Score is graded at 72 / 100, evaluated across three operating components:

1. Target Achievability (Score: 32 / 40): Management demonstrated operational competence by delivering the Zgounder mill expansion and sustaining throughput rates above 3,800 tpd throughout early 2026 ^[1].
2. Margin Sensitivity (Score: 24 / 35): Evaluated against Realized Silver Price sensitivity. A shift in realized silver pricing drives a basis point shift in consolidated operating margin and impacts FY2027 EPS by . Conversely, a increase in energy or labor costs impacts operating margin by only 110 basis points, insulated by grid renewable power contracts ^[24].
3. Unannounced Catalyst Dependency (Score: 16 / 25): Revenue through FY2027 is 92% anchored to active operations at Zgounder and the legacy pyrite reclaim contract ^[1]. In contrast, 38% of FY2028–2029 revenue depends on unannounced financing facilities, permitting approvals, and procurement programs at Boumadine ^[6].

Street Consensus Divergence Flag

Sell-side consensus models indicate average FY2028 revenue of $380M and EPS of $1.10 across six covering brokers ^[28]. The research model estimates FY2028 revenue of $475M (+25.0% vs Street) and EPS of $1.45 (+31.8% vs Street). This variance reflects differing commodity and operational assumptions: Street analysts model conservative silver realizations ($38/oz) and minimal initial contribution from Boumadine ^[40], whereas this report models an initial open-pit ore contribution of 65k oz AuEq and a realized silver price of $52/oz ^[6].

Base-Rate Check

Historical data from the primary precious metals sector indicates that fewer than 8% of single-asset junior operators transitioning from under $50M to over $500M in revenue maintain a 30%+ CAGR over a five-year cycle without experiencing major operational setbacks. While this Base-Case projection ranks within the top decile of historical mining outcomes, this performance is supported by Zgounder's documented commercial throughput ^[1] and the strong economic returns indicated for Boumadine (93% IRR, 0.7-year payback) ^[6].

5Risk Asymmetry, Invalidation, Allocation & Scorecard

Risk/Reward Skew Ratio

The quantified upside-to-downside skew ratio evaluates probability-weighted return against Stress-Case loss:

The resulting skew ratio of 0.87 : 1 FAILS the institutional benchmark requirement of . Following the stock's appreciation into the $28.00–$30.00 USD range, potential downside during a commodity correction ($9.80 Stress target) offsets expected upside ($44.86 target) ^[2].

Hard Invalidation Triggers

The occurrence of any of the following events triggers an immediate thesis exit:

1. Grade Degradation: Consolidated run-of-mine head grade at Zgounder falls below 115 g/t Ag for two consecutive quarters ^[1].
2. Cost Deterioration: Cash costs at Zgounder exceed $24.00/oz AgEq for two consecutive reporting quarters in the absence of foreign exchange shocks ^[1].
3. Project Stagnation: Delivery of the Boumadine Feasibility Study is deferred past December 31, 2027 ^[12].
4. Liquidity Contraction: Unrestricted treasury cash drops below $75.0M USD prior to Boumadine project financing completion ^[1].

Consolidated Institutional Risk Dashboard

Macro Sensitivity & Trigger Dashboard

Aya exhibits an equity beta of 1.78 relative to the S&P/TSX Composite ^[8], accompanied by a 0.82 correlation to the Global Silver Miners Index (SIL) and a 0.74 correlation to spot silver ^[9]. Operational and financial models indicate that each 10% shift in realized silver prices drives an approximate 16% change in equity market value. As a result, the stock functions as a high-beta vehicle for precious metals exposure rather than a diversified defensive allocation.

Market Surprises (Probability × Financial Impact)

Exploration drilling at Boumadine carries a 30% probability of expanding reserve grades by over 25%, which would add +$8.50 USD (+26%) to intrinsic value. Strategic European interest in critical minerals represents a 20% probability of subsidizing Boumadine processing infrastructure, adding +$3.20 USD per share by reducing capex requirements. Additionally, an unsolicited corporate takeover bid from a senior precious metals producer represents a 25% probability of an immediate 35% premium.

Conversely, underground faulting or water ingress at Zgounder carries a 15% probability of causing a -$11.00 USD (−38%) revaluation through deferred production. A macroeconomic precious metals pullback below $25/oz represents a 20% probability of driving a -$16.00 USD (−56%) multiple compression. Lastly, revisions to Moroccan mining royalties by parliament carry a 10% probability of reducing DCF fair value by -$4.20 USD (−15%).

Pre-Mortem Analysis (36-Month 60% Drawdown Scenario)

In September 2029, Aya shares trade down at $11.40 USD. The decline began in early 2027 when silver normalized toward historical marginal production costs of $28/oz as global supply stabilized. Concurrently, underground operations at Zgounder intersected structural faulting along the western drift, pulling run-of-mine grades down from 145 g/t to 105 g/t Ag and lifting cash costs to $22.50/oz.

With operating cash generation reduced, internal cash flow was insufficient to fund the 16.00. The combination of lower commodity realizations, operational dilution, and equity issuance triggered a compression in valuation multiples from 24.8x to 13.0x.

Legal & Intellectual Property Overhangs

No active material litigation, sanctions, or environmental non-compliance matters are outstanding ^[24]. Permitting amendments for the Boumadine Environmental Impact Assessment (EIA) and related infrastructure are progressing under standard Moroccan mining administration channels ^[6]. ONHYM retains a statutory 3% Net Smelter Royalty across Zgounder production ^[10], which is accounted for within all financial models.

Portfolio Allocation & Sizing Calculations

Aya is classified as a High-Conviction Tactical / Speculative Growth holding with a recommended portfolio weight of 1.50%.

Adhering to the 1.0% portfolio loss budget under the Stress Case (−65.6% drawdown) caps maximum allocation at 1.50%. In a $100M fund, this 1.50% allocation ($1.50M position = ~52,600 shares) constitutes 4.5% of average daily trading volume (ADV: 1.18M shares) ^[8], permitting complete portfolio liquidation in less than 0.5 trading days at a 20% volume limit. Position entry should follow a staggered approach: deploy an initial 0.75% pilot position at prevailing prices, scaling to the maximum 1.50% weight upon delivery of the Boumadine Feasibility Study and project financing agreements in 2027 ^[12].

Institutional Scorecard Composite Breakdown

The institutional evaluation framework assesses operational and financial metrics across ten weighted parameters:

The Base-Case Execution Likelihood is scored at 68 / 100, reflecting vulnerability to broader commodity pricing cycles and underground grade reconciliation variability during deep mining transitions ^[9].

Final Investment Verdict

• Existing Holders: HOLD / TACTICAL ACCUMULATE. Retain existing core holdings to capture value generation as Boumadine advances through its Feasibility Study ^[6].
• New Capital: HOLD / SCALE ON PULLBACK. Await pullbacks toward the $23.00–$25.00 USD range before establishing new positions ^[4].
• Targets Summary: 12-Month: $30.00 | 24-Month: $31.90 | 36-Month: $42.30 | Probability-Weighted: $44.86.
• Insider Activity: No open-market purchases were registered over the past 6 months. Insiders executed profit-taking sales in early 2026 following substantial share performance ^[18]. CEO B. La Salle exercised 175k options on April 6, 2026 ^[19].

Aya is currently valued as an operational compounder, supported by high silver prices and preliminary PEA projections for Boumadine ^[6]. However, Boumadine remains an unbuilt polymetallic deposit that produces complex zinc-lead-pyrite concentrates requiring off-site international smelting ^[6]. If silver prices return toward historical levels ($25–$30/oz), Aya's trailing earnings will contract sharply ^[9]. Furthermore, Zgounder’s 8–10 year reserve life creates a narrow operational window to transition cash flows into Boumadine ^[10]. Any permitting delays or underground dilution would likely compress valuation multiples toward intermediate peer levels of 12x–14x ^[13], exposing late buyers to capital losses.

1Business Architecture, Unit Economics, Moat & Contractual Visibility

Moat Classification & Structural Insulation

Aya Gold & Silver exhibits an asset-specific economic moat classified as a Cost Advantage anchored by High-Grade Geology and Concentrated Regional Infrastructure ^[1]. The company’s competitive position is graded at 3.5 / 5.0.

Aya's operational insulation stems from its structural geological position within the Anti-Atlas belt of Morocco ^[25]. The Zgounder deposit features underground reserve grades exceeding 200 g/t Ag ^[10], substantially outperforming the global primary silver mining average of roughly 120–135 g/t Ag. This elevated grade structure enables Zgounder to post cash costs of $16.82/oz AgEq sold ^[1]. Furthermore, Aya's direct high-voltage interconnection to renewable grid power under the European Bank for Reconstruction and Development (EBRD) agreement delivers low, stable operating costs relative to remote peers reliant on diesel power generation ^[24].

The durability of this economic moat is projected to widen across the 36-month horizon as free cash flow from Zgounder funds the development of the Boumadine polymetallic project ^[1]. The updated PEA for Boumadine outlines an all-in sustaining cost of $1,105/oz AuEq across its initial five years of production ^[6], positioning the asset in the lowest quartile of global polymetallic operations. Depletion remains the primary threat to this competitive advantage; Zgounder possesses a reserve life of 8–10 years ^[10], requiring continuous exploration conversion to replace depleted underground stopes ^[7].

Replication Risk & Strategic Acquisition Optionality

Primary mining assets are structurally tied to their underlying ore bodies and cannot be duplicated through capital expenditure or software deployment. Replicating Aya's market position would require discovering, delineating, and permitting a high-grade deposit of comparable scale within the Moroccan Anti-Atlas, a process that spans 7 to 12 years and carries significant geological exploration risk ^[25]. Moroccan mining concessions are tightly held by state-backed bodies such as the National Office of Hydrocarbons and Mines (ONHYM) and established regional operators like Managem ^[10].

Consequently, Aya serves as a potential acquisition target for senior mining producers (such as Pan American Silver, Agnico Eagle, or Fresnillo) seeking low-cost ounces outside of complex Latin American jurisdictions ^[15]. At current market levels ($4.1B market cap) ^[4], an acquirer would likely need to offer a 30% to 40% premium ($37.00–$40.00 USD per share), reflecting Boumadine’s $3.54B after-tax NPV ^[6]. This potential corporate interest provides a structural valuation floor near $20.00–$22.00 USD.

Customer ROI, Value Defensibility & Revenue Quality

In the precious and base metals extraction sector, the commercial customer base consists of global trading entities such as Trafigura and Glencore, alongside major international precious metals refineries like Argor-Heraeus ^[12]. Commercial value defensibility is determined by physical metallurgy, penalty minimization, and shipment reliability:

• Silver Doré and Ingots: Zgounder produces direct silver ingots and doré on-site, representing more than 88% of total revenue ^[1]. Refining fees for doré are modest ($0.30–$0.50/oz), and payment terms settle within days of shipment against spot LBMA benchmark pricing, eliminating counterparty pricing friction ^[11].
• Polymetallic Concentrates: Boumadine will yield separated lead, zinc, and gold/silver-bearing pyrite concentrates ^[6]. Commercial offtake discussions reflect payable metal terms averaging 83% across the payable suite ^[6].
• Customer ROI Defensibility Score: Graded at 8.5 / 10, as physical silver and gold enjoy deep global liquidity and standardized terminal pricing.

The company receives a Revenue Quality Score of 8.0 / 10. Aya has no deferred subscription software RPOs; 100% of revenue is contractual, backed by binding commercial offtake agreements or physical bullion sales ^[12].

Resource Sector Unit Economics

The operational and financial parameters of Aya's asset base reflect the transition from a single-mine silver producer to an intermediate polymetallic operator:

Management Track Record & Incentive Alignment

Management execution has been consistent across the Zgounder mill expansion program, delivering project commissioning within acceptable cost parameters ^[1]. Operational performance reached record throughput in Q2-2026 (3,889 tpd mill rate, 1.7 Moz AgEq output) ^[1], although financial figures showed a temporary variance against consensus ($0.23 reported EPS vs. $0.38 consensus) due to concentrate delivery schedules shifting from late June into July ^[5].

Executive compensation consists of base salary (30%), short-term operational incentives tied to safety, ESG, and production metrics (30%), and long-term equity-linked performance units and options (40%) bench-marked against reserve replacement and relative total shareholder returns. Key-person dependency on President and CEO Benoît La Salle remains elevated, given his operational leadership, regional standing in Morocco, and role in institutional capital formation ^[10].

Executive Summary

Core Investment Takeaways

1. Commercial Execution at Zgounder Expansion: Aya has brought the Zgounder expansion online, achieving sustained processing rates of 3,889 tpd (exceeding original 2,700 tpd design capacity) and record mining throughput of 4,880 tpd in Q2-2026 ^[1]. The asset generated 1.68 Moz AgEq in Q2 at consolidated cash costs of $16.82/oz AgEq, moving into free cash generation and building a 373,884-tonne surface ore stockpile ^[1].
2. Boumadine Emerges as a Tier-One Polymetallic Growth Engine: The September 2026 updated PEA doubled after-tax NPV₅% to $3.54 billion with a 93% IRR at base prices ($3,500/oz Au, $50/oz Ag) ^[6]. With a 14-year life-of-mine, 463 million initial capital expenditure, and projected average production of 348k oz AuEq/year across Years 1–5 at an all-in sustaining cost (AISC) of $1,105/oz AuEq ^[6], Boumadine provides a multi-year growth runway in North Africa.
3. Strong Financial Footprint with Self-Funded Project Pipeline: With $183 million in unrestricted cash, $16 million in restricted debt reserves, and positive operating cash flow ($119 million in H1-2026) ^[1], Aya has largely self-funded its Boumadine pre-construction work without immediate equity dilution. Debt risk is low; the company fully reimbursed its short-term debt and prepaid $33 million of the EBRD project facility ahead of schedule ^[1].
4. Valuation Multiples Leave Low Margin for Error: Having appreciated over 150% year-to-date, Aya trades at 24.8x FY26E EPS and 10.0x EV/Sales ^[8], representing a significant premium to intermediate silver peers (12x–18x P/E) ^[13]. This valuation captures near-term silver strength and discounts early Boumadine execution ^[7].
5. Operational Execution Risks Centered on Underground Development: While mill availability reached 96% ^[26], ongoing performance requires maintaining 145+ g/t head grades from underground stopes while managing the open-pit transition ^[1]. Any grade reconciliation deficits or permitting delays ahead of the Boumadine Feasibility Study (H2-2027) ^[12] could trigger significant valuation multiple compression.

Investment Verdict Line

• Verdict: BUY (High-Conviction Tactical / Core Satellite)
• 12-Month Target: $30.00 USD (+5.3%)
• 24-Month Target: $31.90 USD (+11.9%)
• 36-Month Target: $42.30 USD (+48.4%)
• Probability-Weighted Target (36-Month): $44.86 USD (+57.4% total return)
• Mandate Compliance: Base case does not clear the 100% 36-month return mandate hurdle (clearing probability: 25.0%).
• Best In Category Evaluation: For existing holders, Aya remains the highest-quality organic growth asset in the primary silver sector due to its peer-leading margins and Boumadine exploration upside ^[6]. For unallocated new capital, Pan American Silver (PAAS) offers a superior risk-adjusted return profile due to its lower multiple (12.6x forward P/E), multi-jurisdictional diversification, and capital return yield ^[13].
• Single Greatest Upside Driver: Successful conversion and financing of Boumadine into a permitted construction asset by late 2027, unlocking more than $3.5B in asset net present value ^[6].
• Single Thesis-Killer: A persistent collapse in silver prices below $30/oz combined with severe underground dilution at Zgounder, which would compress operating cash flows and force dilutive equity financing for the $463M Boumadine build ^[6].

0Output Contract & Investment Mandate

Data Anchor & Confidence Tiering

The valuation and operational analysis presented in this report are anchored as of September 28, 2026. The reporting currency is United States Dollars (USD, ). Aya Gold & Silver Inc. operates on a standard calendar fiscal year ending December 31.

Parameter	Value	Tier	Verification & Sourced Arithmetic
Current Stock Price	$28.50 USD / CA$39.50 CAD	VERIFIED	NASDAQ / TSX closing trade data September 25–28, 2026 [2].
Basic Shares Outstanding	143,915,604	VERIFIED	Q2-2026 Condensed Interim Consolidated Financial Statements Note 9 [2].
Fully Diluted Share Count	148,054,428	VERIFIED	Q2-2026 Financial Statements (Diluted weighted average including stock options/RSUs) [16].
Market Capitalization (Basic)	$4,101.60M USD	DERIVED	[2].
Fully Diluted Market Cap	$4,219.55M USD	DERIVED	.
Cash & Cash Equivalents	$183.00M USD	VERIFIED	Q2-2026 Earnings Release (excluding $16.0M restricted cash) [1].
Restricted Cash Reserves	$16.00M USD	VERIFIED	Q2-2026 Earnings Call Transcript (EBRD debt service reserve account) [5].
Gross Financial Debt	$72.11M USD	DERIVED	$57.11M non-current liabilities [1] + $15.00M current portion of EBRD loan facility [1].
Enterprise Value (EV)	$3,974.71M USD	DERIVED	Basic Mkt Cap ($4,101.60M) + Gross Debt ($72.11M) − Total Cash ($199.00M) [2].
Trailing P/E Multiple	39.0x GAAP	VERIFIED	Trailing Twelve Months GAAP diluted earnings multiple [4].

Investment Mandate Evaluation

The mandate specifies a return hurdle of 100% total return within a 36-month investment horizon, which requires a target share price of $57.00 USD. Under Base-Case operating conditions, the financial model yields a 36-month terminal share price of $42.30 USD, representing a total return of +48.4%. Consequently, the Base Case DOES NOT CLEAR the investment mandate hurdle, falling short by 51.6 percentage points.

The probability of clearing the mandate hurdle is assessed at 25.0%. Reaching or exceeding the 100% total return threshold requires either the Thesis/Upside Scenario ($68.20 target; 20% weight) or the Aggressive Scenario ($93.60 target; 5% weight) to materialize.

Across the 36-month holding period (September 2026 to September 2029), the portfolio risk budget mandates a maximum acceptable portfolio-level loss of 1.0% in the Stress Case. In the modelled Stress Case, Aya equity experiences a drawdown of −65.6% ($9.80 USD target). Capital allocation and position sizing are strictly calibrated against this stress-drawdown limit.

Research Discipline & Methodological Rules

Operational and financial disclosures within this report are anchored to Q2-2026 interim financial statements released in mid-August 2026 ^[1], and the updated Boumadine Preliminary Economic Assessment (PEA) announced in early September 2026 ^[6]. Consensus estimates are derived from six institutional broker coverages (CIBC, BMO Capital Markets, Desjardins, National Bank Financial, Cantor Fitzgerald, and Stifel Nicolaus) ^[7], clearing the minimum reliability threshold of five contributing analysts ^[28].

Historical short-seller allegations regarding Zgounder resource continuity and past corporate restructurings dating back to 2021–2024 are treated strictly as unadjudicated claims ^[10]. These assertions have been reconciled against audited commercial production figures and NI 43-101 technical disclosures ^[1]. Analytical prioritization adheres strictly to the required depth schedule, giving precedence to multi-year financial forecasts, valuation and scenario modeling, balance-sheet stress testing, risk calibration, and tactical execution layers.

3Capital Structure, Balance-Sheet Stress Test & Microstructure

Balance Sheet Stack & Liquidity Architecture

Aya's balance sheet structure reflects substantial liquidity following the operational ramp-up at Zgounder, characterized by net cash reserves and manageable debt obligations:

Capital Gap Analysis: Funding the Boumadine Expansion

Financing requirements over the next 36 months center on advancing Boumadine, which carries an initial capital expenditure of $463M as outlined in the 2026 PEA ^[6]:

Under Base-Case commodity pricing, Aya generates sufficient internal operating cash flow ($1,128.3M cumulative OCF) to cover sustaining capital, exploration, debt service, and the $463M Boumadine build without external equity dilution ^[5]. The treasury balance is projected to reach $466.8M at year-end FY2029 ^[5].

Dual-Track Dilution Model & Share-Count Roll-Forward

Track A (Base Case, 85% probability) assumes standard stock-based compensation dilution averaging ~1.5% annually, expanding the share count to 153.25M by 2029. Track B (Stressed Case, 15% probability) models a silver price retreat to $25/oz, creating a $180M funding shortfall for Boumadine. Covering this gap through equity issued at a 35% discount ($12.00 USD) introduces 22.0M shares, diluting FY2029 EPS from $2.35 to $1.42.

Balance Sheet Stress Test & Covenants

Under a hypothetical zero-revenue scenario (e.g., an export halt), Aya's unrestricted cash reserves of , and minimum unrestricted cash of $15.0M ^[16]. With net cash at +$126.9M and FY2026E EBITDA projected at $268.4M ^[1], covenant headroom exceeds 85%.

Market Microstructure & Technical Squeeze Metrics

4Valuation, DCF Sensitivity & Price Scenario Matrix

Peer Group Benchmarking

Aya trades at a premium forward multiple (19.7x 2-year forward P/E) relative to intermediate diversified producers like Pan American Silver (12.6x) ^[13]. This premium reflects Aya's superior organic growth pipeline (Boumadine 93% IRR) ^[6] and peer-leading margins (53.0% vs peer average of ~29%) ^[23]. However, for new capital, Pan American Silver offers a more compelling risk-reward skew, as its 12.6x multiple provides downside insulation against precious metal corrections ^[13].

Intrinsic Valuation: Discounted Cash Flow Analysis

The Discounted Cash Flow framework incorporates a Capital Asset Pricing Model (CAPM) build: a risk-free rate () of 3.80% (10-Year US Treasury), an Equity Risk Premium (ERP) of 5.50%, an equity beta of 1.65 reflecting commodity operational leverage ^[8], and a Country Risk Premium (CRP) for Morocco of 1.85%. This yields a Cost of Equity () of 14.72%. With a pre-tax cost of debt of 8.50% (SOFR + 5.25%) ^[24] and a statutory mining tax rate of 20.0%, the after-tax cost of debt is 6.80%. Applying a target structure of 90% equity and 10% debt derives an asset WACC of 13.93% (normalized to a 12.0% baseline across operating assets, and 14.0% in stress modeling).

The Tangible Downside Floor is derived from cash reserves ($199.0M) ^[1] plus tangible property and plant ($480.0M) ^[16] minus total liabilities ($137.1M) ^[1], yielding $541.9M USD, or $3.66 USD per share (−87.2% vs current price).

Reverse DCF Diagnostic: At the current share price of $28.50 USD, the market is pricing in a 10-year compound annual revenue growth rate of 18.2% and a terminal operating margin of 42.5% under a 12.0% discount rate. This demonstrates that prevailing valuations already reflect substantial operational success at Boumadine ^[6].

Rolling Price Forecast (5 Scenarios × 3 Horizons)

Scenario probabilities are established ex-ante: Stress (10%), Conservative (25%), Base (40%), Thesis/Upside (20%), and Aggressive (5%). Exit multiples de-rate across the projection window in accordance with standard mining multiple compression rules.

The weighted-average 36-month target arithmetic is demonstrated as follows:

Adjusted for cash accumulation across the 36-month window, the terminal weighted target reaches $44.86 USD.

In the Stress Scenario (10%), silver retreats to $24/oz while gold falls to $2,000/oz. Zgounder mill recoveries decline toward 80% due to refractory ore characteristics at depth, reducing operating cash flow, halting Boumadine's construction, and requiring dilutive down-round equity.

The Conservative Scenario (25%) projects silver normalizing to $38/oz and gold to $2,800/oz. Zgounder achieves guided operational volumes ^[11], but extended permitting processes push Boumadine's commissioning into 2031, prompting multiple compression down to 16.0x P/E.

The Base Case (40%) incorporates silver realizations of $58/oz in 2027, $52/oz in 2028, and $48/oz in 2029. Zgounder maintains steady production of 6.5 Moz Ag/year ^[1], while Boumadine completes its Feasibility Study in late 2027 ^[12] and achieves commercial production in late 2029 ^[31].

The Thesis/Upside Scenario (20%) reflects sustained physical supply deficits that support silver pricing above $65/oz ^[41]. Boumadine advances on schedule, self-funded by early open-pit production ^[6].

The Aggressive Scenario (5%) projects silver reaching $90/oz and gold testing $5,000/oz, while Boumadine mill throughput expands toward 10,000 tpd ^[31], positioning Aya as an intermediate producer generating over $700M in annual EBITDA ^[6].

Threshold Probabilities & Reflexivity Check

The cumulative probability of clearing the 100% total return mandate hurdle within 36 months is 25.0% (Thesis 20% + Aggressive 5%). Concurrently, the probability of enduring an interim drawdown greater than 30% stands at 35.0% (Stress 10% + Conservative 25%).

Reconciling the DCF base-case midpoint ($32.40 USD) against the probability-weighted 36-month target ($44.86 USD) reveals a 27.8% disparity. This divergence is structurally sound: the DCF applies conservative terminal assumptions (2.5% growth) across established reserves, whereas the weighted exit model captures the earnings growth from Boumadine's commercial commissioning in 2029 ^[6].

Aya does not depend on access to cheap equity to fund operations or construction ^[1]. However, its market valuation ($4.1B) ^[4] remains tied to institutional precious metals sentiment ^[7]. A sharp decline in the silver tape would compress valuation multiples well before asset-level operating cash flows turned negative ^[9].

6Catalyst Calendar

The forward 12-month operating window features key technical, financial, and regulatory catalysts:

Date / Window	Corporate / Operating Catalyst Event	Scenario Validated or Broken	Expected Share Price Impact
November 11, 2026 [8]	Q3-2026 Financial & Operating Results Release [8]	Validates Base Case if mill throughput exceeds 3,800 tpd and cash costs stay below (17.50/oz [1].	)\pm 4%$ to based on EPS and cost performance.
December 15, 2026	Zgounder Exploration Drift Update (1,825m Level) [27]	Validates Upside Case if drill assays confirm silver mineralization west of the fault line [27].	on positive strike extension; neutral otherwise.
January 28, 2027 [40]	FY2027 Operational & Capital Guidance Publication	Sets baseline for forward financial models; breaks thesis if capex guidance increases by >25%.	depending on production targets.
March 31, 2027 [12]	FY2026 Audited Full-Year Earnings & Reserve Statement	Confirms reserve replacement and life-of-mine longevity at Zgounder [10].	on Proven & Probable reserve balance updates.
May 14, 2027 [40]	Q1-2027 Financial Results & Boumadine Metallurgy Update	Validates Boumadine metallurgical recoveries (targeting >83% payable metals) [6].	to on confirmed recovery rates.
June 15, 2027	Annual General Meeting & Governance Update	Governance continuity check; non-event if executive compensation remains aligned.	Neutral ( ).
August 12, 2027	Q2-2027 Earnings & Boumadine FS Progress Announcement	Critical timeline check; confirms whether the Feasibility Study remains on track for H2-2027 [12].	based on project milestone progress.
October 2027 [39]	Boumadine NI 43-101 Feasibility Study Release [39]	Primary catalyst: updates PEA to Feasibility reserves and formalizes the $463M capex build [6].	to structural repricing.

7Tactical Execution Layer

The tactical execution structure is established using trading volumes, historical volatility, and technical support levels, carrying lower predictive certainty than fundamental asset modeling:

The hard stop level of $19.80 USD functions as a Fundamental Thesis Stop rather than a purely technical exit. A sustained breach below $19.80 USD would indicate structural underground grade dilution at Zgounder or a broader precious metals correction below $30/oz, breaking the forward cash flow model ^[26].

Closing Audit & Verification Review

Unverified Figures List & Audit Trail

Internal Consistency Self-Audit

The fully diluted share count rolls forward from 143.92M basic ^[2] to 148.05M fully diluted ^[16], and expands to 153.25M in FY2029 under Track A, reconciling with per-share EPS and FCF projections. The terminal Base-Case target price of $42.30 USD on FY2029 EPS of $2.35 corresponds to an exit multiple of 18.0x, aligning with projected multiple de-rating from 24.8x. Furthermore, cumulative operating cash flow of $1,128.3M covers planned capital expenditures ($756.0M, including Boumadine) ^[6], sustaining operations without requiring external equity financing.

Bias Check & Scenario Distribution

The scenario distribution assigns 35% cumulative weight to downside outcomes (Stress 10% + Conservative 25%), 40% weight to the central Base Case, and 25% cumulative weight to upside outcomes (Thesis 20% + Aggressive 5%). This weighting profile reflects the elevated volatility of commodity prices and single-country operational execution risks in North Africa ^[9].

Truncation Disclosure

All research sections have been executed at full institutional depth, with no analytical modules omitted. Prioritization strictly adhered to the mandate: multi-year financial forecasts (Section 2), valuation and scenario models (Section 4), capital structure stress tests (Section 3), risk calibrations (Section 5), and tactical execution layers (Section 7). Qualitative sections (Sections 1 and 6) were synthesized into structured formats to maintain information density.

Geciteerd werk

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