Aya Gold & Silver's revised Boumadine PEA doubles NPV to $3.5 billion — but the rock got thinner
The Deep Dive reviews Aya Gold & Silver's revised Boumadine PEA: after-tax NPV doubled to $3.5 billion on higher metal prices, better payables, and three extra mine years, while initial capital rose just 4% to $463 million. But grades fell, the strip ratio worsened, AISC rose 27% to $1,300/oz, and about four of five planned mill tonnes remain inferred.
Investor angle
For investors, the key is separating headline from substance. Strip out the higher metal prices and Boumadine is worth about 23% more than the November plan — real progress, not a doubling. The operational gains are concrete: payables up 10 points to 83%, initial capital near flat at $463 million with a $99 million contingency, and margins above 60% even with AISC up 27% to $1,300/oz. The risks are geological and structural: head grades down 19–27%, a strip ratio of 22.6, annual output down about 17% on like-for-like prices, concentrate sales resting on proposals rather than signed contracts, and roughly 80% of scheduled mill tonnes still inferred — a category a feasibility study cannot rely on, making the inferred-to-indicated conversion the catalyst to watch. The host's valuation math implies the market already pays a developer-plus multiple for Boumadine once the producing Zagounder mine is netted out, and Aya has committed to building before the feasibility study due in the second half of 2027.
Aya Gold & Silver is building its Boumadine project in Morocco out of order. CEO Benoit LaSalle said on the second-quarter call that the investment decision has already been made, more than a year before the feasibility study meant to justify it. The revised preliminary economic assessment (PEA — an early-stage study of whether a deposit can be mined profitably) arrived only afterward, and The Deep Dive's latest video walks through what it changes. The picture is mixed: the project is worth far more on paper, but the rock behind the numbers got thinner.
## What doubled, and why
After tax, Boumadine now carries a net present value (NPV — the project's discounted future cash flows expressed in today's dollars) of $3.5 billion, up from $1.5 billion in the PEA published last November. The projected return doubles to 93%, while initial capital barely moves, up 4% to $463 million, of which $99 million is contingency (a budget buffer for overruns).
Most of the jump comes from assumptions rather than new rock. Gold price assumptions moved from $2,800 to $3,500 per ounce and silver from $30 to $50, both still well below spot. Mine life adds three years. Payables — the share of metal value a smelter actually pays the miner for — improve sharply: the average rises from 73% to 83% of shipped metal value, with gold up from 69% to 82%. That is an extra ten cents on every dollar of metal leaving site.
The host uses the study's sensitivity table to strip the price effect out. At $2,625 gold, slightly below last year's base case, the project is still worth about $1.8 billion — roughly 23% more than the old plan. Better, but not doubled. He does credit Aya for cleaning up the upside table: last year's version ran above $17,000 gold for an $18 billion NPV, while the new one tops out at $5,250 gold and adds a break-even scenario at $1,700. Analyst reactions split, with BMO calling the study mixed and Desjardins calling it a strong positive.
## Bigger rock, thinner rock
The operating plan keeps its shape: six open pits and three underground mines feeding an 8,000-tonne-per-day flotation plant making zinc, lead, and pyrite concentrates. What changed is the resource. Aya rebuilt the model with 190,000 meters of new drilling, a new estimation method, and a lower cutoff grade, and the predictable happened — tons up, grade down.
The new estimate is 5.4 million gold-equivalent ounces (total ounces expressed as if all metals were gold) at about 3.1 grams per tonne. Indicated tons rise 66% at a 19% lower grade, netting 34% more ounces. Inferred tons — the least certain resource category — rise 55%, but their grade drops 35% and the ounces barely move. That flows straight into the mill, which takes a third more tonnes at a head grade 19% lower, and 27% lower for gold. Gold-equivalent production rises 7%, but the host calculates that on last year's prices the new plan yields only about 1% more metal, spread over three extra years — so annual output falls roughly 17%.
Mining gets harder, too. The strip ratio (tons of waste moved per ton of ore) worsens from 20.9 to 22.6, which the host attributes to geology: the veins run one to five meters wide and near vertical, so following them down means carving a wide cone of waste around a thin slice of ore. Underground feed rises 63% and now supplies 46% of the mill.
Metallurgy is better, sort of. The stated 96% gold recovery counts metal recovered into concentrate, not finished metal, and in the prior study 71% of that gold sat in a pyrite concentrate locked in sulfide — a form that must be roasted before refining. For now the buyer does the roasting, and LaSalle says all concentrate goes to a smelter that carries the risk. The host cautions that this rests on preliminary proposals, not signed contracts, and that the cost of a roaster Aya may build itself, still in testing, is not in the study.
## Costs, funding, and the inferred problem
All-in sustaining cost (AISC — what it really costs to produce an ounce, including sustaining spend) rises 27% to $1,300 per ounce, because each tonne now carries fewer ounces, and sustaining capital jumps 49%, mostly for underground mining. Even so, margins hold: 63% at the study's gold price and 71% at spot, which the host sums up as a strong business case with a thinner cushion.
On funding, the release cites cash flow plus external debt on top of $183 million in the bank, with the EBRD, a development bank, prepared to lend $200 million. Construction is set to start in the fourth quarter of this year, and while the PEA's own timeline puts first production in late 2030, LaSalle is pushing for mid-2029.
The largest caveat is confidence in the mine plan itself. With 8.6 million indicated tonnes against 41 million scheduled for the mill, roughly four of every five planned tonnes are inferred. PEAs are allowed to rely on inferred material; a feasibility study cannot. Converting those ounces through infill drilling is the milestone that matters most from here.
## How the market is pricing it
Aya closed the week at $38.76 Canadian — about 6% below its close the day the study landed — for an enterprise value near $3.9 billion US, roughly 1.1 times the Boumadine NPV. That is well above developers like Abra Silver (0.55x) and Vizsla (0.72x), though below Montage at 1.4x while it builds. The host counters that Aya's value also carries its producing Zagounder mine, which is not in that NPV. Annualizing first-half EBITDA to about $290 million and applying the 10x multiple LaSalle himself uses for Zagounder leaves roughly $1.3 billion implied for Boumadine, or 0.34 times Aya's share of the NPV (0.53x at an 8x multiple). His read: investors are paying a developer multiple for a company that insists it is already building.
## Bottom line
The host's verdict splits the study in two. Where money is concerned — payables, near-flat capital, a third more indicated ounces, strong margins, and a producing mine to help fund it — Boumadine got better. Where rock is concerned — grades, strip ratio, per-ounce costs, and a plan leaning on inferred tonnes — it got worse. Aya has decided to build regardless, and the feasibility study due in the second half of 2027 will reveal what exactly is being built while it is under construction.
Generated by Pixys from the source video below. Not investment advice.
