Economic Improvement of the Boumadine Polymetallic Mine in Morocco

Aya Gold & Silver’s Boumadine project in Morocco has seen its after-tax net present value double to $3.5 billion due to higher gold and silver price assumptions, while its initial capital expenditure has risen by only 4%, according to Mining.com.

The updated preliminary economic assessment released on the 9th shows that, assuming a gold price of $3,500/oz and a silver price of $50/oz, this lead-zinc-silver-gold project has an internal rate of return of 93% and a payback period of 0.7 years. Initial capital expenditure is estimated at $463 million, up from the $446 million estimated in 2025, while the mine life has been extended from 11 years to 14 years.

“We intend to fund Boumadine using cash on hand and external borrowings, consistent with our long-standing strategy of minimizing dilution, and this will deliver outsized returns to all shareholders,” said Benoit La Salle, the company’s CEO.

“We are accelerating development and are confident the project can be scaled beyond the results of this study. While Boumadine is a gold-dominant project, it also has the potential to double Aya’s silver production.”

Located approximately 340 km southeast of Rabat, the project already holds a mining license and is advancing toward a feasibility study in H2 2027. If built, it would add a major precious metals mine to Morocco beyond phosphates and begin producing silver.

Drilling

Aya is carrying out a 400,000-meter drilling program, to be completed by the end of next year, with the primary goal of converting inferred resources to indicated resources to support the feasibility study.

The improved economics in the new study are partly due to higher metal price expectations. The gold price assumption has been raised by 25% from the $2,800/oz used in the prefeasibility study, and the silver price has been raised by 67% from the previous $30/oz. Based on preliminary offtake proposals, the average payable metal has also increased from 73% to 83%. Aya has received expressions of interest for offtake of lead-zinc and pyrite concentrates from Boumadine, which contain associated gold and silver.

Based on the September 3 gold price of $4,472/oz and silver price of $66.85/oz, Aya calculates an after-tax net present value of $5.5 billion, an internal rate of return of 128%, and a payback period of six months.

Analyst views

BMO Capital Markets is more cautious on the project, describing the prefeasibility study results as “mixed,” with improved economics and a longer mine life but lower grades. Using the firm’s long-term assumptions of $3,100/oz gold and $36/oz silver, analyst Kevin O’Halloran calculates a net asset value for Boumadine of $1.85 billion, 11% lower than his previous estimate.

The expanded mine plan is accompanied by lower grades: gold at 1.77 g/t, silver at 63.5 g/t, zinc at 1.37%, and lead at 0.58%, compared with 2.43 g/t gold, 72.5 g/t silver, 1.91% zinc, and 0.70% lead in the 2025 study.

Over its 14-year production life, Boumadine is expected to produce 2.25 million oz of gold, 81.2 million oz of silver, 422,000 mt of zinc, and 195,000 mt of lead. Compared with the previous study, expected silver production rises by 16%, while gold declines by 4%.

Desjardins Securities is more bullish on the project, calling the prefeasibility study results “very good.” Analyst Bryce Adams said the 93% internal rate of return, moderate capital expenditure, rapid payback, and 4 million oz gold-equivalent production place Boumadine among the world’s most attractive precious metals projects. Desjardins models initial capital expenditure of $600 million.

Open pits

The mine plan calls for six open pits, followed by underground mining, feeding a flotation plant at a rate of 8,000 mt of ore per day. Gold and silver from Boumadine will account for the majority of the mine’s revenue. Aya is considering expanding the beneficiation plant capacity to 10,000 mt of ore per day three or four years after start-up.

Resources published in February show indicated ore resources at Boumadine of 8.6 million mt, with average grades of 1.93 g/t gold, 121.7 g/t silver, 2.19% zinc, 1.01% lead, and 0.09% copper. In terms of metal content, this equates to 532,000 oz of gold, 33.6 million oz of silver, 188,000 mt of zinc, 87,000 mt of lead, and 8,000 mt of copper.

Inferred ore resources total 45.4 million mt, with grades of 1.82 g/t gold, 56.8 g/t silver, 1.33% zinc, 0.58% lead, and 0.08% copper. In terms of metal content, this equates to 2.65 million oz of gold, 82.8 million oz of silver, 604,000 mt of zinc, 265,000 mt of lead, and 35,000 mt of copper.