Top Picks 2024: Aya Gold & Silver
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As we start 2024, many of the extremely bullish drivers for gold are the same for its cousin, silver. On Dec. 1, 2023, gold hit a new all-time high of $2,071 after three previous attempts in 2020, early 2022, and again in early 2023. Now it seems the fourth time’s the charm – making Aya Gold & Silver (AYASF) attractive.
So, what’s driving precious metals? The two main drivers have been an anticipated end to Federal Reserve rate hikes and a renewed US dollar bear move. As inflation continues to fall and unemployment continues to rise, the Fed’s interest rate hikes are having the intended effect of slowing economic growth.
Naturally, high rates compete with precious metals as low-risk bonds pay attractive returns. By the same token, as the market starts to price in eventual rate cuts in 2024, likely on the back of a recession, then a weakening US dollar makes sense. With precious metals priced in dollars, it takes more dollars when they are weak to buy an ounce of silver or gold, hence their rising prices.
In addition to this, central banks have become net buyers of gold after the 2008 global financial crisis. In 2022, they bought a record 1,000 tons of gold and are expected to surpass that level once again for 2023. All of this is very bullish for precious metals.
Aya is a silver miner operating in the Kingdom of Morocco, with one of the world’s largest high-grade, pure silver mines. Its Zgounder mine currently produces about 1.8Moz of silver annually. However, the opportunity is highlighted by its current mine expansion program.
Zgounder will ramp up production in Q2 2024, quadrupling annual output to 8Moz silver at an all-in, life-of-mine sustaining cost of just $9.58/oz. This expansion boasts a 48% IRR and a payback of just 1.7 years.
In addition, Aya is exploring and expanding resources at Zgounder as well at its Boumadine polymetallic project, which itself has an IRR of 56% and NPV of $575 million.
Aya is also aggressively acquiring additional highly prospective projects located along the prolific Anti-Atlas Mountain range. In this rising silver price environment, Aya is poised to become a veritable cash machine, making it a true bargain at recent prices.
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