Mr. Benoit La Salle reports

AYA GOLD & SILVER REPORTS RECORD CASH FLOW IN Q3-2023

Aya Gold & Silver Inc. has released its interim financial and operational results for the third quarter ended Sept. 30, 2023. All amounts are in U.S. dollars unless otherwise stated.

Q3 2023 highlights

Operational and financial:

• Excellent operational performance:
  • Silver production of 519,085 ounces (oz) in Q3 2023, a 15-per-cent increase from Q3 2022;
  • Recovery was 86.6 per cent in Q3 2023, compared with 86.2 per cent in Q3 2022;
  • 70,258 tonnes (t) of ore were processed in Q3 2023, compared with 69,697 t in Q3 2022;
• Revenue of $11.7-million in Q3 2023, a 63-per-cent increase from Q3 2022;
• Cash cost of $10.73 per oz in Q3 2023, compared with $14.03 per oz in Q3 2022 (1);
• Operating cash flow of $7.7-million in Q3 2023, a 35-per-cent increase compared with Q3 2022;
• Robust financial position with $71-million of cash, cash equivalents and restricted cash (2), compared with $42-million at Dec. 31, 2022;
• Ranked 14th on the 2023 TSX30 as a top-performing stock with a three-year share appreciation of 498 per cent.

Exploration and development:

• Conducted 4,675 metres (m) of drilling at Zgounder in Q3 2023:
  • Expanded 2023 drill program by 3,000 m to 29,000 m;
• Completed 1,923 m of DDH (diamond drill hole) on Zgounder Regional, including 830 m on Tourchkal:
  • Expanded 2023 6,700 m DDH program to 14,000 m;
  • Acquired four Zgounder Regional permits totalling 62.6 kilometres (km) (2), boosting Zgounder total land package to 425 km (2);
• Doubled the 2023 DDH program at Boumadine to 76,000 m, with the aim of carrying out infill drilling and extending the strike:
  • Completed 52,400 m of the 76,000 m DDH program, extending the open-ended strike by 400 m to 4.2 km;
  • Acquired adjacent permit;
• Reviewed drill and geophysical data at Tirzzit to inform Q4 2023 fieldwork.

Zgounder expansion:

• Overall project 60 per cent complete and tracking on budget;
• Underground development on track, with 76 per cent of lateral and 65 per cent of vertical development completed;
• Completed the water storage facilities and advanced the new tailings facilities on schedule;
• Received ball mill on site and mobilized contractors for its assembly;
• Drew down $35-million from project facility for Zgounder mine expansion.

(1) The corporation reports non-GAAP (generally accepted accounting principles) measures, which include cash costs per silver ounce and free cash flow, which are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and the methods used by the corporation to calculate such measures may differ from methods used by other companies with similar descriptions. See non-GAAP measures section of the corporation's Q3 2023 MD&A (management's discussion and analysis) for a reconciliation of non-GAAP to GAAP measures.

(2) Non-GAAP measures, consisting of cash and cash equivalents of $50,609,505 and restricted cash of $20,562,506.

Environmental, social and governance (ESG):

• Commissioned the mine rescue station and provided phase I training to teams;
• Rollout of community program in collaboration with local authorities:
  • Provided medical and logistical support to survivors of Al Haouz earthquake in the Taroudant region;
  • Health -- conducted first ear, nose and throat clinic and third phase of diabetes clinic;
  • Water access -- launched program in six villages;
  • Livelihood projects -- planted saffron and set up irrigation within the community farm.

"The third quarter was an exceptional quarter from an operational perspective that sets us up for another record year. Zgounder delivered one of its best silver production quarters at industry-low cash costs and generated record cash flow," said Benoit La Salle, president and chief executive officer. "Based on our performance to date, we are well positioned to exceed our 2023 guidance, notably our production guidance for a third consecutive year.

"We continue to develop and grow our project pipeline and to execute on our expansion plan, which is now about 66 per cent complete and on budget. Drilling at Zgounder reconfirmed continuity of high-grade mineralization both at surface and underground. Further, high-grade drill results at Boumadine extended the strike of the main trend, which remains open in all directions. These results will be included in our Q1 2024 resource estimate and underpin our focus to grow ounces on a per share basis.

"These excellent quarterly results highlight the dedication and commitment of our local teams, particularly in the context of the devastating Al Haouz earthquake."

Third quarter 2023 financial and operational highlights:

• Quarterly silver production of 519,085 oz, comprising 323,172 oz as silver concentrate and 195,193 oz as silver ingots;
• Mill average feed grade of 261 grams per tonne (g/t) silver (Ag) was recorded in Q3 2023, compared with 232 g/t Ag in Q3 2022, an increase of 13 per cent;
• Milling operations reached 764 tonnes per day (tpd);
• Average combined mill recovery of 86.6 per cent in Q3 2023, compared with 86.2 per cent in Q3 2022, an increase of 0.4 per cent;
• Availabilities at the flotation and cyanidation plants reached 91.9 per cent and 95.6 per cent, respectively;
• Cash flow generated by operating activities of $7.7-million in Q3 2023, compared with $5.7-million generated in operating cash flow in Q3 2022;
• Revenue from silver sales totaled 11.7-million (Q3 2022 -- $7.2-million) in Q3 2023, an increase of 63 per cent, representing an average realized price of $21.53 per oz (Q3 2022 -- $17.12 per oz);
• Operations generated a gross margin of $6.2-million in Q3 2023, compared with $774,000 in Q3 2022, an increase of 699 per cent;
• Net profit was $1.2-million (diluted earnings per share (EPS) of one cent) in Q3 2023, compared with net earnings of $672,000 (diluted EPS of one cent) in Q3 2022.

Q3 2023 operations review

In Q3 2023, the Zgounder operations team focused on the ramp-up of the open pit, which reached 409 tpd of ore in September, 2023. Underground production was steady and mining production for the quarter averaged 1,446 tpd for a total of 132,998 t of ore.

The 1,950 m underground level is now fully operational and access to the 1,925 m level was completed during the quarter. The open pit is now in full production and will be further ramped up after the mill is operational.

In Q3 2023, 70,258 t of ore were processed, adding over 63,000 t of ore to inventory, in line with the 2024 commissioning plan. Steady throughput, recovery and availability of both plants resulted in total silver production of 519,085 oz. Combined silver recovery was 86.6 per cent, while combined mill availability reached 93.7 per cent. The mill feed grade averaged 261 g/t Ag in the quarter.

The quarter also saw commencement of an intensive training program for the mine rescue and emergency response team. By Q1 2024, Zgounder is expected to have a significantly improved response capacity and to be fully operational by Q3 2024. Year to date, the training hours at Zgounder, which have more than doubled every year since 2021, totalled over 7,800 as of quarter-end.

Zgounder development

On Feb. 22, 2022, the corporation completed a feasibility study to expand the Zgounder silver mine from 700 tpd to 2,700 tpd capacity. At the end of Q3 2023, construction of the plant and surface infrastructure continued to track budget. Over all, the expansion project was 60 per cent complete, compared with 45 per cent at last quarter-end.

At the end of Q3 2023, construction of the processing plant was halfway through, with detailed engineering near complete and procurement well advanced. Several long-lead items were delivered on site in Q3 2023, including the ball mill, thickener steel structures, the intensive leach reactors and the crusher circuit equipment. Installation of the leach reactors also commenced.

Underground development progressed to plan in Q3 2023. Over 7,145 m of lateral and ramp accesses have now been completed since January, 2022, representing 76 per cent of the planned lateral infrastructure. Most levels between 1,925 m and 2,100 m are now connected to the underground ramp. The main ventilation was also commissioned. To date, two of the three ore chutes have been completed and the second ventilation shaft has begun. In June, 2023, the open-pit contractor was mobilized, open-pit operations commenced and ore was mined as planned. Over all, open-pit and underground mine development was 65 per cent completed.

At quarter-end, construction of the tailing storage facility was progressing well and was 86 per cent complete. The two water storage basins were 100 per cent completed. Other infrastructures, such as the camp, roads, workshops and warehouses, were 55 per cent completed. Furthermore, the power line and electrical substations progressed to 48 per cent completion.

At the end of Q3 2023, $138-million had been committed across all capital cost categories and $91-million had been incurred. The Aya project team continues to remain confident of completing the project within the original budget of $159-million, including contingency.

An attached table presents construction progress by main project area.

Q3 2023 exploration

Zgounder

A total of 4,675 m of DDH was completed on the near-mine permits in Q3 2023, of which 2,219 m were completed by two rigs from surface. Two underground drill rigs were also mobilized in the quarter, conducting a total of 2,456 m of DDH laterally and at depth. The underground program has been designed to explore the downplunge potential of the Zgounder mineralized system toward the granite, to extend known mineralization and to expand mineral resources.

The open-pit area near the east continued to return high-grade results in the quarter, including: ZG-RC-23-2230-212, which intercepted 2,812 g/t Ag over eight m; ZG-RC-CT7-P63-23-63, which intercepted 2,227 g/t Ag over 7.0 m; and ZG-RC-C3-23-25, which intercepted 480 g/t Ag over 17 m.

In the quarter, the 2023 drill program on Zgounder was expanded by 3,000 m to 29,000 m. The additional program will follow up early 2023 surface results east of the deposit and the reverse circulation (RC) results in the southern part of the open pit.

Zgounder Regional

In Q3 2023, 1,923 m of DDH were drilled on Zgounder Regional, including 830 m on the Tourchkal area. One drill rig is currently active at Zgounder Regional as part of its 2023 expanded drill program, which now totals 14,000 m.

The additional 7,300 m in the 2023 regional program will be used to test the potential continuation of the Zgounder deposit east of the granophyre, to test the southern contact of the rhyolite and to test a new target in the Tourchkal area, showing silver grab samples and stream anomalies.

Four new permits located about 25 km east of Zgounder were acquired during the period as part of a reallocation of exploration permits by the Moroccan Directorate of Mines. As a result, the total Zgounder land package now totals 425 km (2).

Boumadine

Following successful completion of the initial program in July, the 2023 drill program on Boumadine was more than doubled to total 76,000 m DDH.

As a result, six drill rigs were mobilized on the Boumadine property through Q3 2023, with the aim of conducting infill and exploring along strike including on new targets. In mid-September, drilling results were released, extending the main trend mineralization by 400 m to 4.2 km to the south with BOU-DD23-143, BOU-DD23-161 and BOU-DD23-168 demonstrating continuity.

The north area returned high-grade intersections, which expand the mineralization both at depth and to the north, with section 5400N to the south also extending Boumadine Main trend. At quarter-end, the drilling program was 69 per cent complete and on track for completion in December, 2023.

In parallel, the corporation announced acquisition of a 16 km (2) exploration permit east of Boumadine as part of a reallocation of exploration permits by the Moroccan Directorate of Mines.

The technical information relating to Zgounder, Zgounder Regional and Boumadine properties was reviewed and approved by David Lalonde, BSc, head of exploration, designated as a qualified person under National Instrument 43-101.

Q3 2023 conference call

The corporation will hold a conference call on Nov. 16, 2023, at 10 a.m. EST, to discuss its Q3 2023 financial and operational results. The webcast can be accessed as follows:

• Via webcast;
• Via URL entry;
• To join the call without operator assistance, register on-line and enter your phone number to receive an instant automated callback;
• Via telephone: local and international at 1-416-764-8650; North American toll-free at 888-664-6383.

You can also dial direct to be entered to the call by an operator. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.

The conference call and webcast will be available for replay by dialling 1-416-764-8677 or toll-free at 1-888-390-0541, entry code 95470 followed by the pound key. The conference call replay will expire on Nov. 23, 2023.

The presentation slides will also be posted on Aya's website.

About Aya Gold & Silver Inc.

Aya is a rapidly growing, Canada-based silver producer with operations in the Kingdom of Morocco.

The only Toronto Stock Exchange-listed pure silver mining company, Aya operates the high-grade Zgounder silver mine and is exploring its properties along the prospective South-Atlas fault, several of which have hosted past-producing mines and historical resources. Aya's Moroccan mining assets are complemented by its Tijirit gold project in Mauritania, which is being advanced to feasibility.

Aya's management team is focused on maximizing shareholder value by anchoring sustainability at the heart of the company's operations, governance and financial growth plans.

We seek Safe Harbor.