On Monday, BMO Capital Markets maintained its Outperform rating on shares of Aya Gold & Silver Inc (AYA:CN) (OTC: MYAGF), with a steady price target of Cdn$21.50. This decision comes after the company announced a setback in the expansion of its Zgounder mine due to issues encountered during the commissioning of the ball mill's hydraulic unit. The expected ramp-up of the mine is now delayed by approximately two months to address necessary rework on the piping system.
The delay in the commissioning process has led BMO Capital to revise its production estimates for Aya Gold & Silver. The firm's forecast for the company's 2024 production is now reduced by approximately 750,000 ounces to 2.15 million ounces. Despite this adjustment, BMO Capital has not altered its price target for the mining company's stock.
The update from Aya Gold & Silver indicated that while the ramp-up is postponed, other critical path items for the expansion project remain on schedule. The company is currently reviewing its 2024 production guidance in light of the recent developments. BMO Capital's analysis suggests that the delay is a temporary issue, with the expectation that the rework costs will be covered under the existing fixed price EPC contract.
The unchanged price target of Cdn$21.50 by BMO Capital reflects the firm's continued confidence in Aya Gold & Silver's overall performance and potential. The mining company's shares continue to be rated Outperform, indicating that BMO Capital expects the stock to perform better than the average total return of the stocks analyzed by the firm.
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