Thank you for standing by. Welcome to Aya Gold & Silver's second quarter 2024 results conference call. At this time, all participants are in a listen-only mode. After the CEO's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Ruth Hannah, Manager, Investor Relations and Communications at Aya Gold & Silver. Please go ahead.
Thank you, operator. Good morning, everyone, and welcome to Aya's second quarter 2024 results conference call. My name is Ruth Hannah, and I'm dialing in with the Aya team from Montreal and Marrakech this morning. On the call today, we have Benoit La Salle, President and CEO; Ugo Landry-Tolszczuk, CFO; Raphaël Beaudoin, Vice President, Operations; and David Lalonde, VP Exploration. We will finish today's event with a Q&A session with the team. Please contact our IR team directly with any follow-up questions that are not addressed during the call. Before we begin, I'd like to remind listeners that today's event will contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Details of the forward-looking statements are contained in our August fourteenth news release, as well as on SEDAR+ and at www.ayagoldsilver.com.
With that, I'd like to turn the conference over to Aya's President and CEO, Benoit La Salle. Benoit, please go ahead.
Thank you, Ruth. Good morning, everyone. Welcome to the Q2 2024 conference call. I'm pleased to represent to you a robust quarter in a milestone year. We continue to advance the Zgounder mine as per our plan. We are pleased to say that we are on schedule and budget for commercial production in Q4 2024. An important element, which is often missed, is that we now have stockpile on the ROM pad of 309,000 t of ore at the end of this quarter. Our goal, originally, we, we communicated to you that we- our aim was at 260,000 ton, and we are-- we have reached almost 310,000 t to be ready for the ramp up in Q4. We've delivered more typical results that we see from Zgounder.
Our production this quarter was 432,000 ounces due to an increase in fresh ore, mainly some coming from the open pit. We generated revenue of $13.7 million as a result of Q1 selling of silver concentrate that we had in inventory and also, our production. There was no over of inventory from one quarter to the next, as we saw in Q1. Our net income is $6.8 million for the quarter, and our total cash cost is $17.85, and I will comment on that, on the next page. We have a very strong balance sheet.
We closed the quarter with $103 million in cash and cash equivalent, and importantly, we were able to draw down the last $50 million on our EBRD loan for now a total of $100 million. And why I say it's important? Because before we can draw down on the EBRD loan, we have to go through full DD with them, due diligence with them. They come to site, the team goes to site, we go through all their KPIs, all their ESG KPIs, and then they authorize the drawdown. I'm pleased to say that as of today, we have drawn down the full amount, the $100 million. During the quarter, we still have, and we continue to have, ongoing positive results from our exploration program. We've confirmed high-grade mineralization again at depth.
An important piece of news this morning, we've doubled the drill program at Zgounder main zone from the originally planned 15,000 m up to 30,000 m as we keep hitting, and we have now consumed all of the budget for this year at midyear. We've extended the Boumadine main trend. You recall we did the resource calculation on 4.2 km. We're now drilled up to 5 km at the end of the quarter. During the quarter as well, we've acquired 7 new permits, which we are now up to 18 new permits since we made the discovery. We've identified multiple potential high conductive anomalies to the west and to the south of the Boumadine main zone. So it's a robust quarter.
Again, the highlights of it, 95% completion of the construction, 432,000 ounces of production. It's a 42% increase from the previous quarter, same period last year. $100 million in the bank, and we've increased the Zgounder drill program by 100%, or we've doubled it. That's taking us to page 4 of the presentation... We had that discussion in Q1, where, you know, this is as our plan. I mean, we were mining according to our plan, we were processing according to our plan, so it's a steady state production at Zgounder, and where we have a summary of the guidance and a summary of the results in Q2 and in H1. We are confirming to you the guidance is staying intact, and it is as part of our plan.
So after two quarters, we are at almost 800,000 ounces of production, and we knew that the big production or the more important production was coming in H2, Q3, and mainly in Q4, as we're gonna be, you know, kicking in with the new plant. The cash cost was higher in Q1. It was $20. We told you it would come down in Q2 at $17, and we're maintaining our guidance for the end of the year because we know that we're heading into, you know, better grade and better recoveries for the end of the year. So the average grade for Q2 was 196. You recall, the average grade for Q1 was 173, and we said it at the time that Q1, Q2 would be below the expected grade for the year.
We were mining, you know, in sequence. We are also mining differently, we have started also to backfill some of the galleries, hence, we knew that we were heading towards higher grade galleries in Q3 and Q4. Mill recoveries were 81%, or 82% in Q1. We're better at 84%-85% in Q2, and we knew that as we were getting into better grade and into the open pit, deeper into the open pit, we would get better recoveries. Ton process is excellent. We are at 80,000. We were at 80,000 as well in Q1, and it's just way above the design capacity of these two plants, so we're, you know, we're doing extremely well.
The availability, which doesn't show on the slide, but the availability of the plants in Q2 was around 96%, and you all know that that's extremely good for a plant in mining to be available 96% of the time. Taking us to page 5 of the presentation, just a couple of bar charts. On the top left side, the silver production. You know, with the two plants, it running, the historical plants, we should be between 400,000-500,000 a month, and that's exactly where we are. We're back up there, which is normal for Zgounder. The grade, we expected it to be lower in Q1, Q2. It is. We're expecting it to kick back up in Q3, Q4. It will. So that's what you're seeing on the left-hand side at the bottom.
The mill recoveries, again, we've hit up to 87%. We're now at 84.7%. We know that with the new plant, we will be above 90%, so that will kick in. I'm not telling you we will be above 90% in Q4, but that will kick in when we're at steady state. And the, the ton process, while we're there, we are achieving records, we're twenty percent above design capacity, if not twenty-five percent above design capacity, which you're seeing on the right-hand side at the bottom. Page six, you have the cash flow. We had a strong quarter with $5 million of cash flow coming from Zgounder. The gross margin is at 4.9%.
The cost of sale is, of course, a function of the production, so the cost of sale is up there. Let me just remove this. The cost of sale is at $8.8 million, and the cash cost, as we discussed when we reviewed guidance, is $17.85. It's higher than the historical four years, but we also knew that the cost was gonna be going up this year, as we were preparing for the new capacity. Moving to page 7, the construction. So this is a major milestone. We know that in our industry, that's very difficult to be on time and on budget. We have been putting out videos to show you where we are.
Today, we can tell you that we are 95% complete. We're on track to completion with and on track with our capital cost estimate. Underground development is on track. We're 96% done on lateral development, 83 on vertical, but we have one vent that is completed. You've seen in some of the videos. We're progressing to plant on electrical work, instrumentation, piping, Merrill-Crowe, all of that. You saw we've poured already a couple of silver bars. The underground workshop is spectacular. You can see that in the videos. The warehouse, the backfill station is up and running, and the silver room building as well. So we've completed the on time and on schedule, all the civil work, structural work, equipment, silver room, electrical, power line, and the lab, all of that's been completed.
We are pleased to say that as of now, we are operating on green energy. The power line was commissioned. It's extremely important because it's green. It's very rare in the world that you operate 100% on green energy. It's a PPA that we have signed with an independent power producer. We're getting it from the grid. We build it on time and on budget. It is a fantastic job, so we have—we are now running on green energy. Going to page 10, the drill program. So, you know, we've created value historically by drilling. The original budget for this year was 144, 145, sorry, thousand meters of drilling. We have about 15, 16 drills turning at all time.
So the original program at Zgounder was 15,000 m, and as of now, it is completed. So we have authorized an additional 15,000 m. So the program's been expanded to 30,000 m at Zgounder, the main zone, and that's following very, very good results. Boumadine is on track. You know, Boumadine has a 120,000-m program. We are currently at 42,000, but we knew that. We knew that H1 would be a bit slower. It was Ramadan as well, so we knew that we would have a smaller production in H1, but looking to catch up in H2.
You recall that on the 120,000-m program, 60,000 m is on the main zone, on the Boumadine zone, the 4.2-km, which is now 5, which we want to, you know, increase 'cause it's still open north, south, and at depth. And, and there's another 60,000 m that will test new targets, new targets that have been identified. We've shared with you one of them to the west. There are more to come. We've completed the MobileMT regional survey, and, that is giving us some, you know, geophysics targets, and we're waiting for additional data. On the Zgounder Regional, it's ongoing. We have a 10,000-m program that's being, you know, worked on. David and the team are, are looking for similar mineralization.
At Zgounder, there's a lot of geological theory and targets that are being tested. We've also completed the geophysics on Tirzit, which is very close by to the mine. So we're expecting a very busy H2 at Zgounder and at Tirzit. And Amizmiz is a small project that we have in which we, you know, we have never focused a lot. We may start a small drill campaign there, as it has a great gold potential. Taking us to page 11 to talk about Zgounder, it's a big news event. We are doubling up that program from 15 m- 30,000 m.
I know for us, it's like when you're drilling 120,000 m at Boumadine, it seems small, but it is important 'cause we're drilling that zone, which is 1.4 km long, has a depth of about 600 m, and the results keep coming in. We've been giving you results. There are more to come, but you know, we're often hitting 1,000 g per t over, like we have here, 13 m, 2,000 g per t over 8 m, and it is ongoing. One of the focus is where it touches the granite at the bottom of the structure, and so far, we've been pretty good at hitting mineralization. Going to page 12 on Boumadine. Boumadine is a cornerstone asset of Aya.
We, you know, through drilling, we've really shown a beautiful, right now, 5-km structure. As I indicated, we're gonna be drilling 120,000 m there. But through field work, so we've done the drilling in this quarter. We've done 27,000 m this quarter, 42,000 after two quarters, so by, you know, subtraction, there's 80,000 m to come in H2. We've seen results. We're gonna be seeing more results soon. It's really it is ongoing. I believe we have 9 drills there. It changes sometimes, but up to 9 drills at the moment, turning, and many results are coming. But through the field work, we've been mapping and doing the prospection on the 18 new permits, because our goal is to control the zone.
We want to control the whole district, the Boumadine district, so we're still working on new permits, but we have 18. So we've completed the mapping, the hyperspectral. We're using all of the techniques that we know work. We've completed the MobileMT program, 13,000 lines that were, you know, flew over by- with the helicopter. It's an extremely large and important program. It's a new program in, in, in Morocco, and it's giving us extremely, extremely interesting results that I'll show you in a minute. So, it's, the, our, our field work is continuing, our drilling is continuing, and our consolidation is continuing. We've increased our land package by a hundred and eighty- one hundred and ninety-eight square kilometers, and our goal is to increase that considerably. A couple of results on page 13 on Boumadine.
Those are silver equivalent, 1,000 g per t of silver equivalent on 13 m. So we keep, you know, hitting. You recall that on page 18, you recall that the resource that was put out in March and the final report was filed 45 days later in Q2, that we were showing 352 million ounces of silver equivalent or 4.1 million ounces in gold equivalent. So that is just the beginning. It's on 4.2 km. We've now extended it to 5. And we are drilling it to extend that to the north and to the south. 41% of the resource was in pit, 59% was deemed underground.
We're continuing the drilling, where, as I indicated, 60,000 m is going on strike and 60,000 is going on the parallel zone. Why? Well, take a look at page 15. If you take a look at page 15, you see a portion of the geophysics. We did not give it all out. We're keeping a lot of information right now to ourselves, but you have—you see on the right-hand side, the, the, the purple color, that's the main zone, that's what we've been drilling, and that's up to now 5 km, but well, the signature is longer than that. And look to the west or to the left-hand side, where you have that same purple color. So it's a very large potential conductive anomaly, which is 5 km west of Boumadine. Similar orientation, stronger intensity than the Boumadine main zone, main conductor.
It's a large system. It has conductors across east-west, similar to what we're seeing at Boumadine. So obviously, this is now a top priority. So we are waiting for the inversion of the data from the geophysics. We will be getting that in August. We will be reviewing this, and as soon as we have the targets, David will be moving some of the drill rigs off the main zone, and as the program will be getting close to be completed, and we'll start drilling some additional targets to the west, and hopefully towards the end of the year or early next year to the south. So going to page 16, on our social values and on corporate social responsibility, very good quarter.
No, zero lost time injuries, 3,700 hours of health and safety training. So it's a 30% increase year-over-year on our training. We have received certification of emergency response teams. You are following us on LinkedIn. You see often some videos on the new facilities that we have. It's a very dynamic process. Everybody has bought into the concept of health and safety, and it's coming along quite well. On the Clean Technology Fund, we've met the milestones. We had, you know, milestone 1, 2, and 3 to meet. We've met the milestone, and in meeting the milestone, our capital costs on our debt related to the CTF is now moved, our CTF tranche is down now to 1% cost of capital. And that was something that came with EBRD, it was very important.
It's a $10 million tranche that went from, round number, 10% down to 1%. And, with the local communities, well, we're extremely involved, as you know. Education, we're, you know, helping with school supplies, equipment, and all that. Environmental Day, we celebrated that. Women's Day, we celebrated that with them. And, we are, you know, we have a health program where we have, you know, clinics, that we, we have for the villages around. And, we have also a livelihood project, which is gardens, vegetable, and saffron, because the area is very well known for its, the saffron culture. So as a summary, of where we are and what we have is, the drill program is ongoing at Boumadine. The extreme drill program is ongoing at Zgounder, 40,000 m.
Boumadine is 120,000 m. So as a group, we're gonna be at 160,000 m of drilling. So very, very, you know, large program, completely funded. The 2,700 t per day plant, which is the first, the two plants that we have plus the new plant, is on time and on budget. We are in commissioning and we expect commercial production in Q4 of 2024. And on the ESG front, well, again, as I said, we keep going through these EBRD due diligence, that, where we do extremely well, and we are happy to say that we are fully funded. So as a company, we have $100 million in the bank, the projects built. There's still some payables there.
We still have, you know, some payable, but if everything goes, you know, according to plan and our budgets are built, you know, with low $20 silver, you know, our minimum cash balance, we will always be around $40-$50 million. So we are fully funded for now and for the future. The plants are operating. The two plants extremely well. The third plant, we will know in Q4, but it's coming very, very quickly and very well, and the drilling is going extremely well. So that covers my presentation. Operator, I think we are ready for questions.
Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Puneet Singh from Eight Capital.
... Hi, Benoit team. Wanted to ask a couple questions on Boumadine. First on the geophysics, really positive to see that conductive anomaly to the west. I understand you'll be looking for those massive sulfide bodies and cross-cutting features, but how will you vector in further before drilling? Could you run us through that, expand on some of those tools you were talking about and why they're useful and what exactly they tell you? And if you can also just repeat, I think you mentioned it, but when do you expect to drill that area to the west? Thanks.
Okay. Well, Puneet, we have David on the call. So David, do you want to comment on the geophysics and on the spectral? And when do you expect to bring the drills over to the west?
Hi, Puneet. I'll try to answer that question. Yes, the geophysics is very spectacular. I fully agree with you. What we are waiting, when we start getting the final results from the company that did the survey, is all the inversions. So right now we do have the magnetics, we do have the surface response, different layers from the electromagnetic, the magnetotellurics. But what we want to see before doing a drill program is the full inversion to really narrow the potential conductive corridors, so to better allocate the meterage and to have a more accurate drilling plan. We expect to receive those deliverables by the end of August. So then it's a matter of building the drill program and bringing drill rigs there.
So most likely end of September, beginning of October, around that time, we should be able to start the drilling campaign there. Other tools that we have and use is the hyperspectral. So the survey we've completed this year, we already have all the layers, so it allows us to really map the alteration created by hydrothermalism and/or other features like dikes around the property. So that's a great tool to help us locate targets. And on top of that, we have some detailed mapping on the ground, lots of grabs, lots of geochemistry data. So it's a matter of putting all those data together and come up with the best drill program for Q3, end of Q3, beginning of Q4 this year.
Okay, sounds good. Sounds like it could be well timed with the higher production in Q4, first results. So that'll be good to see. Had one last question on the main trend at Boumadine, and the survey was showing more anomalies at depth there. But will the bulk of the program be focused on targets closer to surface like it was before? Or how are you thinking about that split?
Well, we have the 60,000 m that is already planned and well advanced. Like, at the end of the quarter, we were at 42,000 m, if I recall. Right now, today, we're at 55,000 m completed. So the main trend will lead the program as it was, so it was mostly to extend the strike length. But we did reserve few holes to go target at depth, also at the Boumadine and see the big geophysical anomaly. So as soon as we have the inversion for that too, we will give it a try, so later in Q4. And the rest of the more regional program, if you want, of 60,000, the idea was to go and test different targets.
So Tirzit was one, we have a big program completed the south on some north, east-west structures. We will just allocate some of those targets, especially the North 70 and North 30 structures. We'll allocate the meterage for the western geophysical anomaly. It's always a matter of prioritizing the target, and with this geophysical response, we believe that it might be more significant than the small cross-cutting structures. But again, lots of those structures we'll test this year, and there's a lot more coming for 2025 as well, as there's plenty of geophysical targets and lots of nice things we're seeing on the ground.
Okay. Thanks, David, and good luck. Sounds like you got a lot, a lot to do, but that's good to stay busy. Thanks.
Thank you. One moment for our next question. Our next question comes from the line of Justin Chan from SCP Resource Finance.
Hi, guys. Congratulations on getting Zgounder to where it is and another good quarter. A couple of questions just on perhaps the path forward and where you are now. On the vertical development, could you give us a sense of what's left to do? Is it on the vent raise side or material handling or, yeah, what's left on that, and how does that impact your ramp-up rates? Maybe is the first question.
Sure, happy to comment on that. This completion rate was on July 30th, so at the end of July, and we were still working on one last ventilation raise for the sub-levels, and that raise is now complete. So you can expect 100% on next quarter on the vertical development. So all vent raise are completed, and we have one ore chute and one waste chutes that are also completed. And we are finalizing to install the civil work to put them online. But as we speak, all vertical development is now complete.
... Okay, perfect. Thanks. That's a great update. And on the ore mine this quarter, what was the split between open pit and underground? And could you give us the grades between the two, if you have that data available?
We comment on overall grade, mine, and obviously, as per sequence, sometimes one goes up, the other one goes down, which is not quite relevant on a quarter-over-quarter. That's why we publish overall grade. We target towards the end of the year to have about 1,000 t per day from the open pit, and for a full ramp up for the open pit at 1,000 t per day. We're now about 500 t per day, simply because we don't need more, but we can increase it to 1,000 t per day when the new plant is up and running.
Got you. And roughly where do you, I mean, I think the guidance implies a fairly big step up in grade in the second half as well as tons. I guess, what are your thoughts on grades you're targeting for Q3 and 4, if you can give us any granularity there?
It's, Justin, it's difficult, 'cause as you know, with the deposit, the way it is, you know, when we hit these very high grade pockets, it goes very, very quickly into the hundreds and hundreds of gram per ton. But we're comfortable when we look at the model, that globally, we are going to meet our guidance. So if our guidance is around, let's say, we take the bottom part of the guidance at 215, and we're currently now on average at 196 for Q2, 184, that means we will be, you know, above the 215 for Q3 and Q4.
Okay, perfect. Thanks. I appreciate that. And I guess given where your lateral development is, you've got good flexibility. Well, anyway, I'll free up the line. Thanks very much for taking my questions.
Thanks, Justin. Thank you.
Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our next question comes from the line of Don DeMarco from National Bank Financial.
Thank you, operator, and good morning, or good morning, Benoit. Boumadine, yeah, Boumadine is on my mind. So with the new conductive anomalies, Benoit, shall we assume that you embark on a multi-quarter or even multi-year drill program before you start thinking about a PEA? I mean, if those new anomalies prove out, it just seems really early to start thinking about what the throughput should be and things like that.
Totally. You're absolutely right, Don. The drilling to the west, it could be a game changer. And we are doing some work. Right now, we have a project manager that we've hired, who is a top-of-the-line metallurgist and mining, you know, and a production man. So we are doing the tests. We're doing some metallurgical tests. We're doing all of that. But to finalize the flow sheet, the throughput, the quantity, it's a function of the size of the project. So we are working on understanding all of that and getting ready. Now, there are a lot of chapters that you don't need, you know, the size, on water management, electricity, tailing. So we started all of that.
All these chapters have been started, but the actual PEA based on size is gonna be a very dynamic system, because if we find what we believe is there on the west side and on the south, we haven't yet, have not yet, you know, put that out. But on the south, of course, it's a different size project. So absolutely, based on drilling and based on results, the project will be dynamic.
Okay. And can you comment on the existing infrastructure at Boumadine, like, for example, power, water, and is there driving access between the current and the new conductive anomalies?
So look at Boumadine, it's you've we've been together to Zgounder. Zgounder is 2,000 m above sea level. It's quite hilly. It's higher. Boumadine is a lot, you know, it's 1,000 m. It's got an airport 1 hour away. You can drive from the airport, which you've got flights from Agadir all the time because it's the entrance to the tourist area, where when you go on camel rides and on safaris. So it's quite good infrastructure. Power is not far away, so power will come from the grid. It's not at site yet, but it's gonna be at site. It's not far away. There are villages around, there are good hotels in the uh uh...
I'll ask Raphaël maybe to comment after. So, of course, it's something that's pretty straightforward. The issue is always in Morocco and in North Africa, is water. So we have a team on water right now. Is it gonna be reservoirs? Is it gonna be from some of the villages that are around? So we're working on that. That's always, you know, the pacing item. But at this point today, it's all about David and David, you know, putting in the drills and increasing the size of the resource. Raphaël, did you want to add something on the infrastructure? No?... Yeah, no, so that's what it is, Don.
Okay.
And-
Okay, well, thanks for that color. Go ahead.
We'll organize a visit to Boumadine in the fall with Alex.
Okay.
And a lot of people wanna come and see it, and it's like you'll see the infrastructure is actually, I would say, almost simpler than Zgounder, just because of the where it is and access to an airport very close by.
Okay. Okay, good to hear. And then, one question on Zgounder. When do you expect to reach mining rates of 2,700 t per day? Is that gonna be late this year or later, with some reliance on the stockpiles?
I'll ask Raphaël, who's sitting right across me and-
So we take our time. We wanna do it right, and we started early to be able to have this flexibility. Right now we have extra mining capacity, and we're not mining as fast as we could if we wanted, because we have over 300,000 t of ore stockpiled. But to answer your question, is somewhere in mid-2025. Early 2025-
Okay
... mid-2025, depending on mill throughput, on mill ramp up. So we have this flexibility right now.
Okay, thank you for that. Well, good luck with Q3, and that's all for me.
Thank you, Don.
Thank you. Our next question comes from the line of Mike Kozak from Cantor Fitzgerald.
Yeah, good morning, Benoit team. Congrats on the solid quarter. Most of my questions have been asked, but I just had one more. With the Zgounder expansion almost done, how are you as a company thinking about debt reduction next year? Do you have a kind of a target debt repayment amount per quarter in mind or something like that? Just any guidance there would be appreciated. Thank you.
Well, it's a very good question, and I'm gonna not turn it over. It depends on David's demand on drilling. It's for us-
Fair enough.
For us, drilling is the most important value creation. So far, with 94,000 m at Boumadine, we found 352 million ounces of silver equivalent or 4.1 million ounces of gold equivalent. You know what? And David's on the line, and I shouldn't say this, but when David is showing us things, he says, "I wanna drill this," for us, that's the top priority. EBRD is extremely flexible. We have a payback program over four years, starting in 2026, and they're extremely flexible. They come to site. We are their star project in their new mining strategy. If we wanted to pay faster, we could. If we wanted to delay, we could. Not that we would delay, but they are very happy with this project.
Seriously, if David keeps coming up with discoveries, both at Zgounder, Zgounder regional, Boumadine and, and, and Tirzit, the value of the drill, the cost of drilling is, is, you know... Our, our cost of discovery last year was, like, $0.10 an ounce of silver. So but yes, if, if we do have excess cash, it will be to pay down the debt, obviously. But, you know, it's a soft loan with the EBRD. It's extremely soft. They're very good, and hence, you know, we're comfortable. But yes, with $35-$40 silver and the production that we're gonna get, we'll probably have all the money in the world for David and, and, and to be able to pay down the debt.
All right. Good stuff. That's it for me. I'll revert back. Thank you.
Thanks, Mike.
Thank you. One moment for our next question. Our next question comes from the line of Stephen Soock from Stifel.
Hi, guys. Most of my questions have been answered, too. I just had one on cost structure. Now that you've kind of ramped up or you know largely ramped up underground, have a good handle on the open pit mining, you know, how are kind of unit costs tracking versus your expectations and maybe versus the study? I know inflation in Morocco has been very low, so I think you know it looks like a potential to beat there. But just wondering what you're seeing day to day and how you're thinking about that going forward. Thanks.
Yeah. So on open pit specifically, it's a contract miner that we use. And so far, you know, it's been exactly as expected in both in terms of drill and blast, and in terms of haulage from the pit to down the valley and back up to the other mountain. So it's exactly, honestly, we're quite happy, and I think we've mentioned that in the MD&A. We're very happy with our contractor, the performance and the cost. There's no surprises.
Perfect. No, that, that's great to hear. I know, the expanded capacity will really have a notable positive impact on the cost structure and margin overall. So looking forward to that, that inflection point in the second half of the year. That's it for me. Thanks.
Thank you.
Yeah, thank you, Stephen. And as you said, the inflation in Morocco has been contained, and the value of the dirham is, you know, devalued just a little bit, not much. So you see it in our construction costs. When you look at us coming through with 2022 CapEx numbers that, you know, we are able to build it on time and on budget, it says a lot about the capacity of the construction capacity in Morocco.
Thank you. At this time, I would now like to turn the conference back over to Benoit La Salle for closing remarks.
... Well, thank you so much. Thank you all for attending. It was a good quarter, heading into a very interesting second half of the year with the commissioning ongoing. Keep watching our little videos. It will show you what we're doing and how we're doing it. And heading into the commercial production in Q4 of 2024. What's also very interesting is the fact that we have 300,000 t on the ROM pad. That's like extremely important for a smooth ramp-up, and it's all there, so it's been mined. So when we look at the mining rate and the fact that we've been mining 1,200 t a day, and including we feeding the two plants, we've been able to stockpile 300,000 t.
It just tells you that we do have, as Ralph said, the capacity to grow, and we have also the capacity to slow it down if we have to, which is what we've done. So you have a very well-oiled machine, which is giving us 96% availability, and the third plant's coming, you know, live now and will be, you know, in commercial production in Q4. So on the operating side, it's going extremely well. On the exploration side, it's... What can I say? 160,000 m of drilling in Morocco, with a very good team of geos that have made some big discoveries for Aya. So that will be a very, very good year. On the geopolitical front, Morocco, now that we have all the issues all over the world, Morocco is fantastic.
They are, you know, now being recognized as one of the top mining jurisdiction, investment jurisdiction in the world. Their EV strategy is working out. They have many companies investing billions of dollars to the north, in their EV strategy, and Aya is the key player with Managem in the, on the, on the mining front. They are organizing a conference, a Morocco mining conference in December, from the third to the fifth in, in Marrakech. I'm inviting all of you, to come and see us at the booth. It will be very interesting. So Morocco is coming through as a very good mining jurisdiction. We are there. We have many things going on for us, and, H2 will be very, very interesting.
So thank you for being a shareholder, thank you for being our analyst, and being interested in Morocco, in Aya, and the work that we do. We will talk to you in November at the Q3 call, and that will be from the mine site, as we will be having our board meeting at the mine site in November of 2024. Thank you, all of you. Have a great summer, and we'll see you in the conferences starting at Beaver Creek.
This concludes today.