Good morning. I will now turn the call over to Elizabeth Hamaue, Aya Gold & Silver's Director of Corporate and Financial Communication. Please go ahead.
Thank you, operator, and welcome, everyone, to Aya Gold & Silver's second Quarter 2025 Earnings Conference Call. Here with me today are Benoit La Salle, President and CEO, Ugo Landry-Tolszczuk, Chief Financial Officer, Elias Elias , Chief Legal and Sustainability Officer, Raphaël Beaudoin, Vice President, Operations, and David Lalonde, Vice President, Exploration. We will be referring to a presentation on this conference call, which will be available via the webcast and is also posted on our website. We will be making forward-looking statements during the call. Please refer to the cautionary notes included in the presentation, news release, and MD&A as well as the risk factors included in our annual information form.
Technical information in this presentation has been reviewed and approved by Raphaël Beaudoin, Aya' s Vice President of Operations, and David Lalonde, Aya's Vice President of Exploration, both of whom are Aya 's qualified persons as defined under National Instrument 43-101 Standards of Disclosure for Mineral Projects. I would also like to remind everyone that our presentation will be followed by a Q&A session. With that, I will turn the call over to Benoit La Salle. Benoit?
Thank you, Elizabeth. Welcome, everybody, to our Q2 2025 earnings call. Before I start the presentation, I would like to tell you and announce that we have reached the 10 million oz of silver production last week and since we took over as management in April of 2020. We did produce, now we are over 10 million oz of pure native silver in the last five years. I thought it's worth mentioning. There is a presentation where you can follow my comments. You have the forward-looking statement on page 2 and 3, and then we will start on page 4. The Q2 highlights, it is a very strong quarter, a very good quarter. We've delivered across all the key pillars of our strategy. First, the production, 1,042,000 oz in Q2, very similar to Q1. Gold and silver, but in our case, it's silver revenue of $38.6 million.
We report in U.S. dollars. Cash flow from operation in Q2, $8 million. I'd like to point that we are now at $15 million after Q1 and Q2 of cash flow from operation. Remembering that this is a ramp-up period. We commissioned the plant at the end of December last year. We started the ramp-up in January of 2025. We are now completing the ramp-up, as we will see while we're evaluating our KPIs at the end of Q2. During the first six months of ramp-up, we did produce $15 million of cash flow from operation. At the end of the quarter, our balance sheet is strong. We have $114 million in cash in our bank. We have a line of credit of $25 million, and we have a very strong working capital position.
Reviewing some of the key milestones on production, we've had a very good quarter, solid operational KPIs that I will review with you, and we did reach 1 million oz of production. On the exploration front, drilling programs are on track. We have many drills starting, both at Zgounder and Boumadine, and we are continuously giving you results that are positive. We've also been acquiring new permits at Zgounder and at Boumadine, which is part of our strategy. We really do take advantage of the fact that we're first in country, and we add a lot of ground every quarter at Zgounder and at Boumadine. On the development of our second asset, which is Boumadine, the work supporting the upcoming Boumadine PEA is going extremely well and according to plan. On the ESG front, in the quarter, we published our 2024 sustainability report.
We are always focusing on health and safety, and we had a clean quarter in Q2 2025. No incidents, nothing. We always strengthen our community engagement. We actually, in Q2, have accepted 26 new initiatives that were presented to us by local communities. They actually presented 80 initiatives. We selected in Q2 26 that we will be implementing. Strengthening our community engagement is part of our core value. Financing position, cash from operation, as I mentioned, $8 million, $15 million after two quarters. Extremely pleased with this number. We've completed an equity raise in June of CAD 140 million , so let's say $100 million , hence giving us a very, very strong balance sheet. Taking you to slide number five, we're going to go through the KPIs. You recall, I always say in the ramp-up, we have five KPIs that we need to manage.
The first three, ore process and milling rate. As you can see, in Q1 2025, we were at 2,800 tonnes per day. In Q2 2025, we're at 3,000 tonnes per day. We are moving up the ladder. Remember that the nameplate capacity when we built the plant was 2,700 tonnes per day. By the end of Q1, we're at 2,800. By the end of Q2, we're at 3,000. We are now approaching, for Q3, 3,500 tonnes per day. This KPI is well managed, well under control, and exceeds nameplate capacity by more than 20%. Recovery rate has always been something extremely delicate. We know that metallurgy is an important element of a good mine. Currently, in Q2, the average was 86.5%. We have reached 92% recovery in June. You recall that at the beginning of the ramp-up, the oxygen plant was creating the main issue.
That's been solved and working according to plan. We are now above 90% recovery, which is better than what we had in the feasibility study. The availability of the plant, this is another key KPI. For Q2 2025, we were at 98%. We wrote exceeding industry standard. I've been in this business more than 30 years, and I've rarely seen plant availability better than 95%, sometimes 96%. Here we are at 98%. The operational KPIs are sustainable into H2. We expect that the ramp-up is near completion. We're going to be at cruising speed at 3,500 tonnes a day, good recovery, and good availability. Moving on to slide number six, the Zgounder ramp-up phase on our mine. When you look at the ore mine, the tonnage is there. In Q1, we did 195,000 tonnes, which is 2,100 tonnes a day.
You recall, we started at 900 tonnes a day when we had the two smaller plants. Our goal is to go to 3,500 tonnes a day. We were at 2,100 in Q1. We're at 2,600 now in Q2. This is increasing as we're ramping up the open pit in Q3. In Q2, we were preparing the open pit. We did a lot of stripping. We'll continue to do that in Q3 for our objectives to go to 3,500, which is equal. The mining will be equal to the processing. Another KPI that is green, that we manage very well, and is according to plan. The only KPI where, you know, we've talked about in the previous quarter that we're still, you know, working on and that we need to improve is the average grade.
The issue here in the ramp-up, as we move from 900 tonnes a day to 3,000 tonnes a day and 3,500 tonnes a day, is not a metallurgical or a metal issue. It's not a metal issue. The metal is there. What we need to address is dilution. It's the way we mine it, the way we mine the underground, and the way we mine the open pit. Historically, we were doing a lot of selective mining, and we had the time because we were mining originally 200 tonnes a day, then 500 tonnes a day, 900 tonnes a day. The dilution was not a big problem. Currently, with the speed of execution, the dilution is becoming our number one enemy. We know this. We are all focusing on improving or reducing, should I say, the dilution. We're improving mining selectivity. We're improving operational control. We have hired more people.
We've hired more senior underground managers. The last KPI of the five that we need to address in the ramp-up is really the dilution of the grade from the mining. On the open pit, we need to monitor better blast movement because we see where the grade is. We blast it, then it moves, and then we dilute it again too much. Underground is definitely even more difficult. All of that is something we understand is something we is our key priority right now. We have to stabilize the mining rate, reduce the dilution, control the ore, and send all the ore to the plant and all the waste to the waste dump. Going to slide number seven, which is the financial highlights. Of course, on the revenue side, it's a record quarter, $38.6 million of revenue, obviously driven by the ramp-up and the higher silver price.
We've moved from $33 million in Q1 to $38 million in Q2. The average selling price is excellent, and that is even getting better now in Q3. On the left side of the slide, you see the average net realized silver price. When you compare that to the cash cost, just to show you the margin, we do have a $12 margin. We had a $12 margin in Q1 as well. We expect that margin to increase in the coming quarters as the selling price is higher than what it is right now. Really, as we're completing the ramp-up phase and as we're improving the grade or reducing the dilution of the grade, you can expect the cost to come down, the selling price to go up, and the margin therefore to increase.
Slide number eight shows that we have a very strong balance sheet, and that's something extremely important as we are really stepping up now the Boumadine development. This quarter, we discussed this, we had $8 million of cash from operations, $15 million after two quarters. CapEx and exploration in line with our budget of $13 million. We spend about $3.5 million- $4 million per quarter on exploration. As you know, we have two large drill programs. The cash position is extremely important at $114 million as we plan to increase the drilling at Boumadine and really get into a more detailed feasibility study next year. That cash position is instrumental. When we raised the money in June, it was clearly identified that it was for the Boumadine development. Strong cash flow, you know, CapEx completely under control.
A recent development, some of you saw that, we did receive two weeks ago now or a week and a half ago, $8 million payment in compensation for the EPC contractual breach. You recall that last October, the plant was delivered to us with a delay. You recall that we had a fixed date for plant delivery. We had obtained in the EPC contract some contractual obligation, which there was a breach. Because of this breach, we were able and have received $8 million in compensation. That, of course, is not accounted for right now in the cash position because that came after the quarter end. It just now tells us that we've built this new plant at Zgounder. We've built it. It was already on budget, but now it's $8 million below budget. The on-time of delivery was late. You recall, we explained that in Q3 of last year.
The commissioning was very quick, much quicker than expected. We did the commissioning in three weeks. The commercial production was declared in December, and that was aligned with the plan. To conclude the balance sheet portion, strong balance sheet, enough balance sheet to really develop Boumadine and continue with the exploration at Zgounder and at Boumadine. On page nine, we gave you a few pictures. I know many of you have been to site. It's beautiful. There's no more snow on the top of the mountains. As of last week, it was 48 degrees. A little bit warmer than Canada, but not that much. You can see all of those pictures. Now, talking about exploration, because as you know, we are a producing company. We have a beautiful, pure silver mine at Zgounder. The exploration portion of Aya is extremely important.
The exploration at Zgounder at the mine and the exploration at Zgounder regional. At Zgounder at the mine, we've drilled 4,700 m. That drill is in the structure. You remember our structure is 1.4 km long, about 700 m deep, 20 m thick. We've been drilling the bottom left of the structure. I mean, we've been drilling everywhere. In the bottom left, the drill results outline significant down plunge extension, which we show you when we put out a press release with good thickness, very good grade. It confirmed the continuity of the high-grade mineralization beyond the current resource boundary. Extremely important because it is a major system. It's very well understood. We're seeing extension to the west at depth. We've also seen extension to the east in the open pit because we've shown you new results in the open pit over time. The Zgounder main zone is still growing.
Zgounder regional, which I'll show you a slide in one minute, we've drilled 1,000 m there. It's more exploration drilling. We have an area called Far East permits that we've obtained and that we've done the work in Q2. We have identified many very interesting targets through geochemistry, through satellite imaging, and spectral imaging. We are drilling some of those targets now. The drills are turning. We're drilling some of those targets. As I said, detailed geology is being done, and it's being carried at Touchkal, at Zgounder Far East. We'll see this on the next slide. The next slide is showing you where the mine is, which is the permit right in the middle. Then you have the 10 km, 20 km, 30 km.
We are focusing on finding a new structure, which is a distance that we can truck to the plant to either increase plant capacity, to maybe, depending on what we find, to use. We have three plants: a small leaching plant, a flotation plant, and the bigger plant that we just completed. We are looking at different things. We have identified structures that are gold-bearing. We have identified structures that are silver-copper. We are really working to find that other structure, which we believe is there. We are also using AI. Probably in the next quarter, we will be able to tell you what a massive AI program has done in reviewing all the data that we have, all the data: geophysics, geochemistry, satellites, spectral, stream sediment.
We are using AI now to do the work of many, many geos that we would do in a number of years, and that is being done in a couple of months. The next project, as we all know, is Boumadine. Boumadine is our tier one asset. We have completed 33,000 m of drilling in Q2. You know that 33,000 m for most companies, they do not even do that in one year. This is what we have done in one quarter. We are at 79,000 m after two quarters, and there is more coming. There is more coming because we are finding new structures. This time, we have done a lot of drilling on the main trend, on the Tizi trend, and on the Imariren trend, which are all parallel. Those are the parallel structures to the main trend. We have confirmed continuity and extension.
The PEA is only on these three structures: the Tizi, Imariren, and the main trend. Everything else that we are looking at is not going to be included in the PEA. It is going to come in a second step as we are developing other satellite deposits at Boumadine. The main trend, Tizi, and Imariren have enough quantity of ore and grade to become a tier one producing asset. In addition to the surface work, we have identified a new zone, which you are going to hear over the next couple of weeks and months, called Asirem, which is a permit that we knew because we had done the geophysics that we were able to acquire. As I say, we do acquire permits every quarter. David and his team are picking up additional ground based on additional information. We have acquired this permit.
It has a 9 km traceable structure where we discovered gold and copper. Gold at 3 g per ton, copper at 4%. We can see it on 9 km . This is the, you can see the color. You can see the anomaly. This is what you see on the northwest corner. You see this elongated structure. We are covering it on 9 km . We're also buying additional ground to the north. That is a geochem and a geophysics anomaly and we are very positive about the grab sample, what we're seeing. We will be drilling that in the coming few weeks. Boumadine is, again, a world-class asset. You've seen that slide many times. We have done a lot of work on the main trend, on the parallel trend. We are doing work now on the west structure.
Over the next few quarters, we're also going to be doing work to the south on these very long geochem and geophysics anomalies. That completes the geology. David will be on the call with us if you have questions. Also, on the outlook, we're confirming what we've put out in the past. We're really motivated to meet all of this guidance. The production guidance is between 5 million and 5.3 million oz. We are committed to meet this production number. As a summary, and before we get into the question period, the catalysts for 2025 were and are to commence the drill program. Of course, we have done that. We have commenced and are way into 140,000 m of drilling at Boumadine and 25,000 m, 30,000 m of drilling at Zgounder. Our second catalyst was to commence the Boumadine PEA . That was for 2025.
We are way into this Boumadine PEA. As indicated, we expect that this will be released in Q4 of 2025. We wanted to reach 3,000 tonnes per day of processing at the new plant. It was part of the ramp-up plan. We have reached that throughout the quarter of Q2. We are 15% above this already in Q3. The ramp-up is following a steady state on the plant. I would say the ramp-up is complete. On the infrastructure, it's complete. The only KPI left, and we're fully aware of this, is the dilution of the mine. That's something that we're addressing. Provide update on Boumadine metallurgy and PEA. It's mainly metallurgy because that's been kind of a question mark for many shareholders. There will be a complete update on the metallurgy. The studies are coming to an end. We will have a full update for you in Q4 of 2025.
Publishing the updated Zgounder technical report, we are working on this. The beauty of it is we keep adding beautiful structures and beautiful grade and new extension. We are on it right now and want to have that done before year-end or in Q4 of 2025. This completes the official presentation. We are open for business and for questions. This concludes my formal remarks. I would like to now hand the call back to the operators for a Q&A session. Thank you.
If you'd like to ask a question at this time, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Bryce Adams with Desjardins.
Thank you, Benoit, and I appreciate the presentation. A couple of weeks ago, you put out July month-to-date production numbers. When we extrapolate those data points for the full month of July, it gets to over 400,000 oz produced. Can you talk to those July results and if it cleared that 400,000 level, maybe got closer to 450,000?
Yeah, Bryce, thank you. We did give you 2/3 of July. Yes, for July, we have surpassed the 400,000. As we indicated, we will stop giving monthly production numbers because it does create some turbulence sometimes when you are in the ramp-up. The ramp-up is pretty much done now. You saw the steady state at the plant. Yes, July is above 400,000. It's really on our goal to go towards the 500,000. We had a good July. The grade was better. The throughput was excellent. July is a good month.
Okay, yeah, it sounds like it. I'll mark that down, more than 400,000. For the full second half result, in the open pit, what's the key factors to managing the grade there? It looks like open pit grade is more of a problem than underground. You know, when we were on site a few months ago, the upper benches were a little bit constrained, a little bit tight for space. I mean, that could be normal course when you're opening up the bigger pit, but operational flexibility was maybe not that great a few months ago. How has that improved? Is that the big factor in managing the open pit grade profile through the rest of the year?
Yeah, so look, you're absolutely right. I mean, you know, there's no grade issue at Zgounder. Let's be very clear about this. There's no grade issue. There's a mining learning curve, and the mining learning curve was slower than what we had anticipated. At the beginning, we were in kind of a honeymoon with the open pit. We were hitting all the structures. That was pretty straightforward. It was lower tonnage, and the open pit was quite steady. The underground, as we were really pushing up the underground, created dilution that we didn't expect. We changed the focus. We pushed more the open pit. We reduced the underground. By doing that, we did not solve the dilution of the underground, but we kind of got that under control a bit more and are getting good grades from the underground.
The open pit, then we realized we need a bigger open pit. We started doing some stripping, moving some of the infrastructure that you saw, the ventilation, and getting our contractor to bring in more trucks in order to prepare for the better structure. That was part, that was Q2. The open pit execution in Q2 was excellent. The dilution was not, and we therefore had lower grade than expected in the open pit. We know that in Q3, this is getting better. You're right, the open pit preparation to go on a much bigger pit is definitely the issue why the grade was a little bit lower. We expect that to correct itself in Q3 and definitely getting even better in Q4.
Okay, to expand that footprint gives you more flexibility.
It does. It does.
The last one for me, Benoit, is on exploration. In your newsroom, on your website, the last drill results from Zgounder were back in June. Should we be expecting another batch of drilling results in the near term? How have assay lab times been? Is that a factor in the timing of drilling updates?
Yeah, so you're absolutely right that the exploration results have lagged a little bit. It's because we've given the focus to the development drilling and the drilling at the mine site. At the lab, there's so much capacity, and we've told the lab, look, we want, you know, to have a priority on all the samples coming from production because then, you know, with better definition, we have better grade, we have less dilution. We gave priority to that. Now that, look, the team is back, you know, August is the month on holiday in Africa and mainly also in Morocco. We're working at capacity, and David will have press releases both on Zgounder and on Boumadine, I would say, at the very, very beginning of September as we are, you know, getting, we're drilling. You see that we see that you see the meters that we've done.
We've done like almost 45,000 m in Q2. Yes, there'll be more results coming out. The reason we're a little bit behind is because we gave priority to the production samples than the exploration samples.
Okay, I get it. Thanks so much for all of that. I'll jump back in the queue.
Thank you for your questions, and thank you very much for your support.
Our next question comes from Justin Chan with SCP Resource Finance.
Hi, Benoit, and hi, team. Congratulations on the progress in the quarter. I was just curious maybe to get an update at where the plant is now because it was making steady improvements, and thanks to Alex and the team for hosting us a couple of months ago. I was just curious where the oxygen plant is at, if that's at nameplate now, and I think recoveries were trending up associated with better oxygen performance. As you mentioned, tonnes were getting above 3,000. I was just wondering if you could give us a snapshot now of what the plant performance is like.
Yeah, thanks, Justin. Raphaël came back from the plant to Montreal for the call. He's here still wearing his working boots. He can give you a very fresh summary of where we are right now.
In July, we had a two-day shutdown during which we did some improvement. Recovery stands above 90% now for the last two months, and that's continuing around at 92%. Throughput would be around 3,400, and we have days above that. On average, we stand about 3,400. Availability is good, and we continue to test the limit. Right now, this is where we stand.
The oxygen plant, the question is back to normal?
Yeah, the oxygen plant is no longer a limiting factor in recovery. We fixed what had to be fixed. There's still tune-ups to do, but it's no longer a limiting factor for recovery. That has been the case for the last three months now. Like I said, we stand around 92% recovery, and we are in excess of oxygen in our reactors.
Okay, excellent. It sounds like there's been really great progress on that side of things. I know you have a healthy stockpile, but I suppose that will put some pressure on the mining side of things. I guess just curious where you see mining rates in Q3 and Q4 this year. Do you think you can match the processing rates, or will that still be ramping up over that period of time?
Our mining ramp-up plan is through the year. As we discussed a bit earlier on this call, we need to make more room in the open pit, which we're doing. Our super pit progress is a project that is doing well. We will continue to ramp this up through the year. Of course, ultimately, the target is to have the same mining rate as the milling rate.
Gotcha. Thanks. Maybe just the last one, Raph, when we were at site, you mentioned, you know, improvements on blast monitoring as part of the open pit improvements. Just curious what the timeline for that is, and is that, that starts coming to the numbers this year also.
We have, we're putting in place a team. We have the software. We have the procedure. This is going to be a continuous improvement journey that we're putting in place for the second half of the year. I would say Q3 is the implementation, and by Q4 we'll be in place, and we expect to see good results from that.
Okay, great. Thanks a lot, guys. I'll free up the line for other people and jump back in if there's any more. Thanks so much.
Thanks, Justin.
Our next question comes from Don DeMarco with National Bank.
Thank you, operator, and good morning, Benoit and team. Congratulations on these improvements in recoveries and throughput on a quarter-by-quarter basis. Maybe I'll return to grades just to see if I can get a little more color. Where do you see the most opportunity, whether open pit or underground, both in terms of addressing dilution or also in terms of mine sequencing? Do you have any higher grades on that you might be geared up for the second half of the year?
Yeah, thank you, Don. Of course, your question is right on. This is something that we manage. I looked in doing the review because we do review this on a weekly basis with the team. I looked at the original budget that we approved, and our average grade in the ramp-up for Q1, Q2 in our original budget was 155 g per ton. That was the original budget that we had. We were very clear on what needed to be done. Finally, the average grade for H1 or for Q1, Q2 is 151. Yes, we're a bit lower, but you know, because we knew as of last year that the dilution was something that we needed to manage. Now, when we look at what we will be mining in Q3, Q4, it's between 180 - 200 g per ton. That's what's out there in the mine plan.
We know it's there. We also know that we still have a dilution issue, which, you know, about blast control on the open pit and reducing the dilution, which we're addressing. We're now using new software. We have hired new people to be with us because that's something we've realized is we just need more bench strength because our learning curve was slower than what we wanted. We have hired bench strength. We have more people. We are mining in Q3, Q4 180 - 200 g per ton. July was already better. We know that. You know, because of the nature of the deposit, we can go into some high-grade zone. That's your question, sequencing. We do have in the sequencing better grade than Q1 and Q2. Q1 and Q2, knowing it was a ramp-up.
Again, you know, when you compare yourself, you see that finally our ramp-up, we still made $15 million of cash flow in the ramp-up in Q1, Q2. We want to get into better grade in Q3, Q4. We are going into better grade, but we also absolutely need to reduce the dilution. That's going to come in the open pit with better blast control. In the underground, which is just better geological control, we do have three-by-three spacing, drill spacing in the open pit. We cannot do that in the underground, but we are improving. We are improving, not where we want to be, but we are improving. That's the last KPI of the five KPIs that we're managing in the ramp-up. We are mining in the mine plan 180 - 200 in the Q3, Q4 period.
For us to meet guidance, all we need is to be in the mid-160. We are very comfortable with our guidance because we need 160. We're going to be mining 180 - 200. We're quite comfortable.
Okay. Thank you very much. That's helpful. We've got a catalyst later in the year with the Boumadine PEA. I know you've considered a range of different processing options. With the PEA, have you sort of made your decision? I know you've talked about a roaster at some point. Will you go with that method in the PEA? Also, will there be perhaps options presented that show what the economics might look like if you were to just sell the concentrate and not roast it?
The answer is yes. Exactly that. We will have a two-step project, one with the concentrate, step one, two with the roaster, step two. We indicated that last year that the roaster was ahead of the game on the others, and it's clearly coming out that way. Raphaël and his team are working on this. We've actually even this week started to work on the org chart of how many people we need to recruit to fast-track this project. That's where we are. We're very happy with what we're seeing right now. We'll have something in Q4 available, but you're absolutely right. Step one, do a concentrate. See the economics of that step one, much lower CapEx, lower or, you know, easy OpEx, easy to build. It's about a logistic game.
Step two, talk about the roaster, which we've always said would be done with, you know, the state with a partner. That's becoming a very important project in the country. That's something that is a step two. Yeah, it will be part of the PEA.
Okay. Great. Thank you for that. That's all I've got. Thank you again and good luck with the rest of the quarter.
Thanks, Don. Thank you.
Our next question comes from Charles Ehidiamhen with Scotiabank.
Thank you for taking my question. I'm asking you on behalf of [Obi]. Maybe I can just start from Boumadine. I just wanted to be clear on the PEA year. The expectation is that you'll be putting out the PEA in Q4 of this year.
Yes. If the question is PEA Q4 this year, the answer is absolutely Q4 this year. Yes.
Okay. Thank you. I guess my next question is just going to be on the mine grades. I think there's a comment in the outlook that talks about targeted initiatives. Are you able to speak to some of that? Sorry if I missed that already.
I'm sorry, I didn't get the question precisely. What's your question?
In the outlook section of the press release, you talked about targeted initiatives to strengthen mine grades as operations maintain a steady state. I was asking if you could specifically use it.
Yes, yes, yes. You want to, what kind of initiatives we have? Absolutely. The first initiative was stronger bench strength. That was number one, is bring more people in that have underground or open pit expertise and just, you know, bring senior management that can support the operating team. We've done that. Two, in the open pit, we're using software on blast control. We're using better definition. We have a contractor with whom we work closely. There's a change of equipment as well. The contractor has purchased new trucks that have bigger capacity, more trucks. For the preparation of the open pit so that we can have access to better benches. That is being done as we speak.
In the underground, it's similar, mining bench strength, better definition, more geologists, more mine production geologists so that we have a better planning of what is out there and compare that to execution. We were doing this, but we're now going to increase the bench strength on the underground mining. I don't know, Raphaël, anything from what I just said that you would add to make us better open pit and underground?
Yeah, we also continue the underground development, and we're thinking the ramp, which will give us access to new, always new levels. In the open pit, the blast movement, we know the blast movement is a big contributor to the dilution, and this is what we're tackling head-on. As we go down the pit, we also refine our understanding of the deposit, which will also contribute to help us out. In a nutshell, I would say blast movement for open pit, underground, as we open new levels, we learn from the levels above, and we have a bit more manpower, especially on the geology for mapping underground.
All right. Thank you. Just on exploration, I mean, when could we expect results from the regional exploration project? I know you had talked about Zgounder and Boumadine exploration results coming soon, but the regional bits of it, when could we expect results?
Yeah, thanks for the question. Exploration results, especially for what's regional, really depend on what we hit. A lot of it is greenfield. Right now, as Benoit was mentioning before, we're putting priority to what was near mine for Zgounder specifically, what was near mine and what's development. Regional really depends. On Boumadine, as Benoit mentioned, there's some nice, there's some interesting things that we've seen. I would think it's more the back half of the year in terms of results from that.
All right.
We'll be putting out results on the drilling in September, October, on a regular basis because we're doing a lot of drilling, and you know, we'll keep you informed.
Thank you very much.
As a reminder, if you'd like to ask a question at this time, please press star 11 on your touchtone phone. Our next question comes from Justin Chan with SCP Resource Finance.
Hi, guys. Thanks. Just a small one, maybe for Ugo, but just on, you now have some income taxes built up on your payables. I'm just curious if there's any guidance you can give us about the schedule for tax payments this year.
Yeah. Tax payments in Morocco are a little bit different than in Canada. We do not have our provisional accounts or taxes that we have to pay are based only on last year's numbers. We don't have to make provisional accounts based on expectations as we would in Canada, for example. A lot of our taxes payable are derived from unrealized foreign exchange gains because our debts by our local company are in USD, and the functional currency there is the Moroccan Dirham. The Moroccan Dirham has appreciated quite a bit compared to the USD. We'll see how the end of the year ends, and then a determination will be made or a calculation will be made at the end of the year. We have to pay taxes kind of in the end of March, early April timeframe if taxes are payable.
Okay, gotcha. I guess for the rest of this year, should we just model that as you accrue taxes but don't pay them, or just maybe model them as matching like what's accrued?
We pay our provisional accounts as per what we had last year. We do pay taxes on a quarterly basis, based on last year's results. If there's additional income tax, right now we accrue them on our balance sheet and we show them as liability.
Okay, gotcha. All right. Thanks, Ugo. Appreciate it. Yeah, that was my question for this one. Thanks very much, guys.
That concludes today's question and answer session. I'd like to turn the call back to Benoit La Salle for closing remarks.
Thank you, operators. Thank you, everyone, for being on the call today. Thank you for all the questions. I'd like to close in saying and coming back to the fact that we've already produced 10 million oz of silver production from Zgounder in the last five years. There's much, much more coming as we will present the new mine plan before the end of the year. I also would like to comment that due to the fact that we have a strong balance sheet, we can be very selective on how we sell the silver. We're never in any rush to sell. This week, we were able to sell 100,000 oz at $38.50 and kept 130,000 for a better price. We also have 100,000 oz delivery next Monday in Geneva. We do have a very smart selling strategy, and that pays off. We always get a very good selling price.
We did talk about new hires, but let me tell you that Aya is a very good name in country. It's now a very, it's a very well-recognized name. We are bringing in some new senior managers at the mine level, which will be a complement to the existing team, which will allow us to correct that last KPI that has been an issue. The Zgounder ramp-up, it's six months. It's done at the plant, as Raphaël said, consistently between 3,400, 3,500, even some little peaks above this. With this kind of throughput, with an improving grade and strong recoveries, you can expect a very strong H2 coming. Focus is 100% on underground and open pit operation. This is the last KPI, and we are focusing on this on a daily basis. We're fully committed to our production guidance. Boumadine PEA, two questions on it. It is a transformational PEA.
As we all know, it's a multi-million ounce silver equivalent or gold equivalent. It's a tier one asset, and it's staged for, you know, massive growth of our production profile and also growth in other structures that are in this portfolio in Boumadine, which, as you know, we have now over 700 sq km of land. From that, we're heading into a very exciting time on exploration and resource growth. We have ongoing success at Zgounder. You see the results. We have also ongoing success at Boumadine on the main structure. We will continue to drill and have a very extensive drill program. We are also looking next year at a larger drill program at Boumadine than what we have this year because we will be heading into resource conversion from inferred to M&I and to reserves. You can expect a very large drill program next year.
Boumadine, it's a district-scale project, and there'll be also regional drilling at Boumadine where we have some very, very strong anomalies that we need to drill. We will continue to add ground at Zgounder and Boumadine. The fact that we were the first one in, what is referred to as first mover advantage, is absolutely true. We keep adding ground at Zgounder and at Boumadine. A very exciting time next year for exploration. Cash flow is continuing. We expect a stronger cash flow for H2. Of course, we don't control the silver price, but assuming that is constant, we expect a very strong cash flow position for the rest of the year. We are cash flow positive now, and we'll continue to be in the next few quarters. Margin, you know, are expanding, throughput is stable, and recovery is strong.
In our strategic positioning in Morocco, we are continuing to be focused exclusively on Morocco. We're looking at additional ground on the fault. There are some families that have good assets, good projects that are dormant. We'll always continue to review those and bring them in under the Aya name and under the Aya portfolio. To close on cost, because we did talk about grade, grade has a direct effect on cost. We looked at that very, very precisely. I just want to also tell you that when we looked at the team here and how they manage the Zgounder mine, when we looked at the cost per ounce, it's a certain amount, but we manage cost per ton, which is the cost of each ton that we move. In our budget, open pit and underground, we had $50, $56 a ton.
The actual for the first two quarters is $46. We are almost 20% below our budgeted cost. In processing, the budget was $31.5 million. The actual is $32 million. The difference is additional cyanide that was needed. You see that the costs are very well managed. The plant's doing extremely well. There's one element. We need to reduce dilution. By reducing dilution, we will reduce cash costs, we will reduce ASIC, we will improve cash flow, and we will come back to where we want this project to be so that we can focus on developing and building Boumadine in the next few years. Thank you very much for your time. Thank you for being there and supporting us. We will talk to you over the coming months, and we will be together in November for the Q3 conference call. Thank you so much.
This concludes today's conference call. Thank you for participating. You may now disconnect.