MD&A

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# MD&A

Source: https://ayagoldsilver.com/_resources/financials/2020/Maya-Gold-Silver-Inc-MDA-Q1-2020.pdf
Published: 2020-06-29T00:00:00+00:00
Fetched: 2026-05-06T10:00:40.854+00:00
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## Content

# MD&A
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED MARCH 31, 2020
1320 Boulevard Graham, suite 132, Mont-Royal, Québec, Canada H3P 3C8
Email : info@mayagoldsilver.com | www.mayagoldsilver.com
Management Discussion and Analysis
For the three months ended March 31, 2020
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Management’s Discussion and Analysis (“MD&A”) of the operations, results, and financial position of Maya Gold
& Silver Inc. (“Maya”) and its subsidiaries (together the “Company”), dated June 29, 2020, covers the quarter ended
March 31, 2020 and should be read in conjunction with the Company’s unaudited condensed interim consolidated
financial statements and related notes for the quarter ended March 31, 2020.
The Company’s March 31, 2020 condensed interim consolidated financial statements and the financial information
contained in this MD&A have been prepared in accordance with International Accounting Standard 34, Interim Financial
Reporting. All financial results presented in this MD&A are expressed in United States dollars unless otherwise
indicated.
This MD&A contains forward-looking information that is subject to risk factors set out in a cautionary note in this MD&A
under “Cautionary Statement Regarding Forward-Looking Information”. All information contained in the Company’s
condensed interim consolidated financial statements and this MD&A is current and has been reviewed by the Audit
Committee and approved by the Company’s Board of Directors as of June 29, 2020 unless otherwise stated.
DESCRIPTION OF THE BUSINESS
Maya Gold & Silver Inc. (the “Company, “Maya”) is a Canadian based precious metals mining company which focuses
on the exploration, development, production and acquisition of precious metals mining projects. The Company is
concentrated on producing silver and exploration activities at its flagship project, the Zgounder property. Maya owns
85% of Zgounder Millenium Silver Mine S.A (“ZMSM”), which owns the Zgounder property. The Company also owns
85% of the Boumadine polymetallic project and owns the permits related to the Amizmiz and Azegour properties. All of
these properties are located in the Kingdom of Morocco.
Maya was incorporated under the Canada Business Corporations Act; its financial year-end is December 31 and trades
on the Toronto Stock Exchange under the symbol “MYA”. Maya's issued and outstanding share capital totals
79,543,619 common shares on June 29, 2020. In January 2019, commercial production of the first phase of the
Zgounder project was declared by the Company. All projects other than the Zgounder project are in exploration and
evaluation stage.
Q1-2020 HIGHLIGHTS
COVID-19 Pandemic Impact
The Company’s operations in Morocco have only been minimally impacted by COVID-19 pandemic. The main issue is
the movement of personnel and contractors to and from the site given mandatory national quarantine restrictions in the
country. Out of country management has not been able to visit the site. At this time, we cannot determine when air and
ground travel restrictions will be lifted. The Company has maintained operations but no major repairs or maintenance
activities which require the help of outside contractors is being performed. Drilling and exploration activities have slowed
but we do expect to be able to restart normal exploration in the third quarter of this year. As the situation regarding the
COVID-19 pandemic is uncertain, the Company is unable to determine the impact on its 2020 operations moving
forward. There are currently no confirmed cases of COVID-19 at any of Maya’s operations or offices.
Management Changes
On April 24, 2020 the Company announced the Chairman, President and CEO was stepping down and that the
Company appointed Mr. Benoit La Salle FCPA, CPA as President, Chief Executive Officer and Director, and that
director Robert Taub was appointed as Chairman of the board. Furthermore, the Company announced on May 14,
2020 that Mr. Ugo Landry-Tolszczuk, Ing., CFA was appointed as Chief Financial Officer of the Company, Mr. Mustapha
Elouafi as General Manager and President of Maya Gold and Silver Morocco and Mr. Alex Ball as Vice President,
Corporate Development and Investor Relations for the Company. With these appoints and others to come, the
Maya Gold & Silver Inc. 2020 Q1 Management Discussion & Analysis 1
Management Discussion and Analysis
For the three months ended March 31, 2020
Company is reviewing all of its assets to determine the best way forward for the Company. More information about
these appoints can be found on the Company’s website.
Operational Highlights
• Silver ingot production for the quarter was 67,005 ounces (Q1-2019 – 109,084 ounces). The reduction in silver
production is due to the flotation plant being shut down for the month of January and poor recovery at the
cyanidation plant.
• Silver sales for the quarter were 21,110 ounces (Q1-2019 – 100,544 oz). There were no sales of silver concentrate
for the quarter.
• Ore processed during the first quarter was 20,976 tons (‘t’) (Q1-2019 – 28,239t) a decrease of 26%.
• Feed ore to the mill was 223.1 grams per ton Ag (“g/t”) (Q1-2019 – 219.8 g/t).
• Cost of sales during the year were $552,585 (Q1-2019 – $1,557,275).
• The average silver price realized during quarter was $17.15/oz (Q1-2019 - $15.66/oz). The average selling prices
compares to a quarterly average price of $17.60/oz.
Three-month periods ended March 31,
%
Key Performance Metrics Q1-2020 Q1-2019 Variation
Operational
Ore Processed (tons) 20,976 28,239 (26%)
Average Grade (g/t Ag) 223.1 219.8 2%
Mill Recovery (%) 45.6 65.3 (30%)
Silver Ounces Produced (oz) 67,005 109,084 (39%)
Silver Ounces Sold (oz) 21,110 100,544 (79%)
Average Realized Silver Price per Ounce ($/Oz) 17.15 15.66 10%
Financial
Revenues 525,062 2,067,397 (75%)
Operating (Loss) (275,743) 304,274 (191%)
Net (Loss) Earnings (435,733) 304,745 (243%)
Operating Cash Flows 93,531 2,652,083 (96%)
Cash and Cash Equivalents 14,831,283 16,621,291 (11%)
Change in Working Capital 680,621 2,112,905 (68%)
Shareholders
(Loss) Earnings per Share (“EPS”) – basic & diluted (0.005) 0.004 (241%)
Financial Highlights
• In the first quarter, revenue from silver sales totaled $525,062 including an adjustment of silver concentrate sales
in previous periods of $174,384 (Q1-2019 – $2,067,397). Revenue is down significantly compared to Q1-2019
given logistic issues created by the COVID-19 pandemic. In the event where we were able to sell the ingots from
the theft, an additional 14,884 oz would have been sold contributing $254,574 to revenues based on the average
realized sale price.
• Net loss for the quarter was $435,733 (EPS of $(0.005)), compared to a net gain of $304,745 (EPS of $0.004) for
the same period of 2019. Net loss for the quarter was attributable to reduced gross margin and an increase in
management and administration expenses.
• Operations generated a gross margin of ($41,884) compared to Q1-2019 of $468,764.
• Comprehensive loss for the quarter of $3,727,902, compared to a net gain of $1,061,225 in the same quarter of
last year. The majority of this loss ($3,292,169) is attributable to foreign currency translation loss compared to a
foreign currency translation adjustment gain of 756,480 in Q1-2019.
• Cash flows provided by operating activities for the quarter of $93,531, compared to $2,652,083 provided in
operating cash flows for Q1-2019.
• Cash of $14,831,283 as at March 31, 2020 compared to $16,621,291 at March 31, 2019.
Maya Gold & Silver Inc. 2020 Q1 Management Discussion & Analysis 2
Management Discussion and Analysis
For the three months ended March 31, 2020
Exploration Highlights
• A total of 1,3076.6m of diamond drilling and 378m of reverse-circulation drilling was conducted on the Zgounder
property for exploration purposes.
• A total of 899.0m of diamond drilling was conducted at the Boumadine property, all in the North pit starting at
surface. Analyses are pending.
OPERATING RESULTS
Zgounder Silver Mine
The Company had a few issues at its Zgounder silver mine which affected its production and sale of silver. The flotation
plant was shutdown during the entire month of January because of an issue at the Company’s old tailings facility. The
new tailings facility was commissioned in March which allowed the Company to return to normal production. Given the
flotation plant was temporarily shut down, all ore was treated at the cyanidation plant. Given the Company’s vision was
to produce mainly silver concentrate, maintenance at the cyanidation plant had been significantly reduced. This caused
silver recovery to be 45.6% during the first quarter compared to 65.3% for the first quarter of last year. As a maintenance
was re-initiated, recovery improved in the month of March and continues to improve. Silver grade fed to the mill was
223.1g/t Ag compared to 219.8g/t Ag in Q1-2019.
On January 20th, the Company was fell victim to a theft of 14,884 ounces of silver ingots at its mine site. Local authorities
were notified, a full report was conducted, and suspects were identified. We are currently in discussions with our
insurers to recover the value of the stolen goods. Discussion with the insurer have been slowed due to COVID-19
related restrictions in Morocco. Authorities have increased security surrounding the mine site and management
estimates a low probability of reoccurrence. No employees or contractors were seriously injured as a result of the
robbery.
Silver sales for the quarter were impacted by the COVID-19 pandemic. Ground transportation and customs were
significantly slowed during the quarter and as such only 21,110 ounces of silver ingots were sold.
Exploration at the Zgounder silver mine continued during the first quarter of the year but slowed toward the end of the
quarter because of COVID-19 restrictions. Exploration restart is planned for Q3-2020.
There are three main purposes for the ongoing exploration campaign: continue to define the eastern portion of the
deposit, determine the existence of a mineralized extension to the east of the deposit and determine mineralization at
depth of the current mining areas. To that end, both reverse-circulation (“RC”) and diamond drilling (“DDH”) are being
employed. During the first quarter, 378 meters (“m”) of exploratory RC drilling occurred in the far eastern part of the
deposit, three holes totaling 850m of DDH drilling from surface in the eastern part of the deposit, and four holes totaling
456.6m of depth DDH drilling occurred. Two drill holes conducted in the eastern zone provided high grade intervals
with ZG-19-07 intercepting 3.5m at 614g/t and ZG-19-08 intercepting 5m at 592g/t.
Boumadine Polymetallic Project
Drilling at the Boumadine polymetallic project continued in Q1-2020 with 899m of DDH, all in the North pit, from surface.
Results of these drill holes are pending. Given COVID-19 related restrictions, drilling at the Boumadine property has
stopped. The next step for the Boumadine project is to continue working on metallurgical test work with the goal of
improving gold, zinc and lead recovery.
Maya Gold & Silver Inc. 2020 Q1 Management Discussion & Analysis 3
Management Discussion and Analysis
For the three months ended March 31, 2020
Azegour, Amizmiz, Toulkine Properties
During the quarter, the Company focused on obtaining its exploitation permits for the Azegour, Amizmiz and Toulkine
properties all located with a 15km radius from one another. As of June 2 nd, 2020, the Company has received exploitation
licenses for each property. The expiration date for the Toulkine and Amizmiz properties is May 16, 2029. The expiration
date for the Azegour prope

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