Aya Gold shoots down short-seller claims, stock rebounds
Aya Gold & Silver (TSX: AYA) has shot down a short-seller report alleging that the company had overstated the resource and value of its only producing asset. Shares of Aya bounced back after an initial onslaught.A report by activist short-seller Blue Orca Capital on Thursday claimed that the company had significantly inflated the resource estimate of its Zgounder mine in Morocco to cover up issues such as plummeting grades and underwhelming production.The Canadian miner later responded with a press release, stating that it “strongly refutes” those allegations, and the report “contains numerous inaccuracies and mischaracterizations, including about Aya’s current management team, operations and resource base.” It adds that Blue Orca’s claims were made “intentionally” to tank the company’s share price and make profits.Aya’s stock plunged by as much as 22% to a one-month low following the short-seller report. By Friday morning, it had recovered most of its losses, trading at C$14.35 apiece with a market capitalization of C$2 billion.‘Fabricated’ ouncesAt the heart of Blue Orca’s claims was the veracity of the 100-million-ounce silver resource at Zgounder reported by Aya. According to the short-seller, Aya’s management had “fabricated” as much as half of those resources in a 2021 update despite a lack of significant discoveries, and its report alleged that the company inflated those numbers by “manipulating” the calculation model to meet its previously stated resource growth target.In addition, Blue Orca said there are deeper issues plaguing the Zgounder mine, highlighting its collapsing silver grades, surging cash costs, and low production compared to mine plan despite a favorable market environment.In Friday’s release, Aya affirmed its resource estimate was supported by extensive drilling and independent verification. It also denies the reported production challenges, noting that the mine has produced over 10 million oz. since 2020, which it says is consistent with the published resource.“The allegations made against Aya are categorically false. Zgounder’s mined ounces reconcile as expected, our mining methods and operating practices continue to improve, and we are finalizing an updated technical report that will integrate both open-pit and underground operations,” CEO Benoit La Salle stated.Aya also denies the short-seller’s claims of the company dealing with “anemic” cash flow issues. In its report, Blue Orca pointed to Aya’s promised $120 million cash flows when silver was trading at $22 an ounce, but reported a loss in the 2024 financial year despite silver prices having doubled since then. The company responded by stating that it has “a robust balance sheet” with approximately $115 million in cash and generates operating cash flow from Zgounder.Analysts positiveWhile Blue Orca considers Aya to be a “penny stock”, many analysts disagree. On the same day of its report’s release, those at CIBC raised Aya’s stock price target from C$22.00 to C$23.00 — representing a potential 80% upside. Earlier this week, Cormark also lifted its target price from C$12.50 to C$17.50.Aya’s Zgounder mine is considered the second most important silver producer in Morocco. Since pouring first silver over a decade ago and entering commercial production in 2019, it has undergone significant expansions to lift its annual production to 6.8 million oz. The mine is currently coming off a record quarterly production in Q2 2025.Blue Orca’s previous short report was on Texas-based healthcare provider Nutex Health (NASDAQ: NUTX) in late July. That stock initially fell but has since gained by about 4%.Weiter zum vollständigen Artikel bei Mining.com
Quelle: Mining.com
