We have been sear­ching for a long time and finally found what we were looking for: a pure play silver value with top manage­ment and a lot of upside poten­tial. Here we present you our Artemis (Link) of the silver sector: Aya Gold & Silver (Link) is the new-born star in the silver producer sky. The new manage­ment took over the helm in April and has since made an impres­sive turn around.

Benoit La Salle is the founder and former CEO of the African gold success story Semafo (50cts to $15). He now wants to cele­brate another such success with Aya. To this end he has put toge­ther a strong board with the former BASF CEO Dr. Jürgen Hambrecht. The board holds more than 50% of the shares.

The goal is to show a silver resource of 100 million oz and to expand produc­tion from the current 1 million oz to 4 million oz. These two adjus­t­ments will boost the share price and ensure a re-rating at the market.

The cash costs are very good at $10 and will turn this figure into a cash cow as silver prices continue to rise. Example: with a silver price of $50 and future produc­tion of 4M oz of silver, the cash flow is $160M (($50-$10)*4M oz). Compa­rable compa­nies are traded at 10x the cash flow. This results in a market capi­ta­liz­a­tion of $1.6 billion. The current market valua­tion of Aya is close to $300 million, indi­ca­ting the poten­tial to catch up.
Addi­tional upside poten­tial is provided by the world class silver grades of several 1,000g/t (compa­rable to Silver­Crest Metals) and the explo­ra­tion poten­tial of the compre­hen­sive land package in the Atlas Moun­tains of Morocco.
We look forward to the coming months of the turn around and the accom­panying re-rating in the market. We saw similar deve­lo­p­ments early on with Claude Resources and Kirk­land Lake and were rewarded with 10x returns. 

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