Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (April 2021)
36 slides from Torex Gold Resources's investor presentation, April 2021
Slide 1: Corporate Presentation April 2021
TSX | TXG CORPORATE PRESENTATION April 2021
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT THE PRELIMINARY ECONOMIC ASSESSMENT (THE “MEDIA LUNA PEA” OR “PEA”) IS BASED ON THE TECHNICAL REPORT ENTITLED “MORELOS PROPERTY, NI 43-101 TECHNICAL REPORT, ELG MINE COMPLEX LIFE OF MINE PLAN AND MEDIA LUNA PRELIMINARY ECONOMIC ASSESSMENT, GUERRERO STATE, MEXICO” DATED EFFECTIV
Slide 3: Well-Positioned to Deliver Increasing Value
WELL-POSITIONED TO DELIVER INCREASING VALUE Future underpinned by solid fundamentals Attractively Consistent operator valued relative to with industry-leading intermediate peers safety track record Financially strong gold Long-life potential producer with robust via Media Luna margins and a healthy
Slide 4: Addressing the Valuation Disconnect
ADDRESSING THE VALUATION DISCONNECT Discount to peers expected to narrow as we execute on our strategic plan EV/EBITDA P/CF FCF Yield P/NAV (2021/22) (2021/22) (2021/22) 0% Relative Discount to (20%) Intermediate Peers (40%) (23%) (60%) (42%) (46%) (55%) Single Asset and Perceived Reserve Life & Med
Slide 5: Well-Positioned to Deliver Strong Cash Flow in 2021
WELL-POSITIONED TO DELIVER STRONG CASH FLOW IN 20211 Operational guidance points to higher output year-over-year with costs in line Strong momentum on production with 2020 actuals exceeding high end of revised guidance and lower end of original guidance Total Cash Costs and all-in Sustaining Costs e
Slide 6: El Limón Guajes (ELG) – A Foundational Asset
EL LIMÓN GUAJES (ELG) – A FOUNDATIONAL ASSET Past, present and future supported by robust cash flow from ELG3 Financially robust open pit and underground Relatively consistent production expected from operation ELG through 2023 $413M of EBITDA1 and $168M of Free Cash Flow1 Current production rate su
Slide 7: Safety and Operational Excellence Intertwined
SAFETY AND OPERATIONAL EXCELLENCE INTERTWINED Culture focused on safety evident by LTI performance LEADERSHIP: Getting the right people in the right roles at the right levels to drive business excellence 2.5 250 SYSTEMS OF WORK: SYSTEMS OF WORK: Incident reporting & Business Process Lost Time Injury
Slide 8: ESG Excellence as a Foundation
ESG EXCELLENCE AS A FOUNDATION Delivering value to shareholders while making a positive difference in society Productive relationships with Strong governance & diversity focus employees Women make up 40% of Executive Team 99% workforce from Mexico; 70% from and 30% of Board of Directors Guerrero Sta
Slide 9: Maximizing Free Cash Flow from ELG a Key Focus
MAXIMIZING FREE CASH FLOW FROM ELG A KEY FOCUS Evaluating opportunities to optimize mine plan and extend reserve life1,2 Accelerating near-term underground exploration given ongoing success at Sub-Sill and ELD; positive drill results from 2020 program released last year3 Drill testing additional hig
Slide 10: Robust Cash Flow Funds Sustained Operations
ROBUST CASH FLOW FUNDS SUSTAINED OPERATIONS Development of Media Luna expected to be fully funded at $1,400/oz gold $1,200 Projected cash flow from ELG Excludes Media Luna Capex 2021 onwards1,2,3, expected to be more than $1,000 sufficient to fund development of Year-End Cash / Debt (M$) $800 Media
Slide 11: Media Luna Expected to Extend Cash Flow Beyond ELG
MEDIA LUNA EXPECTED TO EXTEND CASH FLOW BEYOND ELG Significant resource base with only 1/3rd of the magnetic anomaly drilled 10 Extending mine life of ELG a key focus Accelerated underground drill program and studying potential to expand El Limón pit 8 Media Luna would extend cashflow beyond life of
Slide 12: Media Luna on Track for First Production in Q1/24
MEDIA LUNA ON TRACK FOR FIRST PRODUCTION IN Q1/24 Expected to deliver strong cash flow well beyond the life of ELG1 Media Luna has the potential to be Media Luna to leverage existing a multi-decade underground mine infrastructure at ELG 2018 PEA outlined average annual First blast on main Guajes tun
Slide 13: Early Stage Earthworks at Media Luna Underway
EARLY STAGE EARTHWORKS AT MEDIA LUNA UNDERWAY Two access portals mitigate risk and provide operational flexibility ~7 km access tunnel expected to get Addition of the South Portal provides a number of benefits: to bottom of Media Luna deposit by • Allows access for employees on south side of river a
Slide 14: Innovation: A Key Part of the Torex DNA
INNOVATION: A KEY PART OF THE TOREX DNA Leveraging innovation to drive value and mitigate risk ROPECON FILTERED TAILINGS SART PLANT Innovative 1.3 km automated conveyor “Dry-stack” filtered tailings facility Reduces consumption of our two most system which transports ore to our best-in-class in the
Slide 15: Muckahi Mining System – A Torex Innovation
MUCKAHI MINING SYSTEM – A TOREX INNOVATION1 A complete rethink of underground mining Two-way traffic via dual monorails Steep ramps (30 degrees) Jumbo drill hung from monorail Efficient and rapid excavation ¼ the length of conventional ramps Monorail-based transport Muck box “trains” on the level an
Slide 16: Muckahi Mining System
MUCKAHI MINING SYSTEM Potential to be a game changer for underground mining1 Test Objectives in 2019 Successfully demonstrated the ability for monorail- based equipment to break and muck rock Test Objectives in 2020 Successfully demonstrated the individual components could move rock Designed, fabric
Slide 17: Looking to the Future
LOOKING TO THE FUTURE Focused on fundamentals and allocating capital to deliver maximum value1 MIND THE BUSINESS Safety Production Costs Responsible Mining CAPITAL ALLOCATION WELL POSITIONED OPPORTUNITIES TO MANAGING TO BE PATIENT ENHANCE RETURN CAPITAL AROUND M&A TO SHAREHOLDERS Maximize free cash
Slide 18: Appendix
Torex Gold RESOURCES INC. APPENDIX 18
Slide 19: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to enhance shareholder returns OPTIMIZE AND ADVANCE AND MUCKAHI TESTING & EXTEND ELG DE-RISK MEDIA LUNA COMMERCIALIZATION Build on culture as key strategic Continuation of the conventional Complete system and rate testing differentiator feasibility study
Slide 20: Robust Cash Flow Generation
ROBUST CASH FLOW GENERATION1 Cash flow from ELG was used to advance projects and reduce debt in 2020 $700 $413 ($103) $600 $13 ($8) ($81) $500 Cash (M$) ($85) $400 $24 ($142) $300 $14 $206 $200 $162 $100 $0 Working Capital Working Capital Investments Taxes Paid Sustaining Non-Sustaining Cash (2019)
Slide 21: Cost Performance
COST PERFORMANCE1,2 Cost discipline key to maintaining margins Mining - Open Pit ($/t ore + waste mined) Mining unit costs remained flat YOY, staving off FY 2020 $2.17 inflationary and COVID cost pressures FY 2019 $2.20 Mining - Underground ($/t ore mined) Oxidation and ore blending have helped mini
Slide 22: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1 Financial health of business continues to strengthen with strong margins Balance sheet strength continues to improve Available liquidity of over $315M at year-end 2020 $300 $200 $100 $110M Balance (M$) $0 ($100) ($200) ($300) $206M ($400) ($500) 2016 2017 2018 2019 2020 Ca
Slide 23: Cash Flow Seasonality
CASH FLOW SEASONALITY Cash flow tends to be weakest in H1 given timing of payments Final payments related to royalties, profit sharing, and taxes are subject to movements in the Mexican peso relative to the US dollar Quarterly Payments Impacting Cash Flow From Operations1 Cash flow from operations p
Slide 24: Only a Portion of Land Package Has Been Drill Tested
ONLY A PORTION OF LAND PACKAGE HAS BEEN DRILL TESTED 75% of the broader Morelos property remains largely unexplored1 Committed to investing $2.5M on regional exploration in 2021 Significant exploration potential remains across the broader Morelos property Multiple targets have been identified To dat
Slide 25: We Are Focused on Enhancing Our ESG Disclosure
WE ARE FOCUSED ON ENHANCING OUR ESG DISCLOSURE Translating our actions associated with our values into real value1 ENVIRONMENT SOCIAL GOVERNANCE Zero Discharge Site (no discharge Exited 2020 with a LTIF of 0.15 per Seasoned Executive Team with into local watersheds) million hours worked 40% female r
Slide 26: Key Operational Metrics – El Limón Guajes (ELG)
KEY OPERATIONAL METRICS – EL LIMÓN GUAJES (ELG)1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY 2019 2019 2019 2019 2020 2020 2020 2020 2019 2020 Mining - Open Pit Ore mined (kt) 1,070 1,693 1,314 1,475 1,736 666 1,407 1,689 5,552 5,498 Waste mined (kt) 12,281 11,450 11,923 10,795 11,726 4,435 10,097 10,399 46,449 3
Slide 27: Key Financial Metrics – Consolidated
KEY FINANCIAL METRICS – CONSOLIDATED1,2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY 2019 2019 2019 2019 2020 2020 2020 2020 2019 2020 Key Metrics Gold sold (oz) 76,473 113,419 132,535 126,910 108,064 63,147 133,036 133,063 449,337 437,310 Realized gold price ($/oz) $1,302 $1,314 $1,478 $1,481 $1,571 $1,712 $1,884
Slide 28: Corporate Information and Top Shareholders
CORPORATE INFORMATION AND TOP SHAREHOLDERS Broadly owned by skilled institutional investors Top 10 Shareholders2 Share Price Performance1 2.50 Institution Shares Shares (M) (%) 2.25 (Indexed to January 1, 2019) Blackrock 11.3 13.2% Price Performance - USD 2.00 VanEck - ETFs 7.8 9.2% RBC Asset Manage
Slide 29: Board of Directors
BOARD OF DIRECTORS Strong strategic and governance experience FRED STANFORD PEng ICD.D Executive Chair DAVID FENNELL LLB 35+ years of operational and corporate experience. Retired from Vale as 35+ years experience as a director and senior executive with TSX and President of its Ontario Operations. S
Slide 30: Management Team
MANAGEMENT TEAM Proven experience navigating technical, commercial and social complexity JODY KUZENKO LLB President and Chief Executive Officer BARRY MURPHY Pr Eng V.P. Engineering Joined Torex in 2018 as COO; assumed CEO position in June 2020. 25 years of international operating and project develop
Slide 31: Mineral Reserves – El Limón Guajes (ELG)
MINERAL RESERVES1 – EL LIMÓN GUAJES (ELG) As of December 31, 2020 Tonnes Au Ag Au Ag (Mt) (g/t) (g/t) (koz) (koz) Open Pit - El Limón (including El Limón Sur) Proven 2.48 3.59 4.3 286 344 Probable 5.84 2.90 4.2 545 787 Proven & Probable 8.32 3.11 4.2 831 1,130 Open Pit - Guajes Proven 1.88 3.87 3.4
Slide 32: Mineral Resources – El Limón Guajes (ELG)
MINERAL RESOURCES1 – El LIMÓN GUAJES (ELG) As of December 31, 2020 Tonnes Au Ag Au Ag (Mt) (g/t) (g/t) (koz) (koz) Open Pit - El Limón (including El Limón Sur) Measured 2.79 3.64 5.2 330 460 Indicated 9.03 2.66 5.7 770 1,650 Measured & Indicated 11.82 2.89 5.6 1,100 2,120 Inferred 1.68 1.73 7.4 90 4
Slide 33: Notes to Mineral Reserves & Resources (ELG)
NOTES TO MINERAL RESERVES & RESOURCES (ELG) Notes - El Limón Guajes Complex Reserve Statement Notes - El Limón Guajes Resource Statement 1) Mineral reserves are founded on Guajes, El Limón and El Limón Sur measured and 1) The effective date of the estimate is December 31, 2020. indicated mineral res
Slide 34: Mineral Resources – Media Luna
MINERAL RESOURCES – MEDIA LUNA As of December 31, 2019 Tonnes Au Ag Cu Au Ag Cu AuEq AuEq (Mt) (g/t) (g/t) (%) (Moz) (Moz) (Mlb) (g/t) (Moz) Media Luna Indicated 12.6 3.27 37.7 1.16 1.32 15.3 322 5.55 2.24 Inferred 33.5 2.49 23.6 0.93 2.68 25.5 686 4.23 4.56 Notes - Media Luna Resource Statement 1)
Slide 35: Media Luna – 2018 Preliminary Economic Assessment
MEDIA LUNA – 2018 PRELIMINARY ECONOMIC ASSESSMENT1,2 1) Metal Prices used $1,200/oz Au, $17.00/oz Ag, $3.00/lb Cu, USD:MXN 1:18 2) A preliminary economic assessment should not be considered a prefeasibility study or feasibility study, as the economics and technical viability of the Media Luna Projec
Slide 36: www.torexgold.com
TSX | TXG www.torexgold.com Dan Rollins, CFA Vice President, Corporate Development and Investor Relations Email: dan.rollins@torexgold.com | Direct: 1-647-260-1503
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