Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Q3 2024 Earnings Presentation
33 slides from Torex Gold Resources's earnings presentation, Nov 7, 2024
Slide 1: Q3 2024 Results Conference Call
TSX | TXG Q3 2024 RESULTS CONFERENCE CALL November 7, 2024 All amounts expressed in U.S. dollars unless otherwise stated
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT TOTAL CASH COSTS PER OUNCE SOLD (“TCC”), ALL-IN SUSTAINING COSTS PER OUNCE SOLD (“AISC”), SUSTAINING AND NON-SUSTAINING CAPITAL EXPENDITURES, AVERAGE REALIZED GOLD PRICE, TOTAL CASH COSTS MARGIN, ALL-IN SUSTAINING COSTS MARGIN (“AISC MARGIN”), AISC MARGIN PER OUNCE SOLD, ADJUST
Slide 3: Key Highlights & Operational Performance
KEY HIGHLIGHTS & OPERATIONAL PERFORMANCE JODY KUZENKO PRESIDENT & CEO All values U.S. dollars unless otherwise stated
Slide 4: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to continue to enhance shareholder returns DELIVER MEDIA LUNA TO INTEGRATE & OPTIMIZE DISCIPLINED GROWTH & FULL PRODUCTION MORELOS CAPITAL ALLOCATION GROW RESERVES & RETAIN & ATTRACT BEST BUILD ON ESG RESOURCES INDUSTRY TALENT EXCELLENCE 4
Slide 5: Key Highlights
KEY HIGHLIGHTS On track to achieve full-year production guidance for the sixth consecutive year Gold production of 348,728 oz through the first nine months of 2024; on track to deliver on higher revised guidance of 450,000 to 470,000 oz Q3 total cash costs1 of $926/oz gold sold and all-in sustaining
Slide 6: Operational Performance
OPERATIONAL PERFORMANCE ELG Complex continues to deliver strong and reliable results Q3 output driven by slightly higher grade and recovery Processing rates remain stable around 13,000 tpd Processed gold grade has gradually improved YTD ELG Underground expected to continue at ~2,000 tpd 6
Slide 7: Consistent and Reliable Producer
CONSISTENT AND RELIABLE PRODUCER Higher 2024 production guidance reflects rescheduling of plant tie-in to Q1 In millions of U.S. dollars, unless otherwise noted 2024 Updated 2024 Q3 2024 YTD Guidance1,2 Guidance Performance Production Gold oz 400,000 to 450,000 450,000 to 470,000 348,728 Gold Equiva
Slide 8: Financial Performance
FINANCIAL PERFORMANCE ANDREW SNOWDEN CFO
Slide 9: Financial Performance
FINANCIAL PERFORMANCE Robust margins drove strong cash flow; record gold price bodes well going forward Average AISC margin of 52% in Q31 Generated $152M in adjusted EBITDA in Q31 Media Luna capex expected to decrease in Q41 Strong cash flow offset Media Luna capex in Q31 1) For more information on
Slide 10: Unit Cost Performance
UNIT COST PERFORMANCE1 Several one-off drivers impacting year-to-date unit costs2 Open pit mining unit costs reflect higher maintenance costs to maintain fleet through end of 2024 as well as contractor costs as open pit workforce is transitioned underground Increased backfilling (including crown pil
Slide 11: Cash Flow Generation
CASH FLOW GENERATION Strong cash flow generation from ELG Complex continues to support Media Luna build Cash balance reflects modest draw of $5M on revolving credit facility to support strategic objective of maintaining $100M of cash on the balance sheet through Media Luna build Expect to return to
Slide 12: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY Strong financials expected to result in modest net debt upon completion of Media Luna1 Net debt2 of $15M at the end of Q3 2024 Available liquidity2 of $347M as of September 30th Additional net $5M drawn on revolving credit $232M available on $300M revolving credit facility
Slide 13: Well-Positioned to Fund Media Luna Project
WELL-POSITIONED TO FUND MEDIA LUNA PROJECT Funding buffer improved $115M quarter-over-quarter given robust cash generation Available liquidity1 results in a funding surplus of $136M while maintaining strategic objective of preserving $100M of liquidity after accounting for $111M of expenditures rema
Slide 14: Operating Cash Flow Seasonality
OPERATING CASH FLOW SEASONALITY Operating cash flow tends to be weakest in H1 given timing of tax, royalty, and PTU payments Final payments related to royalties, profit sharing, and taxes are subject to movements in the Mexican peso relative to the U.S. dollar Cash flow from operations prior to chan
Slide 15: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Additional FX collars put in place to protect against swings in MXN on opex in 2025 All amounts in U.S. dollars 2024 2025 Q4 Q1 Q2 Q3 Q4 FY Gold Forward Contracts Gold Volumes koz 27.0 -- -- -- -- -- Gold Price $/oz $1,939 -- -- -- -- -- MXN/USD Collars Collar Amount (USD)
Slide 16: Media Luna Project Update
MEDIA LUNA PROJECT UPDATE DAVE STEFANUTO EVP, TECHNICAL SERVICES & CAPITAL PROJECTS
Slide 17: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE Plant tie-ins in February will de-risk and potentially shorten planned downtime Plant tie-ins and upgrades now scheduled in Completion Project To Date February versus mid-November Q3 2024 Procurement 97% Modestly longer delivery window for critical Engineering 100% electri
Slide 18: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE Project nearing completion; 87% complete as at end of Q3 Both e-houses installed at flotation area Detox tanks installed at water treatment plant 230 kV substation substantially complete Paste plant construction on plan 18
Slide 19: EPO Pre-Feasibility Results
EPO PRE-FEASIBILITY RESULTS JODY KUZENKO PRESIDENT & CEO
Slide 20: Low-Risk, Brownfield Addition to the Mine Plan
LOW-RISK, BROWNFIELD ADDITION TO THE MINE PLAN EPO will leverage Media Luna infrastructure and bolster cash flow capability at Morelos Utilizing existing infrastructure results in a lean capital estimate of $81.5M as only modest development (~2,200 m) is required to access and connect to Media Luna
Slide 21: Reserve Scenario
RESERVE SCENARIO The inclusion of EPO is the set up for the long term Bringing EPO into the mine plan is expected to result in minimum annual production of 450 koz AuEq through at least 2030 (annual average output of 473 koz AuEq between 2024 and 2030) Annualized production of 422 koz AuEq through 2
Slide 22: Resource Scenario
RESOURCE SCENARIO Focus now turns to bolstering the reserve scenario through drilling strategy Potential to maintain annual production of 450 to 500 koz AuEq through at least 2033 by bringing Inferred Resources into the mine plan Building on the track record of resource growth and reserve replacemen
Slide 23: Questions?
eo; Torex Gold RESOURCES INC. QUESTIONS?
Slide 24: Robust Cash Flow Generation from ELG
ROBUST CASH FLOW GENERATION FROM ELG Funding position on solid footing given available liquidity and ongoing cash flow LTM Q4 2023 Q1 2024 Q2 2024 Q3 2024 (Q3 2024) Net cash generated from operating activities (M$) $120.0 $79.8 $97.4 $149.5 $446.7 1 Free cash flow (M$) ($24.3) ($49.1) ($62.3) ($0.7)
Slide 25: Key Operational Metrics
KEY OPERATIONAL METRICS1 Consolidated Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2022 2023 2023 2023 2023 2024 2024 2024 Mining - ELG Open Pit Ore mined (kt) 959 916 644 1,026 1,785 969 1,622 1,539 Ore mined (tpd) 10,420 10,182 7,074 11,153 19,404 10,651 17,822 16,731 Waste mined (kt) 8,546 8,437 11,124 10,131 7,841 8
Slide 26: Key Financial Metrics
KEY FINANCIAL METRICS1 Consolidated All amounts in U.S. dollars Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2022 2023 2023 2023 2023 2024 2024 2024 Key Metrics Gold sold (oz) 121,913 118,455 105,749 81,752 138,794 111,642 113,513 122,130 Gold equivalent sold (oz AuEq) -- -- -- -- -- 114,106 115,890 125,414 Average real
Slide 27: Cash Flow Seasonality
CASH FLOW SEASONALITY Timing Differences – Royalties & Profit Sharing Royalty – Mexican Geological Survey Profit Sharing – Employees 2.5% of gross revenue Mandated by Government of Mexico Accrued quarterly and paid the following quarter Accrued quarterly and paid annually in Q2 of the Recognized in
Slide 28: Cash Flow Seasonality
CASH FLOW SEASONALITY Timing Differences – Mining Royalty & Corporate Income Tax Mining Royalty – Government of Mexico Corporate Income Tax – Government of Mexico 7.5% of mine level EBITDA plus allowable 30% of taxable income in Mexico deductions Accrued quarterly and paid monthly via Accrued quarte
Slide 29: Mineral Reserves
MINERAL RESERVES1 Morelos Complex 1) For notes accompanying mineral reserves for Morelos Complex please refer to slide 30. 29
Slide 30: Notes to Mineral Reserves
NOTES TO MINERAL RESERVES Morelos Complex Notes to accompany the mineral reserve table Notes to accompany the EPO Underground mineral reserves 1. Mineral reserves were developed in accordance with CIM (2014) guidelines. 1. Mineral reserves for EPO Underground have an effective date of June 30, 2024.
Slide 31: Mineral Resources
MINERAL RESOURCES1 Morelos Complex 1) For notes accompanying mineral resources for Morelos Complex please refer to slide 32. 31
Slide 32: Notes to Mineral Resources
NOTES TO MINERAL RESOURCES Morelos Complex Notes to accompany the mineral resource table Notes to accompany EPO Underground mineral resources 1. Mineral Resources were prepared in accordance with the CIM Definition Standards (May 2014) and the 1. The effective date of the estimate is December 31, 20
Slide 33: Contact
TSX | TXG www.torexgold.com Dan Rollins, CFA Senior Vice President, Corporate Development and Investor Relations Email: dan.rollins@torexgold.com | Direct: 1-647-260-1503