Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (January 2024)
58 slides from Torex Gold Resources's investor presentation, Jan 17, 2024
Slide 1: Corporate Presentation
TSX | TXG CORPORATE PRESENTATION January 2024 All amounts expressed in U.S. dollars unless otherwise stated
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT Total cash costs per ounce of gold sold (“TCC”), all-in sustaining costs (“AISC”), sustaining and non-sustaining costs, average realized price, total cash cost margin, AISC margin, AISC margin per ounce of gold sold, adjusted net earnings, adjusted net earnings per share, earni
Slide 3: Torex Overview
TOREX OVERVIEW Intermediate Gold & Copper Producer C$1.2B 0.58x market value1 P/NAV1 Significant Size & Scale #1 454 koz gold producer in Mexico in 2023 gold produced in 2023 Large & Growing Resource Base ~4.9 Moz ~7.5 Moz ~2.1 Moz AuEq P&P at 3.98 gpt2 AuEq M&I at 4.86 gpt2 AuEq Inf. at 4.15 gpt2 H
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Future underpinned by solid long-term fundamentals1 Consistent track record of delivering on Competitive cost profile providing strong production guidance margins and cash flow generation Strong balance sheet and robust cash flow High-quality management team with supports devel
Slide 5: Five-Year Production Outlook
FIVE-YEAR PRODUCTION OUTLOOK1,3 Evolution of production outlook reflects continued success in reserve replacement Outlook Outlook Outlook Outlook 2022 Technical Production (koz)2 Actual 2021 2022 2023 2024 Report 2021 (Au) 468 430 to 470 2022 (Au) 474 430 to 470 430 to 470 2023 (Au) 454 400 to 450 4
Slide 6: Consistent and Reliable Producer
CONSISTENT AND RELIABLE PRODUCER 2024 marks a pivotal year; first production from Media Luna in Q41 In millions of U.S. dollars, unless otherwise noted FY 2024 FY 2023 Guidance Guidance Production guidance achieved Production for five consecutive years Gold Equivalent oz 410,000 to 460,000 N/A Gold
Slide 7: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to significantly enhance shareholder returns1 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 1) Please refe
Slide 8: Integrate & Optimize Morelos
INTEGRATE & OPTIMIZE MORELOS Maximizing potential of ELG Open Pits and ELG Underground1 Feed Source2 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 ELG Open Pits ELG Underground Media Luna Underground Stockpiles Open pit mine life pushed out to mid-2025 following reserve additions in El Limó
Slide 9: Integrate & Optimize Morelos
INTEGRATE & OPTIMIZE MORELOS Key focus is on increasing mine life and boosting output from ELG Underground1 Cumulative gold mined plus year-end reserves Demonstrated ability to operate at 2,000 tpd with reflect a 400% increase over initial reserves record throughput of 2,070 tpd in 2023 1) Please re
Slide 10: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Media Luna solidifies the Morelos Property as our foundational asset1 On track for first concentrate production in Project 49% complete and 68% committed late 2024; realistic ramp-up to full as at Q3 2023 end production in 2027 Extends mine life out to at least
Slide 11: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Development activities well advanced at midpoint of build period First concentrate production on track for late 2024 Completion Project To Date Q3 2023 Fully permitted following receipt of in-pit tailings Procurement 52% permit in November Engineering 70% Underg
Slide 12: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Breakthrough of tunnel on south side of Balsas River achieved ahead of schedule Breakthrough occurred December 2023 – three months ahead of plan Access for personnel, materials and supplies from ELG to Media Luna now achievable in 30 minutes; reduced from over 2
Slide 13: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Development activities advancing well; concentrate production on track for Q4 20241 CEO Jody Kuzenko initiating final West adit fan installation for Guajes Tunnel breakthrough blast for Tunnel breakthrough underground ventilation Foundations for paste plant outs
Slide 14: Grow Reserves & Resources
GROW RESERVES & RESOURCES Exploration and drilling focused on improving on Feasibility Study mine plan1 (A) Increased production outlook from ELG through 2027 to create overlap with Media Luna ramp-up5 (B) Focus on ELG Underground and EPO deposit as potential feed sources to fill the mill beyond 202
Slide 15: Grow Reserves & Resources
GROW RESERVES & RESOURCES Key strategic focus and investment in exploration and drilling1 Drilling/exploration budget of $30M in 2024 $15M at Media Luna Cluster (39,000 m) Infill and expansionary drilling at EPO Advanced exploration at Media Luna West Inaugural drill program at Todos Santos $12M at
Slide 16: ELG Underground – Key Focus to Fill the Mill
GROW RESERVES & RESOURCES ELG Underground – A key focus given potential to fill the mill beyond 20261 Mineralization appears to be controlled by north- northwest structural corridors (trends) and northeast- trending faults (La Flaca and Z71) El Limón Sur Trend: Drilling extended high-grade mineraliz
Slide 17: EPO – Initial Results from 2023 Drilling
GROW RESERVES & RESOURCES EPO – Initial results from 2023 drilling indicate potential to upgrade/expand resources Resource categorization drilling Currently 671 koz AuEq Indicated, 732 koz AuEq Inferred Infill drilling along the southern portion of the deposit returned intercepts with similar grades
Slide 18: Media Luna West – Advancing to Next Stage
GROW RESERVES & RESOURCES Media Luna West – Advancing to next stage given results of 2023 exploration drilling Potential third mineralized zone within the Media Luna Cluster First exploration drilling conducted on the Media Luna West target since 2012/2013 Recent results and historical results combi
Slide 19: Well Positioned to Fund Media Luna Project
DISCIPLINED GROWTH & CAPITAL ALLOCATION Well positioned to fund remainder of Media Luna Project1 Estimated internal funding requirement of $106M through year-end 2024 Free cash flow prior to spending on Media Luna Project was $184M over last 12 months2,3 Pro-rated for remaining project period (15 mo
Slide 20: Managing Gold Price and Currency Risk
DISCIPLINED GROWTH & CAPITAL ALLOCATION Managing gold price and currency risk during build-out of Media Luna1 All amounts in U.S. dollars 2024 Total Q1 Q2 Q3 Q4 (Average) Gold Forward Contracts Gold Volumes koz 43.5 43.5 44.0 27.0 158.0 Gold Price $/oz $1,966 $1,966 $2,006 $1,939 $1,972 MXN/USD Coll
Slide 21: Build on ESG Excellence
BUILD ON ESG EXCELLENCE Delivering value to shareholders while making a positive difference in society Excellent environmental performance Strong governance & diversity focus Limited air emissions and water discharge operation Women make up 43% of Executive Team and 37% Filtered tailings facility ma
Slide 22: Build on ESG Excellence
BUILD ON ESG EXCELLENCE Sustained performance & ongoing improvement on ESG disclosure a key focus ESG performance tied to cost of capital Clear and credible GHG emissions targets set One of the first mid-tier gold producers to enter into Scope 1 and 2 greenhouse gas emission targets1 a Sustainabilit
Slide 23: Robust Plan to Increase Shareholder Value
ROBUST PLAN TO INCREASE SHAREHOLDER VALUE1 Re-rating expected with ramp-up of Media Luna and return to positive free cash flow Near-term Value Creation Long-term Value Creation Bring Media Luna into production in late Fill the mill beyond 2027 by extending life 2024; successfully ramp up through 202
Slide 24: Appendix – Corporate Information
APPENDIX – CORPORATE INFORMATION
Slide 25: Corporate Strategy
CORPORATE STRATEGY Executing on Strategic Pillars expected to generate long-term value1 DELIVER MEDIA LUNA TO INTEGRATE AND DISCIPLINED GROWTH AND FULL PRODUCTION OPTIMIZE MORELOS CAPITAL ALLOCATION Bring Media Luna into production and ramp up Ensure smooth production and cashflow Maintain a strong
Slide 26: Management Team
MANAGEMENT TEAM Years of Name Experience Experience Joined Torex in 2018 as COO JODY KUZENKO LLB 25+ Appointed CEO in 2020 President and Chief Executive Officer Previously served as Director of Business Strategy at Vale ANDREW SNOWDEN CPA, CA Joined Torex in 2021 20+ Chief Financial Officer Previous
Slide 27: Board of Directors
BOARD OF DIRECTORS Years of Name Experience Experience Board member since 2020 RICK HOWES P.Eng. 40+ Global technical, operational and management mining expertise Chair of the Board Currently President & CEO of Reunion Gold CEO since June 2020 JODY KUZENKO LLB ICD.D 25+ Joined Torex in 2018 as COO P
Slide 28: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Well positioned to fund strategic priorities Net cash2 of $188M as of September 30th Available liquidity of $501M as of September 30th $400 $300 $200 Balance (M$) $100 $0 ($100) ($200) Cash & ST Investments ($300) Debt & Lease-Related Obligations ($400) FY/18 FY/19 FY/20 F
Slide 29: Corporate Summary
CORPORATE SUMMARY Share Price Performance1 Shareholder Data2 1.50 Other (Active) 1.25 Resource 15% (Indexed to January 1, 2021) (Active) Price Performance - USD 27% Resource 1.00 (Passive) 13% 0.75 Other Undisclosed/ (Passive) 0.50 11% Retail 34% 0.25 TXG GDXJ Index Top 10 Shareholders2 0.00 Institu
Slide 30: ELG – A Foundational Asset
ELG – A FOUNDATIONAL ASSET Future growth supported by strong cash flow and robust margins from ELG Q4 was the 2nd highest production quarter on record All-in sustaining margins expected to improve in Q4 EBITDA set to rebound in Q4 with strong production Quarterly free cash flow set to turn positive
Slide 31: Gold Production Guidance
GOLD PRODUCTION GUIDANCE1,2 Consistent track record of delivering on full year production guidance 1) Please refer to Safe Harbor Statement on slide 2. 2) Guidance Notes: (i) Production guidance in 2018 provided with Q1 financial results in May 2018 with restart of operations following five-month bl
Slide 32: All-In Sustaining Costs Guidance
ALL-IN SUSTAINING COSTS GUIDANCE1,2,3 Targeting to achieve AISC guidance in 2024 following first miss since 2018 1) Please refer to Safe Harbor Statement on slide 2 2) For more information on operational and financial results, including information on non-GAAP measures (such as AISC), please refer t
Slide 33: Robust Cash Flow Generation from ELG
ROBUST CASH FLOW GENERATION FROM ELG Funding position on solid footing given available liquidity and ongoing cash flow Development of Media Luna Project supported by strong forecast cash flow from ELG Mine Complex Over the last 12 months (through Q3 2023), free cash flow generation prior to spending
Slide 34: Key Operational Metrics
KEY OPERATIONAL METRICS1 Consolidated Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2021 2022 2022 2022 2022 2023 2023 2023 Mining - ELG Open Pit Ore mined (kt) 864 1,061 987 883 959 916 644 1,026 Ore mined (tpd) 9,392 11,789 10,846 9,598 10,420 10,182 7,074 11,153 Waste mined (kt) 8,972 8,958 7,960 9,097 8,546 8,437 11,
Slide 35: Key Financial Metrics
KEY FINANCIAL METRICS1 Consolidated All amounts in U.S. dollars Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2021 2022 2022 2022 2022 2023 2023 2023 Key Metrics Gold sold (oz) 109,391 108,012 123,363 119,834 121,913 118,455 105,749 81,752 Realized gold price ($/oz) $1,798 $1,876 $1,865 $1,715 $1,784 $1,899 $1,960 $1,944
Slide 36: Unit Cost Performance
UNIT COST PERFORMANCE1 Solid cost performance despite ongoing inflationary pressures2 Open pit mining costs tracking higher than budget given additional stockpile rehandling and contractor costs associated with period of higher waste stripping during Q2 and Q3 Economies of scale from higher undergro
Slide 37: 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 chang
Slide 38: 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 39: 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 40: Responsible Gold Mining
RESPONSIBLE GOLD MINING Key Highlights from 2022 99% operations employees from Mexico; $69M paid in salaries/benefits Industry-leading safety performance 0.28 LTIF – 13x lower than Mexican average1 92% procurement spend in Mexico; $107M paid to companies in Guerrero State 11 unique Community Develop
Slide 41: Leverage Innovation
LEVERAGE INNOVATION Proven technology to improve safety, minimize emissions, and drive value1 ROPECON FILTERED TAILINGS SART PLANT BEV FLEET2 Innovative 1.3 km conveyor “Dry-stack” filtered tailings Reduces consumption of our Media Luna to utilize a mix of system which transports ore facility best-i
Slide 42: Gold247 Initiative
GOLD247 INITIATIVE Gold247 The World Gold Council's strategic vision for transforming the global gold market and elevating gold into the mainsiream of financial markets. The initiative aims to enable more participation, Gold has a systemic role in the world's economy. The way ‘gold is traded, and su
Slide 43: Appendix – March 2022 Technical Report
APPENDIX – MARCH 2022 TECHNICAL REPORT
Slide 44: Media Luna Project
MEDIA LUNA PROJECT Media Luna solidifies the Morelos Property as our foundational asset1 Life of mine of 11.75 years with Media Luna versus ELG standalone case of 3.5 years2 Annual AuEq sold2 of 374 koz at a mine-site AISC2,3 of $954/oz AuEq 450 koz AuEq at a mine-site AISC of $929/oz AuEq through 2
Slide 45: Summary of March 2022 Technical Report
MEDIA LUNA PROJECT Summary of March 2022 Technical Report1,2 1) Please refer to Safe Harbor Statement on slide 2. 2) As per Technical Report for the Morelos Complex dated March 31, 2022. Gold equivalent sold assumes long-term gold price of $1,600/oz ($1,700/oz in 2022), silver price of $21/oz and co
Slide 46: Summary of March 2022 Technical Report
MEDIA LUNA PROJECT Summary of March 2022 Technical Report1,2 1) Please refer to Safe Harbor Statement on slide 2. 2) As per Technical Report for the Morelos Complex dated March 31, 2022. Gold equivalent sold assumes long-term gold price of $1,600/oz ($1,700/oz in 2022), silver price of $21/oz and co
Slide 47: Upfront Cost to Develop Media Luna Project
MEDIA LUNA PROJECT Upfront cost to develop Media Luna Project estimated at $848M1,2 Metrics as of April 1, 2022 Total ($M) Excludes $124M of estimated project costs incurred 2,3 Non-Sustaining - Media Luna Project prior to April 1, 2022 Directs Guajes Portal & Tunnel $75.8 South Portals & Tunnels $4
Slide 48: Drilling in 2023 Focused on Fill the Mill Initiatives
MEDIA LUNA PROJECT Drilling in 2023 focused on supporting fill the mill initiatives and mine life extensions1 Mill capacity reduced from 13.0 ktpd to 10.6 ktpd in Q4 2024 Extend mine life and increase mining rates of ELG Underground Add incremental feed from ELG open pits Additional mill feed from M
Slide 49: After-Tax NPV (5%) of Morelos Complex and Media Luna
MEDIA LUNA PROJECT After-tax NPV (5%) of Morelos Complex and Media Luna Project1,2 1) Please refer to Safe Harbor Statement on slide 2. 2) As per Technical Report for the Morelos Complex dated March 31, 2022 (base case economics assume long-term metal prices of $1,600/oz gold ($1,700/oz in 2022), $2
Slide 50: Media Luna Project Schedule
MEDIA LUNA PROJECT SCHEDULE1,2 1) Please refer to Safe Harbor Statement on slide 2. 2) Updated based on progress and revised schedule as of September 30, 2023 (refer to press release dated October 30, 2023, titled Torex Gold Provides Quarterly Update on Media Luna Project) 50
Slide 51: Appendix – Mineral Reserves & Resources
APPENDIX – MINERAL RESERVES & RESOURCES
Slide 52: 2022 Mineral Reserve Additions
2022 MINERAL RESERVE ADDITIONS Drilling successful in replacing a majority of AuEq reserve depletion in 20221,2 Replaced 68% of gold equivalent (“AuEq”) reserves processed in 2022 Replaced mine depletion in ELG Underground Expansion of El Limón pit added 190 koz to reserves and expansion of El Limón
Slide 53: 2022 Mineral Resource Additions
2022 MINERAL RESOURCE ADDITIONS AuEq resource growth in 2022 driven by EPO, Media Luna, and ELG Underground1,2 Gold equivalent (“AuEq”) M&I resources up 567 koz (+8%) Increase of 1,078 koz (+16%) prior to mine depletion M&I resource growth driven by: Ongoing success in ELG Underground Inaugural Indi
Slide 54: Mineral Reserves
MINERAL RESERVES1 Morelos Complex Tonnes Au Ag Cu Au Ag Cu AuEq AuEq (kt) (gpt) (gpt) (%) (koz) (koz) (Mlb) (gpt) (koz) Media Luna Underground Proven - - - - - - - - - Probable 23,017 2.81 25.6 0.88 2,077 18,944 444 4.54 3,360 Proven & Probable 23,017 2.81 25.6 0.88 2,077 18,944 444 4.54 3,360 ELG O
Slide 55: Notes to Mineral Reserves
NOTES TO MINERAL RESERVES Morelos Complex Notes to accompany Mineral Reserve Table 13. ELG Low Grade Mineral Reserves are reported above an in-situ cut-off grade of 0.88 g/t Au. 1. Mineral Reserves were developed in accordance with CIM (2014) guidelines. 14. It is planned that ELG Low Grade Mineral
Slide 56: Mineral Resources
MINERAL RESOURCES1 Morelos Complex Tonnes Au Ag Cu Au Ag Cu AuEq AuEq (kt) (gpt) (gpt) (%) (koz) (koz) (Mlb) (gpt) (koz) Media Luna Underground Measured 1,823 5.29 42.0 1.38 310 2,460 55 8.06 473 Indicated 25,567 3.02 30.1 1.05 2,486 24,708 589 5.11 4,196 Measured & Indicated 27,390 3.17 30.9 1.07 2
Slide 57: Notes to Mineral Resources
NOTES TO MINERAL RESOURCES Morelos Complex Notes to accompany the Summary Mineral Resource Table Notes to accompany the ELG Open Pit Mineral Resources 1. CIM (2014) definitions were followed for Mineral Resources. 14. The effective date of the estimate is December 31, 2022. 2. Mineral Resources are
Slide 58: TSX | TXG
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
Torex Gold Resources — Investor Presentation (January 2024) on 6ix