Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Q2 2021 Earnings Presentation
26 slides from Torex Gold Resources's earnings presentation, Aug 5, 2021
Slide 1: Second Quarter 2021 Results Conference Call
TSX | TXG SECOND QUARTER 2021 RESULTS CONFERENCE CALL AUGUST 5, 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: Overview & Key Highlights
OVERVIEW & KEY HIGHLIGHTS JODY KUZENKO PRESIDENT & CEO All values US dollars unless otherwise stated
Slide 4: 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 Advance Media Luna Feasibility Maintain optionality of Muckahi differentiator Study on a convention
Slide 5: Key Operational & Financial Highlights
KEY OPERATIONAL & FINANCIAL HIGHLIGHTS1 On track to deliver on full year production and cost guidance closing out Q2 Produced 118,054 oz of gold (YTD - 247,563 oz); Full year guidance of 430,000 to 470,000 oz Total cash costs2 of $637/oz gold sold (YTD - $606/oz); Guidance of $680/oz to $720/oz COVI
Slide 6: Higher Sustaining Spend with Pit Expansion Approved
HIGHER SUSTAINING SPEND WITH PIT EXPANSION APPROVED Remainder of operational guidance unchanged Production and total cash costs2 tracking well with original guidance • Impact of higher reagent consumption on total cash costs offset by lower anticipated PTU (reflecting recently passed legislation) an
Slide 7: ESG Excellence as a Foundation
ESG EXCELLENCE AS A FOUNDATION Sustained performance and ongoing improvement in ESG disclosure a key focus Staying COVID-19 Resistant ESG Ratings Strict protocols/screening remain in place; Year-to-date, MSCI: ‘A’ rating from ‘BBB’ 375 employees/contractors fully vaccinated and over Refinitiv: ‘B-’
Slide 8: Operational Performance
OPERATIONAL PERFORMANCE JODY KUZENKO PRESIDENT & CEO
Slide 9: Tracking Well to Full Year Production Guidance
TRACKING WELL TO FULL YEAR PRODUCTION GUIDANCE1,2 Solid operational result delivered during Q2 2021 Produced 118,054 oz during the quarter Average plant throughput of 11,989 tpd in Q2 160 14 Gold Produced (koz) Ore Processed (ktpd) 140 12 120 10 COVID 100 COVID Interruption 8 80 Interruption 60 6 40
Slide 10: Cost Performance
COST PERFORMANCE1,2 Cost control key to maintaining margins and offsetting inflationary pressures Open pit and underground mining unit costs higher than 2020 given maintenance costs and rehandling owing to RopeCon repairs Processing costs impacted by higher cyanide and reagent consumption given high
Slide 11: Financial Performance
FINANCIAL PERFORMANCE ANDREW SNOWDEN CFO
Slide 12: Solid Financial Performance Delivered in Q2 2021
SOLID FINANCAL PERFORMANCE DELIVERED IN Q2 20211 Financial results continued to be influenced by strong overall margins $206M of revenue realized during Q2 TCC2 margin of 65% in Q2; AISC2 margin of 50% $300 $2,000 TCC AISC Gold $ per ounce sold $250 $1,500 Revenue (M$) $200 COVID $150 $1,000 Interru
Slide 13: Strong Cash Flow Generation
STRONG CASH FLOW GENERATION1 Balance sheet continues to strengthen with $196M in cash on hand $400 $350 $127 ($24) $300 ($16) ($0) ($20) Cash (M$)2 $250 ($43) $2 ($1) ($1) $196 $200 $172 $150 $100 $50 $0 Taxes Paid Sustaining Non-Sustaining Lease Payment (Q1 2021) (Q2 2021) Working Capital Working C
Slide 14: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1 Financial health of business continues to strengthen Net cash of over $190M at quarter-end2 Available liquidity of over $345M as of June 30th $300 $200 $100 Balance (M$) $0 $150M ($100) ($200) $196M ($300) ($400) ($500) FY/17 FY/18 FY/19 FY/20 Q2/21 Cash & ST Investments D
Slide 15: Cash Flow Seasonality
CASH FLOW SEASONALITY Cash flow in H2 expected to benefit from positive seasonality factors 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 ope
Slide 16: Project & Exploration Update
PROJECT & EXPLORATION UPDATE JODY KUZENKO PRESIDENT & CEO
Slide 17: Key Project Updates: Optimizing & Extending ELG
KEY PROJECT UPDATES Executing on strategic priority to extend and optimize ELG… Optimizing & Extending Production at ELG Board approval of El Limón open pit expansion • Expect to support a smooth transition between ELG and Media Luna • Pushback expected to add approximately 150,000 oz of gold betwee
Slide 18: Key Project Updates: Advancing and De-risking Media Luna
KEY PROJECT UPDATES …while advancing and de-risking Media Luna to production in early-2024 Monorail-based Mining System Media Luna advancing on number of fronts Decision made to advance the Media Luna Feasibility Development in Guajes tunnel has transitioned to Study on a conventional mining basis m
Slide 19: Guajes Tunnel & South Portal Upper
GUAJES TUNNEL & SOUTH PORTAL UPPER Development of Guajes has now transitioned to monorail-based haulage Monorail-based haulage for waste rock Guajes tunnel has advanced 450 m Overhead shot of loadout facility and plant Prep of South Portal Upper well underway 19
Slide 20: Questions?
QUESTIONS ?
Slide 21: Key Operational Metrics – El Limón Guajes (ELG)
KEY OPERATIONAL METRICS – EL LIMÓN GUAJES (ELG)1,2 1) Q2 2020 results were impacted by a mandated suspension of operations by the Government of Mexico to mitigate the spread of COVID-19 in the country 2) For more information on operational and financial results, please refer to Torex Gold’s latest M
Slide 22: Key Financial Metrics – Consolidated
KEY FINANCIAL METRICS – CONSOLIDATED1,2,3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2019 2020 2020 2020 2020 2021 2021 Key Metrics Gold sold (oz) 132,535 126,910 108,064 63,147 133,036 133,063 129,019 111,424 Realized gold price ($/oz) $1,478 $1,481 $1,571 $1,712 $1,884 $1,847 $1,778 $1,816 Cost of sales ($/oz)
Slide 23: Reagent Consumption Driving Higher Process Costs
REAGENT CONSUMPTION DRIVING HIGHER PROCESS COSTS Increased cyanide usage reflective of elevated levels of Cu & Fe in sulphides Copper (Cu) and iron (Fe) in sulphides increasing as mining moves deeper within the open pits • Primarily in the form of pyrrhotite and chalcopyrite Sodium cyanide (NaCN) co
Slide 24: Cash Flow Seasonality: Royalties & Profit Sharing
CASH FLOW SEASONALITY Timing Differences – Royalties & Profit Sharing Royalty – Mexican Geological Survey Profit Sharing (“PTU”) – Employees 2.5% of gross revenue 10% of taxable income in Mexico Accrued quarterly and paid the following quarter • Legislation passed in Q2 2021 caps PTU payment • Recog
Slide 25: Cash Flow Seasonality: Mining Royalty & Corporate Income Tax
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 deductions 30% of taxable income in Mexico Accrued quarterly and paid annually in Q1 of the Accr
Slide 26: 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