Torex Resources Inc. · TSX:TXR
Torex Resources — Torex Gold Resources — Q1 2023 Earnings Presentation
35 slides from Torex Resources's earnings presentation, May 11, 2023
Slide 1: First Quarter 2023 Results Conference Call
TSX | TXG FIRST QUARTER 2023 RESULTS CONFERENCE CALL May 11, 2023
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: Key Highlights & Operational Performance
KEY HIGHLIGHTS & OPERATIONAL PERFORMANCE JODY KUZENKO PRESIDENT & CEO All values US dollars unless otherwise stated
Slide 4: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to continue to enhance shareholder returns1 OPTIMIZE & ADVANCE & GROW RESERVES & EXTEND ELG DE-RISK MEDIA LUNA RESOURCES PRUDENT CAPITAL BUILD ON ESG ALLOCATION EXCELLENCE 1) Please refer to Safe Harbor Statement on slide 2 4
Slide 5: Key Highlights
KEY HIGHLIGHTS 2023 off to a strong operational and financial start Gold production of 122,918 oz Total cash costs1 of $709/oz gold sold and all-in sustaining costs1 of $1,079/oz gold sold Realized gold price1 of $1,899/oz, revenue of $229M and adjusted EBITDA1 of $133M achieved Net cash generated f
Slide 6: Operational Performance
OPERATIONAL PERFORMANCE Q1 2023 results driven by record throughput in the mill Produced 122,918 ounces of gold in Q1 Record plant throughput of 13,073 tpd in Q1 Gold grade processed of 3.50 g/t during Q1 Record underground mining rate of 1,738 tpd in Q1 6
Slide 7: Consistent and Reliable Producer
CONSISTENT AND RELIABLE PRODUCER Well positioned to deliver on full year guidance following a strong start to 20231 In millions of U.S. dollars, unless otherwise noted FY 2023 Q1 2023 FY 2022 Guidance Performance Performance Gold Production oz 440,000 to 470,000 122,918 474,035 Total Cash Costs2 $/o
Slide 8: Build on ESG Excellence
BUILD ON ESG EXCELLENCE Sustained performance & ongoing improvement on ESG disclosure a key focus ESG performance now 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 Sustainab
Slide 9: Financial Performance
FINANCIAL PERFORMANCE ANDREW SNOWDEN CFO
Slide 10: Financial Performance
FINANCIAL PERFORMANCE Strong margins continue to support robust EBITDA and cash flow generation All-in sustaining costs margin1 of 42% in Q1 Adjusted EBITDA1 of $133M in the first quarter Total capex1 of $100M in Q1 ($66M on ML Project) Free cash flow1 deficit of $54M during Q1 1) For more informati
Slide 11: Unit Cost Performance
UNIT COST PERFORMANCE1 Solid cost performance despite ongoing inflationary pressures2 Open pit mining costs impacted by additional contractor costs related to layback of El Limón open pit Economies of scale from higher underground mining rates continue to mitigate cost pressures Processing costs ref
Slide 12: Cash Flow Generation
CASH FLOW GENERATION Free cash flow during Q1 2023 impacted by annual tax/royalty payments Free cash flow in Q1 impacted by $76M of tax and $10M of royalty payments, primarily related to 2022 Total capital expenditures of $100M during the quarter including $66M on the Media Luna Project Pace of spen
Slide 13: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1 Well positioned to fund strategic priorities with $564M of available liquidity Net cash2 of $318M at quarter-end Available liquidity of $564M as of March 31st Exited Q1 2023 with $322M of cash $100M available on term loan facility (undrawn) Debt free and less than $4M of l
Slide 14: Well Positioned to Fund Media Luna Project
WELL POSITIONED TO FUND MEDIA LUNA PROJECT1 Estimated internal funding requirement of $219M as of Q1 2023 Free cash flow prior to spending on Media Luna Project was $283M over last 12 months2,3 Includes $38M spent on drilling and exploration 1) Please refer to Safe Harbor Statement on slide 2. 2) Fo
Slide 15: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Managing gold price risk during build-out of Media Luna1 All amounts in U.S. dollars 2023 2024 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Forward Contracts Gold Volumes koz 27.0 43.5 43.5 43.5 43.5 27.0 27.0 Gold Price $/oz $1,924 $1,957 $1,957 $1,966 $1,966 $1,939 $1,939 $0.5M realized gain on
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 Development activities continuing to ramp-up towards peak rates in 20231 Key Highlights – Q1 2023 Completion Project To Date Q1 2023 Project tracking to schedule and budget Procurement 36% Engineering 47% Procurement of schedule critical items on track Underground developm
Slide 18: Guajes Tunnel Progress Update
GUAJES TUNNEL PROGRESS UPDATE Breakthrough of tunnel on south side of Balsas River anticipated in Q1 20241,2 Guajes Tunnel advanced ~4,080 m as at the end of April Advance rate of 7.0 m/d over the past 3 months versus 6.5 m/d the last 12 months Successfully crossed under the Balsas River South Porta
Slide 19: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE Development activities ramping up with concentrate production on track for late 20241 Guajes Tunnel West Adit Vent breakthrough Paste plant pad preparation Safety Alert – held first Monday of each month 1) Please refer to Safe Harbor Statement on slide 2. 19
Slide 20: Reserve & Resource Update
RESERVE & RESOURCE UPDATE JODY KUZENKO PRESIDENT & CEO
Slide 21: Reserves (P&P) – Majority of Depletion Replaced in 2022
RESERVES (P&P) – MAJORITY OF DEPLETION REPLACED IN 20221 Reserves replaced in ELG Underground; Additional reserves squeezed out of open pits Replaced 68% of gold equivalent (“AuEq”) reserves processed in 2022 Replaced mine depletion in ELG Underground Majority of reserves replaced in pits 190 koz ad
Slide 22: Resources (M&I) – Significant Growth Delivered in 2022
RESOURCES (M&I) – SIGNIFICANT GROWTH DELIVERED IN 20221 AuEq resource growth in 2022 driven by EPO, Media Luna and ELG Underground 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: 275 koz of resources added at
Slide 23: 2023 Drill Program
2023 DRILL PROGRAM Looking to build upon success of 2022 program both north and south of Balsas River1 Drilling/exploration budget of $39M in 2023 Tecate $20M at Media Luna cluster (~55,000 m) Esperanza Querenque Infill and expansionary drilling at EPO Inaugural drill program at ML West $6M at ELG U
Slide 24: Questions?
eo; Torex Gold RESOURCES INC. QUESTIONS ?
Slide 25: Operating Cash Flow Seasonality
OPERATING CASH FLOW SEASONALITY Operating cash flow tends to be weakest in H1 given timing of tax, royalty and PTU payments Final payments related to royalties, profit sharing, and taxes are subject to movements in the Mexican peso relative to the US dollar Cash flow from operations prior to changes
Slide 26: Robust Cash Flow Generation from ELG
ROBUST CASH FLOW GENERATION FROM ELG Funding position on solid footing given available liquidity and ongoing cash flow LTM Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2023 Net cash generated from operating activities ($M) $126.9 $102.4 $132.1 $47.0 $408.4 Free cash flow ($M)1 $73.1 $32.0 $40.5 ($54.0) $91.6
Slide 27: Key Operational Metrics
KEY OPERATIONAL METRICS1 Consolidated Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2021 2021 2021 2022 2022 2022 2022 2023 Mining - ELG Open Pit Ore mined (kt) 1,131 1,406 864 1,061 987 883 959 916 Ore mined (tpd) 12,429 15,283 9,392 11,789 10,846 9,598 10,420 10,182 Waste mined (kt) 8,593 7,476 8,972 8,958 7,960 9,097
Slide 28: Key Financial Metrics
KEY FINANCIAL METRICS1 Consolidated All amounts in U.S. dollars Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2021 2021 2021 2022 2022 2022 2022 2023 Key Metrics Gold sold (oz) 111,424 118,989 109,391 108,012 123,363 119,834 121,913 118,455 Realized gold price ($/oz) $1,816 $1,786 $1,798 $1,876 $1,865 $1,715 $1,784 $1,89
Slide 29: 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 30: 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 31: 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 32: 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 33: 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 34: 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 35: 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