Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (January 2023)
49 slides from Torex Gold Resources's investor presentation, January 2023
Slide 1: Corporate Presentation
TSX | TXG CORPORATE PRESENTATION January 2023 All amounts expressed in U.S. dollars unless otherwise stated
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT The Company has presented certain future non-GAAP financial measures (“Non-GAAP Measures”) in this presentation within the meaning of National Instrument 52-112 – Non-GAAP and Other Financial Measures. Total cash costs per ounce of gold or gold equivalent (AuEq) sold (“TCC”), a
Slide 3: Who We Are
WHO WE ARE Reliable gold producer with a strong balance sheet and significant exploration upside Morelos Complex is the second-largest gold operation in Mexico Production and cash flow currently anchored by El Limón Guajes (“ELG”) operations Media Luna Project key to sustaining output beyond 2025 Si
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Future underpinned by solid long-term fundamentals1 Consistent track record of achieving Competitive cost profile providing strong production and cost guidance margins and cash flow generation Strong balance sheet and robust cash flow High quality management team with supports
Slide 5: ELG – A Foundational Asset
ELG – A FOUNDATIONAL ASSET Future growth supported by strong cash flow and robust margins from ELG Record gold production of 474,000 ounces in 2022 Average AISC margin2 of 44% over LTM (Q3 2022) $460M of Adjusted EBITDA2 in LTM (Q3 2022) Free cash flow2 of $126M during LTM (Q3 2022) 1) Please refer
Slide 6: Five-Year Production Outlook
FIVE-YEAR PRODUCTION OUTLOOK1,3 Optimization of ELG open pits and underground drive improved near-term outlook Production Outlook Outlook Outlook 2022 Technical Actual (koz) 2 2021 2022 2023 Report 2021 (Au) 468.2 430 to 470 2022 (Au) 474.0 430 to 470 430 to 470 2023 (Au) 400 to 450 420 to 460 440 t
Slide 7: Consistent and Reliable Producer
CONSISTENT AND RELIABLE PRODUCER 2023 guidance points to another solid year of profitable production1 Delivered record production of 474,000 ounces in 2022; fourth year in a row of achieving guidance All-in sustaining costs in 2023 expected to be $100/oz higher than guided in 2022 driven by: Ongoing
Slide 8: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to significantly enhance shareholder returns1 OPTIMIZE & EXTEND ADVANCE & GROW RESERVES & EL LIMÓN GUAJES (ELG) DE-RISK MEDIA LUNA RESOURCES BUILD ON ESG PRUDENT CAPITAL LEVERAGE EXCELLENCE ALLOCATION INNOVATION 1) Please refer to Safe Harbor Statement on
Slide 9: Optimize & Extend ELG
OPTIMIZE & EXTEND ELG Maximizing potential of ELG Open Pits and ELG Underground1,3 Drilling in 2022 successful at extending life of El Limón pit and smaller El Limón Sur pit Depletion of Guajes pit still anticipated mid-2023 to enable future tailings infrastructure Continue to increase mining rates
Slide 10: Extending mine life of ELG Underground beyond 2027
OPTIMIZE & EXTEND ELG Extending mine life of ELG Underground beyond 20271 Mine life into 2027 based on current reserves4 A source of significant reserve growth Reserves plus cumulative gold mined represents a 3.5-fold increase over initial Mineral Reserves Mineral Reserves increased 20% in 2021 foll
Slide 11: Targeting underground mining rates of 2,000 tpd by year-end 2024
OPTIMIZE & EXTEND ELG Targeting underground mining rates of 2,000 tpd by year-end 20241 Record underground mining rate of 1,523 tpd in 2022 Including record average rate of 1,685 tpd during Q4 Targeting to exit 2023 at a rate of 1,800 tpd and 2024 at a rate of 2,000 tpd3 Portal #3 now complete Expec
Slide 12: Advance & De-Risk Media Luna
ADVANCE & DE-RISK MEDIA LUNA Media Luna solidifies the Morelos Property as our foundational asset1 Replaces production from ELG open pits Meaningful exposure to copper with annual and extends mine life out to at least 20332 production of 45 Mlbs per year post 20242 Significant upside for exploration
Slide 13: Deliver project on time and on budget
ADVANCE & DE-RISK MEDIA LUNA Deliver project on time and on budget1 Key Highlights Media Luna Project – Physical Progress at 9% Project To Date Procurement activities ramping up Q3 2022 Purchase orders executed for Guajes Tunnel Engineering 22% Procurement 14% conveyor, regrind mills, flotation circ
Slide 14: Maintain schedule on Guajes Tunnel and South Portal
ADVANCE & DE-RISK MEDIA LUNA Maintain schedule on Guajes Tunnel and South Portal Upper and Lower1 Guajes Tunnel advanced ~3,250 m as at the end of December Q4 advance rate of 6.4 m/d and 2022 average of 6.1 m/d (budgeted rate of 6 to 6.5 m/d) Record advance rate of 7.2 m/d during December Tunnel suc
Slide 15: Steady progress on surface construction and underground development
ADVANCE & DE-RISK MEDIA LUNA Steady progress being made on surface construction and underground development1 Preparation of pad for paste plant Development of key infrastructure South Portal Lower emblematic of near South Portal Upper in upper portion of Media Luna approach to inclusion 1) Please re
Slide 16: 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 Increase r
Slide 17: Key strategic focus and investment in exploration and drilling
GROW RESERVES & RESOURCES Key strategic focus and investment in exploration and drilling1 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 Underground (~
Slide 18: Step-out drilling has extended mineralized footprint of EPO
GROW RESERVES & RESOURCES Step-out drilling has extended mineralized footprint of EPO1,2 Infill program focused on upgrading a portion of Inferred Resources to the Indicated category EPO has potential to provide incremental feed to the processing plant Inferred resource of 1.0 Moz AuEq at 3.97 g/t A
Slide 19: Two new potential mining fronts within ELG Underground
GROW RESERVES & RESOURCES Drilling has identified two new potential mining fronts within the ELG Underground1 Follow-up drilling at Sub-Sill South (left side) has demonstrated the potential for a new underground mining front 120 m from existing infrastructure2 Drilling below current open pit has ide
Slide 20: Build on ESG Excellence
BUILD ON ESG EXCELLENCE Delivering value to shareholders while making a positive difference in society Solid environmental performance Strong governance & diversity focus Limited air emissions and zero water discharge Women make up 43% of Executive Team and 44% operation of Board of Directors Filter
Slide 21: Sustained performance & ongoing improvement on ESG disclosure
BUILD ON ESG EXCELLENCE Sustained performance & ongoing improvement on ESG disclosure a key focus Clear and credible GHG emissions targets set ESG Ratings Scope 1 and 2 greenhouse gas emission targets1 MSCI: ‘A’ rating from ‘BBB’ 10% reduction on an absolute basis by 2030 Refinitiv: ‘B-’ rating from
Slide 22: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Strong balance sheet and liquidity1 Net cash2 of $336M at quarter-end Available liquidity of $589M as of September 30th Exited Q3 2022 with $339M of cash Amended credit facilities increase total available Debt free with just over $3M of lease obligations credit to $250M an
Slide 23: Managing gold price risk during build-out of Media Luna
PRUDENT CAPITAL ALLOCATION Managing gold price risk during build-out of Media Luna1 All amounts in U.S. dollars 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Forward Contracts Gold Volumes koz 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 Gold Price $/oz $1,924 $1,924 $1,924 $1,924 $1,939 $1,939 $1,939 $1,939 Hedged
Slide 24: Leverage Innovation
LEVERAGE INNOVATION Proven technology to improve safety, minimize emissions, and drive value1 ROPECON FILTERED TAILINGS SART PLANT BEV FLEET 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-in
Slide 25: Continuing to Execute on Long-Term Strategy
CONTINUING TO EXECUTE ON LONG-TERM STRATEGY1 Targeting to improve valuation by successfully delivering on strategy2 WE DID WHAT WE SAID WE WOULD DO Pivoted the strategy to focus on mining and exploration Smooth production plan during transition to Media Luna Delivered on production guidance four yea
Slide 26: Corporate Information
Appendix Corporate Information All amounts expressed in U.S. dollars unless otherwise stated
Slide 27: Corporate Strategy
CORPORATE STRATEGY Executing on Strategic Pillars expected to generate long-term value1 OPTIMIZE & ADVANCE & GROW RESERVES & EXTEND ELG DE-RISK MEDIA LUNA RESOURCES Build on culture as key strategic Bring Media Luna into production Robust multi-year drill program at differentiator on time and on bud
Slide 28: 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 29: 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 30: Corporate Summary
CORPORATE SUMMARY Share Price Performance’ Lei ehold 1.25 Institution Shares Shares (M) (%) = 100 Blackrock 11.8 13.1% BS - VanEck - ETFs 84 9.4% 2c RBC Asset Management 44 18% 8 = Ore Dimensional 3.2 3.7% ee Vanguard 24 2.8% 25 0.50 Franklin 23 2.7% a 3 Sprott Asset Management 22 26% £8 05 ALPS Adv
Slide 31: Key Operational Metrics
KEY OPERATIONAL METRICS1 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2021 2021 2021 2022 2022 2022 Mining - ELG Open Pit Ore mined (kt) 1,689 1,359 1,131 1,406 864 1,061 987 883 Waste mined (kt) 10,399 9,882 8,593 7,476 8,972 8,958 7,960 9,097 Strip ratio (waste:ore) 6.2 7.3 7.6 5.3 10.4 8.4 8.1 10.3 Gold gra
Slide 32: Key Financial Metrics – Consolidated
KEY FINANCIAL METRICS – CONSOLIDATED1 All amounts in U.S. dollars Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2021 2021 2021 2022 2022 2022 Key Metrics Gold sold (oz) 133,063 129,019 111,424 118,989 109,391 108,012 123,363 119,834 Realized gold price ($/oz) $1,847 $1,778 $1,816 $1,786 $1,798 $1,876 $1,865 $1,
Slide 33: 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 34: 2021 Responsible Gold Mining Report
2021 RESPONSIBLE GOLD MINING REPORT Key Highlights 99% operations employees from Mexico; $67.4 million paid in salaries and benefits Industry leading safety performance Ratified labour agreement with unionized employees 90% procurement spend in Mexico; $74.7 million paid to companies in Guerrero Sta
Slide 35: 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 36: March 2022 Technical Report
Appendix March 2022 Technical Report All amounts expressed in U.S. dollars unless otherwise stated
Slide 37: Advance & De-Risk Media Luna
ADVANCE & DE-RISK MEDIA LUNA 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
Slide 38: Summary of March 2022 Technical Report
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 copper price of $3.50
Slide 39: Summary of March 2022 Technical Report
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 copper price of $3.50
Slide 40: Non-Sustaining Capital Expenditures
NON-SUSTAINING CAPITAL EXPENDITURES1 Upfront cost to develop Media Luna Project estimated at $848M2 Metrics as of April 1, 2022 Total ($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 Port
Slide 41: Grow Reserves & Resources
GROW RESERVES & RESOURCES Drilling in 2023 focused on supporting fill the mill initiatives and mine life extensions Mill capacity reduced from 13.0 ktpd to10.6 ktpd in Q4 2024 Extend mine life and increase mining rates of ELG Underground Add incremental feed from ELG open pits Additional mill feed f
Slide 42: Sensitivity Analysis
SENSITIVITY ANALYSIS1,2 After-tax NPV (5%) of Morelos Complex and Media Luna Project 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),
Slide 43: Media Luna Project Schedule
MEDIA LUNA PROJECT SCHEDULE1 1) Please refer to Safe Harbor Statement on slide 2. 43
Slide 44: Mineral Reserves & Resources
Appendix Mineral Reserves & Resources All amounts expressed in U.S. dollars unless otherwise stated
Slide 45: Mineral Reserves – Morelos Complex
MINERAL RESERVES1 – MORELOS COMPLEX Tonnes Au Ag Cu Au Ag Cu AuEq AuEq (kt) (g/t) (g/t) (%) (koz) (koz) (Mlb) (g/t) (koz) El Limón Guajes Open Pit (ELG OP) Proven 4,900 3.95 4.6 0.14 623 719 15 4.00 630 Probable 5,471 2.35 4.5 0.12 414 784 15 2.39 421 Proven & Probable 10,371 3.11 4.5 0.13 1,037 1,5
Slide 46: Notes to Mineral Reserves – Morelos Complex
NOTES TO MINERAL RESERVES – MORELOS COMPLEX Notes to accompany Mineral Reserve Table Notes to accompany the ELG Underground Mineral Reserves 1. Mineral Reserves were developed in accordance with CIM (2014) guidelines. 15. Mineral Reserves are founded on Measured and Indicated Mineral Resources, with
Slide 47: Mineral Resources – Morelos Complex
MINERAL RESOURCES1 – MORELOS COMPLEX Tonnes Au Ag Cu Au Ag Cu AuEq AuEq (kt) (g/t) (g/t) (%) (koz) (koz) (Mlb) (g/t) (koz) El Limón Guajes Open Pit (ELG OP) Measured 5,727 3.89 5.0 0.13 716 919 17 3.93 724 Indicated 11,027 2.37 4.7 0.12 842 1,660 28 2.41 856 Measured & Indicated 16,754 2.89 4.8 0.12
Slide 48: Notes to Mineral Resources – Morelos Complex
NOTES TO MINERAL RESOURCES – MORELOS COMPLEX Notes to accompany the Summary Mineral Resource Table Notes to accompany ELG Underground Mineral Resources 1. CIM (2014) definitions were followed for Mineral Resources. 14. Mineral Resources are reported above a cut-off grade of 2.6 g/t Au. 2. Mineral Re
Slide 49: TSX | TXG www.torexgold.com
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
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