Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (November 2022)
48 slides from Torex Gold Resources's investor presentation, November 2022
Slide 1: Corporate Presentation November 2022
TSX | TXG CORPORATE PRESENTATION November 2022 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”), m
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 2024 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 Gold production of 467 koz in LTM (Q3 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 to Sa
Slide 6: Consistent and Reliable Producer
CONSISTENT AND RELIABLE PRODUCER On track to deliver on full year guidance for the fourth year in a row1 In millions of U.S. dollars, unless otherwise noted Prior Revised Q3 2022 YTD 2 2022 Guidance 2022 Guidance Progress Gold Production oz 430,000 to 470,000 No change 357,839 Total Cash Costs3 $/oz
Slide 7: Future on Solid Footing with Media Luna
FUTURE ON SOLID FOOTING WITH MEDIA LUNA1 Media Luna more than triples mine life of Morelos Complex Estimated after-tax IRR2 of 16.1% Potential to increase return by filling the mill beyond 2027 and extending overall life of project Processing of Media Luna ore expected to start in 20242 Projected an
Slide 8: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to significantly enhance shareholder returns OPTIMIZE & EXTEND ADVANCE & GROW RESERVES & EL LIMÓN GUAJES (ELG) DE-RISK MEDIA LUNA RESOURCES BUILD ON ESG PRUDENT CAPITAL LEVERAGE EXCELLENCE ALLOCATION INNOVATION 8
Slide 9: Optimize & Extend ELG
OPTIMIZE & EXTEND ELG Maximizing potential of ELG Open Pits and ELG Underground1,2,3 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 El Limón Sur Open Pit Guajes Open Pit El Limón Open Pit ELG Underground Media Luna Underground Stockpiles Evaluating opportunities to mine incremental addi
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 since 2017 Reserves plus cumulative gold mined represents a 3.5-fold increase over initial Mineral Reserves Mineral Reserves increased 20% i
Slide 11: Increasing underground mining rates towards 2,000 tpd
OPTIMIZE & EXTEND ELG Increasing underground mining rates towards 2,000 tpd1 Year-to-date throughput of ~1,470 tpd through Q3 2022 Average of 1,570 tpd over last two quarters Evaluating opportunities to increase mining rates towards 2,000 tpd Portal #3 now complete Expected to reduce haul distances
Slide 12: 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 13: Deliver project on time and on budget
ADVANCE & DE-RISK MEDIA LUNA Deliver project on time and on budget 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 circu
Slide 14: Steady progress on surface construction and underground development
ADVANCE & DE-RISK MEDIA LUNA Steady progress made on surface construction and underground development in Q31 Guajes Portal entrance South Portal Lower lay down area South Portal Lower Preparation of pad for paste plant South Portal Upper Slope stabilization 1) Please refer to Safe Harbor Statement o
Slide 15: Maintain schedule on Guajes Tunnel and South Portals
ADVANCE & DE-RISK MEDIA LUNA Maintain schedule on Guajes Tunnel and South Portal Upper and Lower1 Guajes Tunnel advanced ~2,835 m as at the end of October Year-to-date advance rate of 5.9 m/d versus budgeted rate of 6 to 6.5 m/d South Portal Lower advanced ~1,175 m as at the end of October Year-to-d
Slide 16: Exploration and drilling key to filling the mill post 2027
GROW RESERVES & RESOURCES Exploration and drilling key to filling the mill post 20271 Mill capacity reduced from 13.0 ktpd to10.6 ktpd in Q4 2024 Extend ELG Underground Add incremental feed from ELG open pits Additional mill feed from Media Luna cluster Potential development of EPO deposit Only 30%
Slide 17: Key strategic focus and investment in exploration and drilling
GROW RESERVES & RESOURCES Key strategic focus and investment in exploration and drilling Drilling/exploration budget of $39M in 2022 Tecate $19M at Media Luna cluster (~64,000 m) Esperanza Querenque $6M at ELG Underground (~27,000 m) $9M on near-mine drilling (~28,500 m) and regional exploration (~6
Slide 18: Step-out drilling has extended mineralized footprint of EPO
GROW RESERVES & RESOURCES Step-out drilling has extended mineralized footprint of EPO1 Infill program focused on upgrading a portion of Inferred Resources to the Indicated category3 EPO has potential to provide incremental feed to the processing plant Inferred resource of 1.0 Moz AuEq at 3.97 g/t Au
Slide 19: Drilling continues to highlight reserve and resource upside at ELG
GROW RESERVES & RESOURCES Drilling continues to highlight reserve and resource upside at ELG1,2 Step-out and infill drilling at ELD returned several high- grade intersects below current reserves3 Identified a potential new mining front at Sub-Sill South (120 m from Sub-Sill) Drilling activities at S
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: Build on ESG Excellence
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 liquidity 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 and
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 2022 2023 Q4 Q1 Q2 Q3 Q4 Forward Contracts Gold Volumes koz 30.0 27.0 27.0 27.0 27.0 Gold Price $/oz $1,910 $1,924 $1,924 $1,924 $1,924 Hedged approximately 25% of gold production between
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: Solid Fundamentals at a Deeply Discounted Valuation
SOLID FUNDAMENTALS AT A DEEPLY DISCOUNTED VALUATION1,2 Shares expected to re-rate as we continue to successfully execute on strategy 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 operational
Slide 26: Appendix Corporate Information
Appendix Corporate Information All amounts expressed in U.S. dollars unless otherwise stated
Slide 27: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to significantly enhance shareholder returns OPTIMIZE & ADVANCE & GROW RESERVES & EXTEND ELG DE-RISK MEDIA LUNA RESOURCES Build on culture as key strategic Bring Media Luna into production $39M exploration and drilling differentiator on time and on budget
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 Awarded Outstanding Innovator of 2016 by Mining Technology Hall of Fame. CEO since June 2020 JODY KUZENKO LLB ICD.D 25
Slide 30: Multi-Year Outlook
MULTI-YEAR OUTLOOK1 Forward production ranges now incorporate gold equivalent output from Media Luna Projected improvement in 2023 reflects ongoing optimization within the ELG Mine Complex Increase in 2024 reflects first gold equivalent production from Media Luna Gold equivalent production expected
Slide 31: Corporate Summary
CORPORATE SUMMARY Top 10 Shareholders2 Share Price Performance1 1.50 Institution Shares Shares (M) (%) 1.25 Blackrock 11.9 13.9% Price Performance - USD (Indexed to July 1, 2020) VanEck - ETFs 8.2 9.6% 1.00 RBC Asset Management 4.2 4.9% Dimensional 3.1 3.6% 0.75 Vanguard 2.4 2.7% Franklin 2.3 2.7% 0
Slide 32: 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 33: 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 34: 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 35: 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 two-year labour agreement with unionized employees (where annual agreements are the norm) 90% procurement spend in Mexico;
Slide 36: 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 37: Appendix March 2022 Technical Report
Appendix March 2022 Technical Report All amounts expressed in U.S. dollars unless otherwise stated
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: 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 42: Media Luna Project Schedule
MEDIA LUNA PROJECT SCHEDULE1 1) Please refer to Safe Harbor Statement on slide 2. 42
Slide 43: Appendix Mineral Reserves & Resources
Appendix Mineral Reserves & Resources All amounts expressed in U.S. dollars unless otherwise stated
Slide 44: 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 45: 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 46: 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 47: 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 48: 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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