Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (December 2020)
32 slides from Torex Gold Resources's investor presentation, Dec 1, 2020
Slide 1: Corporate Presentation
TSX | TXG CORPORATE PRESENTATION DECEMBER 1, 2020
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT THE PRELIMINARY ECONOMIC ASSESSMENT (THE ‘MEDIA LUNA PEA” OR “PEA”) IS BASED ON THE TECHNICAL REPORT (DEFINED BELOW). THE PEA IS A CONCEPTUAL STUDY OF THE POTENTIAL VIABILITY OF MINERAL RESOURCES OF THE MEDIA LUNA PROJECT. THE PEA IS NOT A PREFEASIBILITY STUDY OR FEASIBILITY ST
Slide 3: Well-Positioned to Deliver Increasing Value
WELL-POSITIONED TO DELIVER INCREASING VALUE Future underpinned by solid fundamentals Attractively Consistent operator valued relative to with industry-leading intermediate peers safety track record Financially strong gold Long-life potential producer with robust via Media Luna margins and a healthy
Slide 4: Addressing the Valuation Disconnect
ADDRESSING THE VALUATION DISCONNECT Discount to peers expected to narrow as we execute on our strategic plan EV/EBITDA P/CF FCF Yield P/NAV (2021/22) (2021/22) (2021/22) 0% Relative Discount to (20%) Intermediate Peers (40%) (27%) (35%) (37%) (60%) (50%) Single Asset and Perceived Reserve Life & Med
Slide 5: COVID-19 Risks Being Actively Managed
COVID-19 RISKS BEING ACTIVELY MANAGED On track to achieve revised operational guidance1,2 Developed and implemented a “layers of protection” approach for the ongoing health of our workforce; shored up supply chain early on to mitigate risk Q3 2020 production of 131,790 ounces, the second highest qua
Slide 6: El Limón Guajes (ELG) – A Foundational Asset
EL LIMÓN GUAJES (ELG) – A FOUNDATIONAL ASSET Past, present and future supported by robust cash flow from ELG4 Financially robust open pit and underground Production expected to remain consistent operation through mid-2023 $378M of Adjusted EBITDA1 and $169M of Free Current run rate through 2022 supp
Slide 7: Safety and Operational Excellence Intertwined
SAFETY AND OPERATIONAL EXCELLENCE INTERTWINED ELG surpassed 10 million hours lost time injury free in November 2020 LEADERSHIP: Getting the right people in the right roles at the right levels to drive business excellence SYSTEMS OF WORK: SYSTEMS OF WORK: Incident reporting & Business Process investi
Slide 8: Excellent Relationships in Mexico Support Operations
EXCELLENT RELATIONSHIPS IN MEXICO SUPPORT OPERATIONS Delivering value to shareholders while making a positive difference in society Productive relationships Strong relationships with local with employees communities and stakeholders 99% workforce from Mexico; 70% from Community Development Agreement
Slide 9: Maximizing Free Cash Flow from ELG a Key Focus
MAXIMIZING FREE CASH FLOW FROM ELG A KEY FOCUS Evaluating opportunities to optimize mine plan and extend reserve life1,2 Accelerating near-term underground exploration given ongoing success at Sub-Sill and ELD; Positive drill results from 2020 program recently released3 Drill testing additional high
Slide 10: Robust Cash Flow Funds Sustained Operations
ROBUST CASH FLOW FUNDS SUSTAINED OPERATIONS Development of Media Luna expected to be fully funded at $1,400/oz gold Projected cash flow from ELG expected to be more than sufficient to fund debt repayment and development of Media Luna without requiring external sources of financing3 Exited Q3/20 in a
Slide 11: Media Luna Expected to Extend Cash Flow Beyond ELG
MEDIA LUNA EXPECTED TO EXTEND CASH FLOW BEYOND ELG Significant resource base with only 1/3rd of the magnetic anomaly drilled 12 Extending mine life of ELG a key focus Accelerated underground drill program and studying 10 potential to expand El Limón pit Implied Life (years)1,2,3 8 Media Luna would e
Slide 12: Media Luna on Track for First Production in Q1/24
MEDIA LUNA ON TRACK FOR FIRST PRODUCTION IN Q1/24 Expected to deliver strong cash flow well beyond the life of ELG1 Potential multi-decade underground Leverage existing infrastructure mine at ELG 2018 PEA outlined average annual ~7 km access tunnel starting north AuEq production of ~350 koz over of
Slide 13: Early Stage Earthworks at Media Luna Underway
EARLY STAGE EARTHWORKS AT MEDIA LUNA UNDERWAY Two access portals mitigate risk and provide operational flexibility ~7 km access tunnel expected to get Addition of the South Portal provides a number of benefits: to bottom of Media Luna deposit by • Allows access for employees on south side of river a
Slide 14: Innovation: A Key Part of the Torex DNA
INNOVATION: A KEY PART OF THE TOREX DNA Leveraging innovation to drive value and mitigate risk ROPECON FILTERED TAILINGS SART PLANT Innovative 1.3 km automated conveyor “Dry-stack” filtered tailings facility Reduces consumption of our two most system which transports ore to our best-in-class in the
Slide 15: Muckahi Mining System – A Torex Innovation
MUCKAHI MINING SYSTEM – A TOREX INNOVATION A complete rethink of underground mining Two-way traffic via dual monorails Steep ramps (30 degrees) Jumbo drill hung from monorail Efficient and rapid excavation Bulk material transport by conveyors Monorail-based transport Muck box “trains” on the level 2
Slide 16: Muckahi Mining System
MUCKAHI MINING SYSTEM Potential to be a game changer for underground mining1 Test Objectives in 2019 – Breaking Rock Monorail-based development on the level ✓ ✓ o Monorail-based development on a 30 decline ✓ Long-hole open stope fragmentation of 95% passing 400 mm or less Long-hole open stope muckin
Slide 17: Looking to the Future
LOOKING TO THE FUTURE Focused on fundamentals and allocating capital to deliver maximum value1 MIND THE BUSINESS Safety Production Costs Responsible Mining CAPITAL ALLOCATION WELL POSITIONED OPPORTUNITIES TO MANAGING TO BE PATIENT ENHANCE RETURN CAPITAL AROUND M&A TO SHAREHOLDERS Maximize free cash
Slide 18: Appendix
Torex Gold RESOURCES INC. APPENDIX 18
Slide 19: Key Operational Metrics – El Limón Guajes (ELG)
KEY OPERATIONAL METRICS – El LIMÓN GUAJES (ELG)1 1) For more information on operational and financial results, please refer to Torex Gold’s latest MD&A filed on SEDAR (www.sedar.com) or on the Company’s website (www.torexgold.com) 19
Slide 20: Key Financial Metrics – Consolidated
KEY FINANCIAL METRICS – CONSOLIDATED1 1) For more information on operational and financial results, including information on non-IFSR measures (such as realized gold price, total cash cost, all-in sustaining cost, EBITDA, adjusted EBITDA, adjusted net earnings, free cash flow, and net (cash) debt, p
Slide 21: ELG Unit Operating Costs
ELG UNIT OPERATING COSTS1 Unit costs through the first nine months of 2020 tracking in line with 2019 1) Unit costs include direct costs and PTU (Profit sharing based on 10% of taxable income) allocated by cost center 21
Slide 22: Only a Portion of Land Package Has Been Drill Tested
ONLY A PORTION OF LAND PACKAGE HAS BEEN DRILL TESTED 75% of the broader Morelos property remains largely unexplored1 Significant exploration potential remains across the broader Morelos property Multiple targets have been identified To date, magnetic anomalies have been a strong indicator of potenti
Slide 23: We Are Focused on Enhancing Our ESG Disclosure
WE ARE FOCUSED ON ENHANCING OUR ESG DISCLOSURE Translating our actions associated with our values into real value1 ENVIRONMENT SOCIAL GOVERNANCE Zero Discharge Site (no discharge Currently surpassed 10 million hours Seasoned Executive Team with into local watersheds) worked without a lost-time injur
Slide 24: Corporate Information and Top Shareholders
CORPORATE INFORMATION AND TOP SHAREHOLDERS Broadly owned by skilled institutional investors Top 10 Shareholders2 Share Price Performance1 2.50 Institution Shares Shares (M) (%) 2.25 (Indexed to January 1, 2019) Blackrock 10.2 11.9% Price Performance - USD 2.00 VanEck - ETFs 8.8 10.3% RBC Asset Manag
Slide 25: Board of Directors
BOARD OF DIRECTORS Strong strategic and governance experience FRED STANFORD PEng ICD.D Executive Chair DAVID FENNELL LLB 35+ years of operational and corporate experience. Retired from Vale as 35+ years experience as a director and senior executive with TSX and President of its Ontario Operations. S
Slide 26: Management Team
MANAGEMENT TEAM Proven experience navigating technical, commercial and social complexity JODY KUZENKO LLB President and Chief Executive Officer BARRY MURPHY Pr Eng V.P. Engineering Joined Torex in 2018 as COO; assumed CEO position in June 2020. 25 years of international operating and project develop
Slide 27: Mineral Reserves – El Limón Guajes (ELG)
MINERAL RESERVES1 – EL LIMÓN GUAJES (ELG) As of December 31, 2019 Tonnes Au Ag Au Ag (Mt) (g/t) (g/t) (koz) (koz) Open Pit - El Limón (including El Limón Sur) Proven 3.13 3.53 3.9 356 397 Probable 8.18 3.08 4.0 811 1,039 Proven & Probable 11.31 3.21 4.0 1,167 1,436 Open Pit - Guajes Proven 2.41 3.44
Slide 28: Mineral Resources – El Limón Guajes (ELG)
MINERAL RESOURCES1 – El LIMÓN GUAJES (ELG) As of December 31, 2019 Tonnes Au Ag Au Ag (Mt) (g/t) (g/t) (koz) (koz) Open Pit - El Limón (including El Limón Sur) Measured 3.68 3.60 4.6 430 550 Indicated 13.11 2.80 5.0 1,180 2,120 Measured & Indicated 16.79 2.97 4.9 1,610 2,670 Inferred 1.96 1.87 5.4 1
Slide 29: Notes to Mineral Reserves & Resources (ELG)
NOTES TO MINERAL RESERVES & RESOURCES (ELG) Notes - El Limón Guajes Complex Reserve Statement Notes - El Limón Guajes Resource Statement 1) Mineral reserves are founded on Guajes, El Limón, El Limón Sur, Sub-Sill and El 1) The effective date of the estimate is December 31, 2019. Limón Deep measured
Slide 30: Mineral Resources – Media Luna
MINERAL RESOURCES – MEDIA LUNA As of December 31, 2019 Tonnes Au Ag Cu Au Ag Cu AuEq AuEq (Mt) (g/t) (g/t) (%) (Moz) (Moz) (Mlb) (g/t) (Moz) Media Luna Indicated 12.6 3.27 37.7 1.16 1.32 15.3 322 5.55 2.24 Inferred 33.5 2.49 23.6 0.93 2.68 25.5 686 4.23 4.56 Notes - Media Luna Resource Statement 1)
Slide 31: Media Luna – 2018 Preliminary Economic Assessment
MEDIA LUNA – 2018 PRELIMINARY ECONOMIC ASSESSMENT1,2 1) Metal Prices used $1,200/oz Au, $17.00/oz Ag, $3.00/lb Cu, USD:MXN 1:18 2) A preliminary economic assessment should not be considered a prefeasibility study or feasibility study, as the economics and technical viability of the Media Luna Projec
Slide 32: 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
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