Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (January 2022)
40 slides from Torex Gold Resources's investor presentation, January 2022
Slide 1: Corporate Presentation
TSX | TXG CORPORATE PRESENTATION January 2022
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT THE PRELIMINARY ECONOMIC ASSESSMENT (THE “PEA” OR “2018 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 EFFECTIVE MARC
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Future underpinned by solid fundamentals Attractively valued relative Consistent operator with industry- to intermediate peers leading safety track record Financially strong gold producer Long-life potential via Media with robust margins and a Luna project healthy balance sheet
Slide 4: 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 Deliver Media Luna Feasibility $39M exploration and drilling differentiator Study in Q1/22 on a con
Slide 5: ELG Well Positioned for Another Strong Year in 2022
ELG WELL POSITIONED FOR ANOTHER STRONG YEAR IN 2022 Production consistent with 2021 with AISC reflecting El Limón pushback Delivered record gold production of 468,200 ounces in 2021 Production guidance in 2022 is consistent with guided range in 2021 and with 3-year outlook released in Sep/21 Total c
Slide 6: El Limón Guajes (ELG) – A Foundational Asset
EL LIMÓN GUAJES (“ELG”) – A FOUNDATIONAL ASSET Future supported by strong cash flow and robust margins from ELG3 489,000 ozs of gold produced last 12 months (LTM) AISC2 margin of more than 50% LTM COVID Interruption Total EBITDA2 of $565M LTM Total free cash flow2 of $130M LTM COVID COVID Interrupti
Slide 7: ESG Excellence as a Foundation
ESG EXCELLENCE AS A FOUNDATION Sustained performance & ongoing improvement on ESG disclosure a key focus Staying COVID-19 Resistant ESG Ratings Strict protocols/screening remain in place MSCI: ‘A’ rating from ‘BBB’ By year-end 2021, 97% of direct employees and 85% Refinitiv: ‘B’ rating from ‘C’ of c
Slide 8: ESG Excellence as a Foundation
ESG EXCELLENCE AS A FOUNDATION Delivering value to shareholders while making a positive difference in society Productive relationships with Strong governance & diversity focus employees Women make up 50% of Executive Team 99% workforce from Mexico; 60% from and 44% of Board of Directors Guerrero Sta
Slide 9: Extending and Optimizing ELG a Key Strategic Priority
EXTENDING AND OPTIMIZING ELG A KEY STRATEGIC PRIORITY El Limón pushback extends open pit mining Pushback of El Limón pit extends open pit production to mid-2024 from late- 2023 and is expected to add ~150,000 ounces of production Accelerating near-term underground exploration to continue to extend l
Slide 10: ELG Underground – A Significant Value Driver
ELG UNDERGROUND – A SIGNIFICANT VALUE DRIVER Source of solid reserve growth over the last few years Mined gold production2 from ELG underground averaged 93 koz at a grade of ~7.5 g/t between 2019 and 2020 Mining rate of ~1,340 tpd YTD (Q3 2021) 84 koz mined YTD (Q3 2021) at a grade of ~7.1 g/t Under
Slide 11: Multi-Year Production Outlook for ELG
MULTI-YEAR PRODUCTION OUTLOOK FOR ELG On track to deliver a smooth transition between ELG and Media Luna2 ELG Only (excludes Media Luna) Guidance Outlook1,2 2021 2022 2023 2024 Gold Production koz 430 to 470 430 to 470 400 to 450 300 to 350 Guided production for 2022 in line with 3-year outlook Mode
Slide 12: Media Luna on Track for Production in Early 2024
MEDIA LUNA ON TRACK FOR PRODUCTION IN EARLY 2024 De-risking and advancing Media Luna as per plan1,2 Media Luna has the potential to be a Permitting well underway multi-decade underground mine1,2 CUS approved; MIA amendment 2018 PEA outlined average annual approved (for southside development) AuEq sa
Slide 13: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE1,2 Tunnelling from both sides of Balsas expected to mitigate schedule risk1 Guajes tunnel had advanced 1,033m at year-end 2021 (total of 1,300m including lateral development) Q4 2021: 460m of advance (599m total development) Rates expected to increase with arrival of a lon
Slide 14: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE1,2 Technical Report on schedule for completion in Q1 2022 Several scope changes have been made to the design Capital expenditures in upcoming Feasibility Study of Media Luna versus design outlined in 2018 PEA: expected to be higher than in 2018 PEA due to: Access and mater
Slide 15: 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 Media Luna would extend cashflow beyond life of ELG ~10 years based on 2018 PEA which assumed a top-end mining rate of 8,500 tpd2 ~7.5 years based on April 2021 Indicated reso
Slide 16: Exploration Has Become a Key Strategic Pillar
EXPLORATION HAS BECOME A KEY STRATEGIC PILLAR 75% of the broader Morelos property remains largely unexplored1 $39M budgeted towards exploration and drilling in 2022 $19M on infill and step-out drilling at Media Luna and EPO (~64,000 m) $6M on infill and step-out drilling at ELG Underground (~28,000
Slide 17: Cash Flow from ELG Funds Sustained Operations
CASH FLOW FROM ELG FUNDS SUSTAINED OPERATIONS Strong financial position to advance Media Luna and exploration3 Forecast cash balances exclude spending on Media Luna Robust cash flow from ELG supportive of funding Media Luna and value accretive exploration Potential to utilize debt to be considered b
Slide 18: Executing on Plan Expected to Deliver Re-rating
EXECUTING ON PLAN EXPECTED TO DELIVER RE-RATING Several key deliverables anticipated in the coming months EV/EBITDA P/CF FCF Yield P/NAV (2022-24) (2022-24) (2022-24) 0% (20%) Relative Discount to Intermediate Peers (40%) (26%) (Average) (36%) (60%) (48%) (80%) (66%) Optimize & Extend Advance & De-R
Slide 19: Appendix
Torex Gold RESOURCES INC. APPENDIX
Slide 20: Safety and Operational Excellence Intertwined
SAFETY AND OPERATIONAL EXCELLENCE INTERTWINED Culture focused on safety evident by ongoing performance 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 investigations Frame
Slide 21: 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 Exited 2021 with a LTIF of 0.14 per Seasoned Executive Team with into local watersheds) million hours worked 50% female r
Slide 22: 2020 Responsible Gold Mining Report
2020 RESPONSIBLE GOLD MINING REPORT Key Highlights 99% operations employees from Mexico; $64.3 million paid in salaries and benefits at site Industry leading safety performance Ratified two-year labour agreement with unionized employees (where annual agreements are the norm) 89% procurement spend in
Slide 23: 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 24: El Limón Expansion Extends Open Pit Life into Mid-2024
EL LIMÓN EXPANSION EXTENDS OPEN PIT LIFE INTO MID-2024 Pushback to support a smooth transition between ELG and Media Luna1 Expect to support a smooth transition between ELG and Media Luna Fit for purpose investment decision Adds ~150,000 ounces of gold during transition period Extends open pit mine
Slide 25: 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 increased stockpile rehandling owing to RopeCon repairs Processing costs impacted by higher cyanide and reagent co
Slide 26: Strong Cash Flow Generation
STRONG CASH FLOW GENERATION1 Balance sheet continues to strengthen with $222M in cash at end of Q3 2021 Generated $88M in operating cash flow ($100M prior to changes in non-cash working capital) and more than $29M in free cash flow during the third quarter 1) All amounts in US dollars unless otherwi
Slide 27: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1 Financial health of business continues to strengthen Net cash of $218M at quarter-end2 Available liquidity of more than $370M at end of Q3 Exited Q3 2021 with $222M of cash $150M revolving debt facility fully undrawn Debt free with less than $4M of lease obligations Amende
Slide 28: Cash Flow Seasonality
CASH FLOW SEASONALITY Cash flow tends to be weakest in H1 given timing of payments Final payments related to royalties, profit sharing (PTU), and taxes are subject to movements in the Mexican peso relative to the US dollar Cash flow from operations prior to changes in non-cash working capital impact
Slide 29: Monorail-Based Mining System
MONORAIL-BASED MINING SYSTEM Media Luna Feasibility Study to be advanced under a conventional mine design Mitigates risk to the business given Media Luna will be primary source of feed post mid-2024 Insufficient available upside at Media Luna as it relates to financial or schedule considerations Add
Slide 30: 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 31: Key Financial Metrics – Consolidated
KEY FINANCIAL METRICS – CONSOLIDATED1,2,3 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) All amounts in US dollars unless otherwise stated 3) For more information on operational and financial re
Slide 32: Corporate Information and Top Shareholders
CORPORATE INFORMATION AND TOP SHAREHOLDERS Broadly owned by skilled institutional investors Top 10 Shareholders2 Share Price Performance1 2.00 Institution Shares Shares TXG GDX Index (M) (%) 1.75 Blackrock 11.9 13.8% (Indexed to January 1, 2020) Price Performance - USD VanEck - ETFs 7.7 8.9% 1.50 RB
Slide 33: Board of Directors
BOARD OF DIRECTORS Ongoing Board refresh to maintain strong strategic and governance experience RICK HOWES PEng Chair of the Board ROSIE MOORE MSc (Geology) 40 years global technical, operational and management mining expertise; Exploration geologist whose 35+ year career includes experience in awar
Slide 34: Management Team
MANAGEMENT TEAM Proven experience navigating technical, commercial and social complexity JODY KUZENKO LLB President and Chief Executive Officer FAYSAL RODRIGUEZ V.P. Mexico Joined Torex in 2018 as COO; assumed CEO position in June 2020. 20+ years of mining experience in corporate & operational roles
Slide 35: Mineral Reserves – El Limón Guajes (ELG)
MINERAL RESERVES1 – EL LIMÓN GUAJES (ELG) As of December 31, 2020 Tonnes Au Ag Au Ag (Mt) (g/t) (g/t) (koz) (koz) Open Pit - El Limón (including El Limón Sur) Proven 2.48 3.59 4.3 286 344 Probable 5.84 2.90 4.2 545 787 Proven & Probable 8.32 3.11 4.2 831 1,130 Open Pit - Guajes Proven 1.88 3.87 3.4
Slide 36: Mineral Resources – El Limón Guajes (ELG)
MINERAL RESOURCES1 – El LIMÓN GUAJES (ELG) As of December 31, 2020 Tonnes Au Ag Au Ag (Mt) (g/t) (g/t) (koz) (koz) Open Pit - El Limón (including El Limón Sur) Measured 2.79 3.64 5.2 330 460 Indicated 9.03 2.66 5.7 770 1,650 Measured & Indicated 11.82 2.89 5.6 1,100 2,120 Inferred 1.68 1.73 7.4 90 4
Slide 37: Notes to Mineral Reserves & Resources (ELG)
NOTES TO MINERAL RESERVES & RESOURCES (ELG) Notes - El Limón Guajes Complex Reserve Statement Notes - El Limón Guajes Complex Resource Statement 1. Mineral reserves are founded on Guajes, El Limón and El Limón Sur measured 1. The effective date of the estimate is December 31, 2020. and indicated min
Slide 38: Mineral Resources – Media Luna
MINERAL RESOURCES – MEDIA LUNA Notes - Media Luna Resource Statement 1. The effective date of the estimate is April 30, 2021. 10. Mineral Resources are reported as undiluted; grades are contained grades. 2. Mineral Resources are reported above a 2.0 g/t gold equivalent (AuEq) cut-off 11. The estimat
Slide 39: 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 40: 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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