Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (September 2023)
58 slides from Torex Gold Resources's investor presentation, Sep 15, 2023
Slide 1: Corporate Presentation
TSX | TXG CORPORATE PRESENTATION September 2023 All amounts expressed in U.S. dollars unless otherwise stated
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: Torex Overview
TOREX OVERVIEW Intermediate Gold & Copper Producer C$1.2B 0.54x market value P/NAV1 Significant Size & Scale #2 474 koz gold producer in Mexico in 2022 gold produced in 2022 Large & Growing Resource Base ~4.9 Moz ~7.5 Moz ~2.1 Moz AuEq P&P at 3.98 gpt2 AuEq M&I at 4.86 gpt2 AuEq Inf. at 4.15 gpt2 He
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 On track to meet full year 2023 production guidance All-in sustaining costs margin2 of 38% YTD Q2 2023 Adjusted EBITDA2 of $238M generated YTD Q2 2023 Expect to return free cash flow2 positive in 2025
Slide 6: Five-Year Production Outlook
FIVE-YEAR PRODUCTION OUTLOOK1,3 Continuously working to optimize future output 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 to 470 435.7 2024 (AuEq) 300 to 3
Slide 7: Consistent and Reliable Producer
CONSISTENT AND RELIABLE PRODUCER Well positioned to deliver on full year guidance1 In millions of U.S. dollars, unless otherwise noted FY 2023 YTD Q2 2023 FY 2022 Guidance Performance Performance Gold Production oz 440,000 to 470,000 230,425 474,035 Total Cash Costs2 $/oz 740 to 780 775 730 All-in S
Slide 8: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to significantly 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 8
Slide 9: Optimize & Extend ELG
OPTIMIZE & EXTEND ELG Maximizing potential of ELG Open Pits and ELG Underground1 Feed Source2 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 ELG Open Pits ELG Underground Media Luna Underground Stockpiles Open pit mine life pushed out to mid-2025 following reserve additions in El Limón and E
Slide 10: Optimize & Extend ELG
OPTIMIZE & EXTEND ELG Key focus is on increasing mine life and boosting output from ELG Underground1 Cumulative gold mined plus year-end reserves On track to exit 2024 at targeted mining rate of reflect a 400% increase over initial reserves 2,000 tpd following record throughput of 1,913 tpd in Q2 20
Slide 11: 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 Executable Feasibility Study backe
Slide 12: Advance & De-Risk Media Luna
ADVANCE & DE-RISK MEDIA LUNA Development activities advancing well towards peak rates in 20231 Project tracking to schedule and budget Key purchase orders signed: BEV underground support equipment (MacLean) BEV personnel transport equipment (Rokion) Ball mill replacement motors and variable 1) Physi
Slide 13: Guajes Tunnel Progress Update
GUAJES TUNNEL PROGRESS UPDATE Breakthrough of tunnel on south side of Balsas River anticipated by early Q1 20241,2 Guajes Tunnel north access advanced ~4,925 m as at the end of August; 5 km mark crossed in September Average daily advance rate of 6.9 m year-to-date Successfully crossed under the Bals
Slide 14: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE Development activities advancing well; concentrate production on track for late-20241 Sedimentation pond construction Water treatment plant and substation Pouring footing for Mazapa bridge Pouring foundation for comedor at MML camp Footings for tower crane and flotation ce
Slide 15: 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 beyond 202
Slide 16: Grow Reserves & Resources
GROW RESERVES & RESOURCES Key strategic focus and investment in exploration and drilling1 Drilling/exploration budget of $39M in 2023 $20M at Media Luna Cluster (~55,000 m) Infill and expansionary drilling at EPO Inaugural drill program at ML West $6M at ELG Underground (~30,000 m) Infill and expans
Slide 17: Grow Reserves & Resources
GROW RESERVES & RESOURCES ELG Underground remains a key focus given potential to fill the mill beyond 20271 Initial results from 2023 drilling demonstrated the potential to expand and upgrade resources El Limón Sur Deep: Extended higher-grade mineralization outside of current resource and validated
Slide 18: Grow Reserves & Resources
GROW RESERVES & RESOURCES Initial results from 2023 drilling at EPO indicate potential to upgrade/expand resources Resource categorization drilling (732 koz AuEq in Inf., 671 koz AuEq in Ind.) Infill drilling along the southern portion of the deposit returned intercepts with similar grades and width
Slide 19: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Well positioned to fund remainder of Media Luna Project1 Estimated internal funding requirement of $129M including $50M increase to revolving facility as part of an amended credit agreement that closed in early August Free cash flow prior to spending on Media Luna Project
Slide 20: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Managing gold price risk during build-out of Media Luna Project1 All amounts in U.S. dollars 2023 2024 Q3 Q4 Q1 Q2 Q3 Q4 Forward Contracts Gold Volumes koz 43.5 43.5 43.5 43.5 27.0 27.0 Gold Price $/oz $1,957 $1,957 $1,966 $1,966 $1,939 $1,939 Hedged gold production covers
Slide 21: 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 water discharge operation Women make up 43% of Executive Team and 37% Filtered tailings facility materi
Slide 22: 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 targets 1 a Sustaina
Slide 23: Executing on Long-Term Strategy
EXECUTING ON LONG-TERM STRATEGY1 Targeting to improve valuation by successfully delivering on our plans WE DID WHAT WE SAID WE WOULD DO OUR GO-FORWARD PLAN IS ON TRACK Pivoted the strategy to focus on mining and Deliver Media Luna on time and on budget exploration Fill the mill beyond 2027 by bringi
Slide 24: Appendix – Corporate Information
APPENDIX – CORPORATE INFORMATION
Slide 25: 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 26: 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 27: 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 28: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Well positioned to fund strategic priorities Net cash2 of $274M at quarter-end Available liquidity of $577M3 post amended facility Exited Q2 2023 with $285M of cash Amended credit agreement closed in early August Debt free and less than $12M of lease-related Extends maturi
Slide 29: Corporate Summary
CORPORATE SUMMARY 1 2 Share Price Performance Shareholder Data 1.50 Resource Other 1.25 (Active) (Indexed to January 1, 2021) (Active) Price Performance - USD 27% 15% 1.00 Resource 0.75 (Passive) 13% 0.50 0.25 Other TXG GDXJ Index (Passive) Undisclosed/ 0.00 Retail 11% Jul-21 Nov-21 Jul-22 Nov-22 Ju
Slide 30: Gold Production Guidance
GOLD PRODUCTION GUIDANCE1,2 Consistent track record of delivering on full year production guidance 1) Please refer to Safe Harbor Statement on slide 2. 2) Guidance Notes: * Production guidance in 2018 provided with Q1 financial results in May 2018 with restart of operations following five-month bloc
Slide 31: Total Cash Costs Guidance
TOTAL CASH COSTS GUIDANCE1,2,3 Even with COVID government shut down, only narrowly missed original cost guidance 1) Please refer to Safe Harbor Statement on slide 2. 2) For more information on operational and financial results, including information on non-GAAP measures (such as TCC), please refer t
Slide 32: All-In Sustaining Costs Guidance
ALL-IN SUSTAINING COSTS GUIDANCE1,2,3 Achieved full year all-in sustaining cost guidance the past several years 1) Please refer to Safe Harbor Statement on slide 2 2) For more information on operational and financial results, including information on non-GAAP measures (such as AISC), please refer to
Slide 33: Robust Cash Flow Generation from ELG
ROBUST CASH FLOW GENERATION FROM ELG Funding position on solid footing given available liquidity and ongoing cash flow LTM Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q2 2023 Net cash generated from operating activities (M$) $102.4 $132.1 $47.0 $89.6 $371.1 Free cash flow (M$)1 $32.0 $40.5 ($54.0) ($37.4) ($18.
Slide 34: Key Operational Metrics
KEY OPERATIONAL METRICS1 Consolidated Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2021 2021 2022 2022 2022 2022 2023 2023 Mining - ELG Open Pit Ore mined (kt) 1,406 864 1,061 987 883 959 916 644 Ore mined (tpd) 15,283 9,392 11,789 10,846 9,598 10,420 10,182 7,074 Waste mined (kt) 7,476 8,972 8,958 7,960 9,097 8,546 8,4
Slide 35: Key Financial Metrics
KEY FINANCIAL METRICS1 Consolidated All amounts in U.S. dollars Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2021 2021 2022 2022 2022 2022 2023 2023 Key Metrics Gold sold (oz) 118,989 109,391 108,012 123,363 119,834 121,913 118,455 105,749 Realized gold price ($/oz) $1,786 $1,798 $1,876 $1,865 $1,715 $1,784 $1,899 $1,96
Slide 36: Unit Cost Performance
UNIT COST PERFORMANCE1 Solid cost performance despite ongoing inflationary pressures2 Open pit mining costs in-line with levels delivered in 2022 Economies of scale from higher underground mining rates continue to mitigate cost pressures Processing costs reflect higher reagent and other consumable p
Slide 37: 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 U.S. dollar Cash flow from operations prior to chang
Slide 38: 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 39: 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 40: Responsible Gold Mining
RESPONSIBLE GOLD MINING Key Highlights from 2022 99% operations employees from Mexico; $69M paid in salaries/benefits Industry-leading safety performance 0.28 LTIF – 13x lower than Mexican average1 92% procurement spend in Mexico; $107M paid to companies in Guerrero State 11 unique Community Develop
Slide 41: Leverage Innovation
LEVERAGE INNOVATION Proven technology to improve safety, minimize emissions, and drive value1 ROPECON FILTERED TAILINGS SART PLANT BEV FLEET2 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-i
Slide 42: 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 43: Appendix – March 2022 Technical Report
APPENDIX – MARCH 2022 TECHNICAL REPORT
Slide 44: Media Luna Project
MEDIA LUNA PROJECT 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 through 2
Slide 45: Media Luna Project
MEDIA LUNA PROJECT 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 co
Slide 46: Media Luna Project
MEDIA LUNA PROJECT 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 co
Slide 47: Upfront cost to develop Media Luna Project estimated at $848M
MEDIA LUNA PROJECT Upfront cost to develop Media Luna Project estimated at $848M1,2 Metrics as of April 1, 2022 Total ($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 Portals & Tunnels $4
Slide 48: Drilling in 2023 focused on fill the mill initiatives
MEDIA LUNA PROJECT Drilling in 2023 focused on supporting fill the mill initiatives and mine life extensions1 Mill capacity reduced from 13.0 ktpd to 10.6 ktpd in Q4 2024 Extend mine life and increase mining rates of ELG Underground Add incremental feed from ELG open pits Additional mill feed from M
Slide 49: After-tax NPV (5%) of Morelos Complex and Media Luna
MEDIA LUNA PROJECT After-tax NPV (5%) of Morelos Complex and Media Luna Project1,2 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), $2
Slide 50: Media Luna Project Schedule
MEDIA LUNA PROJECT SCHEDULE1,2 1) Please refer to Safe Harbor Statement on slide 2. 2) Updated based on progress and revised schedule as of June 30, 2023 (refer to press release dated July 26, 2023, titled Torex Gold Provides Third Quarterly Update on Media Luna Project) 50
Slide 51: Appendix – Mineral Reserves & Resources
APPENDIX – MINERAL RESERVES & RESOURCES
Slide 52: 2022 Mineral Reserve Additions
2022 MINERAL RESERVE ADDITIONS Drilling successful in replacing a majority of AuEq reserve depletion in 20221,2 Replaced 68% of gold equivalent (“AuEq”) reserves processed in 2022 Replaced mine depletion in ELG Underground Expansion of El Limón pit added 190 koz to reserves and expansion of El Limón
Slide 53: 2022 Mineral Resource Additions
2022 MINERAL RESOURCE ADDITIONS AuEq resource growth in 2022 driven by EPO, Media Luna, and ELG Underground1,2 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: Ongoing success in ELG Underground Inaugural Indi
Slide 54: 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 55: 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 56: 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 57: 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 58: TSX | TXG
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
Torex Gold Resources — Investor Presentation (September 2023) on 6ix