Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (September 2012)
36 slides from Torex Gold Resources's investor presentation, September 2012
Slide 1: Developing the Morelos Gold Project
TSX: TXG Developing the Morelos Gold G Project September, 2012
Slide 2: Safe Harbour Statement
Safe Harbour Statement This presentation contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information regarding future exploration and development plans concerning the Morelos gold pr
Slide 3: Executing on Our Strategy
Executing on Our Strategy High grade open pit project... Our strategy hasn’t changed: – Build a mine • Near-term, Nea te m high g grade ade open pit project p oject at feasibility stage – Find another one on the same property • Exciting new discovery to define at Media Luna which provides near-term
Slide 4: Torex Gold – A quick introduction
Torex Gold – A quick introduction A large 29,000 ha land package... ...in a great geological neighbourhood 4
Slide 5: Torex Gold – Investors have done well
Torex Gold – Investors have done well Torex has outperformed peers in a difficult market... Courtesy of BMO Capital Markets; Source: FactSet; Note: Shown in USD and adjusted for reinvested dividends Developer Peers include: Andina, Belo Sun, Detour, Eco Oro, Exeter, Gabriel, Guyana Goldfields, Inter
Slide 6: Torex Gold – An experienced team
Torex Gold – An experienced team Most have done this before... Terry MacGibbon, B.Sc., P.Geo., ICD.D Fred Stanford, P.Eng Chairman of the Board, President & CEO Chairman of the SHE Committee, Director Andrew Gottwald, CA Fred Stanford, P.Eng. Chief Financial Officer President & CEO, Director Al j d
Slide 7: What We've Accomplished
What We’ve Accomplished Since starting from scratch two years ago... Established two field camps and one prep lab Completed over 100,000 meters of resource drilling Developed p government g relations and obtained extensive communityy support pp Secured water rights Resolved Ejido land acce
Slide 8: Morelos Profile – BFS dated August 30, 2012
Morelos Profile – BFS dated August 30, 2012 BFS confirms robust project… Production Start Q1 2015 P & P Mineral Reserves 48.8 mt @ 2.61g/t LOM Strip Ratio (Waste:Ore) 5.6:1 Mill head grade 2.61 g/t Au Mill recovery 87 4 Au 87.4 A Mine Life 10.5 years Annual Production 2015 128 koz Au Annual Producti
Slide 9: What will this simple mine and mill produce?
What will this simple mine and mill produce? An after tax IRR of 24.2%... ...with exploration potential to extend the mine life 9
Slide 10: Robust project economics
Robust project economics Significant returns for stakeholders… US$1,276/oz (1) US$1,500/oz US$1,750/oz US$2,000/oz (B (Base C Case) ) (2) Cumulative Cash $1,558 $2,121 $2,747 $3,374 Flow US$M After Tax NPV @ $900 $1 262 $1,262 $1 679 $1,679 $2 096 $2,096 5% (US$ mm) After Tax IRR 24.2% 28.9% 34.6% 3
Slide 11: Torex's Competitive Advantage – Low Cash Cost
Torex’s Competitive Advantage – Low Cash Cost Competitive grade advantage leads to low costs that… $1,000 $904 $800 $742 $643 $572 $600 $531 $421 $413 $400 $200 -- Latin North Australia South Africa World Torex Torex LOM America America Average Average Average Average Average Source: 2012 Thomson Re
Slide 12: Next Steps and Near Term Objectives
Next Steps and Near Term Objectives Continue to de-risk the mine build project... • Construction permit applications to be submitted in September – Permits expected in 6-9 months • Village relocation process proceeds on schedule • Recruiting for the senior operations team is well underway • EPCM con
Slide 13: Financing – Balancing dilution and debt encumbrances
Financing – Balancing dilution and debt encumbrances As with everything, start with a structured plan... Continuing to work with in-house in house advisor that has done this many times – Ron Gagel, former CFO of FNX and Aur Resources Begun process to provide bank project financing alternative –
Slide 14: The Fun Part – Building It
The Fun Part – Building It A simple, high margin, mine and mill... El Limon pit North North pit Guajes pit 1K tph Rope- Con 14,000 tpd mill Dry stack tailings Water containment ...that we can all be proud to a be a part of 14
Slide 15: The Exciting Part – Finding More Ounces
The Exciting Part – Finding More Ounces We have exploration targets all over the place... ...current focus is the Media Luna Area (MLA) 15
Slide 16: Why focus on the Media Luna Area?
Why focus on the Media Luna Area? Great results and relatively close to the mill... ...we want to advance it very quickly 16
Slide 17: How encouraging have the results been?
How encouraging have the results been? Every hole hit skarn at the intrusive contact... ...except one that hit a dike 17
Slide 18: Potential Easy Access
Potential Easy Access The magnetite skarn... ...has been mapped on the face of the hill 18
Slide 19: Skarn at the intrusive contact has been predictable
Skarn at the intrusive contact has been predictable East/West, unless “diked out”, the skarn is there... ...and a high grade base metal hit in ML-46 19
Slide 20: Moving 600 meters north
Moving 600 meters north True to skarn form, the gold grades are variable... ...with very interesting silver and copper values 20
Slide 21: NW/SE, 3km magnetic anomaly strike length
NW/SE, 3km magnetic anomaly strike length One kilometre explored so far... ...infill has supported the model of continuity 21
Slide 22: The Exciting Part – Finding more ounces
The Exciting Part – Finding more ounces Adding more and larger drills to MLA... ...which will increase the pace of news flow 22
Slide 23: Torex differentiated within peer group
Torex differentiated within peer group Torex will continue to add value… • A simple project with robust economics – High grade equals high margins and high returns – Very competitive capital and operating costs – It is harder to break a high grade project • We can finance development – Capex scale w
Slide 24: Appendix
TSX: TXG Appendix
Slide 25: Reserves
Reserves 85% of M&I Resource was converted to reserve... Tonnes Gold Grade Gold Silver Silver Reserve R ( illi ) (millions) ( /t Au) (g/t A ) O Ounces G d Grade O Ounces Category (g/t Ag) o e Proven 10.5 05 2.93 93 994,000 99 ,000 33.67 6 1,245,000 , 5,000 Probable 38.2 2.52 3,096,000 4.53 5,569,000
Slide 26: Operating Cash Costs
Operating Cash Costs Cash costs net of silver revenue US$421 / oz ((After the declaration of commercial p production and without the production tail at the end of mine life) (Includes 2.5% royalty to the government) Mining cost per tonne US$1.90 / tonne (After the declaration of commercial productio
Slide 27: Key expenditures before and after commercial production
Key expenditures before and after commercial production in US$ Capex required up to Capex required after commercial production commercial production Expenditures (With Contingency) Plant & Infrastructure 452 M 15 M Mine Access Roads 27 M 2M Initial Mine Equipment q p Fleet 48 M 46 M Mining Ore & Was
Slide 28: The strategy has delivered for investors
The strategy has delivered for investors The junior gold space has been a tough market... Belo Sun 30% Torex 22% Spot Gold 22% Detour (19%) Sabina (39%) Rubicon (42%) Orezone (52%) Probe (58%) Keegan (60%) Note: Relative performance shown in Canadian Dollars Source: BMO Capital Markets, Bloomberg an
Slide 29: Morelos Mineral Resource Estimate at a 0.5 g/t Au Cutoff Grade
Morelos Mineral Resource Estimate at a 0.5 g/t Au Cutoff Grade. Effective date is 4 May, 2012 Deposit Resource Tonnes Gold Grade Gold Ounces Category (Mt) (g/t) (000’s) El Limon M&I 32 1 32.1 3 04 3.04 3 135 3,135 Guajes M&I 21.7 2.42 1,689 Total M&I 53.8 2.79 4,824 El Limon Inferred 8.3 2.0 543 Gua
Slide 30: Morelos: A World-Class Deposit
Morelos: A World-Class Deposit 4 New Liberty 3 Perama Hill Meadow Bank Massawa M l Morelos Grade (g/t) Golden 2 Meadows Haile 5 Central Pit 1 Tocantinzinho Esaase Ashanti Amulsar North America 1 Kiaka Toroparu Bombore Africa Shahuindo Blackwater South America 4 Volcan Rest of World -- -- 2 4 6 8 10
Slide 31: The Guerrero Gold Belt: a growing mining district
The Guerrero Gold Belt: a growing mining district Surrounding Projects Com pany Project Status M&I: 4.8 moz Au @ 2.79 gg/t T Torex M l Morelos Inferred: 620 koz Au @ 2.0 g/t Inferred: 68.2 koz Au @ 1.49 g/t Cayden Mina Verde (0.2 g/t cut-off grade) Surface sampling yielded grades of Citation Biricu
Slide 32: Who is going to build it?
Who is going to build it? A project that is going to be built... M3 Engineering of Tucson, Arizona Lead consultant, responsible for overall document process and infrastructure design El AMEC Mining & Metals Consulting of Sparks, Nevada Limon Responsible for resource estimation Pit SRK Canada of Toro
Slide 33: 2012 has been a transformational year
2012 has been a transformational year Major advances toward production... T k Task 2012 2013 2014 2015 Land lease agreements New resource estimate Bankable feasibility study Permits Construction decision Construction Commissioning Production Exploration results ...and rapid advance on the expl
Slide 34: What do we have to work with?
What do we have to work with? Lots of cash on hand to do everything that... • Approx. $70 million cash August 31, 2012 TXG: C$1.82 • No debt 413 million shares issued Market cap $751M • Large, high-grade, open pit gold deposit ...has to be done before a construction decision 34
Slide 35: Analyst Coverage
Analyst Coverage BMO Capital Markets Scotia Capital Analysts: Andrew Breichmanas Breichmanas, P.Eng P Eng Analyst: Trevor Turnbull, MBA, MSc Tel. (416) 359 8387 Tel. (416) 863 7427 Email: Andrew.breichmanas@bmo.com Email: Trevor_Turnbull@scotiacapital.com Dundee Securities Corporation Stifel Nicolau
Slide 36: TSX: TXG
TSX: TXG For further information: Gabriela Sanchez, VP Investor Relations email: gabriela.sanchez@torexgold.com Mobile: (416) 357-6673 www.torexgold.com
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