Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Gold Forum Americas 2020
32 slides from Torex Gold Resources's conference presentation, September 2020
Slide 1: Gold Forum Americas 2020
TSX | TXG GOLD FORUM AMERICAS 2020 SEPTEMBER 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% (10%) Relative Discount to (20%) Intermediate Peers (30%) (40%) (25%) (41%) (36%) (50%) (42%) Single Asset and Perceived Reserv
Slide 5: COVID-19 Risks Being Actively Managed
COVID-19 RISKS BEING ACTIVELY MANAGED Strong re-start post government mandated suspension; guidance reissued1,2 Developed and implemented a “layers of protection” approach for the ongoing health of our workforce; shored up supply chain early on to mitigate risk Production was suspended in April, par
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 ELG Financially robust open pit and underground Production expected to remain consistent operation through mid-2023 $337M of Adjusted EBITDA and $141M of Free Current run rate through 2022 suppor
Slide 7: Safety and Operational Excellence Intertwined
SAFETY AND OPERATIONAL EXCELLENCE INTERTWINED ELG surpassed 8 million hours lost time injury free in August 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 investigat
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 Drill testing additional high priority targets including the down-dip extension of ore in
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 $1,200 Projected cash flow from ELG Excludes Media Luna Capex 2020 onwards1,2,3 $1,000 expected to be more than sufficient to fund debt repayment $800 Year-End Cash / Debt (M$) and dev
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 Addition of the South Portal provides a number of benefits: get to bottom of Media Luna • Allows access for employees on south side of river as well depo
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 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Mining - Open Pit Ore mined (kt) 1,208 1,167 1,070 1,693 1,314 1,475 1,736 666 Waste mined (kt) 9,846 10,065 12,281 11,450 11,923 10,795 11,726 4,435 Waste:Ore 8.2 8.6 11.5 6.8 9.1 7.3 6.8 6.7 Gold grade
Slide 20: Key Financial Metrics – Consolidated
KEY FINANCIAL METRICS – CONSOLIDATED1 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Key Metrics Gold sold (oz) 102,919 104,169 76,473 113,419 132,535 126,910 108,064 63,147 Realized gold price ($/oz) $1,214 $1,235 $1,302 $1,314 $1,478 $1,481 $1,571 $1,712 Total cash cost ($/oz) $590 $627 $745 $606
Slide 21: ELG Unit Operating Costs
ELG UNIT OPERATING COSTS Unit costs include direct costs as well as impact of profit sharing (PTU)1 $2.50 $80 $40 $12 Open Pit Mining ($/t moved) Underground Mining ($/t ore) $2.00 $10 Processing ($/t ore) $60 $30 Site G&A ($/t ore) $8 $1.50 $40 $20 $6 $1.00 $4 $20 $10 $0.50 $2 $0.00 $0 $0 $0 2019 2
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 Surpassed 8 million hours worked Seasoned Executive Team with into local watersheds) without a lost-time injury 40% femal
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 9.3 10.8% Price Performance - USD 2.00 VanEck - ETFs 8.3 9.7% Sprott Asset Mana
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