Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (April 2022)
58 slides from Torex Gold Resources's investor presentation, Apr 12, 2022
Slide 1: Corporate Presentation
TSX | TXG CORPORATE PRESENTATION April 2022 All amounts expressed in U.S. dollars unless otherwise stated
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT The Company has presented certain future non-GAAP financial measures (“Non-GAAP Measures”) in this presentation within the meaning of National Instrument 52-112 – Non-GAAP and Other Financial Measures. Total cash costs per ounce of gold or gold equivalent (AuEq) sold (“TCC”), t
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 operation 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 Commence formal construction of $39M exploration and drilling differentiator Media Luna Project bud
Slide 5: El Limón Guajes (ELG) – A Foundational Asset
EL LIMÓN GUAJES (“ELG”) – A FOUNDATIONAL ASSET Future supported by strong cash flow and robust margins from ELG1 Record production of 468,203 ounces in 2021 AISC2 margin of 47% achieved in 2021 COVID Interruption Generated $491M of adjusted EBITDA2 in 2021 Free cash flow2 of $98M during 2021 COVID C
Slide 6: Operational Guidance
OPERATIONAL GUIDANCE1 Well positioned for another strong year in 2022 In millions of U.S. dollars, unless otherwise noted 2022 2021 Guidance Guidance Actual Gold Production koz 430 to 470 430 to 470 468.2 Total Cash Costs2 $/oz $695 to $735 $680 to $720 $674 All-in Sustaining Costs2 $/oz $980 to $1,
Slide 7: Multi-Year Outlook
MULTI-YEAR OUTLOOK1 Forward production ranges now incorporate gold equivalent output from Media Luna Projected improvement in 2023 reflects ongoing optimization within the ELG Mine Complex Increase in 2024 reflects first gold equivalent production from Media Luna Gold equivalent production expected
Slide 8: ESG Excellence as a Foundation
ESG EXCELLENCE AS A FOUNDATION Sustained performance & ongoing improvement on ESG disclosure a key focus Managing the latest wave of COVID-19 ESG Ratings By year-end 2021, 97% of employees and 85% of MSCI: ‘A’ rating from ‘BBB’ contractors fully vaccinated against COVID-19 Refinitiv: ‘B’ rating from
Slide 9: 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 43% of Executive Team 99% workforce from Mexico; 60% from and 44% of Board of Directors Guerrero Sta
Slide 10: The Foundation for Growth Has Been Cast
THE FOUNDATION FOR GROWTH HAS BEEN CAST1,2 Development of Media Luna to have a material impact on Morelos Complex Life of mine more than triples to 11.75 years versus ELG standalone case of 3.5 years Annual AuEq sold3 of 374 koz at a mine-site AISC4 of $954/oz AuEq 450 koz AuEq at a mine-site AISC o
Slide 11: Media Luna Mine Design
MEDIA LUNA MINE DESIGN Mineral Reserve1 of 23 Mt to be mined from 6 discrete mining blocks ML designed for longhole open stope mining Looking Southeast Separate mining blocks enable production capacity MLU 1 Dedicated infrastructure for each block MLU 2 South Portals MLL 3 MLL 1 MLL 2 Guajes Tunnel
Slide 12: Final Process Flowsheet for Morelos Complex
FINAL PROCESS FLOWSHEET FOR MORELOS COMPLEX1 1) Please refer to Safe Harbor Statement on slide 2. 12
Slide 13: Tunnel Development
TUNNEL DEVELOPMENT1,2 Advancing from both sides of Balsas River expected to mitigate schedule risk Guajes Tunnel expected to have advanced ~1,540 m by end of March New bolter with longer reach has been commissioned Budgeted a daily advance rate of 6.0 to 6.5 m South Portal Upper has now split with u
Slide 14: Consistent Output Maintained Through 2027
CONSISTENT OUTPUT MAINTAINED THROUGH 20271 Media Luna extends production profile and provides meaningful exposure to Cu Annual AuEq sold2,3 of 450 koz through 2027 when process plant is at full capacity Similar run rate as last three years Annual Cu sales of 45 Mlbs post 2024 when the ML Project bec
Slide 15: Attractive Cost Profile Maintained
ATTRACTIVE COST PROFILE MAINTAINED1,2,3 Robust margins forecast over life of mine including a mine-site AISC margin4 of 41% Average TCC4 of $809/oz AuEq implying a TCC margin4 of 50% at base case metal prices Average mine-site AISC4 of $954/oz AuEq implying mine-site AISC margin4 of 41% Potential to
Slide 16: Non-Sustaining Capital Expenditures
NON-SUSTAINING CAPITAL EXPENDITURES1 Upfront cost to develop Media Luna Project estimated at $848M Metrics as of April 1, 2022 Total ($M) Excludes $124M of project costs incurred prior to Non-Sustaining2,3 - Media Luna Project April 1, 2022 Directs Guajes Portal & Tunnel $75.8 South Portals & Tunnel
Slide 17: Significant Leverage to Stronger Metal Prices
SIGNIFICANT LEVERAGE TO STRONGER METAL PRICES1,2 Implied IRR of Media Luna Project increases to 24.9% at spot prices 1) Please refer to Safe Harbor Statement on slide 2. 2) As per Technical Report for the Morelos Complex dated March 31, 2022. 3) For more information on operational and financial resu
Slide 18: Leveraging Excess Capacity Post 2027
LEVERAGING EXCESS CAPACITY POST 20271 Exploration already targeting to the fill the mill while extending overall life of mine Mill capacity = 10,600 t/d Media Luna = 7,500 tpd Initiatives underway to address excess capacity post 2027 Exploration/drilling a key strategic pillar Historically under inv
Slide 19: Significant Resource Potential
SIGNIFICANT RESOURCE POTENTIAL1 75% of the broader property remains largely unexplored Drilling/exploration budget of $39M in 2022 Tecate Esperanza $19M within ML Cluster (~64,000 m) Querenque $6M on infill and step-out drilling at ELG Underground (~28,000 m) $9M on near-mine drilling (~28,500 m) an
Slide 20: ELG Underground – A Significant Value Driver
ELG UNDERGROUND – A SIGNIFICANT VALUE DRIVER1 Continues to be a key driver of Reserve growth Mined underground production2 since 2019 has averaged 97 koz Au at a grade of ~7.4 g/t Au Record annual mining rate of ~1,260 tpd in 2021 Underground gold Reserves increased 20% in 2021 Current Reserves plus
Slide 21: Media Luna Cluster Remains Under Explored
MEDIA LUNA CLUSTER REMAINS UNDER EXPLORED1 Significant resource potential exists within the broader Media Luna area Significant resource potential exists to expand Resources and Reserves around Media Luna EPO Current Mineral Resource covers about 1/3rd of North ML02 associated magnetic anomalies Inf
Slide 22: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1 Financial health of business continues to strengthen Available liquidity of $406M at end of Q4 2021 Strong balance sheet with no debt Robust forecast cash flows from ELG Mining Complex through Media Luna build Target $250M to $300M of debt to support strategic priorities:
Slide 23: Liquidity Expected to Be Enhanced via Debt Financing
LIQUIDITY EXPECTED TO BE ENHANCED VIA DEBT FINANCING1 Targeting $250M to $300M to support balance sheet during Media Luna build Annual cash flow of $190M forecast through 2024 before ML expenditures at $1,600/oz gold2,3,4 Analysis assumes $20M of corporate G&A and $35M of exploration/drilling annual
Slide 24: Executing on Plan Expected to Deliver Re-Rating
EXECUTING ON PLAN EXPECTED TO DELIVER RE-RATING Several key deliverables anticipated in the coming months Optimize & Extend Advance & De-Risk Grow Reserves & ELG Media Luna Resources Deliver consistent production Advance Guajes Tunnel as per $39M drill budget in 2022 and cash flow schedule Fill the
Slide 25: Appendix: March 2022 Technical Report
Appendix March 2022 Technical Report All amounts expressed in U.S. dollars unless otherwise stated
Slide 26: Summary of March 2022 Technical Report
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. 3) Gold equivalent sold assumes long-term gold price of $1,600/oz ($1,700/oz in 2022), silver price of $21/oz and copper price of $3
Slide 27: Summary of March 2022 Technical Report
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. 3) Gold equivalent sold assumes long-term gold price of $1,600/oz ($1,700/oz in 2022), silver price of $21/oz and copper price of $3
Slide 28: Materials Handling System
MATERIALS HANDLING SYSTEM Separate ore passes and one waste pass feed the GT conveyor Dedicated ore/waste passes Gravity fed grizzlies with rock-breakers Dedicated bins above Guajes Tunnel conveyor 28
Slide 29: Mine Services & Logistics
MINE SERVICES & LOGISTICS1 Building a clean, energy efficient mine with the future in mind Mobile Equipment Fleet BEV Units Hybrid Fleet - Diesel and BEV mobile equipment 14 tonne LHD 11 Less ventilation required, reduced vent infrastructure costs Top-Hammer Longhole Drill Rig 5 ITH Drill with reame
Slide 30: Credible Ramp-Up Period Assumed for Media Luna
CREDIBLE RAMP-UP PERIOD ASSUMED FOR MEDIA LUNA1 Media Luna expected to take 3 years to reach design rate of 7,500 tpd Assuming a 3-year ramp-up from initial production ore (3.5 years from first development ore) Industry ramp-up periods tend to be underestimated, which can have negative implications
Slide 31: Life of Mine Recoveries and Payable Factors
LIFE OF MINE RECOVERIES AND PAYABLE FACTORS1,2 Ore from Media Luna will result in significantly higher copper and silver production 1) Please refer to Safe Harbor Statement on slide 2. 2) As per Technical Report for the Morelos Complex dated March 31, 2022. 31
Slide 32: Media Luna Project Capital Cost
MEDIA LUNA PROJECT CAPITAL COST1 Initial capital cost planned expenditure by quarter Total projected spend of $848M with peak quarterly spend through 2023 Commercial production expected to be declared on January 1, 2025 $85M of underground mine development during pre-commercial mining period (Q4 202
Slide 33: Sustaining Capital Expenditures
SUSTAINING CAPITAL EXPENDITURES1 Reflects costs of running and sustaining a large-scale underground operation Metrics as of April 1, 2022 Total Total Total ($M) ($/t ore) ($/oz AuEq) Total ore processed (kt) 39,778 Total payable gold equivalent sold (koz AuEq) 4,392 2,3 Sustaining ELG Open Pit - Cap
Slide 34: Life of Mine Unit Costs
LIFE OF MINE UNIT COSTS1,2 Opportunities to improve overall cost structure being investigated Potential to reduce ELG UG mining costs: Employing longhole stoping Opportunities to reduce contract mining costs Higher processing costs post 2025 reflect additional processes to recover metal at Media Lun
Slide 35: Attractive Cost Profile
ATTRACTIVE COST PROFILE1 Reconciliation of gold equivalent costs and by-product costs Metrics as of April 1, 2022 LOM AuEq Au ($M) ($/oz) ($/oz) Metal Sold 2,3 Total payable gold equivalent sold (AuEq) 4,392 Total payable gold sold (Au) 3,294 Operating Costs Operating expenses $3,122 $711 $947 Treat
Slide 36: Well Positioned on the Industry Cost Curve
WELL POSITIONED ON THE INDUSTRY COST CURVE1,2 Average mine-site AISC3,4 screens well against peers5 on a co-product basis Mine-site AISC = $954/oz AuEq 1) Please refer to Safe Harbor Statement on slide 2. 2) As per Technical Report for the Morelos Complex dated March 31, 2022. 3) For more informatio
Slide 37: Sensitivity Analysis
SENSITIVITY ANALYSIS1,2 After-tax NPV (5%) of Morelos Complex and Media Luna Project 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),
Slide 38: Media Luna Project Schedule
MEDIA LUNA PROJECT SCHEDULE1 1) Please refer to Safe Harbor Statement on slide 2. 38
Slide 39: Appendix: Mineral Reserves & Resources
Appendix Mineral Reserves & Resources All amounts expressed in U.S. dollars unless otherwise stated
Slide 40: Mineral Reserves – Morelos Complex
MINERAL RESERVES1 – MORELOS COMPLEX 1) For notes accompanying Mineral Reserves for Morelos Complex please refer to slide 68. 40
Slide 41: Notes to Mineral Reserves – Morelos Complex
NOTES TO MINERAL RESERVES – MORELOS COMPLEX Notes to accompany Mineral Reserve Table Notes to accompany the ELG Underground Mineral Reserves 1. Mineral Reserves were developed in accordance with CIM (2014) guidelines. 15. Mineral Reserves are founded on Measured and Indicated Mineral Resources, with
Slide 42: Mineral Resources – Morelos Complex
MINERAL RESOURCES1 – MORELOS COMPLEX 1) For notes accompanying Mineral Resources for Morelos Complex please refer to slide 70. 42
Slide 43: Notes to Mineral Resources – Morelos Complex
NOTES TO MINERAL RESOURCES – MORELOS COMPLEX Notes to accompany the Summary Mineral Resource Table Notes to accompany ELG Underground Mineral Resources 1. CIM (2014) definitions were followed for Mineral Resources. 14. Mineral Resources are reported above a cut-off grade of 2.6 g/t Au. 2. Mineral Re
Slide 44: Appendix: Corporate Information & ESG
Appendix Corporate Information & ESG All amounts expressed in U.S. dollars unless otherwise stated
Slide 45: 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 46: 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 43% female r
Slide 47: 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 48: 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 49: Extending and Optimizing ELG a Key Strategic Priority
EXTENDING AND OPTIMIZING ELG A KEY STRATEGIC PRIORITY1 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
Slide 50: Cost Performance
COST PERFORMANCE1 Actively pursuing opportunities to offset cost inflation Open pit costs higher due to RopeCon repairs mid-year and higher contractor costs associated with COVID-19 Higher underground costs reflect increased levels of development than in 2020 Processing costs reflect higher levels o
Slide 51: Strong Cash Flow Generation
STRONG CASH FLOW GENERATION Balance sheet continued to strengthen with $256M in cash at year-end • Generated $330M in operating cash flow ($365M prior to changes in non-cash operating working capital) • Cash balance improved $82M during the year including repayment of $40M of remaining long-term deb
Slide 52: Cash Flow Seasonality
CASH FLOW SEASONALITY1,2 Cash flow tends to be weakest in H1 given timing of payments Seasonality expected to be more pronounced in 2022 than 2021 given gold production is anticipated to be higher in H2 than in H1 Final payments related to royalties, profit sharing (PTU), and taxes are subject to mo
Slide 53: 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
Slide 54: 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) For more information on operational and financial results, including information on non-GAAP measures (s
Slide 55: Corporate Information and Top Shareholders
CORPORATE INFORMATION AND TOP SHAREHOLDERS Broadly owned by skilled institutional investors 55
Slide 56: 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 57: 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 58: 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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