Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (May 2021)
38 slides from Torex Gold Resources's investor presentation, May 2021
Slide 1: Corporate Presentation May 2021
TSX | TXG CORPORATE PRESENTATION May 2021
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT THE PRELIMINARY ECONOMIC ASSESSMENT (THE “MEDIA LUNA PEA” OR “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 EFFECTIV
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% (20%) Relative Discount to (40%) Intermediate Peers (30%) (60%) (44%) (45%) (80%) (60%) Single Asset and Perceived Reserve Life
Slide 5: Well-Positioned to Deliver Strong Cash Flow in 2021
WELL-POSITIONED TO DELIVER STRONG CASH FLOW IN 20211 Operational guidance points to higher output year-over-year with costs in line Strong momentum on production with 2020 actuals exceeding high end of revised guidance and lower end of original guidance Total Cash Costs and all-in Sustaining Costs e
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 ELG3 Financially robust open pit and underground Relatively consistent production expected from operation ELG through 2023 $526M of EBITDA1 and $198M of Free Cash Flow1 Current production rate su
Slide 7: Safety and Operational Excellence Intertwined
SAFETY AND OPERATIONAL EXCELLENCE INTERTWINED Culture focused on safety evident by LTI 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 Framework
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 40% of Executive Team 99% workforce from Mexico; 60% from and 30% of Board of Directors Guerrero Sta
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 2021 onwards1,2,3, expected to be more than $1,000 sufficient to fund development of Year-End Cash / Debt (M$) $800 Media
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 10 Extending mine life of ELG a key focus Accelerated underground drill program and studying potential to expand El Limón pit 8 Media Luna would extend cashflow beyond life of
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, 2 Media Luna has the potential to be Media Luna to leverage existing a multi-decade underground mine infrastructure at ELG 2018 PEA outlined average annual Guajes tunnel has advanced
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 get Addition of the South Portal provides a number of benefits: to bottom of Media Luna deposit by • Allows access for employees on south side of river a
Slide 14: Guajes Tunnel
GUAJES TUNNEL Gearing up to transition to monorail-based haulage mid-year Overhead shot of Guajes Portal Guajes tunnel advanced ~300 metres Steel infrastructure for monorail load-out Installation of bridge conveyor 14
Slide 15: 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 16: Muckahi Mining System – A Torex Innovation
MUCKAHI MINING SYSTEM – A TOREX INNOVATION1 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 ¼ the length of conventional ramps Monorail-based transport Muck box “trains” on the level an
Slide 17: Muckahi Mining System
MUCKAHI MINING SYSTEM Potential to be a game changer for underground mining1 Test Objectives in 2019 Successfully demonstrated the ability for monorail- based equipment to break and muck rock Test Objectives in 2020 Successfully demonstrated the individual components could move rock Designed, fabric
Slide 18: 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 19: Appendix
Torex Gold RESOURCES INC. APPENDIX
Slide 20: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to enhance shareholder returns OPTIMIZE AND ADVANCE AND MUCKAHI TESTING & EXTEND ELG DE-RISK MEDIA LUNA COMMERCIALIZATION Build on culture as key strategic Continuation of the conventional Complete system and rate testing differentiator feasibility study
Slide 21: 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 22: 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 2020 with a LTIF of 0.15 per Seasoned Executive Team with into local watersheds) million hours worked 40% female r
Slide 23: 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 Committed to investing $2.5M on regional exploration in 2021 Significant exploration potential remains across the broader Morelos property Multiple targets have been identified To dat
Slide 24: Robust Cash Flow Generation
ROBUST CASH FLOW GENERATION1 Decline in cash position a result of cash flow seasonality and debt repayment $450 $400 $153 ($66) $350 ($14) ($1) ($26) $300 Cash (M$)2 ($29) $250 $206 ($1) ($40) $200 ($10) $172 $150 $100 $50 $0 Taxes Paid Sustaining Investments Non-Sustaining (Q1/21) Principal Working
Slide 25: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1 Financial health of business continues to strengthen with strong margins Debt free following $40M repayment in March2 Available liquidity of over $320M as of March 31st $300 $200 $100 Balance (M$) $0 $150M ($100) ($200) $172M ($300) ($400) ($500) FY/17 FY/18 FY/19 FY/20 Q1
Slide 26: Cash Flow Seasonality
CASH FLOW SEASONALITY Cash flow tends to be weakest in H1 given timing of payments Final payments related to royalties, profit sharing, and taxes are subject to movements in the Mexican peso relative to the US dollar Quarterly Payments Impacting Cash Flow From Operations1 Cash flow from operations p
Slide 27: Cost Performance
COST PERFORMANCE1,2 Cost discipline key to maintaining margins and offsetting inflationary pressures Mining - Open Pit ($/t ore + waste mined3) Open pit and underground mining unit costs up slightly Q1 2021 $2.33 relative to full year 2020 given maintenance costs and FY 2020 $2.17 rehandling Mining
Slide 28: 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 29: 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 30: 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 12.1 14.1% Price Performance - USD 2.00 VanEck - ETFs 7.9 9.2% RBC Asset Manage
Slide 31: Board of Directors
BOARD OF DIRECTORS Ongoing Board refresh to maintain 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 Pres
Slide 32: 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 33: 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 34: 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 35: 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 and El Limón Sur measured and 1) The effective date of the estimate is December 31, 2020. indicated mineral res
Slide 36: 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 37: 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 38: 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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