Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (August 2024)
63 slides from Torex Gold Resources's investor presentation, Aug 8, 2024
Slide 1: Corporate Presentation
TSX | TXG CORPORATE PRESENTATION August 2024 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 capital expenditures, average realized gold price, total cash cost margin, AISC margin, AISC margin per ounce of gold sold, adjusted net earnings, adjusted net earni
Slide 3: Torex Overview
TOREX OVERVIEW Intermediate Gold & Copper Producer C$1.7B 0.73x market value1 P/NAV1 Significant Size & Scale #1 454 koz gold producer in Mexico in 2023 gold produced in 2023 Large & Growing Resource Base ~4.8 Moz ~7.8 Moz ~2.2 Moz AuEq P&P at 3.95 gpt2 AuEq M&I at 5.00 gpt2 AuEq Inf. at 4.45 gpt2 H
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Future underpinned by solid long-term fundamentals Consistent track record of delivering on Competitive cost profile providing strong production guidance margins and cash flow generation Strong balance sheet and robust cash flow High-quality management team with supports develo
Slide 5: Five-Year Production Outlook
FIVE-YEAR PRODUCTION OUTLOOK1 Evolution of production outlook reflects continued success in replacing reserves Outlook Outlook Outlook Outlook 2022 Technical Production (koz)2 Actual 2021 2022 2023 2024 Report 2021 (Au) 468 430 to 470 2022 (Au) 474 430 to 470 430 to 470 2023 (Au) 454 400 to 450 420
Slide 6: Consistent and Reliable Producer
CONSISTENT AND RELIABLE PRODUCER On track to deliver full-year production and cost guidance for sixth consecutive year In millions of U.S. dollars, unless otherwise noted 2024 Q2 2024 YTD Guidance Performance 2024 production assumes Production a one-month shutdown of Gold oz 400,000 to 450,000 229,3
Slide 7: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to significantly enhance shareholder returns DELIVER MEDIA LUNA TO INTEGRATE & OPTIMIZE DISCIPLINED GROWTH & FULL PRODUCTION MORELOS CAPITAL ALLOCATION GROW RESERVES & RETAIN & ATTRACT BEST BUILD ON ESG RESOURCES INDUSTRY TALENT EXCELLENCE 7
Slide 8: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Media Luna solidifies the Morelos Property as our foundational asset On track for first concentrate production in Project 78% complete and 97% committed late 2024; realistic ramp-up to full on spend at the end of Q2 2024 production in 2027 Extends mine life out
Slide 9: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION First concentrate production remains on track by year-end 20241 Majority of Guajes conveyor belt tables installed and Completion Project To Date aligned Q2 2024 Procurement 89% Belt has begun to be fed onto the conveyor Engineering 96% Underground development/co
Slide 10: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Project expenditures finalized at $950 million primarily due to strength of MXN Final budget calculated as engineering and procurement activities near completion; strength of Mexican peso (MXN) relative to U.S. dollar through build period incorporated into budge
Slide 11: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Breakthrough of tunnel on south side of Balsas River achieved ahead of schedule Guajes Tunnel breakthrough occurred December 2023 – three months ahead of plan Access for personnel, materials and supplies from ELG to Media Luna now achievable in 30 minutes; reduc
Slide 12: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Development activities advancing well; conveyor commissioning on track for late Q3 Conveyor belt installation Readying conveyor drive ahead of belt installation Steel erection and assembly for paste plant 12
Slide 13: Integrate & Optimize Morelos
INTEGRATE & OPTIMIZE MORELOS Maximizing potential of ELG Open Pits and ELG Underground Feed Source1 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 ELG Open Pits ELG Underground Media Luna Underground Stockpiles Open pit mine life extends into 2025 following reserve additions in El Limón and
Slide 14: Integrate & Optimize Morelos
INTEGRATE & OPTIMIZE MORELOS Key focus is on increasing mine life and boosting output from ELG Underground ELG Underground has been a key source of Mining rates have consistently increased over past reserve growth since 2019 few years, surpassing 2,000 tpd in 2023 1) Please refer to slide 59 for a s
Slide 15: Disciplined Growth & Capital Allocation
DISCIPLINED GROWTH & CAPITAL ALLOCATION More than sufficient funding on hand to support strategic objectives1 Available liquidity2 results in a funding surplus of $21M while maintaining strategic objective of preserving $100M of liquidity after accounting for $224M of expenditures remaining on Media
Slide 16: Disciplined Growth & Capital Allocation
DISCIPLINED GROWTH & CAPITAL ALLOCATION Managing gold price and currency risk during build-out of Media Luna Hedged gold production covers the development phase of the Media Luna Project Hedged amount follows trend of capital spending on the Project; no plans to hedge metal prices in 2025 Several fo
Slide 17: Grow Reserves & Resources
GROW RESERVES & RESOURCES Exploration and drilling focused on improving on Feasibility Study mine plan (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 2027
Slide 18: Grow Reserves & Resources
GROW RESERVES & RESOURCES Multi-year exploration strategy focused on achieving key business objectives Exploration strategy supports key business objectives of: Maintaining more than 450 koz of production annually beyond 2027 Making at least one new discovery at Morelos in the coming years Explorati
Slide 19: Grow Reserves & Resources
GROW RESERVES & RESOURCES Key strategic focus and investment in exploration and drilling Drilling/exploration budget of $30M in 2024 $15M at Media Luna Cluster (33,500 m forecast) Infill and expansionary drilling at EPO Advanced exploration at Media Luna West Inaugural drill program at Todos Santos
Slide 20: Grow Reserves & Resources
GROW RESERVES & RESOURCES ELG Underground – Successful history of reserve growth since 2019 Drilling continues to validate ability to replace reserves and grow resources at ELG Underground. In 2023: Proven & Probable reserves increased to 654 koz AuEq1, extending mine life by more than two years thr
Slide 21: Grow Reserves & Resources
GROW RESERVES & RESOURCES Potential to expand resources and replace reserves along El Limón Sur Trend Drill hole LS-310 in the southern ore shoot returned 7.19 gpt AuEq over 12.2 m, ~100 m below the high-grade intercepts reported in 2023 Drilling in the northern ore shoot confirmed the potential to
Slide 22: Grow Reserves & Resources
GROW RESERVES & RESOURCES Drilling successfully expanding mineralization at the El Limón Deep and Sub-Sill trends Five out of six holes drilled to test the western extension of the El Limón Deep Trend encountered high - grade mineralization. Drill hole LDUG-315 returned two high-grade intercepts of
Slide 23: Grow Reserves & Resources
GROW RESERVES & RESOURCES EPO – 2023 drilling successful in upgrading/expanding resources Resource categorization drilling Infill drilling in 2023 was successful in increasing Indicated resources by 481 koz AuEq1 to 1,153 koz AuEq at 5.14 gpt, surpassing target of one million ounces Results to suppo
Slide 24: Grow Reserves & Resources
GROW RESERVES & RESOURCES Media Luna West – Advancing to next stage given results of 2023 exploration/drilling Potential third mineralized zone within the Media Luna Cluster First exploration drilling conducted on the Media Luna West target since 2012/2013 Recent results and historical results combi
Slide 25: Retain & Attract Best Industry Talent
RETAIN & ATTRACT BEST INDUSTRY TALENT People as a strategic differentiator Safety first and always – no lives lost and no Total Employment lives harmed Invest in the growth and development of our people Overall turnover rate of 9% in 2023 Maintain Torex culture as growth occurs Systems Leadership as
Slide 26: Build on ESG Excellence
BUILD ON ESG EXCELLENCE Delivering value to shareholders while making a positive difference in society Excellent environmental performance Strong governance & diversity focus Limited air emissions and water discharge operation Women make up 43% of both the Executive Team Filtered tailings facility m
Slide 27: Build on ESG Excellence
BUILD ON ESG EXCELLENCE Sustained performance & ongoing improvement on ESG disclosure a key focus ESG performance tied to cost of capital Clear and credible GHG emissions targets set One of the first mid-tier gold producers to enter into Reduction measures planned, approved, and funded; a Sustainabi
Slide 28: Robust Plan to Increase Shareholder Value
ROBUST PLAN TO INCREASE SHAREHOLDER VALUE Re-rating expected with ramp-up of Media Luna and return to positive free cash flow Near-term Value Creation Long-term Value Creation Bring Media Luna into production in late Fill the mill beyond 2027 by extending life 2024; successfully ramp up through 2027
Slide 29: Appendix – Corporate Information
APPENDIX – CORPORATE INFORMATION
Slide 30: Corporate Strategy
CORPORATE STRATEGY Executing on Strategic Pillars expected to generate long-term value DELIVER MEDIA LUNA TO INTEGRATE & OPTIMIZE DISCIPLINED GROWTH & FULL PRODUCTION MORELOS CAPITAL ALLOCATION Bring Media Luna into production and ramp up Ensure smooth production and cashflow Maintain a strong balan
Slide 31: 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 32: 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
Slide 33: Balance Sheet & Available Liquidity
BALANCE SHEET & AVAILABLE LIQUIDITY Well-positioned to fund strategic priorities1 Net (debt) cash2 of $5M at the end of Q2 2024 Available liquidity2 of $346M as of June 30th $55M drawn on revolving credit facility during Q2 Credit facility amended in July; repayment date to support cash balance thro
Slide 34: Corporate Summary
CORPORATE SUMMARY 1) All amounts USD unless otherwise noted. 4) Shares outstanding as of August 6, 2024. 2) Shareholder data as of August 5, 2024 and based on S&P surveillance. 5) Cash/Cash Equivalents, Short-term Investments and Total Debt as of June 30, 2024. 3) Market price data as of August 6, 2
Slide 35: Relative Valuation
RELATIVE VALUATION1,2 Torex shares attractively valued relative to peers on near-term consensus metrics 1) Peer average multiples based on consensus estimates for Alamos Gold, Allied Gold, Aris Mining, Artemis Gold, Aura Minerals, B2Gold, Calibre, Centerra Gold, Coeur Mining, Dundee Precious Metals,
Slide 36: Operational & Financial Performance
OPERATIONAL & FINANCIAL PERFORMANCE Future growth supported by strong cash flow and robust margins from ELG1 Gold recovery of 90.5% in Q2 in line with record Q1 Average AISC margin of 44% achieved in Q22 Generated $121M in adjusted EBITDA in Q22 Quarterly free cash flow set to turn positive in 20252
Slide 37: Production Guidance
PRODUCTION GUIDANCE1 Consistent track record of delivering on full year production guidance 1) Guidance Notes: (i) Production guidance in 2018 provided with Q1 financial results in May 2018 with restart of operations following five-month blockade which started in November 2017; (ii) Production guida
Slide 38: All-In Sustaining Costs Guidance
ALL-IN SUSTAINING COSTS GUIDANCE1,2 Targeting to achieve AISC guidance in 2024 following first miss since 2018 1) For more information on operational and financial results, including information on non-GAAP measures (such as AISC), please refer to relevant section of the latest MD&A described in mor
Slide 39: Robust Cash Flow Generation from ELG
ROBUST CASH FLOW GENERATION FROM ELG Funding position on solid footing given available liquidity and ongoing cash flow LTM Q3 2023 Q4 2023 Q1 2024 Q2 2024 (Q2 2024) Net cash generated from operating activities (M$) $44.2 $120.0 $79.8 $97.4 $341.4 1 Free cash flow (M$) ($69.7) ($24.3) ($49.1) ($62.3)
Slide 40: Key Operational Metrics
KEY OPERATIONAL METRICS1 Consolidated Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2022 2022 2023 2023 2023 2023 2024 2024 Mining - ELG Open Pit Ore mined (kt) 883 959 916 644 1,026 1,785 969 1,622 Ore mined (tpd) 9,598 10,420 10,182 7,074 11,153 19,404 10,651 17,822 Waste mined (kt) 9,097 8,546 8,437 11,124 10,131 7,84
Slide 41: Key Financial Metrics
KEY FINANCIAL METRICS1 Consolidated All amounts in U.S. dollars Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2022 2022 2023 2023 2023 2023 2024 2024 Key Metrics Gold sold (oz) 119,834 121,913 118,455 105,749 81,752 138,794 111,642 113,513 Gold equivalent sold (oz AuEq) -- -- -- -- -- -- 114,106 115,890 Average realized
Slide 42: Unit Cost Performance
UNIT COST PERFORMANCE1 Strength of Mexican peso through Q2 continued to pressure unit costs2 Overall costs impacted by strong Mexican peso (MXN) as ~50% of costs are denominated in MXN H1 2024 MXN has averaged 17.1 against the USD compared with 17.7 during 2023 Open pit mining costs reflect increase
Slide 43: 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 44: 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 45: 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 46: Media Luna Project Schedule
MEDIA LUNA PROJECT SCHEDULE1 1) Updated based on progress and revised schedule as of June 30, 2024 (refer to press release dated July 29, 2024, titled Torex Gold Provides Q2 2024 Update on Media Luna Project) 46
Slide 47: Responsible Gold Mining
RESPONSIBLE GOLD MINING Key Highlights from 2023 Industry-leading safety performance – ended 2023 with a lost-time injury (“LTI”) frequency of 0.31 per million hours worked for employees and contractors; 10 million hours worked without a LTI at ELG for third time since 2020; Zero reportable environm
Slide 48: Leverage Innovation
LEVERAGE INNOVATION Proven technology to improve safety, minimize emissions, and drive value ROPECON FILTERED TAILINGS SART PLANT BEV FLEET1 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-in
Slide 49: 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 50: Appendix – March 2022 Technical Report
APPENDIX – MARCH 2022 TECHNICAL REPORT
Slide 51: Media Luna Project
MEDIA LUNA PROJECT Summary of March 2022 Technical Report1 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 2027 when mill is full Annual r
Slide 52: 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 53: 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 $21/oz and co
Slide 54: Media Luna Project
MEDIA LUNA PROJECT Summary of March 2022 Technical Report1,2 Metrics as of April 1, 2022 Total ($M) Excludes $124M of estimated project costs incurred Non-Sustaining2,3 - Media Luna Project prior to April 1, 2022; excludes $26M of adjustment Directs Guajes Portal & Tunnel $75.8 for underspend in Q1
Slide 55: 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 (base case economics assume long-term metal prices of $1,600/oz gold ($1,700/oz in 2022), $21/oz silver and $3.50/
Slide 56: Appendix – Mineral Reserves & Resources
APPENDIX – MINERAL RESERVES & RESOURCES
Slide 57: 2023 Mineral Reserve Drivers
2023 MINERAL RESERVE DRIVERS Drilling was successful in replacing a majority of AuEq reserve depletion in 20231,2 Replaced 67% of gold equivalent (“AuEq”) reserves processed in 2023 Increased ELG Underground reserves by 146 koz AuEq (280 koz prior to depletion) Reserve metal prices increased Gold $1
Slide 58: 2023 Mineral Resource Drivers
2023 MINERAL RESOURCE DRIVERS AuEq resource growth driven by EPO and ELG Underground1 Gold equivalent (“AuEq”) M&I resources up 360 koz (+5%) Increase of 901 koz AuEq (+12%) prior to mined depletion M&I resource growth driven by: Ongoing success in ELG Underground (+432 koz AuEq) Indicated resource
Slide 59: 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 2,001 4.28 33.1 1.09 276 2,129 48 6.48 417 Probable 21,568 2.56 24.2 0.84 1,775 16,749 401 4.24 2,943 Proven & Probable 23,569 2.71 24.9 0.86 2,050 18
Slide 60: Notes to Mineral Reserves
NOTES TO MINERAL RESERVES Morelos Complex Notes to accompany the mineral reserve table 3. Cut-off grades and mining shapes are considered appropriate for a metal price of US$1,500/oz Au, US$19/oz Ag and US$3.50/lb Cu and metal recoveries of 90% Au, 1. Mineral reserves were developed in accordance wi
Slide 61: 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 1,835 5.26 41.7 1.37 310 2,463 55 8.00 472 Indicated 25,616 2.99 29.5 1.04 2,463 24,328 585 5.03 4,146 Measured & Indicated 27,451 3.14 30.4 1.06 2
Slide 62: Notes to Mineral Resources
NOTES TO MINERAL RESOURCES Morelos Complex Notes to accompany the mineral resource table Notes to accompany ELG Underground mineral resources 1. CIM (2014) definitions were followed for mineral resources. 1. The effective date of the estimate is December 31, 2023. 2. Mineral resources are depleted a
Slide 63: 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
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