Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Q2 2023 Earnings Presentation
32 slides from Torex Gold Resources's earnings presentation, Aug 3, 2023
Slide 1: Second Quarter 2023 Results Conference Call
TSX | TXG SECOND QUARTER 2023 RESULTS CONFERENCE CALL August 3, 2023
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 COSTS, AVERAGE REALIZED PRICE, TOTAL CASH COST MARGIN, AISC MARGIN, AISC MARGIN PER OUNCE OF GOLD SOLD, ADJUSTED NET EARNINGS, ADJUSTED NET EARNINGS PER SHARE, EARNI
Slide 3: Key Highlights & Operational Performance
KEY HIGHLIGHTS & OPERATIONAL PERFORMANCE JODY KUZENKO PRESIDENT & CEO All values U.S. dollars unless otherwise stated
Slide 4: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to continue to enhance shareholder returns1 OPTIMIZE & ADVANCE & GROW RESERVES & EXTEND ELG DE-RISK MEDIA LUNA RESOURCES PRUDENT CAPITAL BUILD ON ESG ALLOCATION EXCELLENCE 1) Please refer to Safe Harbor Statement on slide 2 4
Slide 5: Key Highlights
KEY HIGHLIGHTS On track to meet full year production and cost guidance Gold production of 107,507 oz (YTD – 230,425 oz) Total cash costs1 of $848/oz gold sold during the quarter (YTD – $775/oz) and all-in sustaining costs1 of $1,308/oz gold sold (YTD – $1,187/oz) Generated revenue of $211M (YTD – $4
Slide 6: Operational Performance
OPERATIONAL PERFORMANCE Q2 marks another quarter of record processing and underground mining rates Produced 107,507 oz in Q2 Record plant throughput of 13,293 tpd in Q2 Gold grade processed of 3.13 g/t during Q2 Record underground mining rate of 1,913 tpd in Q2 6
Slide 7: Consistent and Reliable Producer
CONSISTENT AND RELIABLE PRODUCER Well positioned to deliver on full year guidance1 In millions of U.S. dollars, unless otherwise noted FY 2023 YTD Q2 2023 FY 2022 Guidance Performance Performance Gold Production oz 440,000 to 470,000 230,425 474,035 Total Cash Costs2 $/oz 740 to 780 775 730 All-in S
Slide 8: Excellent Drilling Program Results To-Date
EXCELLENT DRILLING PROGRAM RESULTS TO-DATE ELG Underground remains a key focus given potential to fill the mill beyond 20271 Initial results from 2023 drilling demonstrated the potential to expand and upgrade resources El Limón Sur Deep: Extended higher-grade mineralization outside of current resour
Slide 9: 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 Scope 1 and 2 greenhouse gas emission targets 1 a Sustainabili
Slide 10: Financial Performance
FINANCIAL PERFORMANCE ANDREW SNOWDEN CFO
Slide 11: Financial Performance
FINANCIAL PERFORMANCE Development of Media Luna supported by strong cash flow from ELG All-in sustaining costs margin1 of 33% in Q2 Adjusted EBITDA1 of $106M in Q2 Total capex1 of $125M in Q2 ($77M on Media Luna) Free cash flow1 deficit of $37M during Q2 1) For more information on operational and fi
Slide 12: Unit Cost Performance
UNIT COST PERFORMANCE1 Solid cost performance despite ongoing inflationary pressures2 Open pit mining costs in-line with levels delivered in 2022 Economies of scale from higher underground mining rates continue to mitigate cost pressures Processing costs reflect higher reagent and other consumable p
Slide 13: Cash Flow Generation
CASH FLOW GENERATION Free cash flow during Q2 2023 reflects increasing Media Luna Project spend Total capital expenditures of $125M during the quarter including $77M on the Media Luna Project Pace of spending at Media Luna expected to increase through the remainder of 2023 1) For more information on
Slide 14: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1 Well positioned to fund strategic priorities Net cash2 of $274M at quarter-end Available liquidity of $577M3 post amended facility Exited Q2 2023 with $285M of cash Amended credit agreement expected to close in early August: Debt free and less than $12M of lease-related ob
Slide 15: Well Positioned to Fund Media Luna Project
WELL POSITIONED TO FUND MEDIA LUNA PROJECT1 Anticipated increase to revolving facility provides further confidence on funding picture Estimated internal funding requirement of $129M including $50M increase to revolving facility as part of an amended credit agreement which is expected to close in ear
Slide 16: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Managing gold price risk during build-out of Media Luna1 All amounts in U.S. dollars 2023 2024 Q3 Q4 Q1 Q2 Q3 Q4 Forward Contracts Gold Volumes koz 43.5 43.5 43.5 43.5 27.0 27.0 Gold Price $/oz $1,957 $1,957 $1,966 $1,966 $1,939 $1,939 $0.6M realized loss on forward sales
Slide 17: Media Luna Project Update
MEDIA LUNA PROJECT UPDATE DAVE STEFANUTO EVP, TECHNICAL SERVICES & CAPITAL PROJECTS
Slide 18: Media Luna Progress Update (Q2 2023)
MEDIA LUNA PROGRESS UPDATE (Q2 2023) Development activities advancing well towards peak rates in 20231 Project tracking to schedule and budget Key purchase orders signed: BEV underground support equipment (MacLean) BEV personnel transport equipment (Rokion) 1) Physical progress measured starting as
Slide 19: Guajes Tunnel Progress Update
GUAJES TUNNEL PROGRESS UPDATE Breakthrough of tunnel on south side of Balsas River anticipated by early Q1 20241,2 Guajes Tunnel advancing ahead of schedule; ~4,710 m as at the end of July Advance rate of 6.9 m/d (3 months) versus 6.6 m/d (12 months) Successfully crossed under the Balsas River South
Slide 20: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE Development activities advancing well; concentrate production on track for late-20241 Sedimentation pond construction New security building West adit vent tunnel breakthrough Civil works for the pad expansion at MML camp Copper flotation cells arriving at site 1) Please re
Slide 21: Questions?
Lo; Torex Gold RESOURCES INC. QUESTIONS
Slide 22: Operating Cash Flow Seasonality
OPERATING CASH FLOW SEASONALITY Operating cash flow tends to be weakest in H1 given timing of tax, royalty, and PTU payments Final payments related to royalties, profit sharing, and taxes are subject to movements in the Mexican peso relative to the U.S. dollar Cash flow from operations prior to chan
Slide 23: Robust Cash Flow Generation from ELG
ROBUST CASH FLOW GENERATION FROM ELG Funding position on solid footing given available liquidity and ongoing cash flow LTM Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q2 2023 Net cash generated from operating activities (M$) $102.4 $132.1 $47.0 $89.6 $371.1 Free cash flow (M$)1 $32.0 $40.5 ($54.0) ($37.4) ($18.
Slide 24: Key Operational Metrics
KEY OPERATIONAL METRICS1 Consolidated Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2021 2021 2022 2022 2022 2022 2023 2023 Mining - ELG Open Pit Ore mined (kt) 1,406 864 1,061 987 883 959 916 644 Ore mined (tpd) 15,283 9,392 11,789 10,846 9,598 10,420 10,182 7,074 Waste mined (kt) 7,476 8,972 8,958 7,960 9,097 8,546 8,4
Slide 25: Key Financial Metrics
KEY FINANCIAL METRICS1 Consolidated All amounts in U.S. dollars Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2021 2021 2022 2022 2022 2022 2023 2023 Key Metrics Gold sold (oz) 118,989 109,391 108,012 123,363 119,834 121,913 118,455 105,749 Realized gold price ($/oz) $1,786 $1,798 $1,876 $1,865 $1,715 $1,784 $1,899 $1,96
Slide 26: 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 27: 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 28: 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 - - - - - - - - - Probable 23,017 2.81 25.6 0.88 2,077 18,944 444 4.54 3,360 Proven & Probable 23,017 2.81 25.6 0.88 2,077 18,944 444 4.54 3,360 ELG O
Slide 29: Notes to Mineral Reserves
NOTES TO MINERAL RESERVES Morelos Complex Notes to accompany Mineral Reserve Table 13. ELG Low Grade Mineral Reserves are reported above an in-situ cut-off grade of 0.88 g/t Au. 1. Mineral Reserves were developed in accordance with CIM (2014) guidelines. 14. It is planned that ELG Low Grade Mineral
Slide 30: 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 1,823 5.29 42.0 1.38 310 2,460 55 8.06 473 Indicated 25,567 3.02 30.1 1.05 2,486 24,708 589 5.11 4,196 Measured & Indicated 27,390 3.17 30.9 1.07 2
Slide 31: Notes to Mineral Resources
NOTES TO MINERAL RESOURCES Morelos Complex Notes to accompany the Summary Mineral Resource Table Notes to accompany the ELG Open Pit Mineral Resources 1. CIM (2014) definitions were followed for Mineral Resources. 14. The effective date of the estimate is December 31, 2022. 2. Mineral Resources are
Slide 32: TSX | TXG www.torexgold.com
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