Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Day (September 2024)
55 slides from Torex Gold Resources's investor day presentation, Sep 5, 2024
Slide 1: Analyst & Investor Day
TSX | TXG ANALYST & INVESTOR DAY September 5, 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: Introduction
INTRODUCTION JODY KUZENKO PRESIDENT & CEO
Slide 4: Agenda
TOREX GOLD ANALYST & INVESTOR DAY Agenda Introduction Jody Kuzenko, President & CEO EPO Pre-Feasibility Study Results Alex Hemmingsen, Principal Engineer, Mine Design Media Luna Update Dave Stefanuto, EVP, Technical Services & Capital Projects Finance Update Andrew Snowden, CFO Exploration Esteban U
Slide 5: 2022 Technical Report Set the Foundation for Morelos
2022 TECHNICAL REPORT SET THE FOUNDATION FOR MORELOS Since then, we have been hard at work filling the mill beyond 2027 Our goal has been to maintain annual production of at least 450 koz AuEq throughout the transition from the open pits to Media Luna and beyond Extending mineral reserves in ELG Ope
Slide 6: Reserve Scenario Demonstrates Success of That Plan
RESERVE SCENARIO DEMONSTRATES SUCCESS OF THAT PLAN EPO provides a third mining front to support filling the mill beyond 2027 Bringing EPO into the mine plan is expected to result in minimum annual production of 450 koz AuEq through at least 2030 (annual average output of 473 koz AuEq between 2024 an
Slide 7: Focus Now Turns to Enhancing Mine Life Beyond 2033
FOCUS NOW TURNS TO ENHANCING MINE LIFE BEYOND 2033 Long-term exploration and drilling strategy to bolster the reserve scenario Potential to maintain annual production of 450 to 500 koz AuEq through at least 2033 by bringing Inferred Resources into the mine plan Building on the track record of resour
Slide 8: Morelos Solidified as a Foundational Asset
MORELOS SOLIDIFIED AS A FOUNDATIONAL ASSET Ability to continually strengthen our business evident by evolution of multi-year outlook Updated 2 Outlook Outlook Outlook Outlook 2022 Technical Production (koz) Actual Outlook 2021 2022 2023 2024 Report 2024 2021 (Au) 468 430 to 470 2022 (Au) 474 430 to
Slide 9: EPO Pre-Feasibility Study Results
EPO PRE-FEASIBILITY STUDY RESULTS ALEX HEMMINGSEN PRINCIPAL ENGINEER, MINE DESIGN
Slide 10: Summary of Pre-Feasibility Study
SUMMARY OF PRE-FEASIBILITY STUDY Robust long-term production profile with a low risk, capital efficient development plan Production profile improved to at least 450 koz AuEq through 2030 on a reserve case alone Could be maintained through 2033 should Inferred Resources from ELG Underground and EPO b
Slide 11: Inaugural Mineral Reserves
INAUGURAL MINERAL RESERVES Initial reserve a solid base to grow from given sizeable resource base Mineralization at EPO amenable to being processed through same flow sheet as ore from Media Luna Reserves at EPO have a higher level of copper than Media Luna and ELG Underground AuEq reserves at EPO mo
Slide 12: A Capital Efficient Development
A CAPITAL EFFICIENT DEVELOPMENT Upfront budget of $81.5M reflects ability to leverage investment made at Media Luna Capital Expenditures Capital efficiency a direct result of ability to millions of U.S. dollars 2025 2026 Total leverage investment at Media Luna Direct costs $10.7 $41.3 $52.0 Indirect
Slide 13: Development Expected to Commence in Mid-2025
DEVELOPMENT EXPECTED TO COMMENCE IN MID-2025 Large portion of upfront budget related to development to access deposit Modest level of upfront development required Long-hole open stoping with battery electric Access ramp off the Guajes Tunnel (~650 m) equipment Haulage ramp (~1,000 m) – ore to be tru
Slide 14: EPO Will Leverage Same Flow Sheet as Media Luna
EPO WILL LEVERAGE SAME FLOW SHEET AS MEDIA LUNA Metal will be primarily recovered to Cu concentrate and doré EPO Standalone Concentrate Doré/Other Total Au Ag Cu Au Ag Cu Au Ag Cu (koz) (koz) (Mlb) (koz) (koz) (Mlb) (koz) (koz) (Mlb) Life of Mine Processed - - - - - - 367 4,820 143 Recovered to 43.0
Slide 15: Operating Costs and Sustaining Capital Expenditures
OPERATING COSTS AND SUSTAINING CAPITAL EXPENDITURES1 EPO mining costs reflect in-mine haulage and anticipated mining rates Mining Costs Processing & Site Based G&A Costs EPO mining costs forecast to average ~$51/t over Processing costs for the Morelos Complex are the life of mine forecast to average
Slide 16: Upgrading Resources to Reserves to Be a Key Focus
UPGRADING RESOURCES TO RESERVES TO BE A KEY FOCUS Sizeable portion of Inferred Resources proximal to planned development Significant portion of the Inferred Resources at EPO located in close proximity to planned underground development and infrastructure If upgraded to reserves, some of this materia
Slide 17: Next Steps for EPO
NEXT STEPS FOR EPO Completion of an internal feasibility study prior to the start of development Internal feasibility study expected to be completed by mid-2025 Year-end 2024 mineral resources to be basis of feasibility study mine plan Amendments to environmental approvals are expected to occur over
Slide 18: Media Luna Update
MEDIA LUNA UPDATE DAVE STEFANUTO EVP, TECHNICAL SERVICES & CAPITAL PROJECTS
Slide 19: Project Expenditures Finalized
PROJECT EXPENDITURES FINALIZED Expected to be $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 budget $75.5M (+8.6%) increase
Slide 20: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION First concentrate production remains on track by year-end 20241 All Guajes Tunnel conveyor belt tables installed and Completion Project To Date Q2 2024 aligned Procurement 89% ~5 km of belt has been fed onto conveyor to date Engineering 96% Underground developme
Slide 21: Underground Development & Construction Update
UNDERGROUND DEVELOPMENT & CONSTRUCTION UPDATE Definition drilling has commenced; conveyor commissioning on track Underground Development First stope blasted on August 24th Definition and grade control drilling underway 7 stopes to be mined in 2024 completed No major deviations with respect to tonnes
Slide 22: Surface Construction Update
SURFACE CONSTRUCTION UPDATE Pace of construction expected to materially increase through remainder of the year Flotation Plant Shutdown of plant for tie-ins and upgrades to process Media Luna ore on schedule to commence in November Process plant expected to be idle for 4 weeks Current schedule has p
Slide 23: Finance Update
FINANCE UPDATE ANDREW SNOWDEN CFO
Slide 24: Well-Funded to Execute on Strategic Objectives
WELL-FUNDED TO EXECUTE ON STRATEGIC OBJECTIVES $346M of liquidity far exceeds remaining Media Luna Project capital expenditures1 Available liquidity3 results in a funding surplus of $21M while maintaining strategic objective of preserving $100M of liquidity after accounting for $224M of expenditures
Slide 25: Cu Concentrate – Material Flow and Sales
CU CONCENTRATE – MATERIAL FLOW AND SALES Sales and logistics for Cu concentrate adds another element to revenue recognition1 Material Flow Production Trucking Warehouse Loading Departure Port Shipping Destination Port Smelter (Manzanillo) (Manzanillo) (varies) 2-day transit 1-2 month transit Accumul
Slide 26: Cu Concentrate – Treatment, Refining & Freight
CU CONCENTRATE – TREATMENT, REFINING & FREIGHT Sales and logistics for concentrate different than current product mix1 Concentrate Cost Assumptions Agreements with primary customers being finalized Netted in Two traders and one smelter Security & revenue, other expense Treatment included in All cost
Slide 27: AISC Expected to Temporarily Increase in 2025
AISC EXPECTED TO TEMPORARILY INCREASE IN 2025 Costs expected to improve as economies of scale gained as Media Luna ramps up Lower volume, higher grade Media Luna (ML) underground ore will replace higher volume, lower grade ore from ELG Open Pit Cost of ML mining will be temporarily higher in 2025 be
Slide 28: Exploration
EXPLORATION ESTEBAN URQUETA JACOBS DIRECTOR, EXPLORATION DISCOVERY
Slide 29: Multi-Year Exploration Strategy
MULTI-YEAR EXPLORATION STRATEGY Exploration pipeline supports executing on business priorities Exploration strategy supports: Maintaining annual production of at least 450 koz AuEq Extending life of Morelos beyond 2035 Making at least one new discovery at Morelos in the coming years Exploration pipe
Slide 30: Multi-Year Exploration Strategy
MULTI-YEAR EXPLORATION STRATEGY Significant resource upside given only a portion of Morelos has been explored Near-term focus Expanding and upgrading reserves and resources at Media Luna, ELG Underground, and EPO Drill testing targets within Media Luna Cluster including Media Luna West, Media Luna E
Slide 31: 2024 Exploration and Drilling Program
2024 EXPLORATION AND DRILLING PROGRAM Expecting significant increase in drilling through the second half of the year 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 dr
Slide 32: Morelos – Structural Context
MORELOS – STRUCTURAL CONTEXT Understanding geological context and structural architecture 32
Slide 33: Morelos – Targeting and Magnetic Response
MORELOS – TARGETING AND MAGNETIC RESPONSE Structural corridor unlocks exploration potential of ELG and Media Luna clusters 33
Slide 34: ELG Underground
ELG UNDERGROUND Building on a proven track record of mine life extensions 2023 drilling program was a success: Mine life extended by two years through 2028; M&I resources grew by 570 koz AuEq1 prior to mined depletion Evolved understanding of mineralization controls – now believe it follows structur
Slide 35: ELG Underground – El Limón Sur Trend
ELG UNDERGROUND – EL LIMÓN SUR TREND Early drill results support ability to grow resources and replace reserves Drilling in southern ore shoot indicates mineralization is open to the south and at depth Drilling in northern ore shoot confirmed potential to extend Inferred Resources along 500 m.a.s.l.
Slide 36: Media Luna Cluster
MEDIA LUNA CLUSTER Exploration strategy focused on extending the Morelos Complex production profile Media Luna Significant potential remains to bolster resources and extend reserve life EPO Resource categorization and expansion drilling Media Luna West 2024 program following-up on results from 2023
Slide 37: Media Luna Cluster – EPO
MEDIA LUNA CLUSTER – EPO Focus remains on upgrading and expanding mineral resources at EPO Resource categorization drilling Infill program 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 Focus in 2024 is
Slide 38: Media Luna Cluster – EPO
MEDIA LUNA CLUSTER – EPO Mineralization controls and resource extension potential 1) For more information related to the above drilling results, please refer to press release dated September 5, 2023 titled: Torex Gold Reports Results from 2023 Drilling at EPO and the press release dated March 23, 20
Slide 39: Media Luna Cluster – Media Luna West
MEDIA LUNA CLUSTER – MEDIA LUNA WEST Main ore controls and structural interpretation 1) For more information related to the above drilling results, please refer to press release dated November 30, 2023 titled: Torex Gold Reports Results from 2023 Exploration Drilling Program at Media Luna West. 39
Slide 40: Regional Targets
REGIONAL TARGETS Morelos Property has significant resource potential across multiple targets Initial drill testing El Naranjo Target delineation completed in H1 2024 Drill testing of targets to commence in H2 2024 Querenque (permitting underway) Target Definition Esperanza (proposed for 2025 budget)
Slide 41: Regional Targets – El Naranjo
REGIONAL TARGETS – EL NARANJO Highest ranked targets to be drilled H2 2024 Focus during H1 2024 was on target definition Five high priority targets have been defined to date Targets have been ranked using Torex Exploration System Drill testing of two highest ranked targets to commence in H2 2024 ~3,
Slide 42: Regional Targets – Atzcala
REGIONAL TARGETS – ATZCALA Target selection underway along trend To date, at least 10 areas of IS-type alteration have been defined at Atzcala Target definition underway and expected to be ranked using Torex Exploration System by year-end Initial drill testing of three best ranked targets is expecte
Slide 43: Upcoming Exploration News Flow
UPCOMING EXPLORATION NEWS FLOW Pace of press releases to pick up through back half of 2024 and carry into 2025 Drilling specific news flow: Initial results from EPO infill and step-out drilling (Q3 2024) Second round of drill results from ELG Underground (Q4 2024) Initial results from Media Luna Wes
Slide 44: Closing Remarks
CLOSING REMARKS JODY KUZENKO PRESIDENT & CEO
Slide 45: 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 Maintain annual production of 2024; successfully ramp up through 2027 450 to 500 ko
Slide 46: Appendix
eo; Torex Gold RESOURCES INC. APPENDIX
Slide 47: 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 48: 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 49: 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 50: Mineral Reserves
MINERAL RESERVES1 Morelos Complex 1) For notes accompanying mineral reserves for Morelos Complex please refer to slide 51. 50
Slide 51: Notes to Mineral Reserves
NOTES TO MINERAL RESERVES Morelos Complex Notes to accompany the mineral reserve table Notes to accompany the EPO Underground mineral reserves 1. Mineral reserves were developed in accordance with CIM (2014) guidelines. 1. Mineral reserves for EPO Underground have an effective date of June 30, 2024.
Slide 52: Mineral Resources
MINERAL RESOURCES1 Morelos Complex 1) For notes accompanying mineral resources for Morelos Complex please refer to slide 53. 52
Slide 53: Notes to Mineral Resources
NOTES TO MINERAL RESOURCES Morelos Complex Notes to accompany the mineral resource table Notes to accompany EPO Underground mineral resources 1. Mineral Resources were prepared in accordance with the CIM Definition Standards (May 2014) and the 1. The effective date of the estimate is December 31, 20
Slide 54: Statements on Qualified Persons
STATEMENTS ON QUALIFIED PERSONS The scientific and technical information contained in this presentation pertaining to mineral resources, EPO deposit geology and exploration has been reviewed and approved by Rochelle Collins, P.Geo., (PGO #1412) Principal, Mineral Resource Geologist with Torex Gold R
Slide 55: 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