Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Q1 2022 Earnings Presentation
26 slides from Torex Gold Resources's earnings presentation, May 12, 2022
Slide 1: First Quarter 2022 Results Conference Call
TSX | TXG FIRST QUARTER 2022 RESULTS CONFERENCE CALL May 12, 2022
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT REALIZED GOLD PRICE, TOTAL CASH COSTS PER OUNCE OF GOLD SOLD (“TCC”), TOTAL CASH COSTS MARGIN, ALL-IN SUSTAINING COSTS (“AISC”), ALL-IN SUSTAINING COSTS MARGIN, ADJUSTED EARNINGS, EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”), ADJUSTED EBITDA, FREE C
Slide 3: Overview & Key Highlights
OVERVIEW & KEY HIGHLIGHTS JODY KUZENKO PRESIDENT & CEO All values US dollars unless otherwise stated
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 PRUDENT CAPITAL BUILD ON ESG LEVERAGE ALLOCATION EXCELLENCE INNOVATION 4
Slide 5: Key Highlights
KEY HIGHLIGHTS 2022 off to a solid start Produced 112,446 ounces of gold in Q1 Total cash costs1 of $748 per ounce gold sold during the quarter and all-in sustaining costs1 of $1,034 per ounce gold sold Generated revenue of $208M resulting in adjusted EBITDA1 of $111M during Q1 Q1 cash flow from ope
Slide 6: On Track to Achieve Full Year Guidance
ON TRACK TO ACHIEVE FULL YEAR GUIDANCE1 Quarterly output expected to trend higher and costs lower through remainder of 2022 In millions of U.S. dollars, unless otherwise noted 2022 Guidance Year to Date (Q1) Gold Production oz 430,000 to 470,000 112,446 Total Cash Costs 2 $/oz 695 to 735 748 All-in
Slide 7: 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 99.7% of employees and 89% of contractors fully MSCI: ‘A’ rating from ‘BBB’ vaccinated against COVID-19 Refinitiv: ‘B’ rating from ‘C+’ Boosters n
Slide 8: Operational Performance
OPERATIONAL PERFORMANCE JODY KUZENKO PRESIDENT & CEO
Slide 9: Solid Operational Performance
SOLID OPERATIONAL PERFORMANCE1 Production slightly stronger than anticipated on the back of higher processed grades Produced 112,446 ounces to start off 2022 Average plant throughput of 12,605 tpd in Q1 COVID COVID Interruption Interruption Gold grade processed of 3.47 g/t during first quarter Under
Slide 10: Cost Performance
COST PERFORMANCE1,2 Costs tracking well against full year 2021 results Open pit and underground mining unit costs relatively inline with full year 2021 result Improvement in processing costs reflects reduced cyanide consumption given specific mineralogy associated with sulphur and iron processed Sit
Slide 11: Financial Performance
FINANCIAL PERFORMANCE ANDREW SNOWDEN CFO
Slide 12: Solid Financial Performance
SOLID FINANCAL PERFORMANCE1 Stronger metal price helped bolster margins quarter-over-quarter All-in sustaining margin of 44% delivered in Q1 Adjusted EBITDA2 of $111M in Q1 COVID Interruption Total capital expenditure of $65M in Q1 Free cash flow deficiency of $19M in Q1 COVID COVID Interruption Int
Slide 13: Cash Flow Generation
CASH FLOW GENERATION1 Cash generation during Q1 impacted by seasonality of tax and royalty payments Taxes paid includes $30M related to fiscal 2021 mining tax; working capital includes $4M related to 0.5% royalty accrued during 2021 Cash generation to be weighted towards H2 given seasonality of tax,
Slide 14: Cash Flow Seasonality
CASH FLOW SEASONALITY Cash flow tends to be the 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 US dollar Cash flow from operations prior to changes in non-cash wor
Slide 15: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1 Financial health of business remains strong Net cash2 of $233M at quarter-end Available liquidity of $387M as of March 31st Exited Q1 2022 with $237M of cash $150M revolving debt facility fully undrawn Debt free with just under $4M of lease obligations Discussions to exten
Slide 16: Forward Price Contracts
FORWARD PRICE CONTRACTS Managing gold price risk during build-out of Media Luna All amounts in U.S. dollars 2022 2023 Q4 Q1 Q2 Q3 Q4 Forward Contracts Gold Volumes koz 30.0 27.0 27.0 27.0 27.0 Gold Price $/oz $1,910 $1,924 $1,924 $1,924 $1,924 Hedged approximately 25% of gold production between Octo
Slide 17: Project & Exploration Update
PROJECT & EXPLORATION UPDATE JODY KUZENKO PRESIDENT & CEO
Slide 18: Morelos Complex Technical Report
MORELOS COMPLEX TECHNICAL REPORT1,2 The foundation for growth has been cast 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 of $929/oz AuEq through 2027 when mill
Slide 19: Media Luna Project – Tunnel Development
MEDIA LUNA PROJECT – TUNNEL DEVELOPMENT1,2 Advancing from both sides of Balsas River expected to mitigate schedule risk Guajes Tunnel expected to have advanced ~1,710 m by end of April New bolter with longer reach has been commissioned Year-to-date advance rate of 5.6 m/d versus budgeted rate of 6 t
Slide 20: Morelos Property Offers Significant Resource Potential
MORELOS PROPERTY OFFERS SIGNIFICANT RESOURCE POTENTIAL1 75% of the broader property remains largely unexplored Drilling/exploration budget of $39M in 2022 Tecate Esperanza $19M at Media Luna cluster (~64,000 m) Querenque $6M at ELG Underground (~28,000 m) $9M on near-mine drilling (~28,500 m) and re
Slide 21: Questions?
QUESTIONS ?
Slide 22: Key Operational Metrics
KEY OPERATIONAL METRICS1,2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2020 2020 2020 2021 2021 2021 2021 2022 Mining - ELG Open Pit Ore mined (kt) 666 1,407 1,689 1,359 1,131 1,406 864 1,061 Waste mined (kt) 4,435 10,097 10,399 9,882 8,593 7,476 8,972 8,958 Strip ratio (waste:ore) 6.7 7.2 6.2 7.3 7.6 5.3 10.4 8.4 Gold
Slide 23: Key Financial Metrics – Consolidated
KEY FINANCIAL METRICS – CONSOLIDATED1,2 All amounts in U.S. dollars Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2020 2020 2020 2021 2021 2021 2021 2022 Key Metrics Gold sold (oz) 63,147 133,036 133,063 129,019 111,424 118,989 109,391 108,012 Realized gold price ($/oz) $1,712 $1,884 $1,847 $1,778 $1,816 $1,786 $1,798 $1
Slide 24: Cash Flow Seasonality: Timing Differences – Royalties & Profit Sharing
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 25: Cash Flow Seasonality: Timing Differences – Mining Royalty & Corporate Income Tax
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 26: 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