Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Q3 2021 Earnings Presentation
26 slides from Torex Gold Resources's earnings presentation, Nov 3, 2021
Slide 1: Third Quarter 2021 Results Conference Call
TSX | TXG THIRD QUARTER 2021 RESULTS CONFERENCE CALL NOVEMBER 3, 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: 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 Build on culture as key strategic Deliver Media Luna Feasibility Robust multi-year drill program differentiator Study in Q1/22 on a c
Slide 5: Key Operational & Financial Highlights
KEY OPERATIONAL & FINANCIAL HIGHLIGHTS1 Solid operational and financial performance delivered during Q3 2021 Produced 111,229 oz of gold (YTD – 358,792 oz); full year guidance of 430,000 to 470,000 oz Total cash cost2 of $727/oz gold sold (YTD - $646/oz); guidance of $680/oz to $720/oz All-in sustai
Slide 6: Well on Track to Achieve Full Year Guidance
WELL ON TRACK TO ACHIEVE FULL YEAR GUIDANCE Full year costs expected to come in toward mid-point of guided ranges 2021 Revised 2021 Q3 2021 YTD In millions of U.S. dollars, unless otherwise noted Guidance Guidance Progress Gold Production oz 430,000 to 470,000 No change 358,792 Total Cash Costs $/oz
Slide 7: ESG Excellence as a Foundation
ESG EXCELLENCE AS A FOUNDATION Sustained performance and ongoing improvement in ESG disclosure a key focus Staying COVID-19 Resistant ESG Ratings Strict protocols/screening remain in place MSCI: ‘A’ rating from ‘BBB’ 30% employees/contractors fully vaccinated and 70% Refinitiv: ‘B’ rating from ‘C’ p
Slide 8: Multi-Year Production Outlook for ELG
MULTI-YEAR PRODUCTION OUTLOOK FOR ELG On track to deliver a smooth transition between ELG and Media Luna1,2 ELG Only (excludes Media Luna) Guidance Outlook1,2 2021 2022 2023 2024 Gold Production koz 430 to 470 430 to 470 400 to 450 300 to 350 Gold production in 2022 expected to be in line with the g
Slide 9: Operational Performance
OPERATIONAL PERFORMANCE JODY KUZENKO PRESIDENT & CEO
Slide 10: Tracking Well to Full Year Production Guidance
TRACKING WELL TO FULL YEAR PRODUCTION GUIDANCE1,2 Solid operational result delivered during Q3 2021 Produced 111,229 oz; expect similar level in Q4 Average plant throughput of 12,500 tpd in Q3 COVID COVID Interruption Interruption Lower processed grade of 3.48 g/t in line with plan Underground consi
Slide 11: Cost Performance
COST PERFORMANCE1,2 Cost control key to maintaining margins and offsetting inflationary pressures Open pit and underground mining unit costs higher than 2020 given maintenance costs and increased stockpile rehandling owing to RopeCon repairs Processing costs impacted by higher cyanide and reagent co
Slide 12: Financial Performance
FINANCIAL PERFORMANCE ANDREW SNOWDEN CFO
Slide 13: Solid Financial Performance Delivered in Q3 2021
SOLID FINANCAL PERFORMANCE DELIVERED IN Q3 20211 Financial results continue to be influenced by strong overall margins TCC2 margin of 59% in Q3; AISC2 margin of 49% EBITDA2 of $120M during the quarter COVID Interruption COVID Interruption Total capital expenditures of $58M in the quarter3 $29M of fr
Slide 14: Strong Cash Flow Generation
STRONG CASH FLOW GENERATION1 Balance sheet continues to strengthen with $222M in cash at the end of Q3 Generated $88M in operating cash flow ($100M prior to changes in non-cash working capital) and more than $29M in free cash flow during the third quarter 1) All amounts in US dollars unless otherwis
Slide 15: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1 Financial health of business continues to strengthen Net cash of $218M at quarter-end2 Available liquidity of more than $370M at end of Q3 Exited Q3 2021 with $222M of cash $150M revolving debt facility fully undrawn Debt free with less than $4M of lease obligations Amende
Slide 16: Cash Flow Seasonality: Quarterly Payments Impacting Cash Flow
CASH FLOW SEASONALITY Cash flow in H2 expected to benefit from positive seasonality factors 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 ope
Slide 17: Project Updates
PROJECT UPDATES JODY KUZENKO PRESIDENT & CEO
Slide 18: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE1,2 Tunnelling from both sides of Balsas expected to mitigate schedule risk1 Guajes tunnel now advanced 725m (875m of total development including lateral development) August: 55m of advance (70m total development) September: 115m of advance (170m total development) October:
Slide 19: Media Luna Progress Update: Technical Report
MEDIA LUNA PROGRESS UPDATE1,2 Technical Report on schedule for completion in Q1 2022 Several scope changes have been made to the design Capital expenditures in upcoming Feasibility Study of Media Luna versus design outlined in 2018 PEA: expected to be higher than in 2018 PEA due to: Access and mater
Slide 20: Questions?
QUESTIONS ?
Slide 21: 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 22: 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 23: Reagent Consumption Driving Higher Process Costs
REAGENT CONSUMPTION DRIVING HIGHER PROCESS COSTS Increased cyanide usage reflective of elevated levels of Cu & Fe in sulphides Copper (Cu) and iron (Fe) in sulphides increasing as mining moves deeper within the open pits Primarily in the form of pyrrhotite and chalcopyrite Sodium cyanide (NaCN) cons
Slide 24: Cash Flow Seasonality: Royalties & Profit Sharing
CASH FLOW SEASONALITY Timing Differences – Royalties & Profit Sharing Royalty – Mexican Geological Survey Profit Sharing (“PTU”) – Employees 2.5% of gross revenue 10% of taxable income in Mexico Accrued quarterly and paid the following quarter Legislation passed in Q2 2021 caps PTU payment Recognize
Slide 25: Cash Flow Seasonality: 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 deductions 30% of taxable income in Mexico Accrued quarterly and paid annually in Q1 of the Accr
Slide 26: 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