Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (February 2022)
41 slides from Torex Gold Resources's investor presentation, February 2022
Slide 1: Corporate Presentation
TSX | TXG CORPORATE PRESENTATION February 2022 All amounts expressed in U.S. dollars unless otherwise stated
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT THE PRELIMINARY ECONOMIC ASSESSMENT (THE “PEA” OR “2018 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 EFFECTIVE MARC
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Future underpinned by solid fundamentals Attractively valued relative Consistent operator with industry- to intermediate peers leading safety track record Financially strong gold producer Long-life potential via Media with robust margins and a Luna project healthy balance sheet
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 strategic differentiator Deliver Media Luna Feasibility $39M exploration and drilling Ensure smooth transition fr
Slide 5: ELG Well Positioned for Another Strong Year in 2022
ELG WELL POSITIONED FOR ANOTHER STRONG YEAR IN 20221 Production consistent with 2021 with AISC reflecting El Limón pushback Production guidance in 2022 is consistent with guided range in 2021 and 3-year outlook released in Q3 2021 Total cash costs (“TCC”)2 expected to be moderately higher than the g
Slide 6: El Limón Guajes (ELG) – A Foundational Asset
EL LIMÓN GUAJES (“ELG”) – A FOUNDATIONAL ASSET Future supported by strong cash flow and robust margins from ELG1 Record production of 468,203 ounces in 2021 AISC2 margin of 47% achieved in 2021 COVID Interruption Generated $491M of adjusted EBITDA2 in 2021 Free cash flow2 of $98M during 2021 COVID C
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 By year-end 2021, 97% of employees and 85% of MSCI: ‘A’ rating from ‘BBB’ contractors fully vaccinated against COVID-19 Refinitiv: ‘B’ rating from
Slide 8: ESG Excellence as a Foundation
ESG EXCELLENCE AS A FOUNDATION Delivering value to shareholders while making a positive difference in society Productive relationships with Strong governance & diversity focus employees Women make up 50% of Executive Team 99% workforce from Mexico; 60% from and 44% of Board of Directors Guerrero Sta
Slide 9: Extending and Optimizing ELG a Key Strategic Priority
EXTENDING AND OPTIMIZING ELG A KEY STRATEGIC PRIORITY El Limón pushback extends open pit mining Pushback of El Limón pit extends open pit production to mid-2024 from late- 2023 and is expected to add ~150,000 ounces of production Accelerating near-term underground exploration to continue to extend l
Slide 10: ELG Underground – A Significant Value Driver
ELG UNDERGROUND – A SIGNIFICANT VALUE DRIVER Source of solid reserve growth over the last few years Mined gold production2 from ELG underground averaged 97 koz at a grade of ~7.4 g/t between 2019 and 2021 Record annual mining rate of ~1,260 tpd in 2021 105 koz mined in 2021 at a grade of ~7.1 g/t Un
Slide 11: Multi-Year Production Outlook for ELG
MULTI-YEAR PRODUCTION OUTLOOK FOR ELG1,2 On track to deliver a smooth transition between ELG and Media Luna 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 Guided production for 2022 in line with 3-year outlook Mo
Slide 12: Media Luna on Track for Production in Early 2024
MEDIA LUNA ON TRACK FOR PRODUCTION IN EARLY 2024 De-risking and advancing Media Luna as per plan1,2 Media Luna has the potential to be a Permitting well underway multi-decade underground mine1,2 CUS approved; MIA amendment 2018 PEA outlined ~10 year mine life approved (for southside development) Ann
Slide 13: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE1,2 Tunnelling from both sides of Balsas River expected to mitigate schedule risk Guajes tunnel had advanced 1,193 m as at end of January (total of 1,501 m including lateral development) January 2022: 159 m of advance (201 m total development) Q4 2021: 460 m of advance (599
Slide 14: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE1,2 Technical Report on schedule for completion by end of 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 an
Slide 15: 2021 Media Luna Infill Program Delivered as Expected
2021 MEDIA LUNA INFILL PROGRAM DELIVERED AS EXPECTED1 Gold equivalent Indicated resource increased 24% to 4.39 million ounces2,3,4,5 Media Luna October 31, 2021 April 30, 2021 Variance (excluding EPO) Tonnes AuEq AuEq Tonnes AuEq AuEq Tonnes AuEq AuEq (Mt) (g/t) (Moz) (Mt) (g/t) (Moz) (Mt) (g/t) (Mo
Slide 16: Media Luna Expected to Extend Cash Flow Beyond ELG
MEDIA LUNA EXPECTED TO EXTEND CASH FLOW BEYOND ELG5 Significant resource base with only 1/3rd of the magnetic anomaly drilled ~10 years based on 2018 PEA which assumed a top-end mining rate of 8,500 tpd2 ~9 years based on October 2021 Indicated resource (prior to dilution/recovery factors) at an ave
Slide 17: Exploration Has Become a Key Strategic Pillar
EXPLORATION HAS BECOME A KEY STRATEGIC PILLAR Robust exploration and drilling program planned for 2022 $39M budgeted towards exploration and Tecate drilling in 2022 Esperanza $19M on infill and step-out drilling at Media Querenque Luna and infill drilling at EPO (~64,000 m) $6M on infill and step-ou
Slide 18: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1 Financial health of business continues to strengthen Net cash2 of $252M at year-end Available liquidity of $406M following strong 2021 Exited Q4 2021 with $256M of cash $150M revolving debt facility fully undrawn Debt free with just over $3M of lease obligations Amended re
Slide 19: Executing on Plan Expected to Deliver Re-Rating
EXECUTING ON PLAN EXPECTED TO DELIVER RE-RATING Several key deliverables anticipated in the coming months Optimize & Extend Advance & De-Risk Grow Reserves & ELG Media Luna Resources Deliver consistent production Construction/development Updated reserves and and cash flow (ongoing) MIA Integral appr
Slide 20: Appendix
APPENDIX All amounts expressed in U.S. dollars unless otherwise stated
Slide 21: Safety and Operational Excellence Intertwined
SAFETY AND OPERATIONAL EXCELLENCE INTERTWINED Culture focused on safety evident by ongoing performance LEADERSHIP: Getting the right people in the right roles at the right levels to drive business excellence SYSTEMS OF WORK: SYSTEMS OF WORK: Incident reporting & Business Process investigations Frame
Slide 22: We Are Focused on Enhancing Our ESG Disclosure
WE ARE FOCUSED ON ENHANCING OUR ESG DISCLOSURE Translating our actions associated with our values into real value1 ENVIRONMENT SOCIAL GOVERNANCE Zero Discharge Site (no discharge Exited 2021 with a LTIF of 0.14 per Seasoned Executive Team with into local watersheds) million hours worked 50% female r
Slide 23: 2020 Responsible Gold Mining Report
2020 RESPONSIBLE GOLD MINING REPORT Key Highlights 99% operations employees from Mexico; $64.3 million paid in salaries and benefits at site Industry leading safety performance Ratified two-year labour agreement with unionized employees (where annual agreements are the norm) 89% procurement spend in
Slide 24: Innovation: A Key Part of the Torex DNA
INNOVATION: A KEY PART OF THE TOREX DNA Leveraging innovation to drive value and mitigate risk ROPECON FILTERED TAILINGS SART PLANT Innovative 1.3 km automated conveyor “Dry-stack” filtered tailings facility Reduces consumption of our two most system which transports ore to our best-in-class in the
Slide 25: El Limón Expansion Extends Open Pit Life into Mid-2024
EL LIMÓN EXPANSION EXTENDS OPEN PIT LIFE INTO MID-2024 Pushback to support a smooth transition between ELG and Media Luna1 Expect to support a smooth transition between ELG and Media Luna Fit for purpose investment decision Adds ~150,000 ounces of gold during transition period Extends open pit mine
Slide 26: Cost Performance
COST PERFORMANCE1 Actively pursuing opportunities to offset cost inflation Open pit costs higher due to RopeCon repairs mid-year and higher contractor costs associated with COVID-19 Higher underground costs reflect increased levels of development than in 2020 Processing costs reflect higher levels o
Slide 27: Strong Cash Flow Generation
STRONG CASH FLOW GENERATION Balance sheet continued to strengthen with $256M in cash at year-end • Generated $330M in operating cash flow ($365M prior to changes in non-cash operating working capital) • Cash balance improved $82M during the year including repayment of $40M of remaining long-term deb
Slide 28: Cash Flow Seasonality
CASH FLOW SEASONALITY1,2 Cash flow tends to be weakest in H1 given timing of payments Seasonality expected to be more pronounced in 2022 than 2021 given gold production is anticipated to be higher in H2 than in H1 Final payments related to royalties, profit sharing (PTU), and taxes are subject to mo
Slide 29: 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
Slide 30: 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) For more information on operational and financial results, including information on non-GAAP measures (s
Slide 31: Corporate Information and Top Shareholders
CORPORATE INFORMATION AND TOP SHAREHOLDERS Broadly owned by skilled institutional investors 31
Slide 32: Monorail-Based Mining System
MONORAIL-BASED MINING SYSTEM Media Luna Feasibility Study to be advanced under a conventional mine design Mitigates risk to the business given Media Luna will be primary source of feed post mid-2024 Insufficient available upside at Media Luna as it relates to financial or schedule considerations Add
Slide 33: Board of Directors
BOARD OF DIRECTORS Ongoing Board refresh to maintain strong strategic and governance experience RICK HOWES PEng Chair of the Board ROSIE MOORE MSc (Geology) 40 years global technical, operational and management mining expertise; Exploration geologist whose 35+ year career includes experience in awar
Slide 34: Management Team
MANAGEMENT TEAM Proven experience navigating technical, commercial and social complexity JODY KUZENKO LLB President and Chief Executive Officer FAYSAL RODRIGUEZ V.P. Mexico Joined Torex in 2018 as COO; assumed CEO position in June 2020. 20+ years of mining experience in corporate & operational roles
Slide 35: Mineral Reserves – El Limón Guajes (ELG)
MINERAL RESERVES1 – EL LIMÓN GUAJES (ELG) As of December 31, 2020 Tonnes Au Ag Au Ag (Mt) (g/t) (g/t) (koz) (koz) Open Pit - El Limón (including El Limón Sur) Proven 2.48 3.59 4.3 286 344 Probable 5.84 2.90 4.2 545 787 Proven & Probable 8.32 3.11 4.2 831 1,130 Open Pit - Guajes Proven 1.88 3.87 3.4
Slide 36: Mineral Resources – El Limón Guajes (ELG)
MINERAL RESOURCES1 – El LIMÓN GUAJES (ELG) As of December 31, 2020 Tonnes Au Ag Au Ag (Mt) (g/t) (g/t) (koz) (koz) Open Pit - El Limón (including El Limón Sur) Measured 2.79 3.64 5.2 330 460 Indicated 9.03 2.66 5.7 770 1,650 Measured & Indicated 11.82 2.89 5.6 1,100 2,120 Inferred 1.68 1.73 7.4 90 4
Slide 37: Notes to Mineral Reserves & Resources (ELG)
NOTES TO MINERAL RESERVES & RESOURCES (ELG) Notes - El Limón Guajes Complex Reserve Statement Notes - El Limón Guajes Complex Resource Statement 1. Mineral reserves are founded on Guajes, El Limón and El Limón Sur measured 1. The effective date of the estimate is December 31, 2020. and indicated min
Slide 38: Mineral Resources – Media Luna
MINERAL RESOURCES – MEDIA LUNA As of October 31, 2021 Tonnes Au Ag Cu Au Ag Cu AuEq AuEq (Mt) (g/t) (g/t) (%) (Moz) (Moz) (Mlb) (g/t) (Moz) Media Luna (excluding EPO) Indicated 25.4 3.24 31.5 1.08 2.64 25.7 602 5.38 4.39 Inferred 6.0 2.47 20.8 0.81 0.48 4.0 106 4.05 0.78 Notes - Media Luna Resource
Slide 39: Mineral Resources – EPO
MINERAL RESOURCES – EPO As of April 30, 2021 Tonnes Au Ag Cu Au Ag Cu AuEq AuEq (Mt) (g/t) (g/t) (%) (Moz) (Moz) (Mlb) (g/t) (Moz) EPO Inferred 8.0 1.52 34.6 1.27 0.39 8.9 225 3.97 1.02 Notes - EPO Resource Statement 1. The effective date of the estimate is April 30, 2021. 2. Mineral Resources are r
Slide 40: Media Luna – 2018 Preliminary Economic Assessment
MEDIA LUNA – 2018 PRELIMINARY ECONOMIC ASSESSMENT1,2 1) Metal Prices used $1,200/oz Au, $17.00/oz Ag, $3.00/lb Cu, USD:MXN 1:18 2) A preliminary economic assessment should not be considered a prefeasibility study or feasibility study, as the economics and technical viability of the Media Luna Projec
Slide 41: 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
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