Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Q1 2024 Earnings Presentation
33 slides from Torex Gold Resources's earnings presentation, May 9, 2024
Slide 1: Q1 2024 Results Conference Call
TSX | TXG Q1 2024 RESULTS CONFERENCE CALL May 9, 2024 All amounts expressed in U.S. dollars unless otherwise stated
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT TOTAL CASH COSTS PER OUNCE SOLD (“TCC”), ALL-IN SUSTAINING COSTS PER OUNCE SOLD (“AISC”), SUSTAINING AND NON-SUSTAINING CAPITAL EXPENDITURES, AVERAGE REALIZED PRICE, TOTAL CASH COSTS MARGIN, ALL-IN SUSTAINING COSTS MARGIN (“AISC MARGIN”), AISC MARGIN PER OUNCE SOLD, ADJUSTED NE
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 DELIVER MEDIA LUNA TO INTEGRATE & OPTIMIZE DISCIPLINED GROWTH & FULL PRODUCTION MORELOS CAPITAL ALLOCATION GROW RESERVES & RETAIN & ATTRACT BEST BUILD ON ESG RESOURCES INDUSTRY TALENT EXCELLENCE 1) Please refer
Slide 5: Key Highlights
KEY HIGHLIGHTS On track to achieve full-year production guidance for the sixth consecutive year Surpassed 14 million hours LTI free at ELG Tracking to full year guidance with first quarter gold production of 115,494 oz Total cash costs1 of $918/oz gold sold and all-in sustaining costs1 of $1,202/oz
Slide 6: Operational Performance
OPERATIONAL PERFORMANCE Strong operational start to the year with another record set in the processing plant Record gold recovery of 90.7% achieved in Q1 Fifth consecutive quarter processing above 13,000 tpd Processed grade in line with expectations UG mining rate expected to average 2,000 tpd in 20
Slide 7: Consistent and Reliable Producer
CONSISTENT AND RELIABLE PRODUCER 2024 a pivotal year with first production from Media Luna on track for Q4 In millions of U.S. dollars, unless otherwise noted FY 2024 Q1 2024 FY 2023 Guidance1 Performance Performance Production Gold oz 400,000 to 450,000 115,494 453,778 Gold Equivalent2 oz AuEq 410,
Slide 8: Financial Performance
FINANCIAL PERFORMANCE ANDREW SNOWDEN CFO
Slide 9: Financial Performance
FINANCIAL PERFORMANCE Strong margins achieved in Q1; set to return free cash flow positive in 2025 Average AISC margin of 39% achieved in Q11 Generated $113M in adjusted EBITDA in Q11 Capex expected to remain at these levels through Q31 Free cash flow reflects investment in Media Luna1 1) For more i
Slide 10: Unit Cost Performance
UNIT COST PERFORMANCE1 Solid cost performance despite ongoing inflationary pressures2 Open pit mining costs reflect higher contractor and fuel costs during the quarter as well as stronger MXN Underground costs reflect lower mining rates during the quarter given backfill priorities Processing costs p
Slide 11: Cash Flow Generation
CASH FLOW GENERATION Lower cash balance reflects seasonal tax/royalty payments and Media Luna spend Capital expenditures expected to decrease in Q4 as Media Luna comes online Higher taxes paid in Q1, as expected, reflecting seasonality of tax and royalty payments PTU payment of ~$24M to be paid in Q
Slide 12: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1,2 Well-positioned to fund strategic priorities Net cash2 of $69M at the end of Q1 2024 Available liquidity2 of $405M as of March 31st Ended Q1 with $113M of cash $100M available on term loan facility (undrawn) Debt free and $44M of lease-related obligations $192M available
Slide 13: Well-Positioned to Fund Media Luna Project
WELL-POSITIONED TO FUND MEDIA LUNA PROJECT1 More than sufficient funding on hand to support strategic goals Available liquidity results in a funding surplus of $48M while maintaining strategic objective of preserving $100M of liquidity after accounting for $257M of expenditures remaining on Media Lu
Slide 14: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Managing gold price and currency risk during build-out of Media Luna1 All amounts in U.S. dollars Total Q2 Q3 Q4 (Average) Gold Forward Contracts Gold Volumes koz 43.5 44.0 27.0 114.5 Gold Price $/oz $1,966 $2,006 $1,939 $1,975 MXN/USD Collars Collar Amount (USD) M$ $24.5
Slide 15: Media Luna Project Update
MEDIA LUNA PROJECT UPDATE DAVE STEFANUTO EVP, TECHNICAL SERVICES & CAPITAL PROJECTS
Slide 16: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE Project remains on schedule and budget1 78% of conveyor tables installed; conveyor belt Completion Project To Date Q1 2024 delivered to site and installation expected to Procurement 78% commence in mid-Q2 Engineering 91% Surface construction advancing well – 67% of Undergr
Slide 17: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE Development activities advancing well; concentrate production on track for late 20241 Conveyor table installation Guajes conveyor head station Cu and FeS flotation circuit tanks Foundation work for paste plant well underway 1) Please refer to Safe Harbor Statement on slide
Slide 18: Reserve & Resource Update
RESERVE & RESOURCE UPDATE JODY KUZENKO PRESIDENT & CEO
Slide 19: 2023 Mineral Reserve Drivers
2023 MINERAL RESERVE DRIVERS Drilling was successful in replacing a majority of AuEq reserve depletion in 20231,2 Replaced 67% of gold equivalent (“AuEq”) reserves processed in 2023 Increased ELG Underground reserves by 146 koz AuEq (280 koz prior to depletion) Reserve metal prices increased Gold $1
Slide 20: 2023 Mineral Resource Drivers
2023 MINERAL RESOURCE DRIVERS AuEq resource growth driven by EPO and ELG Underground1,2 Gold equivalent (“AuEq”) M&I resources up 360 koz (+5%) Increase of 901 koz AuEq (+12%) prior to mined depletion M&I resource growth driven by: Ongoing success in ELG Underground (+432 koz AuEq) Indicated resourc
Slide 21: 2024 Drilling & Exploration Plan
2024 DRILLING & EXPLORATION PLAN Key strategic focus and investment in exploration and drilling1 Drilling/exploration budget of $30M in 2024 $15M at Media Luna Cluster (39,000 m) Infill and expansionary drilling at EPO Advanced exploration at Media Luna West Inaugural drill program at Todos Santos $
Slide 22: Questions?
Lo; Torex Gold RESOURCES INC. QUESTIONS ?
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 Q2 2023 Q3 2023 Q4 2023 Q1 2024 (Q1 2024) Net cash generated from operating activities (M$) $89.6 $44.2 $120.0 $79.8 $333.6 1 Free cash flow (M$) ($37.4) ($69.7) ($24.3) ($49.1)
Slide 24: Key Operational Metrics
KEY OPERATIONAL METRICS1 Consolidated Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2022 2022 2022 2023 2023 2023 2023 2024 Mining - ELG Open Pit Ore mined (kt) 987 883 959 916 644 1,026 1,785 969 Ore mined (tpd) 10,846 9,598 10,420 10,182 7,074 11,153 19,404 10,651 Waste mined (kt) 7,960 9,097 8,546 8,437 11,124 10,131
Slide 25: Key Financial Metrics
KEY FINANCIAL METRICS1 Consolidated All amounts in U.S. dollars Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2022 2022 2022 2023 2023 2023 2023 2024 Key Metrics Gold sold (oz) 123,363 119,834 121,913 118,455 105,749 81,752 138,794 111,642 Gold equivalent sold (oz AuEq) -- -- -- -- -- -- -- 114,199 Realized gold price ($
Slide 26: 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 27: 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 28: 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 29: 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 2,001 4.28 33.1 1.09 276 2,129 48 6.48 417 Probable 21,568 2.56 24.2 0.84 1,775 16,749 401 4.24 2,943 Proven & Probable 23,569 2.71 24.9 0.86 2,050 18
Slide 30: Notes to Mineral Reserves
NOTES TO MINERAL RESERVES Morelos Complex Notes to accompany the mineral reserve table 3. Cut-off grades and mining shapes are considered appropriate for a metal price of US$1,500/oz Au, US$19/oz Ag and US$3.50/lb Cu and metal recoveries of 90% Au, 1. Mineral reserves were developed in accordance wi
Slide 31: 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 1,835 5.26 41.7 1.37 310 2,463 55 8.00 472 Indicated 25,616 2.99 29.5 1.04 2,463 24,328 585 5.03 4,146 Measured & Indicated 27,451 3.14 30.4 1.06 2
Slide 32: Notes to Mineral Resources
NOTES TO MINERAL RESOURCES Morelos Complex Notes to accompany the mineral resource table Notes to accompany ELG Underground mineral resources 1. CIM (2014) definitions were followed for mineral resources. 1. The effective date of the estimate is December 31, 2023. 2. Mineral resources are depleted a
Slide 33: Investor Relations Contact
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