Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (December 2024)
63 slides from Torex Gold Resources's investor presentation, Dec 2, 2024
Slide 1: Corporate Presentation
TSX | TXG CORPORATE PRESENTATION December 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: Torex Overview
TOREX OVERVIEW Intermediate Gold & Copper Producer C$2.6B 0.74x market value1 P/NAV1 Significant Size & Scale #1 454 koz gold producer in Mexico in 2023 gold produced in 2023 Large & Growing Resource Base ~5.6 Moz ~7.8 Moz ~2.2 Moz AuEq P&P at 4.05 gpt2 AuEq M&I at 5.00 gpt2 AuEq Inf. at 4.45 gpt2 H
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Future underpinned by solid long-term fundamentals Consistent track record of delivering on Competitive cost profile providing strong production guidance margins and cash flow generation Strong balance sheet and robust cash flow supports development of Media Luna which High-qua
Slide 5: 2024 Guidance
2024 GUIDANCE On track to deliver full-year production guidance for sixth consecutive year In millions of U.S. dollars, unless otherwise noted 2024 Q3 2024 YTD Updated production Guidance Performance Production guidance reflects Gold oz 450,000 to 470,000 348,728 additional four weeks of Gold Equiva
Slide 6: Five-Year Production Outlook
FIVE-YEAR PRODUCTION OUTLOOK1 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 470 430 to 47
Slide 7: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to significantly enhance shareholder returns DELIVER MEDIA LUNA TO INTEGRATE & OPTIMIZE GROW RESERVES & FULL PRODUCTION MORELOS RESOURCES DISCIPLINED GROWTH & RETAIN & ATTRACT BEST BUILD ON ESG CAPITAL ALLOCATION INDUSTRY TALENT EXCELLENCE 7
Slide 8: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Plant tie-ins in February will de-risk and potentially shorten planned downtime Plant tie-ins and upgrades now scheduled in Completion Project To Date February versus mid-November Q3 2024 Procurement 97% Modestly longer delivery window for critical Engineering 1
Slide 9: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Rescheduled tie-in will support de-risking plant commissioning; underground unaffected Deliverable Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Media Luna Underground First Cu Concentrate Guajes Tunnel Conveyor Process/Flotation Plant Paste Plant Commercial Productio
Slide 10: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Breakthrough of tunnel on south side of Balsas River achieved ahead of schedule Guajes Tunnel breakthrough occurred December 2023 – three months ahead of plan Access for personnel, materials and supplies from ELG to Media Luna now achievable in 30 minutes; reduc
Slide 11: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Project nearing completion; 87% complete as at end of Q3 Cu concentrate storage facility Rock breaker installation Transmission line run to the 230 kV switchyard Ball mill motor testing 11
Slide 12: Integrate & Optimize Morelos
INTEGRATE & OPTIMIZE MORELOS 2022 Technical Report set the foundation for Morelos Since the Technical Report released in 2022, 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
Slide 13: Integrate & Optimize Morelos
INTEGRATE & OPTIMIZE MORELOS Keeping the mill full through multiple sources of ore through at least 2030 Available Feed Sources1 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 ELG Open Pit ELG Underground Media Luna Underground EPO Underground Surface Stockpiles Open pit mine life exten
Slide 14: Integrate & Optimize Morelos
INTEGRATE & OPTIMIZE MORELOS EPO is a low-risk, brownfield addition that will leverage Media Luna infrastructure Utilizing existing infrastructure results in a lean capital estimate of $81.5M as only modest development (~2,200 m) is required to access and connect to Media Luna ore handling system De
Slide 15: Integrate & Optimize Morelos
INTEGRATE & OPTIMIZE MORELOS Reserve Scenario - The inclusion of EPO is the set up for the long term 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 and 2030) Annualized produ
Slide 16: Integrate & Optimize Morelos
INTEGRATE & OPTIMIZE MORELOS Resource Scenario - Focus now on bolstering reserve scenario through drilling strategy 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 resource growth a
Slide 17: Grow Reserves & Resources
GROW RESERVES & RESOURCES Significant resource upside given the majority of Morelos remains unexplored 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 East, an
Slide 18: Grow Reserves & Resources
GROW RESERVES & RESOURCES Key strategic focus and investment in exploration and drilling Drilling/exploration budget of $30M in 2024 $15M at Media Luna Cluster (29,000 m forecast) Infill and expansionary drilling at EPO Advanced exploration at Media Luna West Inaugural drill program at Todos Santos
Slide 19: Grow Reserves & Resources
GROW RESERVES & RESOURCES Structural corridor unlocks exploration potential of ELG and Media Luna clusters The north-south structural corridor is considered the main ore control of mineralization The main ore bodies and mineralization clusters of Media Luna and ELG occur at the intersection of the m
Slide 20: Disciplined Growth & Capital Allocation
DISCIPLINED GROWTH & CAPITAL ALLOCATION Funding buffer improved $115M quarter-over-quarter given robust cash generation Available liquidity1 results in a funding surplus of $136M while maintaining strategic objective of preserving $100M of liquidity after accounting for $111M of expenditures remaini
Slide 21: Retain & Attract Best Industry Talent
RETAIN & ATTRACT BEST INDUSTRY TALENT People as a strategic differentiator Safety first and always – no lives lost and no Total Employment1 Media Luna Employment2 lives harmed Invest in the growth and development of our people Overall turnover rate of 9% in 2023 and year-to- date 2024 Maintain Torex
Slide 22: Build on ESG Excellence
BUILD ON ESG EXCELLENCE Delivering value to shareholders while making a positive difference in society Excellent environmental performance Strong governance & diversity focus Limited air emissions and water discharge operation Women make up 43% of the Executive Team and Filtered tailings facility ma
Slide 23: Build on ESG Excellence
BUILD ON ESG EXCELLENCE Sustained performance & ongoing improvement on ESG disclosure a key focus ESG performance tied to cost of capital Clear and credible GHG emissions targets set One of the first mid-tier gold producers to enter into Reduction measures planned, approved, and funded; a Sustainabi
Slide 24: Relative Valuation
RELATIVE VALUATION1,2 TXG shares are attractively valued compared to peers on near-term consensus metrics 1) Peer average multiples based on consensus estimates for Alamos Gold, Allied Gold, Aris Mining, Artemis Gold, Aura Minerals, B2Gold, Calibre, Centerra Gold, Coeur Mining, Dundee Precious Metal
Slide 25: 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 early Maintain annual production of 2025; successfully ramp up through 2027 450 to 500 k
Slide 26: Appendix – Supplemental Information on Strategic Pillars
APPENDIX – SUPPLEMENTAL INFORMATION ON STRATEGIC PILLARS
Slide 27: Corporate Strategy
CORPORATE STRATEGY Executing on Strategic Pillars expected to generate long-term value DELIVER MEDIA LUNA TO INTEGRATE & OPTIMIZE GROW RESERVES & FULL PRODUCTION MORELOS RESOURCES Bring Media Luna into production and ramp up Ensure smooth production and cashflow Execute the near-term, near-mine plan
Slide 28: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Media Luna solidifies the Morelos Property as our foundational asset First concentrate production in Q1 2025; Project 87% complete and fully committed realistic ramp-up to full production in 2027 on spend at the end of Q3 2024 Extends mine life out to at least 2
Slide 29: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Project expenditures finalized at $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 budge
Slide 30: Deliver Media Luna to Full Production
DELIVER MEDIA LUNA TO FULL PRODUCTION Media Luna project schedule1 1) Updated based on progress and revised schedule as of September 30, 2024 (refer to press release dated October 30, 2024 titled: Torex Gold Provides Q3 2024 Update on Media Luna Project and Increases 2024 Production Guidance). 30
Slide 31: Integrate & Optimize Morelos
INTEGRATE & OPTIMIZE MORELOS Key focus is on increasing mine life and boosting output from ELG Underground ELG Underground has been a key source of Mining rates have consistently increased over past reserve growth since 2019 few years, surpassing 2,000 tpd in 2023 1) Please refer to slide 59 for a s
Slide 32: Grow Reserves & Resources
GROW RESERVES & RESOURCES ELG Underground – Building on a proven track record of mine life extensions 2024 drilling results support target of continued resource growth and replacement of reserves mined Drilling along El Limón Sur Trend highlights potential to: Upgrade Inferred Resources to Indicated
Slide 33: Grow Reserves & Resources
GROW RESERVES & RESOURCES EPO – Focus remains on upgrading and expanding mineral resources Drilling to the south and the northeast within the defined resource indicates potential to upgrade Inferred Resources to Indicated Resources Encountered high-grade mineralization with notable intercepts in dri
Slide 34: Disciplined Growth & Capital Allocation
DISCIPLINED GROWTH & CAPITAL ALLOCATION Well-positioned to fund strategic priorities1 Net debt2 of $15M at the end of Q3 2024 Available liquidity2 of $347M as of September 30th Additional net $5M drawn on revolving credit $232M available on $300M revolving credit facility facility in Q3 to support f
Slide 35: Disciplined Growth & Capital Allocation
DISCIPLINED GROWTH & CAPITAL ALLOCATION Additional FX collars put in place to protect against swings in MXN on opex in 2025 All amounts in U.S. dollars 2024 2025 Q4 Q1 Q2 Q3 Q4 FY Gold Forward Contracts Gold Volumes koz 27.0 -- -- -- -- -- Gold Price $/oz $1,939 -- -- -- -- -- MXN/USD Collars Collar
Slide 36: Robust Cash Flow Generation from ELG
ROBUST CASH FLOW GENERATION FROM ELG Funding position on solid footing given available liquidity and ongoing cash flow LTM Q4 2023 Q1 2024 Q2 2024 Q3 2024 (Q3 2024) Net cash generated from operating activities (M$) $120.0 $79.8 $97.4 $149.5 $446.7 1 Free cash flow (M$) ($24.3) ($49.1) ($62.3) ($0.7)
Slide 37: 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 chang
Slide 38: 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 39: 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 40: Responsible Gold Mining
RESPONSIBLE GOLD MINING Key highlights from 2023 Industry-leading safety performance – ended 2023 with a lost-time injury (“LTI”) frequency of 0.31 per million hours worked for employees and contractors; 10 million hours worked without a LTI at ELG for third time since 2020; Zero reportable environm
Slide 41: Appendix – Corporate Information
APPENDIX – CORPORATE INFORMATION
Slide 42: Corporate Summary
CORPORATE SUMMARY 1 2 Share Price Performance Shareholder Data 1.75 Other (Active) 1.50 Resource 11% (Indexed to January 1, 2021) (Active) Price Performance - USD Resource 1.25 29% (Passive) 13% 1.00 Other 0.75 Undisclosed/ (Passive) Retail 11% 0.50 36% 0.25 2 TXG GDXJ Index Top 10 Shareholders 0.00
Slide 43: Production Guidance
PRODUCTION GUIDANCE1 Consistent track record of delivering on full year production guidance 1) Guidance Notes: (i) Production guidance in 2018 provided with Q1 financial results in May 2018 with restart of operations following five-month blockade which started in November 2017; (ii) Production guida
Slide 44: All-In Sustaining Costs Guidance
ALL-IN SUSTAINING COSTS GUIDANCE1,2 Targeting to achieve AISC guidance in 2024 following first miss since 2018 1) For more information on operational and financial results, including information on non-GAAP measures (such as AISC), please refer to relevant section of the latest MD&A described in mor
Slide 45: Key Operational Metrics
KEY OPERATIONAL METRICS1 Consolidated Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2022 2023 2023 2023 2023 2024 2024 2024 Mining - ELG Open Pit Ore mined (kt) 959 916 644 1,026 1,785 969 1,622 1,539 Ore mined (tpd) 10,420 10,182 7,074 11,153 19,404 10,651 17,822 16,731 Waste mined (kt) 8,546 8,437 11,124 10,131 7,841 8
Slide 46: Key Financial Metrics
KEY FINANCIAL METRICS1 Consolidated All amounts in U.S. dollars Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2022 2023 2023 2023 2023 2024 2024 2024 Key Metrics Gold sold (oz) 121,913 118,455 105,749 81,752 138,794 111,642 113,513 122,130 Gold equivalent sold (oz AuEq) -- -- -- -- -- 114,106 115,890 125,414 Average real
Slide 47: Management Team
MANAGEMENT TEAM Years of Name Experience Experience Joined Torex in 2018 as COO JODY KUZENKO LLB, ICD.D 25+ Appointed CEO in 2020 President and Chief Executive Officer Previously served as Director of Business Strategy at Vale ANDREW SNOWDEN CPA, CA Joined Torex in 2021 20+ Chief Financial Officer P
Slide 48: Board of Directors
BOARD OF DIRECTORS Years of Name Experience Experience RICK HOWES P.Eng. Board member since 2020 40+ Chair of the Board Seasoned senior mining executive with over 40 years of experience in the mining industry Director and CEO since 2020 JODY KUZENKO LLB, ICD.D 25+ Joined Torex in 2018 as COO Preside
Slide 49: Appendix: EPO Pre-Feasibility Study Results
APPENDIX: EPO PRE-FEASIBILITY STUDY RESULTS
Slide 50: 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 51: 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 52: 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 53: 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 54: 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 55: 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 56: 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 57: 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 58: Appendix – Mineral Reserves & Resources
APPENDIX – MINERAL RESERVES & RESOURCES
Slide 59: Mineral Reserves
MINERAL RESERVES1 Morelos Complex 1) For notes accompanying mineral reserves for Morelos Complex please refer to slide 60. 59
Slide 60: 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 61: Mineral Resources
MINERAL RESOURCES1 Morelos Complex 1) For notes accompanying mineral resources for Morelos Complex please refer to slide 62. 61
Slide 62: 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 63: 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
Torex Gold Resources — Investor Presentation (December 2024) on 6ix