Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Investor Presentation (April 2023)
51 slides from Torex Gold Resources's investor presentation, April 2023
Slide 1: Corporate Presentation April 2023
TSX | TXG CORPORATE PRESENTATION April 2023 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 costs, average realized price, total cash cost margin, AISC margin, AISC margin per ounce of gold sold, adjusted net earnings, adjusted net earnings per share, earni
Slide 3: Who We Are
WHO WE ARE Reliable gold producer with a strong balance sheet and significant exploration upside Morelos Complex is the second-largest gold operation in Mexico Production and cash flow currently anchored by El Limón Guajes (“ELG”) operations Media Luna Project key to sustaining output beyond 2025 Si
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Future underpinned by solid long-term fundamentals1 Consistent track record of achieving Competitive cost profile providing strong production and cost guidance margins and cash flow generation Strong balance sheet and robust cash flow High-quality management team with supports
Slide 5: ELG – A Foundational Asset
ELG – A FOUNDATIONAL ASSET Future growth supported by strong cash flow and robust margins from ELG 2023 off to a strong start with 122,918 ounces in Q1 All-in sustaining margin2 of 44% achieved in 2022 Adjusted EBITDA2 of $479M generated in 2022 Free cash flow2 of $130M generated in 2022 1) Please r
Slide 6: Five-Year Production Outlook
FIVE-YEAR PRODUCTION OUTLOOK1,3 Optimization of ELG open pits and underground drive improved near-term outlook Production Outlook Outlook Outlook 2022 Technical Actual (koz) 2 2021 2022 2023 Report 2021 (Au) 468.2 430 to 470 2022 (Au) 474.0 430 to 470 430 to 470 2023 (Au) 400 to 450 420 to 460 440 t
Slide 7: Consistent and Reliable Producer
CONSISTENT AND RELIABLE PRODUCER 2023 guidance points to another solid year of profitable production1 In millions of U.S. dollars, unless otherwise noted 2022 Guidance2 2022 Performance 2023 Guidance Gold Production oz 430,000 to 470,000 474,035 440,000 to 470,000 Total Cash Costs3 $/oz 695 to 735 7
Slide 8: Strategic Pillars
STRATEGIC PILLARS Executing on plan expected to significantly enhance shareholder returns1 OPTIMIZE & ADVANCE & GROW RESERVES & EXTEND ELG DE-RISK MEDIA LUNA RESOURCES PRUDENT CAPITAL BUILD ON ESG ALLOCATION EXCELLENCE 1) Please refer to Safe Harbor Statement on slide 2 8
Slide 9: Optimize & Extend ELG
OPTIMIZE & EXTEND ELG Maximizing potential of ELG Open Pits and ELG Underground1 Feed Source2 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 ELG Open Pits ELG Underground Media Luna Underground Stockpiles Open pit mine life pushed out to mid-2025 following reserve additions in El Limón and E
Slide 10: Optimize & Extend ELG
OPTIMIZE & EXTEND ELG Key focus is on increasing mine life and boosting output from ELG Underground1 Cumulative gold mined plus year-end reserves Record underground mining rate in 2022; targeting reflect a 400% increase over initial reserves to exit 2023 at 1,800 tpd and 2024 at 2,000 tpd 1) Please
Slide 11: Advance & De-Risk Media Luna
ADVANCE & DE-RISK MEDIA LUNA Media Luna solidifies the Morelos Property as our foundational asset1 Replaces production from ELG open pits Meaningful exposure to copper with annual and extends mine life out to at least 20332 production of 45 Mlbs per year post-20242 Executable Feasibility Study backe
Slide 12: Advance & De-Risk Media Luna
ADVANCE & DE-RISK MEDIA LUNA Development activities continuing to ramp-up towards peak rates in 20231 Key Highlights Completion Project To Date Q4 2022 Capital expenditures on track with original budget Procurement 33.7% 26% of project expenditures committed including Engineering 24.9% Underground d
Slide 13: Advance & De-Risk Media Luna
ADVANCE & DE-RISK MEDIA LUNA Breakthrough of Guajes Tunnel on track for Q1 20241,2 Guajes Tunnel advanced ~3,870 m as at the end of March Advance rate of 6.9 m/d over the past 3 months (7.4 m/d in February) Successfully crossed under the Balsas River South Portal Lower advanced ~1,725 m as at the en
Slide 14: Advance & De-Risk Media Luna
ADVANCE & DE-RISK MEDIA LUNA First concentrate production on track for Q4 20241 South Portal Lower Guajes Tunnel Portal Paste plant pad preparation South Portal Generator Upper Pad Paste Plant Pad Mazapa by-pass road Raise bore – GT vent raise 1) Please refer to Safe Harbor Statement on slide 2. 14
Slide 15: Grow Reserves & Resources
GROW RESERVES & RESOURCES Exploration and drilling focused on improving on Feasibility Study mine plan1 (A) Increased production outlook from ELG through 2027 to create overlap with Media Luna ramp-up5 (B) Focus on ELG Underground and EPO deposit as potential feed sources to fill the mill beyond 202
Slide 16: Grow Reserves & Resources
GROW RESERVES & RESOURCES Drilling successful in replacing a majority of AuEq reserve depletion in 20221,2 Replaced 68% of gold equivalent (“AuEq”) reserves processed in 2022 Replaced mine depletion in ELG Underground Expansion of El Limón pit added 190 koz to reserves and expansion of El Limón Sur
Slide 17: Grow Reserves & Resources
GROW RESERVES & RESOURCES AuEq resource growth in 2022 driven by EPO, Media Luna and ELG Underground1,2 Gold equivalent (“AuEq”) M&I resources up 567 koz (+8%) Increase of 1,078 koz (+16%) prior to mine depletion M&I resource growth driven by: Ongoing success in ELG Underground Inaugural Indicated r
Slide 18: Grow Reserves & Resources
GROW RESERVES & RESOURCES Significant resource growth delivered from Media Luna Cluster in 20221,2,3 Drilling at Media Luna: Delivered an initial Measured resource of 473 koz AuEq at 8.06 gpt Expanded Indicated resources Grew Inferred resources to north and south Drilling at EPO: Delivered an inaugu
Slide 19: Grow Reserves & Resources
GROW RESERVES & RESOURCES Key strategic focus and investment in exploration and drilling1 Drilling/exploration budget of $39M in 2023 Tecate $20M at Media Luna cluster (~55,000 m) Esperanza Querenque Infill and expansionary drilling at EPO Inaugural drill program at ML West $6M at ELG Underground (~
Slide 20: Build on ESG Excellence
BUILD ON ESG EXCELLENCE Delivering value to shareholders while making a positive difference in society Solid environmental performance Strong governance & diversity focus Limited air emissions and water discharge operation Women make up 43% of Executive Team and 44% Filtered tailings facility materi
Slide 21: Build on ESG Excellence
BUILD ON ESG EXCELLENCE Sustained performance & ongoing improvement on ESG disclosure a key focus Clear and credible GHG emissions targets set ESG Ratings Scope 1 and 2 greenhouse gas emission targets1 MSCI: ‘A’ rating from ‘BBB’ 10% reduction on an absolute basis by 2030 Refinitiv: ‘B-’ rating from
Slide 22: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Exited 2022 with $376M in cash and $623M of liquidity1 Net cash2 of $372M at quarter-end ($376M in cash) Available liquidity of $623M as of December 31st Free cash flow prior to spending on Media Luna $100M available on term loan facility (undrawn) was $273M over the last
Slide 23: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Managing gold price risk during build-out of Media Luna1 All amounts in U.S. dollars 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Forward Contracts Gold Volumes koz 27.0 27.0 43.5 43.5 43.5 43.5 27.0 27.0 Gold Price $/oz $1,924 $1,924 $1,957 $1,957 $1,966 $1,966 $1,939 $1,939 Hedged
Slide 24: Continuing to Execute on Long-Term Strategy
CONTINUING TO EXECUTE ON LONG-TERM STRATEGY1 Targeting to improve valuation by successfully delivering on our plans WE DID WHAT WE SAID WE WOULD DO OUR GO-FORWARD PLAN IS ON TRACK Pivoted the strategy to focus on mining and Deliver Media Luna on time and on budget exploration Fill the mill beyond 20
Slide 25: Appendix Corporate Information
Appendix Corporate Information All amounts expressed in U.S. dollars unless otherwise stated
Slide 26: Corporate Strategy
CORPORATE STRATEGY Executing on Strategic Pillars expected to generate long-term value1 OPTIMIZE & ADVANCE & GROW RESERVES & EXTEND ELG DE-RISK MEDIA LUNA RESOURCES Build on culture as key strategic Bring Media Luna into production Robust multi-year drill program at differentiator on time and on bud
Slide 27: Management Team
MANAGEMENT TEAM Years of Name Experience Experience Joined Torex in 2018 as COO JODY KUZENKO LLB 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 Previous
Slide 28: Board of Directors
BOARD OF DIRECTORS Years of Name Experience Experience Board member since 2020 RICK HOWES P.Eng. 40+ Global technical, operational and management mining expertise Chair of the Board Currently President & CEO of Reunion Gold CEO since June 2020 JODY KUZENKO LLB ICD.D 25+ Joined Torex in 2018 as COO P
Slide 29: Corporate Summary
CORPORATE SUMMARY Top 10 Shareholders2 Share Price Performance1 1.25 Institution Shares Shares (M) (%) Blackrock 12.4 14.4% (Indexed to January 1, 2021) 1.00 Price Performance - USD VanEck - ETFs 8.7 10.1% RBC Asset Management 4.2 4.9% 0.75 Dimensional 3.1 3.6% Vanguard 2.4 2.8% 0.50 CI Investments
Slide 30: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Funding position on solid footing given available liquidity and ongoing cash flow Development of Media Luna Project supported by strong forecast cash flow from ELG Mine Complex Over the last 12 months (through Q4 2023), free cash flow generation prior to spending on the Me
Slide 31: Key Operational Metrics
KEY OPERATIONAL METRICS1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY 2021 2021 2021 2021 2022 2022 2022 2022 2021 2022 Mining - ELG Open Pit Ore mined (kt) 1,359 1,131 1,406 864 1,061 987 883 959 4,761 3,891 Waste mined (kt) 9,882 8,593 7,476 8,972 8,958 7,960 9,097 8,546 34,923 34,560 Strip ratio (waste:ore) 7.3
Slide 32: Key Financial Metrics – Consolidated
KEY FINANCIAL METRICS – CONSOLIDATED1 All amounts in U.S. dollars Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY 2021 2021 2021 2021 2022 2022 2022 2022 2021 2022 Key Metrics Gold sold (oz) 129,019 111,424 118,989 109,391 108,012 123,363 119,834 121,913 468,823 473,122 Realized gold price ($/oz) $1,778 $1,816 $1,786
Slide 33: Unit Cost Performance
UNIT COST PERFORMANCE1 Solid cost performance despite ongoing inflationary pressures3 Open pit mining costs impacted by additional rehandling costs associated with wet season and stockpile blending as well as equipment availability Record underground mining rates helped drive economies of scale in t
Slide 34: 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 US dollar Cash flow from operations prior to changes
Slide 35: 2021 Responsible Gold Mining Report
2021 RESPONSIBLE GOLD MINING REPORT Key Highlights 99% operations employees from Mexico; $67.4 million paid in salaries and benefits Industry-leading safety performance Ratified labour agreement with unionized employees 90% procurement spend in Mexico; $74.7 million paid to companies in Guerrero Sta
Slide 36: Leverage Innovation
LEVERAGE INNOVATION Proven technology to improve safety, minimize emissions, and drive value1 ROPECON FILTERED TAILINGS SART PLANT BEV FLEET2 Innovative 1.3 km conveyor “Dry-stack” filtered tailings Reduces consumption of our Media Luna to utilize a mix of system which transports ore facility best-i
Slide 37: Gold247 Initiative
GOLD247 INITIATIVE Gold247 The World Gold Council's strategic vision for transforming the global gold market and elevating gold into the mainsiream of financial markets. The initiative aims to enable more participation, Gold has a systemic role in the world's economy. The way ‘gold is traded, and su
Slide 38: Appendix March 2022 Technical Report
Appendix March 2022 Technical Report All amounts expressed in U.S. dollars unless otherwise stated
Slide 39: Advance & De-Risk Media Luna
ADVANCE & DE-RISK MEDIA LUNA Media Luna solidifies the Morelos Property as our foundational asset1 Life of mine of 11.75 years with Media Luna versus ELG standalone case of 3.5 years2 Annual AuEq sold2 of 374 koz at a mine-site AISC2,3 of $954/oz AuEq 450 koz AuEq at a mine-site AISC of $929/oz AuEq
Slide 40: Summary of March 2022 Technical Report
SUMMARY OF MARCH 2022 TECHNICAL REPORT1,2 1) Please refer to Safe Harbor Statement on slide 2. 2) As per Technical Report for the Morelos Complex dated March 31, 2022. Gold equivalent sold assumes long-term gold price of $1,600/oz ($1,700/oz in 2022), silver price of $21/oz and copper price of $3.50
Slide 41: Summary of March 2022 Technical Report
SUMMARY OF MARCH 2022 TECHNICAL REPORT1,2 1) Please refer to Safe Harbor Statement on slide 2. 2) As per Technical Report for the Morelos Complex dated March 31, 2022. Gold equivalent sold assumes long-term gold price of $1,600/oz ($1,700/oz in 2022), silver price of $21/oz and copper price of $3.50
Slide 42: Non-Sustaining Capital Expenditures
NON-SUSTAINING CAPITAL EXPENDITURES1 Upfront cost to develop Media Luna Project estimated at $848M2 Metrics as of April 1, 2022 Total ($M) Excludes $124M of estimated project costs incurred 2,3 Non-Sustaining - Media Luna Project prior to April 1, 2022 Directs Guajes Portal & Tunnel $75.8 South Port
Slide 43: Grow Reserves & Resources
GROW RESERVES & RESOURCES Drilling in 2023 focused on supporting fill the mill initiatives and mine life extensions Mill capacity reduced from 13.0 ktpd to10.6 ktpd in Q4 2024 Extend mine life and increase mining rates of ELG Underground Add incremental feed from ELG open pits Additional mill feed f
Slide 44: Sensitivity Analysis
SENSITIVITY ANALYSIS1,2 After-tax NPV (5%) of Morelos Complex and Media Luna Project 1) Please refer to Safe Harbor Statement on slide 2. 2) As per Technical Report for the Morelos Complex dated March 31, 2022 (base case economics assume long-term metal prices of $1,600/oz gold ($1,700/oz in 2022),
Slide 45: Media Luna Project Schedule
MEDIA LUNA PROJECT SCHEDULE1,2 1) Please refer to Safe Harbor Statement on slide 2. 2) Updated based on progress and revised schedule as of December 31, 2022 (refer to press release dated February 9, 2023 titled “Torex Gold provides inaugural quarterly update on Media Luna Project”) 45
Slide 46: Appendix Mineral Reserves & Resources
Appendix Mineral Reserves & Resources All amounts expressed in U.S. dollars unless otherwise stated
Slide 47: Mineral Reserves – Morelos Complex
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 - - - - - - - - - Probable 23,017 2.81 25.6 0.88 2,077 18,944 444 4.54 3,360 Proven & Probable 23,017 2.81 25.6 0.88 2,077 18,944 444 4.54 3,360 ELG
Slide 48: Notes to Mineral Reserves – Morelos Complex
NOTES TO MINERAL RESERVES – MORELOS COMPLEX Notes to accompany Mineral Reserve Table 13. ELG Low Grade Mineral Reserves are reported above an in-situ cut-off grade of 0.88 g/t Au. 1. Mineral Reserves were developed in accordance with CIM (2014) guidelines. 14. It is planned that ELG Low Grade Minera
Slide 49: Mineral Resources – Morelos Complex
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 1,823 5.29 42.0 1.38 310 2,460 55 8.06 473 Indicated 25,567 3.02 30.1 1.05 2,486 24,708 589 5.11 4,196 Measured & Indicated 27,390 3.17 30.9 1.07
Slide 50: Notes to Mineral Resources – Morelos Complex
NOTES TO MINERAL RESOURCES – MORELOS COMPLEX Notes to accompany the Summary Mineral Resource Table Notes to accompany the ELG Open Pit Mineral Resources 1. CIM (2014) definitions were followed for Mineral Resources. 14. The effective date of the estimate is December 31, 2022. 2. Mineral Resources ar
Slide 51: 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
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