Torex Gold Resources Inc. · TSX:TXG
Torex Gold Resources — Q4 2023 Earnings Presentation
35 slides from Torex Gold Resources's earnings presentation, Feb 22, 2024
Slide 1: Fourth Quarter and Full-Year 2023 Results Conference Call
TSX | TXG FOURTH QUARTER AND FULL-YEAR 2023 RESULTS CONFERENCE CALL February 22, 2024
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: 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 Production guidance achieved for fifth consecutive year Full-year gold production of 453,778 oz was near the midpoint of the full year guided range Achieved revised full-year cost guidance with total cash costs1 of $866/oz gold sold and all-in sustaining costs1 of $1,200/oz gold sold
Slide 6: Operational Performance
OPERATIONAL PERFORMANCE Excellent close to 2023 with several production records achieved during the year Second-highest quarter of production on record in Q4 Record annual mill throughput of 13,178 tpd in 2023 Significant increase in Q4 grades, as expected Record underground mining rate of 2,070 tpd
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 FY 2023 FY 2023 Guidance Performance Guidance3 Production Gold Equivalent AuEq oz 410,000 to 460,000 N/A N/A Gold oz 400,000 to 450,0
Slide 8: Five-Year Production Outlook
FIVE-YEAR PRODUCTION OUTLOOK1,3 Evolution of production outlook reflects continued success in reserve replacement Outlook Outlook Outlook Outlook 2022 Technical Production (koz)2 Actual 2021 2022 2023 2024 Report 2021 (Au) 468 430 to 470 2022 (Au) 474 430 to 470 430 to 470 2023 (Au) 454 400 to 450 4
Slide 9: Financial Performance
FINANCIAL PERFORMANCE ANDREW SNOWDEN CFO
Slide 10: Financial Performance
FINANCIAL PERFORMANCE Strong financial close to 2023; set to return free cash flow positive in 2025 Average AISC margin of 38% achieved in 20231 Generated $442M in adjusted EBITDA during 20231 Pace of spending picked up as expected in Q4 Free cash flow reflects investment in Media Luna1 1) For more
Slide 11: Unit Cost Performance
UNIT COST PERFORMANCE1 Solid cost performance despite ongoing inflationary pressures2 Open pit mining costs increased given additional stockpile rehandling and contractor costs associated with period of elevated waste stripping during Q2 and Q3 Economies of scale from higher underground mining rates
Slide 12: Cash Flow Generation
CASH FLOW GENERATION Significant year of spending ahead before Media Luna Project winds down in Q4 2024 Free cash flow expected to remain negative through 2024 before turning positive in 2025 as production from Media Luna ramps up and capital expenditures normalize Similar cash flow seasonality anti
Slide 13: Balance Sheet & Liquidity
BALANCE SHEET & LIQUIDITY1,2 Well positioned to fund strategic priorities Net cash2 of $141M at year end Available liquidity2 of $465M as of December 31st Exited 2023 with $173M of cash $100M available on term loan facility (undrawn) Debt free and $32M of lease-related obligations $192M available on
Slide 14: Well Positioned to Fund Media Luna Project
WELL POSITIONED TO FUND MEDIA LUNA PROJECT1 Available liquidity now exceeds remaining upfront forecast expenditures on Media Luna Estimated internal funding requirement of $19M through year end 2024 Free cash flow prior to spending on Media Luna Project was $181M over last 12 months2,3 Ongoing free
Slide 15: Prudent Capital Allocation
PRUDENT CAPITAL ALLOCATION Managing gold price and currency risk during build-out of Media Luna1 All amounts in U.S. dollars 2024 Total Q1 Q2 Q3 Q4 (Average) Gold Forward Contracts Gold Volumes koz 43.5 43.5 44.0 27.0 158.0 Gold Price $/oz $1,966 $1,966 $2,006 $1,939 $1,972 MXN/USD Collars Collar Am
Slide 16: Media Luna Project Update
MEDIA LUNA PROJECT UPDATE DAVE STEFANUTO EVP, TECHNICAL SERVICES & CAPITAL PROJECTS
Slide 17: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE Significant progress made in 2023; Project remains on schedule and budget1 Final permit for in-pit tailings received in November; Completion Project To Date Q4 2023 project is fully permitted for development and Procurement 63% operational phases Engineering 84% Undergroun
Slide 18: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE Breakthrough of tunnel on south side of Balsas River achieved ahead of schedule 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; reduced from over 2.5 hours pr
Slide 19: Media Luna Progress Update
MEDIA LUNA PROGRESS UPDATE Development activities advancing well; concentrate production on track for late 20241 Concrete work in the paste plant Mazapa bypass road and bridge CEO Jody Kuzenko initiating final thickener area are now complete blast for Tunnel breakthrough Sandvik Rhino diesel/electri
Slide 20: Exploration
EXPLORATION JODY KUZENKO PRESIDENT & CEO
Slide 21: ELG Underground
ELG UNDERGROUND A key focus given potential to fill the mill beyond 20271 Mineralization appears to be controlled by north- northwest structural corridors (trends) and northeast- trending faults (La Flaca and Z71) El Limón Sur Trend: Drilling extended high-grade mineralization 100 m at depth (4.6 m
Slide 22: Media Luna West
MEDIA LUNA WEST Advancing to next stage given results of 2023 exploration drilling Potential third mineralized zone within the Media Luna Cluster First exploration drilling conducted on the Media Luna West target since 2012/2013 Recent results and historical results combined with a new structural mo
Slide 23: 2024 Drilling and Exploration Plans
2024 DRILLING AND EXPLORATION PLANS Key strategic focus and investment in exploration and drilling1 Drilling/exploration budget of $30M in 2024 $15M at Media Luna Cluster (39,000 m) Infill and expansionary drilling at EPO Advanced exploration at Media Luna West Inaugural drill program at Todos Santo
Slide 24: Questions?
eo; Torex Gold RESOURCES INC. QUESTIONS ?
Slide 25: Robust Cash Flow Generation from ELG
ROBUST CASH FLOW GENERATION FROM ELG Funding position on solid footing given available liquidity and ongoing cash flow Full Year Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Net cash generated from operating activities (M$) $47.0 $89.6 $44.2 $120.0 $300.8 1 Free cash flow (M$) ($54.0) ($37.4) ($69.7) ($24.3
Slide 26: Key Operational Metrics
KEY OPERATIONAL METRICS1 Consolidated Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY 2022 2022 2022 2022 2023 2023 2023 2023 2022 2023 Mining - ELG Open Pit Ore mined (kt) 1,061 987 883 959 916 644 1,026 1,785 3,891 4,371 Ore mined (tpd) 11,789 10,846 9,598 10,420 10,182 7,074 11,153 19,404 10,660 11,976 Waste mined
Slide 27: Key Financial Metrics
KEY FINANCIAL METRICS1 Consolidated All amounts in U.S. dollars Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY 2022 2022 2022 2022 2023 2023 2023 2023 2022 2023 Key Metrics Gold sold (oz) 108,012 123,363 119,834 121,913 118,455 105,749 81,752 138,794 473,122 444,750 Realized gold price ($/oz) $1,876 $1,865 $1,715 $1
Slide 28: 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 29: 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 30: 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 31: 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 - - - - - - - - - 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 O
Slide 32: Notes to Mineral Reserves
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 Mineral
Slide 33: 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 1,823 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 2
Slide 34: Notes to Mineral Resources
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 are
Slide 35: Contact: 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