Torex Resources Inc. · TSX:TXR
Torex Resources — Torex Gold Resources — Q4 2021 Earnings Presentation
27 slides from Torex Resources's earnings presentation, Feb 24, 2022
Slide 1: Fourth Quarter & Year-End 2021 Results Conference Call
TSX | TXG FOURTH QUARTER & YEAR-END 2021 RESULTS CONFERENCE CALL February 24, 2022
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: Overview & Key Highlights
OVERVIEW & KEY HIGHLIGHTS JODY KUZENKO PRESIDENT & CEO All amounts expressed in U.S. dollars unless otherwise stated
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: Key Operational & Financial Highlights
KEY OPERATIONAL & FINANCIAL HIGHLIGHTS Solid operational and financial performance delivered in 2021 Record annual gold production of 468,203 oz; towards upper end of guided range (430,000 to 470,000 oz) Total cash cost1 of $674/oz gold sold; beat best end of guided range ($680/oz to $720/oz) All-in
Slide 6: 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 In millions of U.S. dollars, unless otherwise noted 2022 2021 Guidance Guidance Gold Production oz 430,000 to 470,000 430,000 to 470,000 Total Cash Costs2 $/oz $695 to $735 $68
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: 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 9: Operational Performance
OPERATIONAL PERFORMANCE JODY KUZENKO PRESIDENT & CEO All amounts expressed in U.S. dollars unless otherwise stated
Slide 10: Delivered on Guidance for Third Year in a Row
DELIVERED ON GUIDANCE FOR THIRD YEAR IN A ROW1 Solid operational result delivered during 2021 Record production of 468,203 ounces in 2021 Average plant throughput of 12,362 tpd in the year COVID COVID Interruption Interruption Average processed grade of 3.65 g/t in the year Underground averaged 1,26
Slide 11: 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 12: Financial Performance
FINANCIAL PERFORMANCE ANDREW SNOWDEN CFO All amounts expressed in U.S. dollars unless otherwise stated
Slide 13: Robust Financial Results in 2021
ROBUST FINANCIAL RESULTS IN 2021 Adjusted EBITDA1 and free cash flow1 driven by strong underlying margins Average AISC margin1 of 47% over last 12 months Adjusted EBITDA1 of $491M generated in 2021 COVID Interruption Total capital expenditures of $230M in 2021 Free cash flow1 of $98M generated durin
Slide 14: 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 debt an
Slide 15: 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 16: 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 17: Project Updates
PROJECT UPDATES JODY KUZENKO PRESIDENT & CEO All amounts expressed in U.S. dollars unless otherwise stated
Slide 18: 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 19: 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 20: 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) $6M on infill and step-ou
Slide 21: Appendix
APPENDIX All amounts expressed in U.S. dollars unless otherwise stated
Slide 22: Key Operational Metrics – El Limón Guajes (ELG)
KEY OPERATIONAL METRICS – EL LIMÓN GUAJES (ELG)1,2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY 2020 2020 2020 2020 2021 2021 2021 2021 2020 2021 Mining - Open Pit Ore mined (kt) 1,736 666 1,407 1,689 1,359 1,131 1,406 864 5,498 4,761 Waste mined (kt) 11,726 4,435 10,097 10,399 9,882 8,593 7,476 8,972 36,657 34,92
Slide 23: Key Financial Metrics – Consolidated
KEY FINANCIAL METRICS – CONSOLIDATED1,2 All amounts in U.S. dollars Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY 2020 2020 2020 2020 2021 2021 2021 2021 2020 2021 Key Metrics Gold sold (oz) 108,064 63,147 133,036 133,063 129,019 111,424 118,989 109,391 437,310 468,823 Realized gold price ($/oz) $1,571 $1,712 $1,88
Slide 24: Reagent Consumption Driving Higher Process Costs
REAGENT CONSUMPTION DRIVING HIGHER PROCESS COSTS Increased cyanide usage reflective of elevated levels of Cu & Fe in sulphides Quarter Ore Cu Fe S NaCN Copper (Cu) and iron (Fe) in sulphides increasing as (Mt) (%) (%) (%) (kg/t) mining moves deeper within the open pits Q1 2019 1.08 0.14 2.69 1.28 4.
Slide 25: Cash Flow Seasonality: Royalties & Profit Sharing
CASH FLOW SEASONALITY Timing Differences – Royalties & Profit Sharing Royalty – Mexican Geological Survey Profit Sharing (“PTU”) – Employees 2.5% of gross revenue 10% of taxable income in Mexico Accrued quarterly and paid the following quarter Legislation passed in Q2 2021 caps PTU payment Recognize
Slide 26: Cash Flow Seasonality: Mining Royalty & Corporate Income Tax
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 deductions 30% of taxable income in Mexico Accrued quarterly and paid annually in Q1 of the Accr
Slide 27: www.torexgold.com
TSX | TXG www.torexgold.com Dan Rollins, CFA Vice President, Corporate Development and Investor Relations Email: [email protected] | Direct: 1-647-260-1503