Torex Gold Reports Q1 2024 Results
Torex Gold Resources Inc. reports Q1 2024 financial results with solid performance, production of 115,494 oz, all-in sustaining costs of $1,202/oz, and record average realized gold price of $2,023/oz. The Company maintains strong liquidity, with $405 million available, and progresses Media Luna Project 70% complete. ELG maintains excellent safety with 14 million hours lost-time injury free.
Solid operational performance with production of 115,494 oz and record gold recovery of 90.7%.
Impressive all-in sustaining costs margin of 39% due to a record realized gold price of $2,023/oz.
Robust free cash flow of $77 million before Media Luna Project expenditures.
Strong liquidity position with $405 million available, covering remaining project costs.
Media Luna Project close to 70% completion with 95% upfront costs committed.
Negative free cash flow of $49.1 million due to $126.4 million invested in the Media Luna Project.
Cost of sales impacted by the appreciation of the Mexican peso, leading to high costs per oz sold.
Total cash costs and all-in sustaining costs per oz sold increased compared to previous periods.
Decreasing revenue and net income compared to the same period in the previous year.
Project capital expenditures expected to remain above $100 million through Q3 2024.
On track to deliver on full-year production and cost guidance with funding surplus in-hand to complete the Media Luna Project
(All amounts expressed in U.S. dollars unless otherwise stated)
Toronto, Ontario--(Newsfile Corp. - May 8, 2024) - Torex Gold Resources Inc. (the "Company" or "Torex") (TSX: TXG) reports the Company's financial and operational results for the three months ended March 31, 2024. Torex will host a conference call tomorrow morning at 9:00 AM (ET) to discuss the results.
Jody Kuzenko, President & CEO of Torex, stated:
"2024 is off to a solid start with production and costs tracking to full-year guidance. Operational results were in line with expectations, with quarterly gold production of 115,494 ounces ("oz") at all-in sustaining costs1 of
"The strong operational performance resulted in robust free cash flow1 of
"Steady progress was made at Media Luna with the project close to
"With consistently solid operational results from ELG, Media Luna construction advancing as planned, and a funding surplus in-hand to complete Media Luna on time and on budget, our first quarter results have laid the foundation for what we expect will be a transformational year for the Company and our shareholders."
FIRST QUARTER 2024 HIGHLIGHTS
- Strong safety performance continues: The Company exited the quarter with one lost-time ankle injury at the Media Luna Project and reached 14 million hours lost-time injury free at the El Limón Guajes ("ELG") Mine Complex. As at March 31, 2024, the lost-time injury frequency ("LTIF") for the Morelos Complex was 0.15 per million hours worked for both employees and contractors on a rolling 12-month basis.
- Gold production: Delivered gold production of 115,494 oz for the quarter driven by a record average gold recovery of
90.7% , the highest level achieved to date. Throughput rates remained above 13,000 tonnes per day ("tpd") for the fifth consecutive quarter, averaging 13,118 tpd. With the solid start to the year, the Company is on track to achieve annual production guidance of 400,000 to 450,000 oz. On a gold equivalent ounce basis ("oz AuEq"), the Company produced 117,306 oz AuEq2 and is on track to achieve guidance of 410,000 to 460,000 oz AuEq2. - Gold sold: Sold 111,642 oz of gold at an average realized gold price1 of
$2,023 per oz, contributing to revenue of$236.5 million . On a gold equivalent ounce basis, the Company sold 114,199 oz AuEq2. - Total cash costs1 and all-in sustaining costs1: Total cash costs of
$918 per oz sold and all-in sustaining costs of$1,202 per oz sold. All-in sustaining costs margin1 of$821 per oz sold, implying an all-in sustaining costs margin1 of39% . Cost of sales was$157.4 million or$1,410 per oz sold in the quarter, primarily impacted by the appreciation of the Mexican peso. Costs are expected to decrease through 2024 as stripping requirements continue to decline with the wind down of the open pits and as such, the Company is on track to achieve full year total cash costs guidance of$860 t o$910 per oz and all-in sustaining costs guidance of$1,100 t o$1,160 per oz. On a gold equivalent ounce basis, total cash costs of$943 per oz AuEq sold2 and all-in sustaining costs of$1,221 per oz AuEq sold2 relative to guidance of$900 t o$950 per oz AuEq sold2 and$1,130 t o$1,190 per oz AuEq sold2, respectively. - Net income and adjusted net earnings1: Reported net income of
$43.1 million or earnings of$0.50 per share on both a basic and diluted basis. Adjusted net earnings of$35.9 million or$0.42 per share on both a basic and diluted basis. Net income includes a derivative loss of$16.2 million related to gold forward contracts and foreign exchange collar contracts entered into to mitigate downside price risk during the construction of the Media Luna Project. - EBITDA1 and adjusted EBITDA1: Generated EBITDA of
$98.0 million and adjusted EBITDA of$113.2 million . - Cash flow generation: Net cash generated from operating activities totalled
$79.8 million and$72.5 million before changes in non-cash operating working capital, including income taxes paid of$43.9 million including the7.5% Mexican mining royalty for 2023 of$24.8 million . Negative free cash flow1 of$49.1 million is net of cash outlays for capital expenditures, lease payments and interest, including borrowing costs capitalized. Negative free cash flow was a direct result of$126.4 million invested in the Media Luna Project. - Strong financial liquidity: The quarter closed with net cash1 of
$69.2 million , including$113.2 million in cash and$44.0 million of lease-related obligations, no borrowings on the credit facilities of$300.0 million as at March 31, 2024 and letters of credit outstanding of$7.9 million , providing$405.3 million in available liquidity1. - Media Luna Project: During the quarter, Media Luna Project expenditures totalled
$126.4 million , with a remaining project spend of$257.1 million . As of March 31, 2024, physical progress on the Project was approximately69% , with detailed engineering, procurement activities, underground development, and surface construction advancing. With95% of upfront expenditures committed as at March 31, 2024 (including71% incurred), expenditures to date have tracked reasonably well to the initial budget of$874.5 million , noting the strength of the Mexican peso remains a headwind to contend with. Quarterly expenditures are expected to remain above$100 million through Q3 2024 before declining in Q4 2024 as Media Luna nears completion and commercial production is subsequently declared. There has been no change to full-year guidance of$350.0 t o$400.0 million on project capital expenditures. - Year-end Mineral Reserves & Resources3: At ELG Underground, Proven and Probable reserves increased to 654 koz AuEq, extending the reserve life out to late 2028. Measured and Indicated resources expanded by 432 koz AuEq (570 koz AuEq prior to mined depletion), while Inferred resources increased by 119 koz AuEq. The resource growth was a direct result of the successful 2023 drilling program as well as the assumption of a lower cut-off grade, reflecting higher metal price assumptions and lower costs due to steady increases in underground mining rates. At EPO, infill drilling was successful in upgrading Inferred resources, while step-out drilling expanded the overall mineralized footprint. Indicated resources increased by 481 koz AuEq. The updated resource will form the basis of an internal prefeasibility study to be completed in the second half of 2024. The positive results from the 2023 drilling program support the Company's goal to maintain annual production of more than 450,000 oz AuEq beyond 2027 and extend the overall life of the Morelos Complex well beyond 2033.
- ESG rating improvements: The Company's MSCI ESG rating improved from 'A' to 'AA', with governance practices noted as 'leading global peers' (96th percentile). In addition, the Company's overall Sustainalytics ESG Risk Rating score improved from 31.5 for 2023 (classified as High risk) to 28.5 for 2024 (now categorized as Medium risk) and the CDP Climate Change Score improved from 'C' (Awareness level) in 2022 to 'B-' (Management level) in 2023.
- These measures are Non-GAAP Financial Performance Measures or Non-GAAP ratios (collectively, "Non-GAAP Measures"). For a detailed reconciliation of each Non-GAAP Measure to its most directly comparable IFRS financial measure see Tables 2 to 11 of this press release. For additional information on these Non-GAAP Measures, please refer to the Company's management's discussion and analysis ("MD&A") for the three months ended March 31, 2024, dated May 7, 2024. The MD&A, and the Company's unaudited condensed consolidated interim financial statements for the three months ended March 31, 2024, are available on Torex's website (www.torexgold.com) and under the Company's SEDAR+ profile (www.sedarplus.ca).
- Gold equivalent ounces produced and sold includes production of silver and copper converted to a gold equivalent based on a ratio of the average realized prices for each commodity sold in the period. Refer to "Gold Equivalent Reporting" on page 6 of the Company's MD&A for the three months ended March 31, 2024, dated May 7, 2024, for the relevant average realized prices by commodity and "Guidance" on page 7 of the Company's MD&A for 2024 guidance assumptions.
- Mineral reserve and mineral resource estimates for the Morelos Complex can be found in tables 12 and 13, respectively, of this press release. AuEq values account for underlying metal prices and metallurgical recoveries used in reserve and resource estimates. For more information on the mineral reserve and mineral resource estimates for the Morelos Complex, please see the Company's annual information form for the year ended December 31, 2023, or the Company's news release titled "Torex Gold Reports Year-end 2023 Reserves & Resources" issued on March 26, 2024, and filed on SEDAR+ at www.sedarplus.ca and on the Company's website at www.torexgold.com.
Table 1: Operating and Financial Highlights
| Three Months Ended | |||||||||||||
| Mar 31, | Dec 31, | Mar 31, | |||||||||||
| In millions of U.S. dollars, unless otherwise noted | 2024 | 2023 | 2023 | ||||||||||
| Safety | |||||||||||||
| Lost-time injury frequency1 | /million hours | 0.15 | 0.31 | 0.53 | |||||||||
| Total recordable injury frequency1 | /million hours | 0.97 | 1.23 | 1.87 | |||||||||
| Operating Results - Gold only basis | |||||||||||||
| Gold produced | oz | 115,494 | 137,993 | 122,918 | |||||||||
| Gold sold | oz | 111,642 | 138,794 | 118,455 | |||||||||
| Total cash costs2 | $/oz | 918 | 885 | 709 | |||||||||
| All-in sustaining costs2 | $/oz | 1,202 | 1,073 | 1,079 | |||||||||
| Average realized gold price2 | $/oz | 2,023 | 1,995 | 1,899 | |||||||||
| Operating Results - Gold Equivalent basis | |||||||||||||
| Gold equivalent produced3 | oz AuEq | 117,306 | 139,418 | 124,871 | |||||||||
| Gold equivalent sold3 | oz AuEq | 114,199 | 139,854 | 120,748 | |||||||||
| Total cash costs2,3 | $/oz AuEq | 943 | 893 | 732 | |||||||||
| All-in sustaining costs2,3 | $/oz AuEq | 1,221 | 1,080 | 1,095 | |||||||||
| Financial Results | |||||||||||||
| Revenue | $ | 236.5 | 282.4 | 228.8 | |||||||||
| Cost of sales | $ | 157.4 | 191.6 | 137.4 | |||||||||
| Earnings from mine operations | $ | 79.1 | 90.8 | 91.4 | |||||||||
| Net income | $ | 43.1 | 50.4 | 68.2 | |||||||||
| Per share - Basic | $/share | 0.50 | 0.59 | 0.79 | |||||||||
| Per share - Diluted | $/share | 0.50 | 0.58 | 0.79 | |||||||||
| Adjusted net earnings2 | $ | 35.9 | 49.1 | 50.3 | |||||||||
| Per share - Basic2 | $/share | 0.42 | 0.57 | 0.59 | |||||||||
| Per share - Diluted2 | $/share | 0.42 | 0.57 | 0.58 | |||||||||
| EBITDA2 | $ | 98.0 | 115.4 | 102.5 | |||||||||
| Adjusted EBITDA2 | $ | 113.2 | 142.6 | 132.7 | |||||||||
| Cost of sales - gold only basis | $/oz | 1,410 | 1,380 | 1,160 | |||||||||
| Net cash generated from operating activities | 79.8 | 120.0 | 47.0 | ||||||||||
| Net cash generated from operating activities before changes in non-cash operating working capital | $ | 72.5 | 133.5 | 61.9 | |||||||||
| Free cash flow2 | $ | (49.1) | (24.3) | (54.0) | |||||||||
| Cash and cash equivalents | $ | 113.2 | 172.8 | 321.9 | |||||||||
| Lease-related obligations | $ | 44.0 | 32.0 | 3.5 | |||||||||
| Net cash2 | $ | 69.2 | 140.8 | 318.4 | |||||||||
| Available liquidity2 | $ | 405.3 | 464.9 |
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FAQ
What was Torex Gold Resources Inc.'s Q1 2024 gold production?
Torex Gold produced 115,494 ounces of gold in Q1 2024.
What was the all-in sustaining costs margin for Torex Gold in Q1 2024?
Torex Gold achieved an impressive all-in sustaining costs margin of 39% in Q1 2024.
How much liquidity does Torex Gold have available?
Torex Gold maintains $405 million in available liquidity as of Q1 2024.
What is the progress of the Media Luna Project as of Q1 2024?
The Media Luna Project is close to 70% completion with 95% of upfront costs committed.
What is the safety record of Torex Gold Resources Inc. in Q1 2024?
Torex Gold maintained strong safety performance with 14 million hours lost-time injury free at ELG.
TOREX GOLD RES INC ORD
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