Torex Announces Q1 2019 Production Results and the Successful Completion of the First Blast with the Muckahi Mining System
Corporate Office: 130 King St. West, Suite 740, Toronto, ON, M5X 2A2, Canada – Tel: (647) 260 1500 Fax: (416) 304 4000
www.torexgold.com
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TOREX ANNOUNCES Q1 2019 PRODUCTION RESULTS AND THE SUCCESSFUL
COMPLETION OF THE FIRST BLAST WITH THE MUCKAHI MINING SYSTEM
(All amounts expressed in U.S. Dollars unless otherwise stated)
TORONTO, Ontario, April 3, 2019 - Torex Gold Resources Inc. (the "Company" or "Torex") (TSX:TXG) reports that in
Q1 2019, 76,500 ounces of gold were sold, at an average realized price of $1,301 per ounce. 77,800 ounces of gold
were produced. Debt principal was reduced by $18.6 million, and cash balances at the end of the quarter were $119
million, including $26.8 million of restricted cash. The Company is also pleased to announce that field trials are
underway for the first piece of equipment for the proprietary Muckahi mining system. The first tunneling blast of the
field trials was taken on March 26 th. The round was successfully drilled from the monorail mounted Muckahi jumbo
drill. The second piece of equipment, the Muckahi service platform, is currently at the Mexican border and is expected
to be in service this quarter.
Fred Stanford, President & CEO of Torex stated:
“After so many years in concept development, machine design, and more recently machine manufacturing, it was truly
rewarding to see this first part of t he innovative Muckahi mining system ‘com e to life’ and perform the way it was
expected to perform. This outcome is a credit to all of t he people over the years that believed a different way to mine
was possible and contributed ideas and support to transform that possibility into a reality. In recent years, this includes
our Board of Directors, Robert Rennie and team from Medat ech, and many from within Torex, including Bernie Loyer
for machine design and project management, Dawson Proudfoot, Danny Lavigne, and Brian Truman for process design
and leadership in the field trials. The team is looking forward to completing the field trials in 2019. The goal is to
demonstrate the Muckahi mining system capabilities over the full development cycle for tunneling, including on a minus
30-degree gradient, and to demonstrate t he capability of the system to lower costs in long hole open stope mining.
Exciting times!”
“On the production front, many know that skarn deposits are variable. We have seen the upside and downside of that
variability in past quarters. Guidance in 2019 was weight ed to H2 in expectation of managing through more of the
downside of variability in H1. In Q1, we mined the bottom of one pit area and opened up the top of another, with the
expected grade and tonnage variability that comes at the edges of the deposit. There is also variability in the hardness
of the rock types within the deposit. The weighted average Bond Ball Mill Work Index (BMWI) for the deposit is 17
kwh/tonne, with the highest BMWI at 29 kwh/tonne for El Limon hornfels. In H1 we are mining a disproportionate
amount of these hornfels. The proportion of hornfels will decline through the year, which will be advantageous for plant
throughput rates. An unexpected variability in Q1, was a ‘slug’ of cyanide soluble iron that is believed to have originated
from the El Limon Sur pit. Significant concentrations of cya nide soluble iron had not been encountered before and it
increased cyanide consumption rates in the plant until the ‘pocket’ was mined out. Copper variability also affected
cyanide consumption. In spite of this, gold recoveries came in at 88.2% for the quarter, above the design rate of 87%.
Such is life when mining a skarn. Character building when va riability goes against us, all smiles when variability is in
our favour.”
“Guidance for 2019 remains unchanged. Gold production is expected to increase in each quarter of the year.”
About Torex
Torex is an intermediate gold producer based in Canada, engaged in the exploration, development and operation of
its 100% owned Morelos Gold Property, an area of 29,000 hectares in the highly prospective Guerrero Gold Belt located
180 kilometers southwest of Mexico City. The Company’s principal assets are the El Limón Guajes mining complex
Torex Gold Resources Inc. Page 2
Corporate Office: 130 King St. West, Suite 740, Toronto, ON, M5X 2A2, Canada – Tel: (647) 260 1500 Fax: (416) 304 4000
www.torexgold.com
(the “ELG Mine Complex”), comprised of the El Limón, Guajes and El Limó n Sur open pits, the El Limón Guajes
underground mine including zones referred to as Sub-Sill and El Limón Deep, and the processing plant and related
infrastructure, which is in the commercial production stage as of April 1, 2016, and the Media Luna deposit, which is
an early stage development project, and for which the Company issued an updated preliminary economic assessment
(“PEA”) in September 2018. The property remains 75% unexplored.
For further information, please contact:
TOREX GOLD RESOURCES INC.
Fred Stanford
President and CEO
Tel.: (647) 260-1502
Email: [email protected]
CAUTIONARY NOTES
PRELIMINARY ECONOMIC ASSESSMENT
The Media Luna PEA includes information on Muckahi. It is important to note that Muckahi is experimental in nature and has not
been tested in an operating mine. Many aspects of the system are conceptual, and proof of concept has not been demonstrated.
Drill and blast fundamentals, standards and best practices for underground hard rock mining are applied in the Muckahi, where
applicable. The proposed application of a monorail system fo r underground transportation for mine development and production
mining is unique to underground hard rock mining. There are existing underground hard rock mines that use a monorail system for
transportation of materials and equipment, however not in the capacity described in the technical report released (the “Technical
Report”) on September 4, 2018, entitled “NI 43-101 Technical Repor t ELG Mine Complex Life of Mine Plan and Media Luna
Preliminary Economic Assessment”, which has an effective date of March 31, 2018 and is available on the Company’s website at
www.torexgold.com and filed on SEDAR at www.sedar.com.. Aspects of Muckahi mining equipment are currently in the design
stage. The mine design, equipment performance and cost estimations are conceptual in nature, and do not demonstrate technical
or economic viability. The approximate timeframe to develop and test the concept would be by the end of 2019, and for the mine
development activities, by the end of the second quarter 2023. Further studies would be required to verify the viability of Muckahi.
Muckahi is not intended as a “trade off study” but is shown to merely demonstrate the potential benefits Muckahi may have using
the Media Luna deposit as an example. It includes inferred mineral resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no
certainty that the preliminary economic assessment will be realized. It cannot be assumed that all or any part of the inferred mineral
resources will ever be upgraded to a higher category. Furthermore, there is no certainty that the conclusions or results as reported
in the Media Luna PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic
viability.
The ability to develop and test the Muckahi mining system is de pendent on available funding from Torex’s resources including
distributions from its operating subsidiary, Minera Media Luna, S.A. de C.V. (“ MML”). The $400 million debt facility places
restrictions on the amount that MML may distribute to Torex. There is no assurance that the Company will be able to complete
the development and testing of Muckahi as planned.
FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" and "f orward-looking information" within the meaning of applicable
Canadian securities legislation. Notwithstanding the Company's efforts, there can be no guarantee that the Company will not face
unforeseen delays or further disruptions of its operations. Forward-looking information also includes, but is not limited to, the results
of the Media Luna PEA, the Company will achieve the full year guidance as initially released, the expected successful completion
of the ramp-up of the processing plant to consistently produce at design rates, achieving the expected net benefits (including cost
reductions) of the SART plant, expectation that the proportion of hornfels processed will decli ne through the year, which will be
advantageous for plant throughput rates, plans in the second half of 2019, plans to continue to examine the potential of the Muckahi
mining system with the goal of demonstrating the Muckahi mining system capabilities over the full development cycle for tunneling,
including on a minus 30-degree gradient, and demonstrating the capab ility of the system to lower costs in long hole open stope
mining, the expectation that the cyanide soluble iron is in a ‘pocket’ of the deposit, and continued safety and security. Generally,
Torex Gold Resources Inc. Page 3
Corporate Office: 130 King St. West, Suite 740, Toronto, ON, M5X 2A2, Canada – Tel: (647) 260 1500 Fax: (416) 304 4000
www.torexgold.com
forward-looking information can be identified by the use of forwar d-looking terminology such as "p lans", "expects", "estimates",
"intends", "anticipates", "believes" or “potential” or variations of such words and phrases or state that certain actions, even ts or
results "may", "could", "would", "might", or "will be taken", "occu r", or "be achieved". Forward-l ooking information is subject to
known and unknown risks, uncertainties and other factors that may c ause the actual results, level of activity, performance or
achievements of the Company to be materially different from thos e expressed or implied by such forward-looking information,
including, without limitation, uncertainty as a result of the preliminary nature of the PEA and t he Company’s ability to realize the
results of the PEA, uncertainty regarding the inclusion of inferred mineral resources in the mineral resource estimate, uncertainty
involving resource estimates and the ability to extract those resources economically, or at all, risks associated with skarn deposits,
risks associated with new mining technology, and those risk factors mentioned in the press release and identified in the Technical
Report and the Company’s annual information form (“AIF”) and management’s discussion and analysis (“MD&A”). Forward-looking
information are based on the assumptions discussed in the Technical Report, the MD&A, the AIF and elsewhere in the Company’s
public disclosure and such other reasonable assumptions, estimate s, analysis and opinions of management made in light of its
experience and perception of trends, current conditions and expected developments, and other factors that management believes
are relevant and reasonable in the circumstances at the date such statements are made. Although the Company has attempted to
identify important factors that could cause actual results to differ materially from those contained in the forward-looking information,
there may be other factors that cause results not to be as anticipated. There can be no assurance that such information will prove
to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-
looking information, whether as a result of new information or future events or otherwise, except as may be required by applicable
securities laws.