Torex Gold Outlines Multi-Year Exploration Strategy Pipeline of high-quality targets systematically prioritized to unlock the full potential of Morelos
Torex Gold Outlines Multi-Year Exploration
Strategy
Pipeline of high-quality targets systematically prioritized to
unlock the full potential of Morelos
(All amounts expressed in U.S. dollars unless otherwise stated)
Toronto, Ontario--(Newsfile Corp. - June 10, 2024) - Torex Gold Resources Inc. (the "Company" or
"Torex") (TSX: TXG) is pleased to provide detail on a multi-year exploration strategy for its highly
prospective Morelos Property ("Morelos"), designed to generate incremental additions to mineral
resources in the near term, generate at least one new discovery in the mid-term, and extend the mine life
at Morelos in order to deliver stable production and cash flow well beyond 2033.
Jody Kuzenko, President & CEO of Torex, stated:
"Since 2021, our exploration strategy has been focused on shoring up the near-term production profile
and identifying future sources of feed to fill the mill beyond 2027. With these two business priorities well
advanced, our drilling and exploration programs over the coming years will be increasingly focused on
demonstrating the multi-decade potential of Morelos by delineating new deposits within the Media Luna
Cluster and making new discoveries across the broader property.
"As our understanding of the structures and systems that control mineralization at Morelos continues to
evolve, we are now broadening the search to grow organically through the identification of several new
and promising targets including Todos Santos, El Naranjo, and Atzcala. In order to prioritize these
targets to align within the Company's strategic priorities, our Exploration team has developed a
systematic approach for evaluation on both a geologic and economic basis, culminating in the
development of a new multi-year exploration and drilling strategy.
"The increased focus on identifying additional sources of feed across Morelos over the coming years will
continue to be complemented by the near-mine drilling aimed at extending the life of both ELG
Underground and Media Luna, expanding resources and delineating reserves at EPO, and drill testing
Media Luna West and Media Luna East, two high priority targets that we expect will heavily utilize
infrastructure currently being built as part of the scope of the Media Luna Project.
"Morelos is a prolific, world-class asset. Consistent with our approach in all other facets of our business,
we intend to leverage a systematic, data-driven exploration and drilling strategy that will solidify Morelos
as a foundational asset from which to grow the Company and deliver long-term shareholder value."
EXPLORATION STRATEGY OVERVIEW
Morelos is a 29,000-hectare land package that is situated within the heart of the Guerrero Gold Belt and
includes the El Limón Guajes ("ELG") Mine Complex, the Media Luna Project, a processing plant,
related infrastructure, and a number of exploration targets. The $31 million average annual investment in
drilling and resource expansion since 2021 and $30 million budgeted for 2024 demonstrate the
Company's strategic priority of unlocking the full mineralized potential of Morelos. Given existing
knowledge of the geology of the property and the fact that 75% of the land package remains unexplored,
Morelos remains highly prospective with respect to the delineation of additional gold, copper, and silver
mineralization beyond what has been identified to date.
The Company's new multi-year exploration strategy is expected to enable Torex to deliver on its
objective to maintain more than 450,000 gold equivalent ounces ("oz AuEq") of production annually
beyond 2027 and to make at least one new discovery at Morelos in the coming years. The exploration
and drilling strategy will focus on three distinct areas:
Extending the mine life of ELG Underground and Media Luna:
Delineating higher-value ore
to extend the life of mine plan at Morelos by defining upside at ELG Underground and Media Luna
through infill and near-mine step-out drilling;
Expanding resources within the Media Luna Cluster:
Enhancing and extending the
production profile by unlocking the full potential of the Media Luna Cluster, including zones currently
identified as Media Luna, EPO, Media Luna West, Media Luna East, and Todos Santos;
Advancing targets through the growth pipeline:
Strengthening the exploration target pipeline
to deliver new discoveries across Morelos by prioritizing best-ranked projects, including zones
currently identified as El Naranjo, Atzcala, Esperanza, Querenque, Tecate, El Olvido, and Victoria.
The Company's understanding of the structural controls of the mineralization is evolving and the current
interpretation is that there are at least three dominant styles of mineralization present at Morelos: skarn,
intermediate sulphidation ("IS"), and carbonate replacement deposits ("CRD"). As the knowledge
matures and new exploration techniques are tested, uncovering additional upside at previously explored
deposits bolsters confidence about the property-wide potential to host new deposits.
EXPLORATION STRATEGY EXECUTION
The Company has identified several exploration targets across Morelos (Figure 1) that are at various
stages of development as depicted in the exploration pipeline (Figure 2). These range from the earliest
stage of target selection, to target definition, through to exploration and drilling, resource delineation,
and, at the most defined level, reserve definition to assess economic viability.
Figure 1: A number of high-potential targets have been identified across Morelos
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/1863/212314_db283b8e4438f8ee_001full.jpg
The goal is to advance each of the targets in the exploration pipeline and, pending the establishment of
economic resources, ultimately bring them into production. Priorities amongst these targets will shift
based on their economic potential and their ability to fulfill the Company's strategic objectives.
Figure 2: The exploration pipeline of targets identified to date, with each of the targets depicted at their
current stage of development
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/1863/212314_db283b8e4438f8ee_002full.jpg
ELG Underground
The 2023 ELG Underground drilling program was successful in expanding Measured & Indicated
Resources by 570 thousand oz AuEq prior to mine depletion (432 koz AuEq after depletion). The
success of the drill program resulted in Proven & Probable Reserves increasing by 280 thousand oz
AuEq prior to processed depletion (146 koz AuEq after depletion), thereby extending the mine life of
ELG Underground by two years through 2028 (see Tables 1 and 2 of this news release for more
information on mineral reserves and resources).
Building off the success of the 2023 program, the 2024 drilling program is exploring where the identified
mineral corridors (or trends) intersect the La Flaca and Z71 faults. The program will test the potential for
high-grade mineralization along the El Limón Sur and El Limón Deep trends and the potential to extend
high-grade resources within the Sub-Sill and El Limón West trends. Given a consistent history of reserve
replacement and resource growth, ELG Underground is expected to remain a key focus of future drilling
programs.
Media Luna Cluster
The Media Luna Cluster is comprised of the Media Luna and EPO deposits as well as the high-priority
drill targets Media Luna West, Media Luna East, and Todos Santos. The main Media Luna deposit is
characterized by the distribution of north-northeast and west-northwest dikes on the flank of the Cuajiote
fault, which control and define the distribution of gold, silver, and copper mineralization. Media Luna
contains 4.6 million oz AuEq of Measured & Indicated Resources, with an additional 1.0 million oz AuEq
in Inferred Resources and has additional upside at depth confirmed by preliminary drilling that
intercepted similar grade mineralization as the current resource. Testing mineralized potential at depth
will be the subject of follow-up drilling after construction of the Media Luna Project is complete.
Given the success of step-out drilling at EPO in 2023, which saw Indicated Resources expand to more
than 1.1 million oz AuEq and the Inferred Resources upgraded to Indicated largely replaced,
approximately $10 million is budgeted at EPO to conduct more than 24,000 metres ("m") of infill and
expansionary drilling in 2024. The 2024 program is aimed at upgrading additional underground
resources to the Indicated category while further expanding Inferred Resources. More than 700 thousand
oz AuEq remain in Inferred Resources and any further category upgrades will further enhance the
economics of EPO.
Based on the mine design envisioned in an internal pre-feasibility study that is currently underway, and if
determined to be economic, the Company anticipates a similar path of development at EPO as was
undertaken at ELG Underground, with throughput gradually increasing as the underground deposit is
developed. This design approach, combined with the ability for EPO to leverage infrastructure now being
built at Media Luna, is expected to result in a capital-efficient development project. High-level results of
the internal pre-feasibility study are expected to be released later this year.
At Media Luna West, the first drilling since 2012 was conducted in 2023 and yielded positive results. As
an advanced exploration target, 12,000 m of follow-up drilling is planned in 2024 to further define the
deposit's resource potential. Media Luna West, an underground target, sits approximately 1.5 kilometres
("km") to the west of Media Luna and should also benefit from infrastructure developed as part of the
Media Luna Project.
Todos Santos is a promising underground target that was advanced to the initial drill testing stage in
2023. Todos Santos exhibits encouraging magnetic anomalies, potentially indicative of blind
mineralization with no surface expression, which will be further explored through the 3,000 m of drilling
planned in 2024. The target is strategically positioned along the pronounced north-south structural
corridor, bridging the gap between ELG and the Media Luna Cluster, running parallel to the Guajes
Tunnel. Outcropping skarn mineralization with multiple old copper workings as well as gold anomalies in
breccia outcrops were discovered during grassroots exploration at Todos Santos. Although early stage,
Todos Santos has shown signs that it may potentially have a higher proportion of copper to gold than
exists at Media Luna, which could support higher future copper production if the deposit is deemed
economic.
The extent of Media Luna's mineralization to the east remains unknown. The Company has recently
commenced discussions with local Ejidos regarding drilling access. If and as an agreement is achieved,
Media Luna East is expected to become a priority underground target with potential for drilling to
commence as early as 2025. Similar to EPO, Media Luna East would benefit from infrastructure being
developed as part of the Media Luna Project.
Regional Exploration
The 2024 exploration budget includes $3 million allocated for regional exploration. In 2024, 3,000 m of
intermediate drill testing is planned at El Naranjo, focused on completing the geological delineation and
moving the three best areas into the advanced exploration stage. Preliminary surface works confirm the
presence of oxidized gold mineralization within IS veins and breccia bodies, which serve as vectors to
Media Luna-type CRD systems at depth.
Atzcala is currently at the target selection stage. The goal this year is to complete a geological evaluation
of a 15 km x 5 km area, which will include hyperspectral drone surveys, high resolution magnetometry,
and systematic rock geochemistry. The best-ranked area within Atzcala based on geological criteria is
expected to be advanced to the target definition stage.
Within the regional exploration program, there are also plans to explore the north side of the Balsas
River, looking for potential extensions to and/or the identification of new structural corridors, similar to
those identified at the ELG deposit.
Longer-Dated Targets
In addition to the priority targets for 2024, the Exploration team has a number of other projects in the
pipeline that are longer dated. As the Media Luna Project has substantially advanced, exploration has
commenced from platforms situated in the northern areas of the Guajes Tunnel. During excavation,
underground crews encountered many indications through mapping, channel sampling, and visible
chalcopyrite, that there may be mineralization along the 7 km Tunnel from ELG to Media Luna. No further
exploration has been undertaken in the southern end of the tunnel as completion of the Media Luna
underground construction remains the priority.
Other longer-dated targets that have yielded encouraging results in early geological work include
Querenque, Tecate, Esperanza, El Olvido, and Victoria. While not a priority focus in 2024, these areas
will be evaluated and advanced as appropriate in the exploration pipeline over the coming years.
IDENTIFYING & PRIORITIZING TARGETS
Torex has undertaken a refreshed approach to exploration and drilling since 2021 that included
appointing a Vice President of Exploration and enhancing the depth of experience on the Exploration
team. To date, the team has studied both recent and historic drilling data, which provided a framework
for a technical reinterpretation of the geochemical, geophysical, and remote sensing studies completed
in the Morelos district. This reassessment was a key factor in re-evaluating the mineralization model,
now thought to include CRD and IS systems in addition to skarn. As expected in a complex system,
some of these mineralization styles overlap, which can enrich their gold content.
The evolution of this geological understanding is supported by a comprehensive process of evaluating
and ranking the targets identified to date. The exploration pipeline was produced to effectively sort these
targets into defined exploration stages. The aim is to systematize and add transparency to the ranking
process by comparing projects at a similar exploration stage, assessing each target based on several
factors including mineralization style, geology, geography, and economic potential. Working with the
Technical Services team, the results of this ranking system can be used to support future capital
allocation priorities of the Company.
This process delivers a geological ranking that will be reassessed each year, as exploration advances,
to consider both economic and strategic criteria, culminating in an exploration budget proposal for the
following year. A multi-year plan will then be formulated by projecting the anticipated advancements of
the project pipeline and estimating the proposed exploration and budgets at each exploration stage.
Drilling and associated program costs are then estimated for each stage of the pipeline to define the
level of investment for the multi-year period. As significant spending on the Media Luna Project winds
down later this year, more funding is expected to be allocated in the coming years to further explore
priority targets.
MORELOS PROPERTY GEOLOGY
On a regional scale, Morelos is situated in the Guerrero Gold Belt on the western edge of the Mixteca
terrane which is composed of a pre-Carboniferous basement of metamorphic rocks of the Acatlán
Complex, unconformably overlain by a thick succession of Cretaceous sedimentary rocks. These are
known as the Morelos, Cuautla, and Mezcala Formations, which together form the Morelos-Guerrero
basin.
The Cretaceous sedimentary successions of the Morelos-Guerrero basin, containing large expanses of
carbonate (geochemically reactive) rocks are the major hosts for skarn mineralization in the area and
consist of 600- to 1,000-metre-thick, shallow marine carbonate rocks of the Morelos Formation. This unit
is mainly composed of calcareous limestones with some dolomite in lower units. The Morelos Formation
is conformably overlain by the Cuautla Formation, characterized by limestones that gradually transition
upward to pelagic limestones and siliciclastic rocks of the Mezcala Formation. The base of the Mezcala
unit is dominated by gray limestones that gradually transition to shales, siltstones and sandstones, and
conglomerates at the very top.
Cretaceous sedimentary rocks were folded into north-south-striking anticlines and synclines as a result
of the accretion of the Guerrero composite terrane against the Mixteca terrane during the Laramide
orogeny. Subduction of the Farallon Plate beneath the North American craton caused magmatism that
resulted in the formation of Late Cretaceous-Paleocene diorites and granodiorites that intruded the
folded and thrusted sedimentary units of the Morelos-Guerrero basin within the Mixteca Terrane.
At the property scale, structural deformation is dominated by west-northwest faults cut by first-order
north-south faults, which are somewhat displaced by second-order northeast faults. Granodiorites and
diorites intruded the folded sequence, which triggered the hydrothermal systems that gave rise to the
mineralized deposits.
The known mineralized deposits at Morelos correspond to CRD, skarn, and IS mineralized styles hosted
along contacts of the intrusive rocks and carbonate-rich sedimentary rocks of the Cuautla and Morelos
formations, as well as along the footwall contact of the Mezcala Formation. At depth, the mineralization
has a strong structural control related to the major north-south faults.
At a deposit scale, early-stage calc-silicate alteration is related to proximal skarn that evolves to CRD
associated to copper and silver mineralization with a final IS-epithermal mineralization event that
increases the gold volume and grade.
Dykes and sills are deemed the main ore control and traps of the mineralized bodies. Given that gold
precipitates due to the buffer exerted by the early stage calc-silicate alteration and sulfide mineralization,
it occurs as free gold and is dissociated from the previous copper event mainly related to chalcopyrite.
ABOUT TOREX GOLD RESOURCES INC.
Torex is an intermediate gold producer based in Canada, engaged in the exploration, development, and
operation of its 100% owned Morelos Property, an area of 29,000 hectares in the highly prospective
Guerrero Gold Belt located 180 kilometres southwest of Mexico City. The Company's principal asset is
the Morelos Complex, which includes the El Limón Guajes ("ELG") Mine Complex, the Media Luna
Project, a processing plant, and related infrastructure. Commercial production from the Morelos
Complex commenced on April 1, 2016 and an updated Technical Report for the Morelos Complex was
released in March 2022. Torex's key strategic objectives are: integrate and optimize the Morelos
Property; deliver Media Luna to full production; grow reserves and resources; disciplined growth and
capital allocation; retain and attract best industry talent; and build on ESG excellence.
FOR FURTHER INFORMATION, PLEASE CONTACT:
TOREX GOLD RESOURCES INC.
Jody Kuzenko
President and CEO
Direct: (647) 725-9982
Dan Rollins
Senior Vice President, Corporate Development & Investor Relations
Direct: (647) 260-1503
MINERAL RESERVES AND RESOURCES
For additional information on mineral reserves and resources, please see Tables 1 and 2 attached to
this news release and the Company's annual information form filed on SEDAR+ at
www.sedarplus.ca
and on the Company's website at
www.torexgold.com
.
QUALIFIED PERSONS
The exploration strategy and detailed plan have been developed in-house by Torex. Volker Moeller,
Ph.D., P.Geo. (ON), a qualified person (a "QP") as such term is defined in NI 43-101, has reviewed the
strategy and characteristics of the targets on a high level and approved the contents of the news release
in respect thereof. Dr. Moeller is a Senior Resource Geologist employed by SLR Consulting (Canada)
Ltd. and is independent of Torex.
Information in this news release pertaining to mineral reserves and mineral resources, including Tables 1
and 2, have been reviewed and approved by Johannes (Gertjan) Bekkers, P.Eng, a QP, and Vice
President, Mines Technical Services of Torex.
CAUTIONARY NOTES ON FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" and "forward-looking information" within the
meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not
limited to, statements that: pipeline of high-quality targets systematically prioritized to unlock the full
potential of Morelos; the details of a multi-year exploration strategy for its highly prospective Morelos
Property, designed to generate incremental additions to mineral resources in the near term, generate at
least one new discovery in the mid-term, and extend the mine life at Morelos in order to deliver stable
production and cash flow well beyond 2033; since 2021, the Company's strategy has been focused on
shoring up the near-term production profile and identifying future sources of feed to fill the mill beyond
2027; the Company's drilling and exploration programs over the coming years will be increasingly
focused on demonstrating the multi-decade potential of Morelos by delineating new deposits within the
Media Luna Cluster and making new discoveries across the broader property; the Company is now
broadening the search to grow organically through the identification of several new and promising
targets including Todos Santos, El Naranjo, and Atzcala; the increased focus on identifying additional
sources of feed across Morelos over the coming years will continue to be complemented by the near-
mine drilling aimed at extending the life of both ELG Underground and Media Luna, expanding
resources and delineating reserves at EPO, and drill testing Media Luna West and Media Luna East,
two high priorities targets that the Company expects will heavily utilize infrastructure currently being built
as part of the scope of the Media Luna Project; the Company intends to leverage a systematic, data-
driven exploration and drilling strategy that will solidify Morelos as a foundational asset from which to
grow the Company and deliver long-term shareholder value; the $31 million average annual investment in
drilling and resource expansion since 2021 and $30 million budgeted for 2024 demonstrate the
Company's strategic priority of unlocking the full mineralized potential of Morelos; Morelos remains highly
prospective with respect to the delineation of additional gold, copper, and silver mineralization beyond
what has been identified to date; the Company's new multi-year exploration strategy is expected to
enable Torex to deliver on its objective to maintain more than 450,000 oz AuEq of production annually
beyond 2027 and to make at least one new discovery at Morelos in the coming years; the exploration
and drilling strategy will focus on three distinct areas: extending the mine life of ELG Underground and
Media Luna; expanding resources within the Media Luna Cluster; and advancing targets through the
growth pipeline; as the knowledge matures and new exploration techniques are tested, uncovering
additional upside at previously explored deposits bolsters confidence about the property-wide potential
to host new deposits; a number of high-potential targets have been identified across Morelos; the goal is
to advance each of the targets in the exploration pipeline and pending the establishment of economic
resources, ultimately bring them into production; Figure 2 of the exploration pipeline of targets identified
to date, with each of the targets depicted at their current stage of development; the program will test the
potential for high-grade mineralization along the El Limón Sur and El Limón Deep trends and the
potential to extend high-grade resources within the Sub-Sill and El Limón West trends; given a
consistent history of reserve replacement and resource growth, ELG Underground is expected to remain
a key focus of future drilling programs; testing mineralized potential at depth will be the subject of follow-
up drilling after construction of the Media Luna Project is complete; approximately $10 million is
budgeted at EPO to conduct more than 24,000 m of infill and expansionary drilling in 2024; the 2024
program is aimed at upgrading additional underground resources to the Indicated category while further
expanding Inferred Resources; more than 700 thousand oz AuEq remain in Inferred Resources and any
further category upgrades will further enhance the economics of EPO; based on the mine design
envisioned in an internal pre-feasibility study that is currently underway, the Company anticipates a
similar path of development at EPO, if determined to be economic, as was undertaken at ELG
Underground, with throughput gradually increasing as the underground deposit is developed; this design
approach, combined with the ability for EPO to leverage infrastructure now being built at Media Luna, is
expected to result in a capital efficient development project; high-level results of the internal pre-
feasibility study are expected to be released later this year; 12,000 m of follow-up drilling is planned in
2024 to further define the deposit's resource potential; Media Luna West should also benefit from
infrastructure developed as part of the Media Luna Project; Todos Santos exhibits encouraging
magnetic anomalies, potentially indicative of blind mineralization with no surface expression, which will
be further explored through the 3,000 m of drilling planned in 2024; although early stage, Todos Santos
has shown signs that it may potentially have a higher proportion of copper to gold than exists at Media
Luna, which could support higher future copper production if the deposit is deemed economic; if and as
an agreement is achieved with local Ejidos for land access, Media Luna East is expected to become a
priority underground target with potential for drilling to commence as early as 2025; Media Luna East
would benefit from infrastructure being developed as part of the Media Luna Project; the 2024
exploration budget for El Naranjo includes $3 million allocated for regional exploration; in 2024, 3,000 m
of intermediate drill testing is planned at El Naranjo, focused on completing the geological delineation
and moving the three best areas into the advanced exploration drilling stage; for Atzcala the goal this
year is to complete a geological evaluation of a 15 km x 5 km area which will include hyperspectral
drone surveys, high resolution magnetometry, and systematic rock geochemistry; the best-ranked area
within Atzcala based on geological criteria is expected to be advanced to the target definition stage;
while not a priority focus in 2024, Querenque, Tecate, Esperanza, El Olvido, and Victoria will be
evaluated and advanced as appropriate in the exploration pipeline over the coming years; the
reassessment was a key factor in re-evaluating the mineralization model, now thought to include CRD
and IS systems in addition to skarn; as expected in a complex system, some of these mineralization
styles overlap, which can enrich their gold content; as significant spending on the Media Luna Project
winds down later this year, more funding is expected to be allocated in the coming years to further
explore priority targets; and Torex's key strategic objectives are to integrate and optimize the Morelos
Property; deliver Media Luna to full production; grow reserves and resources; disciplined growth and
capital allocation; retain and attract best industry talent; and build on ESG excellence. Generally, forward-
looking information can be identified by the use of forward-looking terminology such as
"strategy",
"designed", "expects", "planned", "focus", "potential", "future", "envisioned", goal",
or variations of such
words and phrases or statements that certain actions, events or results are "on track to" or "will",
"would", "could", "can" or "is expected to" occur. Forward-looking information is subject to known and
unknown risks, uncertainties and other factors that may cause the actual results, level of activity,
performance or achievements of the Company to be materially different from those expressed or implied
by such forward-looking information, including, without limitation, risks and uncertainties identified in the
Company's technical report (the "Technical Report") released on March 31, 2022, entitled "NI 43-101
Technical Report ELG Mine Complex Life of Mine Plan and Media Luna Feasibility Study", which has an
effective date of March 16, 2022, Company's annual information form ("AIF") and management's
discussion and analysis ("MD&A") or other unknown but potentially significant impacts. Forward-looking
information is based on the reasonable assumptions, estimates, analyses 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-