Torex Gold Reports Q1 2024 Results On track to deliver on full-year production and cost guidance with funding surplus in-hand to complete the Media Luna Project
Torex Gold Reports Q1 2024 Results
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
costs
1
of $1,202 per oz. Our cost performance, combined with a record quarterly average realized gold
price
1
of $2,023 per oz, resulted in an impressive all-in sustaining costs margin
1
of 39%. With
decreasing costs expected through 2024 as open pit stripping winds down, we are well-positioned to
deliver even stronger margins should the gold price remain at current levels.
"The strong operational performance resulted in robust free cash flow
1
of $77 million prior to
expenditures on the Media Luna Project ($126 million), which includes $44 million of annual tax and
royalty payments related to fiscal 2023. We exited the quarter with $405 million in available liquidity
1
(including $113 million in cash), which more than covers the $257 million of upfront expenditures
remaining on the Media Luna Project and our objective to maintain at least $100 million of liquidity on the
balance sheet.
"Steady progress was made at Media Luna with the project close to 70% complete at quarter end. As of
March 31, 95% of upfront costs had been committed including 71% incurred. Development and
construction activities are tracking to plan with first concentrate production anticipated before year end
and commercial production expected early next year. With this year expected to be the final year of
elevated capital expenditures, we are well-positioned to return to positive free cash flow in mid-2025.
"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 AuEq
2
and is on track to achieve guidance of 410,000 to 460,000 oz AuEq
2
.
Gold sold:
Sold 111,642 oz of gold at an average realized gold price
1
of $2,023 per oz,
contributing to revenue of $236.5 million. On a gold equivalent ounce basis, the Company sold
114,199 oz AuEq
2
.
Total cash costs
1
and all-in sustaining costs
1
:
Total cash costs of $918 per oz sold and all-in
sustaining costs of $1,202 per oz sold. All-in sustaining costs margin
1
of $821 per oz sold,
implying an all-in sustaining costs margin
1
of 39%. 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 to $910 per oz and all-in sustaining costs guidance of $1,100 to $1,160 per oz.
On a gold equivalent ounce basis, total cash costs of $943 per oz AuEq sold
2
and all-in sustaining
costs of $1,221 per oz AuEq sold
2
relative to guidance of $900 to $950 per oz AuEq sold
2
and
$1,130 to $1,190 per oz AuEq sold
2
, respectively.
Net income and adjusted net earnings
1
:
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.
EBITDA
1
and adjusted EBITDA
1
:
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 the 7.5% Mexican mining royalty for 2023 of $24.8 million. Negative free
cash flow
1
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 cash
1
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 liquidity
1
.
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 approximately 69%, with detailed engineering, procurement activities, underground
development, and surface construction advancing. With 95% of upfront expenditures committed as
at March 31, 2024 (including 71% 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 to $400.0 million
on project capital expenditures.
Year-end Mineral Reserves & Resources
3
:
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' (96
th
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.
1
.
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
).
2
.
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.
3
.
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 frequency
1
/million hours
0.15
0.31
0.53
Total recordable injury frequency
1
/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 costs
2
$/oz
918
885
709
All-in sustaining costs
2
$/oz
1,202
1,073
1,079
Average realized gold price
2
$/oz
2,023
1,995
1,899
Operating Results - Gold Equivalent basis
Gold equivalent produced
3
oz AuEq
117,306
139,418
124,871
Gold equivalent sold
3
oz AuEq
114,199
139,854
120,748
Total cash costs
2,3
$/oz AuEq
943
893
732
All-in sustaining costs
2,3
$/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 earnings
2
$
35.9
49.1
50.3
Per share - Basic
2
$/share
0.42
0.57
0.59
Per share - Diluted
2
$/share
0.42
0.57
0.58
EBITDA
2
$
98.0
115.4
102.5
Adjusted EBITDA
2
$
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 flow
2
$
(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 cash
2
$
69.2
140.8
318.4
Available liquidity
2
$
405.3
464.9
564.0
1
.
On a 12-month rolling basis, per million hours worked.
2
.
These measures are Non-GAAP Measures. For a detailed reconciliation of each Non-GAAP Measure to its most directly comparable
measure in accordance with the IFRS as issued by the International Accounting Standards Board see Tables 2 to 11 of this press release.
For additional information on these Non-GAAP Measures, please refer to the Company's 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
).
3
.
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 relevant average realized prices by commodity.
CONFERENCE CALL AND WEBCAST DETAILS
The Company will host a conference call tomorrow at 9:00 AM (ET) where senior management will
discuss the first quarter operating and financial results. For expedited access to the conference call,
registration
is open to obtain an access code in advance, which will allow participants to join the call
directly at the scheduled time. Alternatively, dial-in details are as follows:
Toronto local or International: 1-647-484-8814
Toll-Free (North America): 1-844-763-8274
A live webcast of the conference call will be available on the Company's website at
https://torexgold.com/investors/upcoming-events/
. The webcast will be archived on the Company's
website.
Table 2: Reconciliation of Total Cash Costs and All-in Sustaining Costs to Production Costs
and Royalties
Three Months Ended
Mar 31,
Dec 31,
Mar 31,
In millions of U.S. dollars, unless otherwise noted
2024
2023
2023
Gold sold
oz
111,642
138,794
118,455
Total cash costs per oz sold
Production costs
$
100.8
116.5
81.5
Royalties
$
6.9
8.4
6.9
Less: Silver sales
$
(1.5)
(0.9)
(1.5)
Less: Copper sales
$
(3.7)
(1.2)
(2.9)
Total cash costs
$
102.5
122.8
84.0
Total cash costs per oz sold
$/oz
918
885
709
All-in sustaining costs per oz sold
Total cash costs
$
102.5
122.8
84.0
General and administrative costs
1
$
8.0
7.3
6.6
Reclamation and remediation costs
$
1.3
1.5
1.4
Sustaining capital expenditure
$
22.4
17.3
35.8
Total all-in sustaining costs
$
134.2
148.9
127.8
Total all-in sustaining costs per oz sold
$/oz
1,202
1,073
1,079
Gold equivalent sold
2
oz AuEq
114,199
139,854
120,748
Total cash costs per oz AuEq sold
Production costs
$
100.8
116.5
81.5
Royalties
$
6.9
8.4
6.9
Total cash costs
$
107.7
124.9
88.4
Total cash costs per oz AuEq sold
2
$/oz AuEq
943
893
732
All-in sustaining costs per oz AuEq sold
Total cash costs
$
107.7
124.9
88.4
General and administrative costs
1
$
8.0
7.3
6.6
Reclamation and remediation costs
$
1.3
1.5
1.4
Sustaining capital expenditure
$
22.4
17.3
35.8
Total all-in sustaining costs
$
139.4
151.0
132.2
Total all-in sustaining costs per oz AuEq sold
2
$/oz AuEq
1,221
1,080
1,095
1
.
This amount excludes a loss of $4.2 million, gain of $0.5 million and loss of $3.6 million for the three months ended March 31, 2024,
December 31, 2023, and March 31, 2023, respectively, in relation to the remeasurement of share-based payments. This amount also
excludes corporate depreciation and amortization expenses totalling $0.1 million, $nil and $0.1 million for the three months ended March 31,
2024, December 31, 2023, and March 31, 2023, respectively, within general and administrative costs. Included in general and administrative
costs is share-based compensation expense in the amount of $2.3 million or $21/oz for the three months ended March 31, 2024, $1.1 million
or $8/oz for the three months ended December 31, 2023, $1.9 million or $16/oz for the three months ended March 31, 2023. This amount
excludes other expenses totalling $1.2 million, $2.1 million and $0.6 million for the three months ended March 31, 2024, December 31, 2023,
and March 31, 2023, respectively.
2
.
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 relevant average realized prices by commodity.
Table 3: Reconciliation of Sustaining and Non-Sustaining Costs to Capital Expenditures
Three Months Ended
Mar 31,
Dec 31,
Mar 31,
In millions of U.S. dollars
2024
2023
2023
Sustaining
$
21.6
17.3
14.6
Capitalized Stripping (Sustaining)
$
0.8
-
21.2
Non-sustaining
$
-
0.3
0.7
Total ELG
$
22.4
17.6
36.5
Media Luna Project
1
$
126.4
124.0
66.4
Media Luna Cluster Drilling/Other
$
1.3
3.8
3.1
Working Capital Changes & Other
$
(24.0)
(4.0)
(6.3)
Capital expenditures
2
$
126.1
141.4
99.7
1
.
This amount includes a realized gain (or a reduction in the capitalized expenditures) of $0.8 million, $0.3 million and $nil for the three months
ended March 31, 2024, December 31, 2023, and March 31, 2023, respectively, in relation to the settlement of foreign exchange zero cost
collars that were entered into to manage the capital expenditure risk related to a further strengthening of the Mexican peso.
2
.
The amount of cash expended on additions to property, plant and equipment in the period as reported in the Condensed Consolidated Interim
Statements of Cash Flows.
Table 4: Reconciliation of Average Realized Gold Price and Total Cash Costs Margin to
Revenue
Three Months Ended
Mar 31,
Dec 31,
Mar 31,
In millions of U.S. dollars, unless otherwise noted
2024
2023
2023
Gold sold
oz
111,642
138,794
118,455
Revenue
$
236.5
282.4
228.8
Less: Silver sales
$
(1.5)
(0.9)
(1.5)
Less: Copper sales
$
(3.7)
(1.2)
(2.9)
Less: Realized (loss) gain on gold contracts
$
(5.4)
(3.4)
0.5
Total proceeds
$
225.9
276.9
224.9
Total average realized gold price
$/oz
2,023
1,995
1,899
Less: Total cash costs
$/oz
918
885
709
Total cash costs margin
$/oz
1,105
1,110
1,190
Total cash costs margin
%
55
56
63
Gold equivalent sold
1
oz AuEq
114,199
139,854
120,748
Revenue
$
236.5
282.4
228.8
Less: Realized (loss) gain on gold contracts
$
(5.4)
(3.4)
0.5
Total proceeds
$
231.1
279.0
229.3
Total average realized gold price
$/oz
2,023
1,995
1,899
Less: Total cash costs
1
$/oz AuEq
943
893
732
Total cash costs margin
1
$/oz AuEq
1,080
1,102
1,167
Total cash costs margin
%
53
55
61
1
.
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 relevant average realized prices by commodity.
Table 5: Reconciliation of All-in Sustaining Costs Margin to Revenue
Three Months Ended
Mar 31,
Dec 31,
Mar 31,
In millions of U.S. dollars, unless otherwise noted
2024
2023
2023
Gold sold
oz
111,642
138,794
118,455
Revenue
$
236.5
282.4
228.8
Less: Silver sales
$
(1.5)
(0.9)
(1.5)
Less: Copper sales
$
(3.7)
(1.2)
(2.9)
Less: Realized (loss) gain on gold contracts
$
(5.4)
(3.4)
0.5
Less: All-in sustaining costs
$
(134.2)
(148.9)
(127.8)
All-in sustaining costs margin
$
91.7
128.0
97.1
Total all-in sustaining costs margin
$/oz
821
922
820
Total all-in sustaining costs margin
%
39
45
42
Gold equivalent sold
1
oz AuEq
114,199
139,854
120,748
Revenue
$
236.5
282.4
228.8
Less: Realized (loss) gain on gold contracts
$
(5.4)
(3.4)
0.5
Less: All-in sustaining costs
$
(139.4)
(151.0)
(132.2)
All-in sustaining costs margin
$
91.7
128.0
97.1
Total all-in sustaining costs margin
1
$/oz AuEq
802
915
804
Total all-in sustaining costs margin
%
39
45
42
1
.
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 relevant average realized prices by commodity.
Table 6: Reconciliation of Adjusted Net Earnings to Net Income
Three Months Ended
In millions of U.S. dollars, unless
otherwise noted
Mar 31,
Dec 31,
Mar 31,
2024
2023
2023
Basic weighted average shares outstanding
shares
85,949,559
85,885,453
85,869,276
Diluted weighted average shares outstanding
shares
86,499,360
86,410,111
86,398,732
Net income
$
43.1
50.4
68.2
Adjustments:
Unrealized foreign exchange gain
$
(0.6)
(0.7)
(0.5)
Unrealized loss on derivative contracts
$
11.6
28.4
27.1
Remeasurement of share-based payments
$
4.2
(0.5)
3.6
Derecognition of provisions for uncertain tax positions
$
(12.1)
-
(15.2)
Tax effect of above adjustments
$
(3.3)
(8.3)
(9.0)
Tax effect of currency translation on tax base
$
(7.0)
(20.2)
(23.9)
Adjusted net earnings
$
35.9
49.1
50.3
Per share - Basic
$/share
0.42
0.57
0.59
Per share - Diluted
$/share
0.42
0.57
0.58
Table 7: Reconciliation of EBITDA and Adjusted EBITDA to Net Income
Three Months Ended
Mar 31,
Dec 31,
Mar 31,
In millions of U.S. dollars
2024
2023
2023
Net income
$
43.1
50.4
68.2
Finance income, net
$
(1.7)
(2.0)
(3.0)
Depreciation and amortization
1
$
49.8
66.8
49.1
Current income tax expense
$
26.2
50.5
16.8
Deferred income tax recovery
$
(19.4)
(50.3)
(28.6)
EBITDA
$
98.0
115.4
102.5
Adjustments:
Unrealized loss on derivative contracts
$
11.6
28.4
27.1
Unrealized foreign exchange gain
$
(0.6)
(0.7)
(0.5)
Remeasurement of share-based payments
$
4.2
(0.5)
3.6
Adjusted EBITDA
$
113.2
142.6
132.7
1
.
Includes depreciation and amortization included in cost of sales, general and administrative expenses and exploration and evaluation
expenses.
Table 8: Reconciliation of Free Cash Flow to Net Cash Generated from Operating Activities
Three Months Ended
Mar 31,
Dec 31,
Mar 31,
In millions of U.S. dollars
2024
2023
2023
Net cash generated from operating activities
$
79.8
120.0
47.0
Less:
Additions to property, plant and equipment
1
$
(126.1)
(141.4)
(99.7)
Lease payments
$
(1.4)
(1.6)
(0.8)
Interest paid
2
$
(1.4)
(1.3)
(0.5)
Free cash flow
$
(49.1)
(24.3)
(54.0)
1
.
The amount of cash expended on additions to property, plant and equipment in the period as reported on the Condensed Consolidated Interim
Statements of Cash Flows.
2
.
Including borrowing costs capitalized to property, plant and equipment.
Table 9: Reconciliation of Net Cash to Cash and Cash Equivalents
Mar 31,
Dec 31,
Mar 31,
In millions of U.S. dollars
2024
2023
2023
Cash and cash equivalents
$
113.2
172.8
321.9
Less: Lease-related obligations
$
(44.0)
(32.0)
(3.5)
Net cash
$
69.2
140.8
318.4
Table 10: Reconciliation of Available Liquidity to Cash and Cash Equivalents
Mar 31,
Dec 31,
Mar 31,
In millions of U.S. dollars
2024
2023
2023
Cash and cash equivalents
$
113.2
172.8
321.9
Add: Available credit of the Debt Facility
$
292.1
292.1
242.1
Available liquidity
$
405.3
464.9
564.0
Table 11: Reconciliation of Unit Cost Measures to Production Costs
Three Months Ended
In millions of U.S. dollars, unless
otherwise noted
Mar 31,
2024
Dec 31,
2023
Mar 31,
2023
Gold sold (oz)
111,642
138,794
118,455
Tonnes mined - open pit (kt)
8,981
9,626
9,354
Tonnes mined - underground (kt)
168
212
156
Tonnes processed (kt)
1,194
1,218
1,177
Total cash costs:
Total cash costs ($)
102.5
122.8
84.0
Total cash costs per oz sold ($)
918
885
709
Breakdown of production costs
$
$/t
$
$/t
$
$/t
Mining - open pit
31.6
3.52
33.8
3.51
28.4
3.03
Mining - underground
13.8
82.34
16.3
77.02
12.6
80.42
Processing
42.5
35.64
45.5
37.36
39.7
33.72
Site support
14.3
12.00
14.1
11.58
12.1
10.25
Mexican profit sharing (PTU)
3.0
2.50
6.4
5.26
5.5
4.64
Capitalized stripping
(0.8)
-
(21.2)
Inventory movement
(4.3)
-
3.5
Other
0.7
0.4
0.9
Production costs
100.8
116.5
81.5
Table 12: Mineral Reserve Estimate - Morelos Complex (December 31, 2023)
Tonnes
Au
Ag
Cu
Au
Ag
Cu
AuEq
AuEq
(kt)
(gpt)
(gpt)
(%)
(koz)
(koz)
(Mlb)
(gpt)
(koz)
Media Luna Underground
Proven
2,001
4.28
33.1
1.09
276
2,129
48
6.48
417
Probable
21,568
2.56
24.2
0.84
1,775
16,749
401
4.24
2,943
Proven & Probable
23,569
2.71
24.9
0.86
2,050
18,877
448
4.43
3,360
ELG Underground
Proven
1,497
5.77
8.0
0.30
277
385
10
6.28
302
Probable
2,007
4.91
7.5
0.29
317
482
13
5.46
352
Proven & Probable
3,504
5.28
7.7
0.30
594
867
23
5.81
654
ELG Open Pit
Proven
1,813
4.30
5.4
0.16
251
313
6
4.36
254
Probable
3,741
2.51
4.5
0.20
302
538
16
2.58
310
Proven & Probable
5,553
3.09
4.8
0.18
552
851
23
3.16
565
Surface Stockpiles
Proven
4,972
1.17
2.8
0.07
187
443
8
1.20
192
Probable
-
-
-
-
-
-
-
-
-
Proven & Probable
4,972
1.17
2.8
0.07
187
443
8
1.20
192
Total Morelos Complex
Proven
10,283
3.00
9.9
0.32
991
3,269
72
3.52
1,165
Probable
27,316
2.73
20.2
0.71
2,393
17,769
430
4.11
3,606
Proven & Probable
37,598
2.80
17.4
0.61
3,384
21,038
502
3.95
4,771
Notes to accompany the mineral reserve table:
1
.
Mineral reserves were developed in accordance with CIM (2014) guidelines.
2
.
Rounding may result in apparent summation differences between tonnes, grade, and contained metal content. Surface stockpile mineral
reserves are estimated using production and survey data and apply the same gold equivalent ("AuEq") formula as ELG Open Pits.
3
.
AuEq of total reserves is established from combined contributions of the various deposits.
4
.
The qualified person for the mineral reserve estimate is Johannes (Gertjan) Bekkers, P. Eng., VP of Mines Technical Services.
5
.
The qualified person is not aware of mining, metallurgical, infrastructure, permitting, or other factors that materially affect the mineral reserve
estimates.
Notes to accompany the Media Luna Underground mineral reserves:
1
.
Mineral reserves are based on Media Luna Measured & Indicated mineral resources with an effective date of December 31, 2023.
2
.
Media Luna Underground mineral reserves are reported above an in-situ ore cut-off grade of 2.4 g/t AuEq.
3
.
Media Luna Underground cut-off grades and mining shapes are considered appropriate for a metal price of $1,500/oz gold ("Au"), $19/oz
silver ("Ag") and $3.50/lb copper ("Cu") and metal recoveries of 90% Au, 86% Ag, and 93% Cu.
4
.
Mineral reserves within designed mine shapes assume long-hole open stoping, supplemented with mechanized cut-and-fill mining and
includes estimates for dilution and mining losses.
5
.
Media Luna Underground AuEq = Au (g/t) + Ag (g/t) * (0.0121) + Cu (%) * (1.6533), accounting for metal prices and metallurgical recoveries.
Notes to accompany the ELG Underground mineral reserves:
1
.
Mineral reserves are founded on Measured and Indicated mineral resources, with an effective date of December 31, 2023, for ELG
Underground (including Sub-Sill, El Limón Deep and El Limón Sur Trend deposits).
2
.
ELG Underground mineral reserves are reported above an in-situ ore cut-off grade of 2.8 g/t AuEq and an in-situ incremental cut-off grade
of 1.6 g/t AuEq.
3
.
Cut-off grades and mining shapes are considered appropriate for a metal price of $1,500/oz gold ("Au"), $19/oz silver ("Ag") and $3.50/lb
copper ("Cu") and metal recoveries of 90% Au, 86% Ag, and 93% Cu, accounting for the planned copper concentrator.
4
.
Mineral reserves within designed mine shapes assume mechanized cut and fill mining method and include estimates for dilution and mining
losses.