TOREX GOLD REPORTS THIRD QUARTER 2023 RESULTS On track to achieve production guidance with a solid start to Q4
For Immediate Release
TOREX GOLD REPORTS THIRD QUARTER 2023 RESULTS
On track to achieve production guidance with a solid start to Q4
(All amounts expressed in U.S. Dollars unless otherwise stated)
TORONTO, Ontario, November 14, 2023 – Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX: TXG)
reports the Company’s financial and operational results for the three- and nine-month periods ended September
30, 2023. Senior management of Torex will host a conference call tomorrow morning at 9:00 AM (ET) to discuss
the quarterly results.
Jody Kuzenko, President & CEO of Torex, stated:
“We expect to close out 2023 on a solid note with the fourth quarter forecast to be the strongest quarter of
production, driven by higher open pit grades now that the period of elevated waste stripping is behind us. Our
confidence in achieving full year production guidance of 440,000 to 470,000 ounces (“oz”) is supported by
October gold production of 41,450 oz, which included 105 hours of planned maintenance in the process plant
at the start of the month. With mining now into higher -grade benches in the open pit, the average gold grade
processed during October averaged 4.05 grams per tonne (“gpt”) compared to 2.47 gpt during Q3.
“Despite the lower grades processed during the third quarter , operational and safety performance remained
strong with the mill exceeding 13,000 tonnes per day (“tpd”) for the third quarter in a row, ELG Underground
setting another record mining rate, and consistent recoveries despite the lower grades processed. On the safety
front, there were no lost time injuries during the quarter, and we exited the quarter with a lost time injury
frequency (“LTIF”) of 0.47 per million hours worked . In October, the ELG Complex (excluding Media Luna)
surpassed 10 million hours lost time injury free, the third time this milestone has been achieved since 2020.
“Full year cost guidance has been revised higher given the ongoing strength of the Mexican peso along with
the combination of higher than budgeted mining volumes and plant throughput with lower processed grades ,
which was due to the greater reliance on lower -grade stockpiles during the period of elevated waste stripping
in Q2 and Q3. As a result, full year total cash costs1 guidance has been revised to $840 to $870 per oz gold
sold and full year all-in sustaining costs1 revised to $1,160 to $1,200 per oz gold sold.
“Steady progress was made at Media Luna during the quarter with the project 49% complete at quarter -end.
Underground development and construction are well underway and s urface construction is tracking to plan .
Advancement of the Guajes Tunnel continues to impress with breakthrough expected in late December. While
the overall project timeline remains intact, some expendi ture has been pushed into 2024 and, as a result, we
have lowered our full year capital expenditure guidance for Media Luna to $360 to $390 million. W ith
$501 million of liquidity (including $209 million in cash) and 15 months of ongoing free cash flow expected from
ELG during the remaining project period, we are well positioned to fund the remaining $508 million of
expenditures on Media Luna while maintaining at least $100 million on the balance sheet.
“With a couple of tough, low -grade quarters now behind us, we continue to deliver the level of operational
excellence our shareholders have come to expect from us. As we continue to make progress on the Media Luna
Project, we look forward to a solid end of the year by delivering a strong f ourth quarter and achieving annual
production guidance for the fifth straight year.”
THIRD QUARTER 2023 HIGHLIGHTS
• Strong safety performance continues: Despite the substantial increase in activity during the quarter
with the construction of the Media Luna Project, there were no lost -time injuries (“LTI”) in the quarter.
Exited the quarter with a LTIF rate of 0.47 per million hours worked on a rolling 12- month basis. On
October 18, the Company reached 10 million hours worked without a LTI at its ELG Mine Complex for
the third time since 2020.
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Torex Gold Resources Inc.
• Hurricane Otis: In late October, the category 5 hurricane Otis made landfall near Acapulco, Mexico,
approximately 300 kilometres from the ELG Mine Complex. The Company's employees are safe and
both the operations and assets are unaffected.
• Gold production: Delivered gold production of 85,360 oz for the quarter (YTD - 315,785 oz) driven by
the processing of lower grade and stockpiled ore during the intense stripping period associated with the
layback at the El Limón open pit, partially offset by a record mining rate at ELG Underground of
2,321 tpd (YTD - 1,993 tpd). With mining of the higher -grade benches started in late September and
gold production of 41,450 oz in October despite an extended planned shutdown, the Company remains
on track to meet annual production guidance of 440,000 to 470,000 oz.
• Gold sold: Sold 81,752 oz of gold (YTD - 305,956 oz) at an average realized gold price 1 of
$1,944 per oz (YTD - $1,932 per oz), contributing to revenue of $160.1 million (YTD - $600.2 million).
• Total cash costs1 and all-in sustaining costs1: Total cash costs of $1,086 per oz sold (YTD - $858)
and all-in sustaining costs of $1,450 per oz sold (YTD - $1,257). All-in sustaining costs margin 1 of
$494 per oz sold (YTD - $675), implying an all-in sustaining costs margin1 of 25% (YTD - 34%). Cost of
sales was $133.0 million (YTD - $408.5 million) or $1,627 per oz sold in the quarter (YTD - $1,335),
impacted by the appreciation of the Mexican peso and the high strip, low grade phase of the open pit
mine plan resulting in the lower average gold grade of ore processed. Given the ongoing strength of
the Mexican peso as well as the combination of higher than budgeted mine volumes (open pit and
underground) and plant throughput with lower processed grades (greater reliance on lower grade
stockpiles during Q2 and Q3), full year total cash costs guidance is now estimated at
$840 to $870 per oz sold and full year all -in sustaining costs guidance is now estimated at
$1,160 to $1,200 per oz sold.
• Net income and adjusted net earnings 1: Reported net income of $10.5 million or earnings of
$0.12 per share on a basic basis and $0.09 per share on a diluted basis (YTD - $154.0 million, or
$1.79 per share on a basic basis and $1.77 per share on a diluted basis). Adjusted net earnings of
$11.1 million or $0.13 per share on a basic basis and $0.13 per share on a diluted basis
(YTD - $99.3 million, or $1.16 per share on a basic basis and $1.15 per share on a diluted basis). Net
income includes a net derivative gain of $18.1 million (YTD - $6.2 million gain) related to gold forward
contracts entered into to mitigate downside price risk during the construction of the Media Luna Project.
In the third quarter of 2023, the Company entered into a series of zero- cost collars whereby it sold call
option contracts and purchased put option contracts for $nil cash premium to hedge against c hanges
in foreign exchange rates of the Mexican peso between September 2023 and December 2024 for a
total notional value of $65.9 million. In October 2023, the Company entered into an additional series of
zero-cost collars between October 2023 and December 2024 for a total notional value of $41.4 million.
• EBITDA1 and adjusted EBITDA 1: Generated EBITDA of $79.4 million (YTD - $307.2 million) and
adjusted EBITDA of $61.2 million (YTD - $299.6 million).
• Cash flow generation : Net cash generated from operating activities totalled $44.2 million
(YTD - $180.8 million) and $52.6 million (YTD - $207.3 million) before changes in non- cash operating
working capital, including income taxes paid of $12.0 million (YTD - $104.2 million). Negative free cash
flow1 of $69.7 million (YTD - $161.1 million) net of cash outlays for capital expenditures, lease payments
and interest, including borrowing costs capitalized.
• Strong financial liquidity: The Company extended and increased the available credit facilities with a
syndicate of international banks in the quarter, now providing a total of $300.0 million in available credit
maturing in 2026. The quarter closed with net cash 1 of $188.3 million, including $209.4 million in cash
and $21.1 million of lease-related obligations, no borrowings on the credit facilities of $300.0 million and
letters of credit outstanding of $7.9 million, providing $501.5 million in available liquidity .
• Media Luna Project: Media Luna Project expenditures totalled $98.7 million during the quarter
(YTD - $242.3 million), with a remaining project spend of $507.5 million. Expenditures during this period
were primarily focused on continued development of the Guajes Tunnel and South Portals, with
development of the Guajes Tunnel reaching 5,160 metres and South Portal Lower reaching
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Torex Gold Resources Inc.
2,325 metres by end of the third quarter. As of September 30, 2023, physical progress on the Project
was approximately 49%, with detailed engineering, procurement activities, underground development,
and surface construction advancing. As of September 30, 2023, the Company had commitments in
place for $591.2 million of project expenditures (approximately 68% of total budgeted expenditures).
With $242.3 million invested year -to-date and the level of spending expected to increase further in the
fourth quarter of 2023, the full year Media Luna Project expenditure guidance has been lowered to
$360 to $390 million reflecting the redistribution in timing of expenditures . Quarterly expenditures are
expected to remain elevated through the third quarter of 2024 before declining with the commissioning
of the upgraded processing plant.
• Exploration and Drilling Activities: In September, the Company announced initial assay results from
the 2023 drilling program at EPO2. Results from the 2023 program continue to highlight the potential to
upgrade Inferred Resources to the Indicated category and expand Inferred Resources through step-out
drilling to the north and south of the deposit. Results from the 2023 program will be incorporated into
the year -end Mineral Resource update and will form the basis of an internal study evaluating the
feasibility of developing an economic mining front at EPO, which could leverage the infrastructure
currently being developed for Media Luna, including the Guajes Tunnel. Overall, the positive results
from the 2023 drilling program at EPO support ongoing resource expansion and reserve growth, which
in turn supports the Company's strategic focus on filling the mill with higher-grade feed beyond 2027.
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 measure in accordance with the IFRS Accounting Standards (“IFRS”) as issued by the
International Accounting Standards Board see Tables 2 to 10 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- and nine- month periods ending September 30 , 2023, dated
November 13, 2023. The MD&A, and the Company’s unaudited condensed consolidated interim financial statements for the three- and nine-month
periods ended September 30, 2023, are available on Torex’s website (www.torexgold.com) and under the Company’s SEDAR profile (www.sedar.com).
2. For more information on EPO drilling results, see the Company’s news release titled “Torex Gold Reports Results From 2023 Dri lling at EPO” issued on
September 5, 2023, and filed on SEDAR (www.sedar.com) and on the Company’s website at www.torexgold.com.
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Torex Gold Resources Inc.
Table 1: Operating & Financial Highlights
1. On a 12-month rolling basis, per million hours worked.
2. Total cash costs, total cash costs margin, all-in sustaining costs, all-in sustaining costs margin, average realized gold price, adjusted net earnings, EBITDA,
adjusted EBITDA, free cash flow and net cash are non-GAAP financial measures with no standardized meaning under IFRS. For a detailed reconciliation of
each Non-GAAP Measure to its most directly comparable IFRS financial measure see Tables 2 to 10 of this press release. Refer to “Non-GAAP Financial
Performance Measures” for further information and a detailed reconciliation to the comparable IFRS measures in the MD&A for the three- and nine-month
periods ending September 30, 2023, dated November 13, 2023.
CONFERENCE CALL AND WEBCAST DETAILS
The Company will host a conference call tomorrow at 9:00 AM ( ET) in which senior management will discuss
the third quarter operating and financial results. Please dial in or access the webcast approximately ten minutes
prior to the start of the call:
• Toronto local or International: 1-416-915-3239
• Toll-Free (North America): 1-800-319-4610
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.
Three Months Ended Nine Months Ended
Sep 30, Jun 30, Sep 30, Sep 30, Sep 30,
In millions of U.S. dollars, unless otherwise noted 2023 2023 2022 2023 2022
Operating Results
Lost-time injury frequency1 /million hours 0.47 0.58 0.10 0.47 0.10
Total recordable injury frequency1 /million hours 1.24 1.66 1.69 1.24 1.69
Gold produced oz 85,360 107,507 122,208 315,785 357,839
Gold sold oz 81,752 105,749 119,834 305,956 351,209
Total cash costs2 $/oz 1,086 848 760 858 736
Total cash costs margin2 $/oz 858 1,112 955 1,074 1,081
All-in sustaining costs2 $/oz 1,450 1,308 1,059 1,257 999
All-in sustaining costs margin2 $/oz 494 652 656 675 818
Average realized gold price2 $/oz 1,944 1,960 1,715 1,932 1,817
Financial Results
Revenue $ 160.1 211.3 209.3 600.2 652.0
Cost of sales $ 133.0 138.1 146.2 408.5 418.0
Earnings from mine operations $ 27.1 73.2 63.1 191.7 234.0
Net income $ 10.5 75.3 43.9 154.0 154.2
Per share - Basic $/share 0.12 0.88 0.51 1.79 1.80
Per share - Diluted $/share 0.09 0.85 0.51 1.77 1.77
Adjusted net earnings2 $ 11.1 37.9 34.6 99.3 128.8
Per share - Basic2 $/share 0.13 0.44 0.40 1.16 1.50
Per share - Diluted2 $/share 0.13 0.44 0.40 1.15 1.50
EBITDA2 $ 79.4 125.3 127.8 307.2 386.8
Adjusted EBITDA2 $ 61.2 105.7 107.8 299.6 355.6
Cost of sales $/oz 1,627 1,306 1,220 1,335 1,190
Net cash generated from operating
activities $ 44.2 89.6 102.4 180.8 276.0
Net cash generated from operating
activities before changes in
non-cash operating working capital
$ 52.6 92.8 91.3 207.3 271.5
Free cash flow2 $ (69.7 ) (37.4 ) 32.0 (161.1 ) 85.4
Cash and cash equivalents $ 209.4 285.3 339.2 209.4 339.2
Lease-related obligations $ 21.1 11.5 3.1 21.1 3.1
Net cash2 $ 188.3 273.8 336.1 188.3 336.1
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Torex Gold Resources Inc.
Table 2: Reconciliation of Total Cash Costs and All-in Sustaining Costs to Cost of Sales
1. This amount excludes a gain of $3.1 million, gain of $1.8 million and gain of $0.3 million for the three months ended September 30, 2023, June 30, 2023,
and September 30, 2022, respectively, and a gain of $1.3 million and gain of $2.1 million for the nine months ended September 30, 2023 and September
30, 2022, 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 September 30, 2023, June 30, 2023, and September 30, 2022,
respectively, $0.2 million and $0.2 million for the nine months ended September 30, 2023 and September 30, 2022, respectively, within general and
administrative costs. Included in general and administrative costs is share- based compensation expense in the amount of $1.2 million or $15/oz for the
three months ended September 30, 2023, $1.2 million or $11/oz for the three months ended June 30, 2023, $0.8 million or $7/oz for the three months
ended September 30, 2022, $4.3 million or $14/oz for the nine months ended September 30, 2023 and $3.4 million or $10/oz for the nine months ended
September 30, 2022. This amount excludes other expenses totalling $2.4 million, $1.6 million and $nil for the three months ended September 30, 2023,
June 30, 2023, and September 30, 2022, respectively, and $4.6 million and $nil for the nine months ended September 30, 2023 and September 30, 2022,
respectively.
Table 3: Reconciliation of Sustaining and Non-Sustaining Costs to Capital Expenditures
1. 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.
Three Months Ended Nine Months Ended
In millions of U.S. dollars, unless otherwise noted Sep 30,
2023 Jun 30,
2023 Sep 30,
2022 Sep 30,
2023 Sep 30,
2022
Gold sold oz 81,752 105,749 119,834 305,956 351,209
Total cash costs per oz sold
Production costs and royalties $ 91.6 93.1 94.9 273.1 272.3
Less: Silver sales $ (1.0 ) (1.3 ) (0.6 ) (3.8 ) (2.0 )
Less: Copper sales $ (1.8 ) (2.1 ) (3.2 ) (6.8 ) (11.7 )
Total cash costs $ 88.8 89.7 91.1 262.5 258.6
Total cash costs per oz sold $/oz 1,086 848 760 858 736
All-in sustaining costs per oz sold
Total cash costs $ 88.8 89.7 91.1 262.5 258.6
General and administrative costs1 $ 6.2 5.9 5.0 18.7 17.8
Reclamation and remediation costs $ 1.1 1.3 1.4 3.8 4.0
Sustaining capital expenditure $ 22.4 41.4 29.4 99.6 70.6
Total all-in sustaining costs $ 118.5 138.3 126.9 384.6 351.0
Total all-in sustaining costs per oz sold $/oz 1,450 1,308 1,059 1,257 999
Three Months Ended Nine Months Ended
Sep 30, Jun 30, Sep 30, Sep 30, Sep 30,
In millions of U.S. dollars 2023 2023 2022 2023 2022
Sustaining $ 16.5 19.5 12.8 50.6 30.0
Capitalized Stripping (Sustaining) $ 5.9 21.9 16.6 49.0 40.6
Non-sustaining $ 0.8 0.4 4.3 1.9 15.0
Total ELG $ 23.2 41.8 33.7 101.5 85.6
Media Luna Project $ 98.7 77.2 32.5 242.3 80.6
Media Luna Infill Drilling/Other $ 4.2 4.9 5.4 12.2 17.2
Working Capital Changes & Other $ (13.7 ) 0.6 (3.0 ) (19.4 ) 3.0
Capital expenditures1 $ 112.4 124.5 68.6 336.6 186.4
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Torex Gold Resources Inc.
Table 4: Reconciliation of Average Realized Price and Total Cash Costs Margin Per Ounce of Gold Sold
to Revenue
Table 5: Reconciliation of All-in Sustaining Costs Margin to Revenue
Three Months Ended Nine Months Ended
In millions of U.S. dollars, unless otherwise noted
Sep 30,
2023
Jun 30,
2023
Sep 30,
2022
Sep 30,
2023
Sep 30,
2022
Gold sold oz 81,752 105,749 119,834 305,956 351,209
Revenue $ 160.1 211.3 209.3 600.2 652.0
Less: Silver sales $ (1.0 ) (1.3 ) (0.6 ) (3.8 ) (2.0 )
Less: Copper sales $ (1.8 ) (2.1 ) (3.2 ) (6.8 ) (11.7 )
Add: Realized gain (loss) on gold contracts $ 1.6 (0.6 ) - 1.5 -
Total proceeds $ 158.9 207.3 205.5 591.1 638.3
Total average realized gold price $/oz 1,944 1,960 1,715 1,932 1,817
Less: Total cash costs $/oz 1,086 848 760 858 736
Total cash costs margin $/oz 858 1,112 955 1,074 1,081
Total cash costs margin % 44 57 56 56 59
Three Months Ended Nine Months Ended
In millions of U.S. dollars, unless otherwise noted
Sep 30,
2023
Jun 30,
2023
Sep 30,
2022
Sep 30,
2023
Sep 30,
2022
Gold sold oz 81,752 105,749 119,834 305,956 351,209
Revenue $ 160.1 211.3 209.3 600.2 652.0
Less: Silver sales $ (1.0 ) (1.3 ) (0.6 ) (3.8 ) (2.0 )
Less: Copper sales $ (1.8 ) (2.1 ) (3.2 ) (6.8 ) (11.7 )
Add: Realized gain (loss) on gold contracts $ 1.6 (0.6 ) - 1.5 -
Less: All-in sustaining costs $ (118.5 ) (138.3 ) (126.9 ) (384.6 ) (351.0 )
All-in sustaining costs margin $ 40.4 69.0 78.6 206.5 287.3
Total all-in sustaining costs margin $/oz 494 652 656 675 818
Total all-in sustaining costs margin % 25 33 38 34 44
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Torex Gold Resources Inc.
Table 6: Reconciliation of Adjusted Net Earnings to Net Income
Table 7: Reconciliation of EBITDA and Adjusted EBITDA to Net Income
1. Includes depreciation and amortization included in cost of sales, general and administrative expenses and exploration and evaluation expenses.
Three Months Ended Nine Months Ended
In millions of U.S. dollars, unless
otherwise noted
Sep 30,
2023
Jun 30,
2023
Sep 30,
2022
Sep 30,
2023
Sep 30,
2022
Basic weighted average
shares outstanding shares 85,885,453 85,884,895 85,843,808 85,879,934 85,827,656
Diluted weighted average
shares outstanding shares 86,401,220 86,565,950 86,039,606 86,409,988 86,059,576
Net income $ 10.5 75.3 43.9 154.0 154.2
Adjustments:
Unrealized foreign exchange
loss (gain) $ 1.4 (2.5 ) 0.3 (1.6 ) (0.3 )
Unrealized gain on
derivative contracts $ (16.5 ) (15.3 ) (20.0 ) (4.7 ) (28.8 )
Remeasurement of
share-based payments $ (3.1 ) (1.8 ) (0.3 ) (1.3 ) (2.1 )
Derecognition of provisions
for uncertain tax
positions
$ - - - (15.2 ) -
Tax effect of above
adjustments $ 5.2 5.9 6.0 2.1 9.4
Tax effect of currency
translation on tax base $ 13.6 (23.7 ) 4.7 (34.0 ) (3.6 )
Adjusted net earnings $ 11.1 37.9 34.6 99.3 128.8
Per share - Basic $/share 0.13 0.44 0.40 1.16 1.50
Per share - Diluted $/share 0.13 0.44 0.40 1.15 1.50
Three Months Ended Nine Months Ended
In millions of U.S. dollars
Sep 30,
2023
Jun 30,
2023
Sep 30,
2022
Sep 30,
2023
Sep 30,
2022
Net income $ 10.5 75.3 43.9 154.0 154.2
Finance income, net $ (2.0 ) (3.2 ) (0.8 ) (8.2 ) (0.7 )
Depreciation and amortization1 $ 41.5 45.0 51.4 135.6 145.9
Current income tax expense $ 12.1 18.6 32.3 47.5 93.9
Deferred income tax expense (recovery) $ 17.3 (10.4 ) 1.0 (21.7 ) (6.5 )
EBITDA $ 79.4 125.3 127.8 307.2 386.8
Adjustments:
Unrealized gain on derivative
contracts $ (16.5 ) (15.3 ) (20.0 ) (4.7 ) (28.8 )
Unrealized foreign exchange loss (gain) $ 1.4 (2.5 ) 0.3 (1.6 ) (0.3 )
Remeasurement of share-based
payments $ (3.1 ) (1.8 ) (0.3 ) (1.3 ) (2.1 )
Adjusted EBITDA $ 61.2 105.7 107.8 299.6 355.6
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Torex Gold Resources Inc.
Table 8: Free Cash Flow
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: Net Cash
Three Months Ended Nine Months Ended
In millions of U.S. dollars
Sep 30,
2023
Jun 30,
2023
Sep 30,
2022
Sep 30,
2023
Sep 30,
2022
Net cash generated from operating
activities $ 44.2 89.6 102.4 180.8 276.0
Less:
Additions to property, plant and
equipment1 $ (112.4 ) (124.5 ) (68.6 ) (336.6 ) (186.4 )
Lease payments $ (1.0 ) (1.4 ) (1.5 ) (3.2 ) (3.0 )
Interest paid2 $ (0.5 ) (1.1 ) (0.3 ) (2.1 ) (1.2 )
Free cash flow $ (69.7 ) (37.4 ) 32.0 (161.1 ) 85.4
Sep 30, Jun 30, Dec 31, Sep 30,
In millions of U.S. dollars 2023 2023 2022 2022
Cash and cash equivalents $ 209.4 285.3 376.0 339.2
Less: Lease-related obligations $ (21.1 ) (11.5 ) (3.9 ) (3.1 )
Net cash $ 188.3 273.8 372.1 336.1