2021 Looking Bright for Torex Gold

Q: After a record 1Q21, what is Torex Gold doing to maintain a strong operating performance for the remainder of the year?

A: 2020 was a very challenging year due to the pandemic, with all the actions and protocols we had to implement to protect our people and communities. We had to ensure that our staff followed our world-class protocols, while aiming for consistency in our results, since the pandemic also had an impact on our operational performance with the government-mandated shut down of our operations in Q2. 1Q21 was the result of teamwork in the field, corporate guidance and introducing additional stability regarding the production we were aiming to achieve. We expect similar results next quarter but we do not want to spur speculation in the market that we will deliver 150,000 oz every quarter. What we are mainly looking for is stability in the levels we have projected in our guidance, which is between 430,000 and 470,000 oz of gold produced this year.

Q: What are Torex’s main targets for 2021?

A: We have a variety of targets for 2021. At Media Luna, we are drilling 44,000m this year to include the results in its feasibility study which will be released in Q1 of next year. At El Limón Guajes, an exploration investment of US$13 million has been budgeted for this year and we have three main objectives. First, we are looking for opportunities to extend the life of the open pit through a drilling campaign. Second, we will look for a connection between the pit and the underground mine; and third, we are seeking opportunities in the deeper areas of the underground mine through an aggressive campaign. At our regional targets, which are very close to El Limón Guajes, we are doing some prospecting and plan to drill some holes, with a projected spend of US$2.5 million. We are confident we will find something to develop after Media Luna, since we have many targets within the 29km2 of this area.

Q: The company no longer holds any long-term debt. How does this impact your business?

A: We are very happy to have reached this point. The result of the stability and compliance of our production tabs gives us the opportunity to have a very solid financial position - with our long-term debt now paid down. We will continue to produce and hope to fully fund Media Luna's activities directly from production at El Limon Guajes. We are also preparing to meet the market challenge and put Media Luna into operation in 2024.

Q: What are the plans for the El Limón Guajes complex’s open pit?

A: According to our mine plans, the open pit will be depleted in 2023. We are planning a smooth transition to the operation of Media Luna in 2024. Right now, our plan is to process a low-grade stockpile to fill that gap in 2023 and early 2024. However, we are looking for optimization opportunities to expand the life of the open pit by investing in additional exploration in our open pits and underground. We are also currently studying the potential for an additional pushback in our El Limón Pit, which would extend the life of that asset and provide additional cushion during the transition between El Limón Guajes and Media Luna.

Q: How is the company planning to make El Limón Guajes Complex’s underground mine a value driver for Torex and its shareholders in the coming years?

A: Both the underground and open pit mines have a very strong operating basis. We will continue with that objective at the underground mine, in addition to the exploration targets that we are drilling to add more resources and reserves to the underground mine. Our geologists have very high expectations for these resources and as a result, we are conducting an aggressive drilling campaign there.

A key factor that will be significant in the coming years is the construction of Portal 3, which is a new access that we have begun building for our underground mine with the goal of reaching deeper areas. That specific infrastructure will be a key driver for future resources for several reasons. First, it will have a very positive impact on the underground mine holes because we will have shorter haulage distances. Second, opening that access will be key to drilling deeper and searching for targets.

Q: What was the process for obtaining the MIA Modification approval for the Media Luna Project and what does this mean for the project?

A: We faced several challenges during the approval of the MIA Modification in large part due to COVID-19, so obtaining a permit this year is different than previous years. As a result, we were very transparent with SEMANAT in this process. We presented all information about the modification, which included the early works on the south of the river for Media Luna so that we can begin building the two main accesses to the deposit on both the north and south side of the river. We also included the development of the Guajes tunnel that will go under the Balsas River, and will now seek a construction permit from CONAGUA to complete that work. Certainly, by obtaining this MIA Modification permit from SEMARNAT, we have taken a very important step in moving forward with this new investment in Guerrero.

Q: How is the Media Luna expansion plan impacting Torex’s relationship with the communities?

A: We are using the same successful strategy that has been implemented at El Limón Guajes, which means having effective communication with the communities and the creation of economic opportunities. The relationship we have created with local communities has provided a great deal of value for them and for the company, since it has provided stability in our operations.

Q: What is the company incorporating into its MIA Integral?

A: There is a river between our two projects, Media Luna and El Limón Guajes, that is considered one of the main water sources for agricultural areas in Guerrero and Michoacan. We recognized that our regional environmental permitting strategy had to change with the construction of Media Luna, considering SEMARNAT´s rules and regulations. The MIA Integral aims to include both projects in a single permit, including all the environmental conditions and actions that we need to apply to both. This will facilitate the evaluation by the authorities and the compliance with these permits by the company. In that permit, we plan on including new infrastructure for the underground mine in Media Luna and some additional infrastructure changes in our process plant, considering the different metallurgy that the Media Luna ore will provide.

Q: The company had a record year in 2020 in many respects. How is Torex ensuring another exceptional year?

A: This year looks great for Torex. In this interview, we have been talking about the company´s production figures, which is fundamental for our business.  However, what we are most proud of is our safety record. During 2020, we crossed the line of more than 10 million working hours with no lost time to incidents, which is a remarkable achievement for the company. We will work with everyone who participates in these two projects at El Limón Guajes and Media Luna to continue reinforcing that safety culture. After the challenges of 2020, our people are performing at a world-class level and the integration of the team has also been strengthened. Our staff knows where we are going, why we are going there and what we expect of them. That creates a lot of clarity for the company and makes us proud and confident for 2021.

Torex Gold is an intermediate gold producer based in Canada. It is engaged in the exploration, development and operation of its 100 percent-owned Morelos gold property, an area of 29,000ha in the highly prospective Guerrero Gold Belt.