EPO Deposit Enhances Value of Torex’s Morelos Complex

Torex Gold has updated the life-of-mine plan for its Morelos Complex, incorporating its EPO underground deposit following the completion of an internal pre-feasibility study. The integration of the EPO deposit is expected to establish a production profile of at least 450,000oz/y AuEq through 2030. 

“The results of the internal pre-feasibility study on the EPO deposit significantly enhance our strategy to deliver robust, long-term, value accretive production out of the Morelos Complex in a highly efficient way by leveraging infrastructure associated with the Media Luna Project. With the addition of EPO into the updated mine plan, we have further bolstered the cash flow capability of our world-class asset, with continued upside as the prospectivity of the Morelos Property continues to show itself through the drill bit,” said  Jody Kuzenko, president and CEO of Torex Gold. 

The upfront capital expenditures for EPO are projected to be US$81.5 million, leveraging the infrastructure investments made for Media Luna. The company announced that several facilities, including the Guajes Tunnel, conveyor and ore handling systems, paste plant, mineral processing facilities, and power and water infrastructure, will be utilized for EPO. The study indicates that the objective of maximizing mill capacity will be met, with a planned processing rate of 10,600t/d.

The EPO deposit is viewed as a low-risk addition to the mine plan, with development and the associated capital investment scheduled to commence in mid-2025 and first ore production expected in late 2026. Torex emphasized that since the EPO deposit is located within the environmental footprint of the Morelos Complex, only minimal permitting is required. Changes to the current environmental approvals are expected in the coming quarters and are not anticipated to hinder development activities.

Underground mining rates at EPO are projected to average 1,680tpd annually from 2027 to 2035. Torex Gold indicated that the EPO deposit will also enhance the company's entry into the copper market, as it contains over 143 million pounds of copper reserves.

With the inclusion of EPO in the life-of-mine plan for the Morelos Complex, the company's five-year outlook has been revised to reflect enhanced production. For 2028, payable production is projected to be between 450,000 and 500,000oz of AuEq, up from the previous estimate of 350,000 to 400,000oz of AuEq. The company announced that an infill drilling program of 6,500m at EPO is planned for 2024, aimed at upgrading additional mineral resources to the Indicated category. In November, the Company reported results from the first half of the drilling program, which indicate strong potential to upgrade Inferred Resources to Indicated Resources and expand resources to the north of the deposit.

“With first ore production from EPO expected in late 2026, we continue to build on our established track record of doing what we say we will do, which has solidified Morelos as a foundational asset. The strong cash flow potential will place Torex in a unique position to drive shareholder value from multiple avenues. This includes unlocking the full potential of Morelos via exploration, the expected return to positive free cash flow in mid-2025, as well as leveraging future balance sheet strength in order to return capital to shareholders and pursue accretive growth opportunities to enhance, strengthen, and diversify our business,” said Kuzenko.