Torex Gold Sees Steady Production for Years to Come

Torex Gold’s decision to extend its El Limón open pit, which is expected to add 150,000oz of gold production through 2H24, coupled with the excellent contribution of high-grade ore from the underground, will ensure steady production at the El Limón Guajes (ELG) complex during the transition between ELG open pits and ramp up of Media Luna.

Jody Kuzenko, President and CEO of Torex Gold, said “A key strategic priority for Torex over the last 12 months has been to optimize and extend mining operations at ELG. With the recent approval of the El Limón pushback and ongoing contribution from the ELG Underground, Torex is well on the path to delivering a smooth transition between ELG and the ramp up of Media Luna.”

 “Overall, we are focused on executing our strategy,” she added. “With robust cash flow generation from ELG, a strong balance sheet and some key strategic decisions behind us, we are well positioned to deliver on our operational guidance for 2021, as well as our long-term plan to deliver shareholder value,” said Kuzenko through a press release.

In September, the company released its three-year outlook for ELG, which includes the expansion of the El Limón open pit. Annual gold production from ELG at the midpoint of the outlook range is 450,000 ounces in 2022, 425,000 ounces in 2023, and 325,000 ounces in 2024, which excludes any gold equivalent production from Media Luna.  Media Luna is expected to begin first production in 2024, and this production will be added to the 2024 outlook when an updated Technical Report (including Feasibility Study) is released in 1Q2022.

The current production outlook assumes production from the ELG open pits through mid-2024, and stable production from the ELG Underground through to at least the end of 2024 and likely longer based on exploration results. The Company explained that lower grade stockpiled material will be leveraged to fill the mill as required throughout the transition period, with higher grade feed from Media Luna and ELG Underground taking priority.

“The additional certainty of steady, multi-year production outlook at ELG comes at a time when our balance sheet has never been stronger. With more than US$220 million in cash on hand at the end of 3Q2021, US$150 million available on a fully undrawn revolving credit facility and robust ongoing cash flow from ELG, we are in a strong financial position to advance Media Luna while continuing to invest in value-accretive exploration to support our future,” said Kuzenko.

Rearding Media Luna, the company reiterated it is still on schedule to release the Feasibility Study in 1Q2022, and reach first production in early 2024. Kuzenko explained that as the company has progressed the Feasibility Study, it has made a series of decisions to optimize the project and upgrade some of its 2018 PEA initiatives to deliver a better transition from open pit production at ELG, and to incorporate potential sources of feed from the wider Morelos property as exploration becomes a greater focus for the company over the coming years.

Among the changes, the main access to Media Luna will be through a 7km Guajes tunnel, which is being built on the north side of the Balsas River. Access from the south will be through the South Portal Upper and South Portal Lower.

The company has also identified the need for a water treatment facility to provide clean water for the copper and iron sulfide flotation circuits. These circuits will be added to the current flowsheet to allow for the production of a saleable copper concentrate, and to recover additional gold and silver in the form of doré. The upgraded circuit will allow for processing of ore from both Media Luna and El Limón Guajes (“ELG”). It is expected that 30 percent of the value of the Media Luna deposit sits in copper.

 “We are excited about becoming a copper producer," Kuzenko emphasized. "In this industry, given the fluctuations in demand and prices of metal, production diversification and market exposure to different commodities is a very positive thing.  And I am quite bullish on the copper market.”

Importantly, the company continues to build its culture as a key strategic differentiator.  Kuzenko concluded, “We have a team that has built an entire culture around working safely – getting home to their families the way they came to work – and taking care of each other. Our most important goal for the optimization and smooth transition is that we do it safely and maintain our safety excellence – with no lives lost and no lives changed as a result of a workplace injury.”