Torex Gold’s Media Luna Project 78% Complete

Torex Gold Resources provided an update on the progress of its Media Luna project as of June 30, 2024. The company notes the project is progressing according to schedule, with the first production of copper concentrate anticipated by the end of the year and commercial production expected in 1Q25.

According to Torex Gold, Media Luna is 78% complete, marking a 9% completion increase compared to the previous period, as the project reported a 69% progress in March 2024. Jody Kuzenko, President and CEO, Torex Gold, noted the project’s budget was set at US$950 million, an increase of US$75 million from the original budget. This rise in capital expenditure is primarily due to the stronger Mexican peso, accounting for US$48 million of the increase. The remaining US$27 million is attributed to additional scope items and carryover costs anticipated before declaring commercial production.

As of June 30, 2024, Torex had over US$345 million in available liquidity. The company expects this to cover the remaining US$224 million required for the Media Luna project while maintaining a minimum of US$100 million in cash reserves.

The company has financed the project through its cash flow and a small amount of debt, without diluting shareholders or selling future interests through royalties or streams. “With the completion of Media Luna tracking to plan, Torex offers shareholders a catalyst-rich near-term future that includes the successful completion and ramp-up of Media Luna, entering the copper concentrate market, incorporating EPO into the integrated mine plan, continued drilling and exploration prospectivity, and a return to positive free cash flow in mid-2025," Kuzenko detailed.

The project's engineering and procurement phases are nearing completion, with engineering at 96% and procurement at 89%. The company has focused on finalizing electrical and network control system drawings and programmable logic controller programming. Major purchase orders and contracts for the project have been awarded, with key equipment deliveries expected through 3Q24.

Underground development and construction are progressing, with significant advancements made in the installation of the Guajes conveyor. Surface construction is also advancing, particularly on the north side of the Balsas River, where work on the flotation circuit and other critical infrastructure is underway.

The project includes upgrades to regional power infrastructure, increasing on-site electricity supply, and ensuring the facility can handle future expansions. The company has received approvals for these upgrades, expected to be completed by late 2024.

Historical and Projected Positive Performance

Torex Gold has consistently reported positive results for the Media Luna project. A significant recent development is the completion of the Guajes Tunnel, which was finished three months ahead of schedule, as reported by MBN. 

Another important development for Terex Gold was ousting Newmont’s Peñasquito mine as the largest gold producer, as El Limon-Guajes produced 453,800oz of gold, according to CAMIMEX’s Annual Report 2024. 

Apart from aiming for a cash-positive operation by mid-2025, the company aims to produce 450,000oz/y by the end of 2027 and maintain that production rate until at least 2030, as detailed in an interview with MBN. “We are open to mergers and acquisitions (M&A) opportunities, particularly in gold, copper, or other precious metals, including silver. We are considering opportunities in Canada, the United States, Mexico, and other places in Latin America. Our main criteria for M&A opportunities are whether there is a clear pathway to cash generation and whether we can unlock additional value using our Torex systems and team,” Kuzenko added.