- (All amounts expressed in U.S. Dollars unless otherwise stated)
TORONTO, Ontario, August 5, 2020 – Today, Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX: TXG) released the Company’s financial results for the three and six months ended June 30, 2020 as well as its updated operational outlook for 2020.

Due to the COVID-19 decree issued by the Government of Mexico, production at El Limón Guajes (ELG) was temporarily suspended for the month of April and partially resumed in May with the processing of lower grade stockpiled material. Following the designation of mining as an essential activity in Mexico, full production resumed at the beginning of June.

Jody Kuzenko, President & CEO of Torex, stated:

“While this quarter was far from business as usual, we delivered solid operational performance and demonstrated the financial strength of our business even in these most challenging times. Despite the mandated suspension of our operations due to COVID-19, we produced 59,500 ounces of gold, delivered $49.3 million in adjusted EBITDA and $28.1 million in operating cash flow (prior to non-cash working capital). With operations back on track, $176.9 million in the bank and a robust gold price at hand, we plan to direct our cash flow to further reducing debt during the second half of 2020.

“With the steady state production run rate reestablished in June, we are well positioned to deliver a solid second half of the year, and are off to a strong start with 42,630 ounces of gold produced in July, following 38,890 ounces produced in June. Our expectations are reflected in the revised production guidance of between 390,000 and 420,000 ounces of gold in 2020.

“During the quarter, we also kept pace on planned investment associated with our future. The modest increase in our capital expenditure forecast for the remainder of 2020 relative to original guidance reflects our decision to advance projects which we believe will add incremental value for shareholders. We are increasing exploration investment in ELG underground and building a third portal to access our underground deposits there, which we expect will cut the current haulage distance in half thereby reducing operating costs. Additionally, we have added a south portal to the Media Luna design in order to mitigate any schedule risk associated with the 7 km long access tunnel.

“I’m particularly proud that we continued to demonstrate our industry leadership in safety this quarter, with more than seven million hours now worked without a single lost time injury. Our strong culture of safety has served us well as we continue to keep our operations running safely by continuously enhancing our controls to prevent the spread of COVID-19 among our employees and local communities.

“With a solid balance sheet, strong momentum on production, gold prices reaching record highs and most importantly, an exceptional team delivering exceptional operational performance, we are poised to deliver very strong results in H2 2020, into 2021 and beyond.”

This release should be read in conjunction with the Company’s June 30, 2020 Financial Statements and MD&A on the Company’s website or on SEDAR. A summary of Torex’s operating and financial results can be found in Table 2.

Q2 2020 Highlights
•Safety: Zero lost time injuries in the quarter and more than 7 million hours worked since the last lost time injury more than a year ago.
•ESG (Environment, Social, Governance): – On August 4th, the Company issued its 2019 Responsible Gold Mining Report, which is available on our website (www.torexgold.com).
•Gold production: Produced 59,508 ounces of gold including 38,892 ounces in June.
•Plant throughput and availability: Plant throughput averaged 7,560 tonnes per day1 for the quarter, including 11,873 tonnes per day processed in June.
•Gold sold: 63,147 ounces of gold sold at an average realized gold price2 of $1,712 per ounce.
•Care and maintenance costs of $11.1 million related to the COVID-19 suspension of operations have been excluded, $8.0 million from production costs and $3.1 million from depreciation.
•Total cash costs2 and all-in sustaining costs2: Total cash costs of $740 per ounce and all-in sustaining costs of $1,015 per ounce, which exclude $8.0 million of production costs related to the COVID-19 suspension of operations.
•Net income: Net income of $3.8 million, or $0.04 per share on a basic and diluted basis.
•Adjusted net earnings2: Adjusted net earnings of $3.6 million, or $0.04 per share on a basic and diluted basis. Adjusted net earnings for the quarter excludes $11.1 million of care and maintenance costs related to the COVID-19 suspension of operations ($7.8 million or $0.09 per share on a tax adjusted basis).
•EBITDA2 and Adjusted EBITDA2: Generated EBITDA of $44.8 million and adjusted EBITDA of $49.3 million. Adjusted EBITDA excludes $8.0 million of production costs related to the COVID-19 suspension of operations.
•Cash flow from operations: Cash flow from operations totaled $2.2 million ($28.1 million prior to changes in non-cash working capital), including income taxes paid of $14.8 million.
•Free cash flow2: Deficiency of $28.5 million after taking into account changes in non-cash working capital.
•Cash balance: As at June 30, 2020 totaled $176.9 million, all unrestricted.
•Debt: Repaid $21.7 million of outstanding debt during the quarter. Drew $90.0 million on the Revolving Facility during the quarter. Total debt stood at $225.2 million as of June 30, 2020.
•Losses on derivative contracts: $2.7 million in losses on derivative contracts this quarter, primarily due to a marked increase in gold price.

1 Based on 91 calendar days for the three months ended June 30, 2020.
2 Refer to “Non-IFRS Financial Performance Measures” within the MD&A for further information and a detailed reconciliation.

Guidance Update
With the resumption of full operations at ELG in June 2020, the Company has revised its operational outlook for 2020. The lower guided output and higher costs primarily reflect the impact the COVID-19 related suspension had on operations in Q2. As with everywhere else in the world, uncertainty still exists over the extent and duration of the impacts that COVID-19 could have on operations, and as such, may impact our ability to achieve the revised outlook outlined in Table 1. There are no changes to the safety and environmental objectives.

Table 1: Revised 2020 Operational Outlook
Original Outlook Revised Outlook
Gold production 420,000 to 480,000 ounces 390,000 to 420,000 ounces
Total cash costs per ounce of gold sold $640 to $670 $695 to $740
All-in sustaining costs per ounce of gold sold $900 to $960 $965 to $1,025
Capitalized waste stripping $51 million $46 million
Other sustaining investment $34 million $37 million
Sustaining capital expenditures $85 million $83 million
Non-sustaining capital expenditures $82 million $92 million

The increase in guidance on non-sustaining capital expenditures includes a $7.0 million increase in investment in the Media Luna project for the ‘South Portal’ and additional equipment, to ensure that the project stays on schedule; and $3.5 million to develop ‘Portal 3’ in order to mine the Sub-Sill Extension area and the El Limón Deep Extension in an efficient and cost-effective manner.

Enhanced Balance Sheet Liquidity
During the quarter, we drew down $90.0 million on our revolving credit facility to enhance balance sheet liquidity. With strong cash flow projected for the remainder of the year, we expect to be in a net cash position before year-end, having exited June 2020 with net debt of $53.5 million from $26.3 million at the end of Q1.

COVID-19 Update
The enhanced COVID-19 control measures put in place in March remain in place today, and screening measures continue to be effective. To date, there have been four confirmed cases of COVID-19 within our workforce. Three of those individuals displayed symptoms and tested positive at home while away from site and are now fully recovered. The fourth individual tested positive at site and was quarantined as outlined in our COVID-19 protocols.

Continued support has been provided for COVID-19 management in neighbouring communities, including the implementation of infection prevention education campaigns for adults and children, the delivery of medical equipment for local health centres, and the donation of hand sanitizer and medical masks.

Conference Call and Webcast Details
The Company will host a conference call today at 9:00 AM (ET) where senior management will discuss the second quarter operating and financial results. Please call the below numbers approximately 10 minutes prior to the start of the call:
•Toronto local or international: 1-416-915-3239
•Toll-Free (North America): 1-800-319-4610
•Toll-Free (France): 0800-900-351
•Toll-Free (Switzerland): 0800-802-457

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