On Track to Achieve Full Year Production and Cost Guidance
(All amounts expressed in U.S. Dollars unless otherwise stated)
TORONTO, Aug. 03, 2022 (GLOBE NEWSWIRE) -- Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX: TXG) reports the Company’s financial and operational results for the three and six months ended June 30, 2022. The Company will host a conference call tomorrow morning at 9:00 AM (ET) to discuss the quarterly results.
Torex is also pleased to announce the appointment of Mr. Rodrigo Sandoval to its Board of Directors.
Jody Kuzenko, President & CEO of Torex, stated:
“Torex delivered solid results across multiple fronts in Q2. Our strong production, combined with ongoing discipline in cost containment, resulted in robust revenue, operating cash flow, and free cash flow generation this quarter. With more than $310 million in cash on hand, strong forecasted cash flow from ELG, and advanced stage plans to increase our available credit facility to $250 million, Torex is in a very favourable position to fund the development of Media Luna while continuing to invest in value-generating exploration.
“Our excellent operational performance this quarter was primarily driven by higher grades from the ELG open pits as well as record mining rates in the ELG Underground. Underground mining rates averaged 1,582 tonnes per day in Q2, well surpassing the prior record of 1,429 tonnes per day achieved in the same quarter last year. With completion of Portal #3 expected later this year and potential to leverage long hole open stoping in portions of the mine, we are steadily making gains toward achieving our long-term target of 2,000 tonnes per day in the ELG Underground.
“At Media Luna, project activity continues to ramp up following Board approval on March 31 st . Earthworks have progressed as planned during the quarter, and advance rates continued to improve in both the Guajes Tunnel and South Portal Lower. Procurement activities are well underway, with the key focus on long lead items including flotation cells, regrind mills, the Guajes Tunnel conveyor, and the battery electric fleet. As of June 30 th , physical progress on the Media Luna Project was approximately 5%, exactly in line with our plan.
“Based on a detailed review of scheduled cost flows for Media Luna, the Company has redistributed the timing of indirect costs associated with freight, import taxes, and contingency. As a result, non-sustaining capital expenditure guidance for Media Luna in 2022 has been lowered to $170 to $210 million from $220 million to $270 million. While the timing of these expenditures has been shifted to 2023 and 2024, the overall cost to develop Media Luna remains unchanged.
“Despite challenging headwinds with the current inflationary environment and the persistence of COVID-19, we delivered a very solid first half of 2022, and we are well on track to deliver on production and cost guidance for the fourth year in a row."
Richard Howes, Chair of the Board, stated:
“We are very pleased to welcome Rodrigo Sandoval to the Torex Board of Directors. Rodrigo brings significant social, commercial and political knowledge and experience from within Mexico’s mining industry, which will serve to enhance the overall governance of the Company. With Rodrigo’s appointment, we have now completed the process started two years ago to refresh, strengthen and diversify the competencies and skills of our Board.”
SECOND QUARTER 2022 HIGHLIGHTS
Safety excellence continues: No lost time injuries in the quarter. The Company exited the quarter with a lost time injury frequency rate of zero per million hours worked on a rolling 12-month basis and surpassed 10 million hours worked without a lost time injury in June.
Gold production: Delivered gold production of 123,185 ounces for the quarter. Gold production is on track to meet full year production guidance of 430,000 to 470,000 ounces.
Gold sold: Sold 123,363 ounces of gold at an average realized gold price 1 of $1,865 per ounce, contributing to revenue of $235.0 million.
Total cash costs 1 and all-in sustaining costs 1 : Total cash costs of $703 per ounce sold and all-in sustaining costs of $911 per ounce sold. The Company is on track to deliver on full year total cash costs guidance of $695 to $735 per ounce as well as all-in sustaining costs guidance of $980 to $1,030 per ounce given ongoing cost management to minimize the impact of inflationary pressures.
Net income and adjusted net earnings 1 : Reported net income of $70.3 million or earnings of $0.82 per share on a basic basis and $0.80 per share on a diluted basis. Adjusted net earnings of $57.0 million or $0.66 per share on a basic basis and $0.66 per share on a diluted basis. Net income includes an unrealized derivative gain of $17.0 million related to gold price contracts entered into during Q1 2022 to reduce downside price risk during the construction of the Media Luna Project (approximately 25% of production between October 2022 to December 2023).
EBITDA 1 and adjusted EBITDA 1 : Generated EBITDA of $155.9 million and adjusted EBITDA of $137.1 million.
Cash flow from operations: Cash flow from operations totalled $126.9 million and $120.6 million prior to changes in non-cash operating working capital. Cash flow from operations includes $18.6 million of income taxes paid and a payment of $21.5 million in relation to mandated profit sharing in Mexico for 2021.
Free cash flow 1 : Free cash flow of $74.0 million including total capital expenditures of $52.5 million.
Net cash 1 and financial liquidity: Net cash of $306.3 million, including $310.7 million in cash and $4.4 million of lease obligations, with no debt and an undrawn $150.0 million credit facility, providing more than $460 million in available liquidity as at June 30, 2022. The Company is in the advanced stages of extending and increasing the available credit facilities with a syndicate of international banks. It is expected that these facilities will be executed in Q3 2022 and provide the Company with a total of $250 million in available credit with a maturity date in 2025.
Media Luna Project: Project period construction at Media Luna commenced as of April 1, 2022, with direct project expenditures of $29.6 million during the quarter out of a total budget of $874.5 million (including adjustment of $26.1 million for Q1 2022 underspend). Spend primarily focused on continued development of the Guajes Tunnel and South Portals, with development of the Guajes Tunnel reaching more than 2,100 metres and South Portal more than 700 metres at quarter end. Construction at Media Luna is well underway with long-lead procurement and earthworks on schedule. At the end of the quarter, physical progress on the Media Luna Project was approximately 5%.
Appointment of New Director: The Company announces the appointment of Mr. Rodrigo Sandoval to the Board of Directors. Mr. Sandoval is a seasoned executive based in Mexico with over 20 years of experience in corporate finance predominantly in the resource and infrastructure sectors, presently as Chief Financial Officer of Grupo Gigante and previously with Grupo Mexico.
These measures are Non-GAAP Financial Performance Measures or Non-GAAP ratios (collectively, “Non-GAAP Measures”). For a detailed reconciliation of each Non-GAAP Measure to its most directly comparable IFRS financial measure see Tables 2 to 10 of this press release. For additional information on these Non-GAAP Measures, please refer to the Company’s management’s discussion and analysis (“MD&A”) for the quarter ended June 30, 2022, dated August 3, 2022. The MD&A, and the Company’s unaudited condensed consolidated interim financial statements for the quarter ended June 30, 2022, are available on Torex’s website (www.torexgold.com) and under the Company’s SEDAR profile ( www.sedar.com ).
Table 1: Operating & Financial Highlights
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