Torex Announces Q1 2018 Financial and Operational Results
May 09 2018 - 6:00AM
(All amounts expressed in U.S. Dollars unless
otherwise stated)
Torex Gold Resources Inc. (the "Company" or "Torex") (TSX:TXG)
reported today the Company’s financial results for the quarter
ended March 31, 2018.
Fred Stanford, President & CEO of Torex
stated: “The Torex team has been tested and strengthened by the
challenges that we have managed in the past six months. With those
challenges now behind us and with a strong Q1 as a foundation, our
eyes are now lifted to the horizon and the opportunities ahead of
us to create shareholder value. 2018 promises to be a catalyst rich
year, with near term advances in throughput, SART plant start-up,
Sub-Sill ramp-up, exploration results, in-fill results at Media
Luna, an updated PEA for Media Luna, and advances in underground
mining technology that we have been working on. We all look forward
to getting on with delivering on these value creating
opportunities.”
This release should be read in conjunction with
the Company's March 31, 2018 Financial Statements and MD&A on
the Company's website or on SEDAR.
HIGHLIGHTS
The processing plant was restarted under
the illegal blockade (the “Blockade”). The team delivered a strong
operating performance.
- Gold produced totalled 67,167 ounces in Dore,
and an additional 8,887 ounces in carbon fines.
- Mine production, 3,079 kt, averaged 41,053
tpd. Mine ore production, 571 kt, averaged 7,613
tpd.
- Average grade mined was 3.29 gpt.
- Plant throughput, 785 kt, averaged 10,467 tpd,
or 75% of design capacity of 14,000 tpd.
- Average grade processed in the quarter of 3.13
gpt.
- Gold recovery averaged 87%, consistent with
design expectations.
- SART plant construction is on track to be
fully operational at the beginning of July 2018.
- Sub-Sill mining was restarted in March 2018,
one month ahead of schedule.
- Principal repayment of $9.3 million was made
to reduce the Term Loan under the Debt Facility to $290.7
million.
Subsequent to the end of the first
quarter of 2018, the blockade ended and full access has been
restored
- On April 6, 2018, after a negotiation with community leaders
that the Company was not a party to, the supporters of the Miners
Union (Los Mineros) ended the Blockade. On April 10, 2018, the
Company received notification from the Federal Labour Board that
the Miners Union had withdrawn their application to challenge and
to become the legally constituted union for the Company’s
union-eligible employees. In April 2018, plant throughput was
constrained as mine production transitioned to the El Limón Pit,
which had been unavailable during the Blockade. Starting in May,
and for the rest of the year, plant throughput is expected to
average 12,500 tonnes per day.
Financial results
- Net income totalled $10.2 million, or
$0.12 per share, on a basic and diluted basis.
- Adjusted net earnings1 totalled $6.6 million,
or $0.08 per share on a basic and diluted basis.
- Earnings from mine operations totalled
$18.8 million.
- Cash flow from operations totalled
$52.5 million.
- Revenue totalled $84.0 million and
cost of sales totalled $65.2 million, or $1,036
per ounce of gold sold.
- Gold sold for the first quarter of 2018
totalled 62,906 ounces for total proceeds of $83.7 million at
an average realized gold price1 of $1,331 per
ounce.
- Cash balances as at March 31, 2018 totalled
$124.4 million (including restricted cash of
$13.9 million).
- Total cash costs1 of $730 per ounce of gold
sold.
- All-in sustaining costs (“AISC”)1 of $954 per
ounce of gold sold.
Grade and tonnage continue to reconcile
well to the reserve model for the ELG Open Pits
- Total ounce reconciliation of 106% to the
reserve model for the quarter.
- Grade reconciliation of 96% to the reserve
model for the quarter.
Financing
- On January 29, 2018, the Company announced that it had entered
into an agreement with a syndicate of underwriters led by BMO
Capital Markets, under which the underwriters agreed to purchase,
on a “bought deal” basis, 4,370,000 common shares at a price of
C$12.60 per common share for gross proceeds of approximately C$55.0
million (the “Offering”). The Offering closed on February 7, 2018
and resulted in aggregate net proceeds of C$58.5 million to the
Company. As part of the Offering, the underwriters partially
exercised their over-allotment option and purchased an additional
12% of the Offering with the remainder of the over-allotment option
being exercised and closing on February 16, 2018, for aggregate net
proceeds of C$60.0 million to the Company.
The maiden ELG Underground mineral
reserves and mine plan was declared in the first quarter of
2018
- The ELG Underground mine plan includes 29
months of production, delivering 480 kt at 11.65 gpt containing
180,000 gold ounces. Total capital required is $23.0 million, with
the majority in the first year.
- Step-out exploration drilling for the Sub-Sill
zone continued to demonstrate the potential to add
resources, with high-grade intercepts beyond the boundaries of the
current mine plan.
- ELG Open Pit mineral reserves and resources
remain largely unchanged, except for depletion.
1 Refer to “Non-IFRS Financial Performance
Measures” in the Company’s March 31, 2018 Management’s Discussion
and Analysis for further information and a detailed
reconciliation.
Qualified Persons
Scientific and technical information contained
in this news release has been reviewed and approved by Dawson
Proudfoot, P.Eng., Vice President, Engineering of Torex Gold
Resources Inc. and a Qualified Person under NI 43-101 – Standards
of Disclosure for Mineral Projects.
Conference CallThe Company will
host a conference call today at 9:00 am (ET) where senior
management will discuss the first quarter of 2018 operational and
financial results. Access the conference call as follows:
Webcast access: A live audio webcast of the
conference call will be available on the Company’s website at
www.torexgold.com.
Telephone access: Please call the numbers
below approximately ten minutes prior to the scheduled start of the
call.Toronto local or international 1 (416) 915-3239 Toll-Free
(North America) 1 800-319-4610 Toll-Free (France) 0 800-900-351
Toll-Free (Switzerland) 0-800-802-457 Toll-Free (United Kingdom) 0
808-101-2791
The webcast will be archived on the Company’s
website.
About Torex
Torex is an intermediate gold producer based in
Canada, engaged in the exploration, development and operation of
its 100% owned Morelos Gold Property, an area of 29,000 hectares in
the highly prospective Guerrero Gold Belt located 180 kilometers
southwest of Mexico City. The Company’s principal assets are the El
Limón Guajes mining complex (the “ELG Mine Complex”),
comprised of the El Limón, Guajes and El Limón Sur open pits, the
El Limón Guajes underground mine including zones referred to as
Sub-Sill, El Limón Deep and 71, and the processing plant and
related infrastructure, which is in the commercial production stage
as of April 1, 2016, and the Media Luna deposit, which is an early
stage development project, and for which the Company issued a
preliminary economic assessment in 2015. The property remains 75%
unexplored.
For further information, please contact:
TOREX GOLD
RESOURCES INC. |
|
Fred
Stanford President and CEO Tel.: (647) 260-1502 Email:
fred.stanford@torexgold.com |
Gabriela
Sanchez Vice President Investor Relations Tel.: (647)
260-1503 Email: gabriela.sanchez@torexgold.com |
|
|
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking
statements" and "forward-looking information" within the meaning of
applicable Canadian securities legislation. Notwithstanding the
Company's efforts, there can be no guarantee that the Company will
not face unforeseen delays or further disruptions of its
operations. Forward-looking information also includes, but is not
limited to, the expected successful completion of the ramp-up,
completion of the SART plant, completion of the ramp-up of the
processing plant and the Sub-Sill, exploration results from the
Sub-Sill and the completion and timing of an updated PEA for Media
Luna and the related in-fill drilling program, the expected
production from the ELG Underground mine plan and related capital
requirements, and continued safety and security. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects",
"estimates", "intends", "anticipates" or "believes" or variations
of such words and phrases or state that certain actions, events or
results "may", "could", "would", "might", or "will be taken",
"occur", or "be achieved". Forward-looking information is subject
to known and unknown risks, uncertainties and other factors that
may cause the actual results, level of activity, performance or
achievements of the Company to be materially different from those
expressed or implied by such forward-looking information,
including, without limitation, those risk factors identified in the
Company's annual information form and management's discussion and
analysis. Forward-looking information is based on the reasonable
assumptions, estimates, analysis and opinions of management, made
in light of its experience and its perception of trends, current
conditions and expected developments, as well as other factors that
management believes to be relevant and reasonable in the
circumstances at the date that such statements are made, but which
may prove to be incorrect. Although the Company believes that the
assumptions and expectations reflected in such forward-looking
information are reasonable, undue reliance should not be placed on
forward-looking information because the Company can give no
assurance that such expectations will prove to be correct. There
can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. The Company
does not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
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