Torex Gold Resources Inc. (the "Company" or "Torex") (TSX:TXG)
reports the Company’s financial and operating results for the
quarter ended March 31, 2019.
Fred Stanford, President & CEO of Torex
stated:
“As previously communicated, 2019 guidance is
weighted toward the second half of the year. We expect to achieve
at least the lower end of the guidance range, by producing for the
remainder of the year at an average throughput rate of 12,600 tpd,
at grades predicted by the reserve model, and at design gold
recovery levels.
In Q1 several changes were made in the
processing plant, and it is best in such circumstances to change
one thing at a time. Since there are no losses associated with ore
in stockpile, throughput rates were the third priority. The initial
changes were focused on improving recovery and then on reducing
costs by lowering reagent consumption. Once those improvements were
entrenched, the focus shifted to improving throughput rates, which
largely took place in April.
The team has been successful in all three
improvement initiatives. Recoveries for the quarter were 1% above
design level, achieving 88% gold recovery. Reagent consumption also
improved steadily through each month of the year to date. Further
improvement is expected once upgrades to the SART plant are
completed in Q3.
In April, additional maintenance downtime was
taken in support of the initiatives to increase throughput.
Subsequent to these changes, the throughput rate per hour in May
has increased by 6.4% and with the larger maintenance jobs
completed, uptime is expected to be higher in the remainder of the
quarter as well. In April, even with the additional planned
maintenance downtime, gold production was 34,400 ounces. This bodes
well for grade, which has increased as predicted by the reserve
model. With grades as forecasted, rising throughput levels, and
effective gold recovery, the operations are expected to deliver on
their potential.”
This release should be read in conjunction with
the Company's March 31, 2019 Financial Statements and MD&A on
the Company's website or on SEDAR.
HIGHLIGHTS
• |
Gold produced totalled 77,870 ounces. |
• |
Income before income tax was $4.9 million. |
• |
Mine production averaged 149,272 tpd. |
• |
Net loss was $1.3 million or $0.02 per share. |
• |
Mine ore production averaged 12,816 tpd. |
• |
Adjusted net loss1 of $5.7 million, or
$0.07/share. |
• |
Grade mined averaged 2.45 gpt. |
• |
Cash flow from operations totalled
$32.3 million. |
• |
Grade processed averaged 2.62 gpt. |
• |
Cash balances as at March 31, 2019 totalled
$118.5 million (including restricted cash of $26.9 million). |
• |
Plant throughput averaged 11,956 tpd. |
• |
Total cash costs1 per ounce of gold sold of
$745. |
• |
Gold recovery averaged 88%. |
• |
All-in sustaining costs1 per ounce of gold sold of
$1,161. |
• |
Gold sold was 76,473 ounces for
$99.6 million. |
• |
Principal repayments of $20.7 million. |
• |
Revenue was $101.9 million, cost of
sales was $85.1 million, or $1,113 per ounce of gold
sold. |
|
|
• |
Earnings from mine operations were $16.8
million. |
|
|
Positive results from first infill
program targeting the El Limon Deep (“ELD”) Zone2
- The Company announced the results from the first 32 holes of
its infill drill program targeting the ELD zone, in preparation for
a maiden underground resource estimate.
- Highlights include intercepts of 25.0 g/t Au over 8.5m in
borehole LDUG-026, 24.9 g/t Au Eq. over 7.5m in borehole LDUG-013,
16.8 g/t Au Eq. over 15.2m in borehole LDUG-021, and 12.5 g/t Au
Eq. over 45.9m in borehole LDUG-002.
Muckahi3
- Initial components have arrived on site with physical testing
of the Muckahi Mining System (“Muckahi”) underway and expected to
be completed by the end of 2019.
- Field trials are underway for the first piece of equipment for
Muckahi. The first tunneling blast of the field trials was taken in
March 2019. The round was successfully drilled from the monorail
mounted Muckahi jumbo drill. Two additional blasts have
subsequently been successfully completed. The second piece of
equipment, the Muckahi service platform, is expected to be in
service in the second quarter.
- The goal is to demonstrate Muckahi’s capabilities over the full
development cycle for tunneling, including on a minus 30-degree
gradient, and to demonstrate the capability of the system to lower
costs in long hole open stope mining.
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 Q1 2019 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 and
El Limón Deep, 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 an updated preliminary
economic assessment in September 2018. 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 |
Steven Thomas Chief Financial Officer Tel.: (647) 260-1505
Email: steven.thomas@torexgold.com |
CAUTIONARY NOTES
PRELIMINARY ECONOMIC ASSESSMENT
The Company prepared a technical report (the
“Technical Report”) on Morelos Property entitled “NI 43-101
Technical Report ELG Mine Complex Life of Mine Plan and Media Luna
Preliminary Economic Assessment”, which has an effective date of
March 31, 2018, has been filed with SEDAR and posted on the
Company’s website.
The Technical Report includes a preliminary
economic assessment (“PEA”) on the Media Luna Project. A
preliminary economic assessment should not be considered a
prefeasibility study or feasibility study, as the economics and
technical viability of the Media Luna Project have not been
demonstrated at this time. The PEA is preliminary in nature and
includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves. It cannot be assumed that all or any part of the inferred
mineral resources will ever be upgraded to a higher category.
Furthermore, there is no certainty that the conclusions or results
as reported in the Media Luna PEA will be realized. Mineral
resources that are not mineral reserves do not do not have
demonstrated economic viability.
The Media Luna PEA includes information on
Muckahi. It is important to note that Muckahi is experimental
in nature and has not been tested in an operating mine. Many
aspects of the system are conceptual, and proof of concept has not
been demonstrated. Drill and blast fundamentals, standards
and best practices for underground hard rock mining are applied in
the Muckahi, where applicable. The proposed application of a
monorail system for underground transportation for mine development
and production mining is unique to underground hard rock mining.
There are existing underground hard rock mines that use a monorail
system for transportation of materials and equipment, however not
in the capacity described in the Technical Report. Aspects of
Muckahi mining equipment are currently in the design stage. The
mine design, equipment performance and cost estimations are
conceptual in nature, and do not demonstrate technical or economic
viability. The Company expects to complete the development and test
the concept by the end of 2019 for the mine development activities
and up to five years for the mine production activities (approx.
second quarter 2023). Further studies would be required to
verify the viability of Muckahi. Muckahi is not intended as a
“trade off study” but is shown in the PEA to merely demonstrate the
potential benefits Muckahi may have using the Media Luna deposit as
an example. It includes inferred mineral resources that are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the
preliminary economic assessment will be realized. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability.
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
including without limitation, delays caused by blockades limiting
access to the ELG Mine Complex and the Media Luna Project or by
blockades or trespassers impacting the Company’s ability to
operate. Forward-looking information also includes, but is not
limited to, the expectation that reagent consumption levels will
improve futher with the upgrade to the SART plant in the third
quarter of 2019, the expected successful completion of the ramp-up
of the processing plant and achieving throughput of 12,600 tpd by
year-end, achieving the lower end of guidance, expectation that
grade improving to levels above plan, expectation that future
production is expected to increase as the new leadership implements
the throughput initiative, plans to further examine the potential
of the new mining technology (Muckahi) including the expected
timing and completion of the testing of the completed system, and
the goal to demonstrate Muckahi’s capabilities over the full
development cycle for tunneling, including on a minus 30-degree
gradient, and to demonstrate the capability of the system to lower
costs in long hole open stope mining. Generally, forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "expects", "estimates", "intends",
"anticipates", "believes" or “potential” 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, uncertainty as a result of the preliminary nature of
the PEA and the Company’s ability to realize the results of the
PEA, uncertainty regarding the inclusion of inferred mineral
resources in the mineral resource estimate, uncertainty involving
resource estimates and the ability to extract those resources
economically, or at all, risks associated with skarn deposits,
uncertainty involving drilling programs and the Company’s the
regulatory process and actions, the success of the Muckahi mining
system, the ability to fund the development and testing of Muckahi,
the ability to finance the Media Luna Project on reasonable terms,
and those risk factors identified in the Technical Report and the
Company’s annual information form and management’s discussion and
analysis. Forward-looking information are based on the assumptions
discussed in the Technical Report and such other reasonable
assumptions, estimates, analysis and opinions of management made in
light of its experience and perception of trends, current
conditions and expected developments, and other factors that
management believes are relevant and reasonable in the
circumstances at the date such statements are made. Although the
Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
the forward-looking information, there may be other factors that
cause results not to be as anticipated. 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. Accordingly, readers should not place undue
reliance on forward-looking information. The Company does not
undertake to update any forward-looking information, whether as a
result of new information or future events or otherwise, except as
may be required by applicable securities laws.
1 Refer to “Non-IFRS Financial Performance
Measures” in the Company’s March 31, 2019 MD&A for further
information and a detailed reconciliation.
2 For more information on the drill
results, see the Company’s news release titled “Torex Announces
Positive Results from its First Infill Program Targeting the El
Limon Deep (ELD) Zone” issued on February 14, 2019, and filed
on SEDAR at www.sedar.com and on the Company’s website at
www.torexgold.com.
3 The Media Luna PEA (as defined in the
Company’s March 31, 2019 MD&A) is preliminary in nature and
includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves. The Media Luna PEA includes information on the Muckahi
Mining System (“Muckahi”). The PEA economics for the Media Luna
Project in the Technical Report (as defined in the Company’s March
31, 2019 MD&A) are based on conventional mining methods. In
addition, Muckahi, a Torex proprietary mining method, is introduced
and described in the Technical Report. The Technical Report uses
the Media Luna Project as a platform for comparison to demonstrate
the potential benefits that could be possible if the Muckahi method
is proven and ultimately applied to the Media Luna Project, or any
other deposit that does not employ caving methods. It is important
to note that Muckahi is experimental in nature and has not been
tested in an operating mine. Many aspects of the systems are
conceptual, and proof of concept has not been demonstrated.
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