Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX: TXG)
reports the Company’s financial and operating results for the three
and nine months ended September 30, 2019.
Fred Stanford, President & CEO of Torex,
stated:
“From every perspective, this was an excellent
quarter. Safety performance continued to be outstanding with zero
lost time injuries in the quarter. Record gold production of
138,145 ounces was more than 20% higher than the previous record
set earlier in the year. Plant throughput increased in each month
of the quarter, both in terms of tonnes per hour and number of
hours operated. Throughput averaged 12,380 tpd in the quarter, 6%
higher than the previous quarter, including 13,561 tpd in
September. The mines continued the strong performance
demonstrated throughout the year, with an average of 15,391
tpd of ore mined in the quarter. Total cash costs in the
quarter were $561 per ounce and all-in sustaining costs were $675
per ounce. As would be expected, the production and cost
performance, aided by the rising gold price, resulted in excellent
quarterly earnings of $0.32 per share ($0.36 per share adjusted)
and excellent cash flow from operations of over $120 million ($82
million before changes in non-cash working capital). Q4 is well set
up to bring in a strong finish to the year. With production and
costs tracking to expectations, guidance is maintained.
“With power to the SAG mill motor being the
limiting factor, we are targeting average steady-state throughput
of 13,000 tpd in the processing plant on a go forward basis. With
the potential of Media Luna on the horizon as an 8,000 tpd
operation, it does not make sense to invest capital for a higher
capacity SAG mill motor to achieve the original design
specification of 14,000 tpd. Continuous improvement
initiatives to maximize plant throughput will be ongoing.
“On the Muckahi front, a patent application has
been submitted and acknowledged. The Muckahi Mining System now has
‘patent pending’ status. We are now ready to move beyond testing
the components individually and will commence testing the
components as an integrated system. The ELD deposit has been
dedicated to this purpose. Blasting and slusher mucking of the
first long hole open stope is scheduled to begin in November. Two
steep ramps to access the lower reaches of the deposit have been
laid out and excavation of those will also begin in November. In
the corporate office, work is accelerating to develop the support
systems required to commercially leverage what could potentially be
an industry disruptive technology.”
This release should be read in conjunction with
the Company’s September 30, 2019 Financial Statements and MD&A
on the Company’s website or on SEDAR.
Q3 2019 HIGHLIGHTS
Operational results
- Record gold
production of 138,145 ounces.
- Mine production
averaged 144,989 tonnes per day.
- Mine ore
production averaged 15,391 tonnes per day.
- Grade mined
averaged 3.19 grams per tonne.
- Plant throughput
averaged 12,380 tonnes per day.
- Grade processed
averaged 4.11 grams per tonne.
- Gold recovery
averaged 89%.
- Total cash
costs¹ per ounce of gold sold of $561.
- All-in sustaining
costs¹ per ounce of gold sold of $675.
Financial results
- Record gold sold
for the quarter was 132,535 ounces for proceeds of $195.9 million
at an average realized gold price¹ of $1,478
per ounce.
- Revenue was $198.2
million.
- Earnings from mine
operations were $68.1 million.
- Income before income
tax was $59.1 million.
- Net income was
$27.4 million or $0.32 per share on a basic and diluted basis for
the quarter, after $32.8 million of current income and mining tax
accrued but not paid in the quarter.
- Adjusted net
earnings¹, which excludes, amongst other items, certain
foreign exchange gains and losses, totalled $30.8 million, or
$0.36 per share on a basic and diluted basis.
- Cash flow from
operations totalled $120.7 million for the quarter ($82.3
million prior to changes in non-cash working capital
balances).
- Cash balance as at
September 30, 2019 totalled $168.0 million, all unrestricted.
- Total outstanding
debt as at September 30, 2019 of $255.7 million following
principal repayments of $39.5 million during the quarter, including
a $20.0 million prepayment on the Company’s revolving facility. In
October 2019, the remaining $11.2 million outstanding on the
equipment lease due to mature in December 2020, was repaid in
full.
Gold price protection program
initiated
- In August 2019, the Company entered
into a series of zero-cost collar hedges for a total of 96,000
ounces of gold sales hedged evenly over 12 months beginning
September 2019.
- The floor price of the monthly gold
collars has been set at $1,400/oz with the ceiling price of the
collars ranging from $1,666/oz in September 2019 to $1,768/oz in
August 2020.
A summary of Torex’s quarterly operating and
financial results can be found in Table 1 of this press
release.
Conference Call and Webcast
details
The Company will host a conference call today at
9:00 AM (ET) where senior management will discuss the Q3 2019
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
- Toll-Free (United Kingdom):
0808-101-2791
A live audio webcast of the conference call will
be available on the Company’s website at www.torexgold.com. The
webcast will be archived on the Company’s website.
¹ Refer to “Non-IFRS Financial Performance
Measures” in the Company’s September 30, 2019 MD&A for further
information and a detailed reconciliation.
About Torex Gold Resources
Inc.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 (“ELG” or 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 (“ELD”), 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
“Technical Report”). The property remains 75% unexplored.
|
|
|
For further information, please contact: |
|
|
|
|
|
TOREX GOLD RESOURCES INC. |
|
|
Fred Stanford |
|
Dan Rollins |
President and CEO |
|
Vice President, Corporate Development & Investor Relations |
Direct: (647) 260-1502 |
|
Direct: (647) 260-1503 |
Email: fred.stanford@torexgold.com |
|
Email: dan.rollins@torexgold.com |
|
|
|
CAUTIONARY NOTES
Muckahi Mining System The
Technical Report 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 and test 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 and
production activities. Further studies would be required to verify
the viability of Muckahi.
Forward-Looking StatementsThis
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 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,
expectation that the Company performance in the fourth quarter will
bring in a strong finish to 2019, production and cost tracking to
expectations to achieve guidance, targeting average steady state
throughput of 13,000 t/day in the processing plant on go forward
basis, the potential of Media Luna to be brought into production
and run at 8,000 t/day, plans to continue improvement initiatives
to maximize plant throughput with the current SAG mill motor
capacity, plans to move the new mining technology (Muckahi) to
testing the system as an integrated mining method, including
without limitation, the testing of the tramming conveyor,
fragmentation and mucking with a slusher, plans to mine the El
Limón Deep deposit using Muckahi, including without limitation, the
excavation of two steep ramps to access the lower part of the
deposit, plans to develop the support systems required to
commercially leverage Muckahi, and the potential for Muckahi to be
an industry disruptive technology. Generally, forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "expects", "believes", “future” or
variations of such words and phrases or state that certain actions,
events or results “can”, "may", "could", "would", "might", “on
track”, "be achieved", or “to deliver”. 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 involving
reserve estimates and production forecasts, the success of the
Muckahi mining system, 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.
|
Table 1: Operating and financial results
summary |
|
|
|
|
|
Three Months Ended |
|
|
Nine MonthsEnded |
|
|
|
|
|
Sep 30, |
|
|
Jun 30, |
|
|
Mar 31, |
|
|
Dec 31, |
|
|
Sep 30, |
|
|
Sep 30, |
|
In
millions of U.S. dollars, unless otherwise noted |
|
2019 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
2018 |
|
|
2019 |
|
Operating Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore tonnes mined |
|
kt |
|
|
1,416 |
|
|
|
1,810 |
|
|
|
1,153 |
|
|
|
1,234 |
|
|
|
1,246 |
|
|
|
4,379 |
|
Waste tonnes mined |
|
kt |
|
|
11,923 |
|
|
|
11,450 |
|
|
|
12,281 |
|
|
|
10,065 |
|
|
|
9,846 |
|
|
|
35,654 |
|
Total tonnes mined |
|
kt |
|
|
13,339 |
|
|
|
13,260 |
|
|
|
13,434 |
|
|
|
11,299 |
|
|
|
11,092 |
|
|
|
40,033 |
|
Strip ratio 2 |
|
waste:ore |
|
|
9.1 |
|
|
|
6.8 |
|
|
|
11.5 |
|
|
|
8.6 |
|
|
|
8.2 |
|
|
|
8.7 |
|
Average gold grade of ore mined |
|
gpt |
|
|
3.19 |
|
|
|
2.91 |
|
|
|
2.45 |
|
|
|
2.76 |
|
|
|
2.60 |
|
|
|
2.88 |
|
Ore in stockpile 4 |
|
mt |
|
|
1.9 |
|
|
|
1.7 |
|
|
|
0.9 |
|
|
|
0.8 |
|
|
|
0.9 |
|
|
|
1.9 |
|
Processing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total tonnes processed |
|
kt |
|
|
1,139 |
|
|
|
1,062 |
|
|
|
1,076 |
|
|
|
1,197 |
|
|
|
1,170 |
|
|
|
3,277 |
|
Average plant throughput |
|
tpd |
|
|
12,380 |
|
|
|
11,670 |
|
|
|
11,956 |
|
|
|
13,011 |
|
|
|
12,717 |
|
|
|
12,004 |
|
Average gold recovery |
|
% |
|
|
89 |
|
|
|
88 |
|
|
|
88 |
|
|
|
85 |
|
|
|
89 |
|
|
|
88 |
|
Average gold grade of ore processed |
|
gpt |
|
|
4.11 |
|
|
|
3.92 |
|
|
|
2.62 |
|
|
|
2.93 |
|
|
|
3.01 |
|
|
|
3.56 |
|
Production and sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold produced |
|
oz |
|
|
138,145 |
|
|
|
113,645 |
|
|
|
77,870 |
|
|
|
96,316 |
|
|
|
101,481 |
|
|
|
329,660 |
|
Gold sold |
|
oz |
|
|
132,535 |
|
|
|
113,419 |
|
|
|
76,473 |
|
|
|
104,169 |
|
|
|
102,919 |
|
|
|
322,427 |
|
Financial
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
|
|
198.2 |
|
|
|
150.7 |
|
|
|
101.9 |
|
|
|
130.7 |
|
|
|
126.4 |
|
|
|
450.8 |
|
Cost of sales |
|
$ |
|
|
130.1 |
|
|
|
115.7 |
|
|
|
85.1 |
|
|
|
96.5 |
|
|
|
94.7 |
|
|
|
330.9 |
|
Earnings from mine operations |
|
$ |
|
|
68.1 |
|
|
|
35.0 |
|
|
|
16.8 |
|
|
|
34.2 |
|
|
|
31.7 |
|
|
|
119.9 |
|
Net income (loss) |
|
$ |
|
|
27.4 |
|
|
|
10.0 |
|
|
|
(1.3 |
) |
|
|
1.4 |
|
|
|
23.9 |
|
|
|
36.1 |
|
Per share - Basic |
|
$/share |
|
|
0.32 |
|
|
|
0.12 |
|
|
|
(0.02 |
) |
|
|
0.02 |
|
|
|
0.28 |
|
|
|
0.42 |
|
Per share - Diluted |
|
$/share |
|
|
0.32 |
|
|
|
0.12 |
|
|
|
(0.02 |
) |
|
|
0.02 |
|
|
|
0.28 |
|
|
|
0.42 |
|
Adjusted net earnings (loss) 1 |
|
$ |
|
|
30.8 |
|
|
|
8.8 |
|
|
|
(5.7 |
) |
|
|
13.9 |
|
|
|
7.3 |
|
|
|
33.8 |
|
Per share - Basic 1 |
|
$/share |
|
|
0.36 |
|
|
|
0.10 |
|
|
|
(0.07 |
) |
|
|
0.16 |
|
|
|
0.09 |
|
|
|
0.40 |
|
Per share - Diluted 1 |
|
$/share |
|
|
0.36 |
|
|
|
0.10 |
|
|
|
(0.07 |
) |
|
|
0.16 |
|
|
|
0.09 |
|
|
|
0.39 |
|
Cost of sales |
|
$/oz |
|
|
982 |
|
|
|
1,020 |
|
|
|
1,113 |
|
|
|
926 |
|
|
|
920 |
|
|
|
1,026 |
|
Total cash costs 1 |
|
$/oz |
|
|
561 |
|
|
|
606 |
|
|
|
745 |
|
|
|
627 |
|
|
|
590 |
|
|
|
620 |
|
All-in sustaining costs 1 |
|
$/oz |
|
|
675 |
|
|
|
760 |
|
|
|
1,161 |
|
|
|
926 |
|
|
|
967 |
|
|
|
820 |
|
Average realized gold price 1 |
|
$/oz |
|
|
1,478 |
|
|
|
1,314 |
|
|
|
1,302 |
|
|
|
1,235 |
|
|
|
1,214 |
|
|
|
1,379 |
|
Cash from operating activities before changes in non-cash working
capital |
|
$ |
|
|
82.3 |
|
|
|
67.1 |
|
|
|
34.3 |
|
|
|
57.2 |
|
|
|
63.2 |
|
|
|
183.7 |
|
Cash generated from operating activities |
|
$ |
|
|
120.7 |
|
|
|
48.6 |
|
|
|
32.3 |
|
|
|
59.3 |
|
|
|
77.8 |
|
|
|
201.6 |
|
Cash and cash equivalents |
|
$ |
|
|
168.0 |
|
|
|
83.5 |
|
|
|
91.6 |
|
|
|
122.2 |
|
|
|
121.6 |
|
|
|
168.0 |
|
Restricted cash |
|
$ |
|
|
- |
|
|
|
32.3 |
|
|
|
26.9 |
|
|
|
26.8 |
|
|
|
26.6 |
|
|
|
- |
|
Working capital (deficiency) 3 |
|
$ |
|
|
116.7 |
|
|
|
(27.4 |
) |
|
|
18.1 |
|
|
|
41.6 |
|
|
|
56.8 |
|
|
|
116.7 |
|
Total debt |
|
$ |
|
|
255.7 |
|
|
|
298.2 |
|
|
|
318.3 |
|
|
|
333.5 |
|
|
|
346.4 |
|
|
|
255.7 |
|
Total assets |
|
$ |
|
|
1,263.1 |
|
|
|
1,230.2 |
|
|
|
1,251.7 |
|
|
|
1,271.4 |
|
|
|
1,253.4 |
|
|
|
1,263.1 |
|
Total liabilities |
|
$ |
|
|
464.6 |
|
|
|
461.0 |
|
|
|
493.8 |
|
|
|
511.8 |
|
|
|
496.9 |
|
|
|
464.6 |
|
- Adjusted net earnings (loss), total
cash costs, all-in sustaining costs, and average realized gold
price are financial performance measures with no standard meaning
under International Financial Reporting Standards (“IFRS”). Refer
to “Non-IFRS Financial Performance Measures” in the MD&A for
further information and a detailed reconciliation.
- Ore mined from the ELG Underground
(defined in the MD&A) of 102 kt and 302 kt is included in ore
tonnes mined and excluded from the strip ratio in the three and
nine months ended September 30, 2019, respectively. For the three
months ended June 30, 2019, March 31, 2019, December 31, 2018 and
September 30, 2018, ore mined from the ELG Underground
(defined in the MD&A) was 117 kt, 83 kt, 67 kt and 38 kt,
respectively.
- Current liabilities at June 30,
2019 included a scheduled repayment of $75.0 million in June 2020
under the 2017 Revolving Facility (defined in the MD&A). As a
result of the refinancing, the $75.0 million due under the 2017
Revolving Facility is no longer required.
- Included within ore in stockpile is
0.6 mt of long term, low grade inventory, with a carrying value of
nil at September 30, 2019. As at June 30, 2019, March 31, 2019,
December 31, 2018 and September 30, 2018, the long term, low grade
inventory was 0.5 mt, 0.2 mt, 0.1 mt and nil, respectively, with
nil carrying value. As at September 30, 2019 the long term, low
grade inventory has an average grade of 0.85 gpt.
- Sum of the quarters may not add to
the year to date amounts due to rounding.
Torex Gold Resources (TSX:TXG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Torex Gold Resources (TSX:TXG)
Historical Stock Chart
From Apr 2023 to Apr 2024