Jody Kuzenko,
President and CEO,
TOREX GOLD RESOURCES
“TXG’s goal is to become a 1 to 1.5 million oz producer. We are constantly scanning the horizon for appropriate opportunities, but given the health and cash flow generated from our flagship asset, we are well positioned to be patient on M&A activity.”

How have the corporate changes at Torex Gold positioned the company for future growth?

2020 has been a significant year for Torex Gold (TXG), which is fitting given it marks just over a decade since the asset was purchased and the company began. In terms of management, as part of our management succession plan, I transitioned from the COO to President and CEO in June 2020, as Fred Stanford transitioned to the role of Executive Chair. We have also welcomed three new directors to the board: Rick Howes, Robin Bienenstock and Roy Slack, all of whom bring tremendous experience and diverse knowledge to Torex.

On the topic of diversity, I would like to highlight that Torex now has 30% female representation on its board and 40% on its executive team. This was achieved solely through merit and without quotas. Our commitment to diversity extends to cultural diversity and a testament to that is the recent appointment of Faysal Rodriguez to the role of VP for Mexico.

What were the operational highlights from the El Limón Guajes (ELG) mining complex in 2020?

2020 was an exceptional year at ELG, and Q3 results can only be described as extraordinary. It was a record-breaking period across many facets of the business. In addition to having TXG’s second highest quarter of production ever, producing over 130,000 oz Au, we had our best financial quarter to date, generating US$124 million in free cash flow (FCF). The records achieved in Q3 include all-time highs for gold sales, realized margin, EBITDA, operating cash flow and – importantly in today’s market environment – record FCF. Finally, for the first time since commercial production, we achieved a net cash position, hitting US$77 million, a US$130 million-dollar improvement from Q2 and an impressive US$174 improvement year over year. We also paid back US$72 million of debt in Q3, and an additional US$50 million post-quarter end, which deleverages our balance sheet even further.

What is timeline for the development of Media Luna?

The project is on track and, based on the PEA concluded in 2018, promises to provide our operations in Mexico with an additional decade of mine life – notably we have only drilled a third of the magnetic anomaly. The feasibility study is scheduled to be concluded in mid 2021 and first production is scheduled for Q1 2024. The work at Media Luna has been progressing in three key areas: the feasibility study, infill drilling that will convert 7 to 9 million tonnes from the inferred to indicated category, and early works. In terms of financing for the project, the significant cash flow we are generating from ELG will fully fund the project even at a conservative gold price of US$1,400/oz, as well as service any outstanding debt.

What progress has been made with Muckahi technology?

In 2019, our test objectives focused on breaking rock – including testing the monorail system on the level. There are strong indicators that the technology is effective in reducing capex and improving productivity, and we were encouraged by the 2019 and 2020 testing results. This year’s testing has been on rock transportation and on the efficiency of the integrated system as a whole. Looking forward, we are working to establish a plan for the commercialization of Muckahi, as we are convinced in the widespread applicability of the technology across mining operations globally.

What is Torex Gold’s strategy for 2021, and does the company intend to expand through M&A in the coming years?

We are actively seeking growth opportunities that enable value accretive geographic diversification. TXG’s goal is to become a 1 to 1.5 million oz producer. We are constantly scanning the horizon for appropriate opportunities, but given the health and cash flow generated from our flagship asset, we are well-positioned to be patient on M&A activity.

Our primary focus is to deliver reliable and consistent cash flow from ELG, pay down debt and internally fund and bring Media Luna into production by early 2024 – while continuing to leverage potential opportunities to extend the current production profile of ELG through 2023 and into 2024. Additionally, since 75% of the Morello gold property is unexplored, we plan to invest in exploration on the broader land package in 2021. We have a winning combination consisting of a great asset, a great team, industry disruptive technology and momentum, and each of those will support continued value generation and a very bright future for Torex.

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