Jody Kuzenko, President & CEO,

TOREX GOLD RESOURCES

"We will manage the El Limón Guajes mine (ELG) underground, open pits and stockpiles to deliver consistent production and cash flow during the transition period between ELG and Media Luna in 2024."

Torex Gold has a diverse team. What role does culture play in your strategy?

From the beginning, we understood how important a desired workplace culture is to safely achieve our goals, particularly in a jurisdiction as socially complex as Guerrero, Mexico. We were deliberate and systematic about creating a workplace where people want to willingly do their best. It started with a framework that we call Systems Leadership, which is a collection of interconnected models that, when applied correctly, create the leadership behaviours, systems and symbols that create an environment where people want to come to work. The result speaks for itself; we recently reached a milestone of 10 million hours lost time injury-free, which is rare amongst our peers, and we are well on track to hit the high end of our production guidance this year.

What is Torex’s plan for the upcoming year for El Limón Guajes and Media Luna?

For our El Limón Guajes mine (ELG) our plans are centred around optimising and extending the operation. From a production and cash flow perspective, we will manage the ELG underground, open pits and stockpiles to deliver consistent production and cash flow during the transition period between ELG and Media Luna in 2024. We also hope to extend the life of the ELG underground mine through ongoing exploration. Meanwhile, over the next year, Media Luna is to be de-risked and advanced. We expect to deliver the feasibility study in Q1 of 2022, and complete the 2021 infill drill program, which totals 83,000 metres. Since Media Luna is seven kilometres away from our existing infrastructure, we must execute the early works program early to ensure we can access the deposit. Finally, we need to continue to advance our permitting plan.

Can you elaborate on your future acquisition plans?

We want to diversify through value derived from M&A, to grow beyond a single asset to become a million to a million and a half-ounce producer. At this point, we are in evaluation mode and are looking at possible acquisition targets. In the near term, our priority is organic growth through Media Luna. Another key aspect of our strategy is prudent capital allocation to continue to strengthen our already strong balance sheet. In Q1 of 2021, we became debt-free and, at the end of Q2, we had US$345 million in available liquidity. Our balance sheet will allow for the development of Media Luna and enable a new slate of opportunities through value creative M&A.

What is the outlook for Torex’s diversification into copper?

Around 30% of the value of Media Luna sits in copper. When it is in full production, we expect to produce 50 million pounds of copper annually, which will require changes to our flow sheet since on the north side of the river we have to add a copper flotation circuit to produce marketable copper concentrate. The upgraded circuit will also allow us to process ore from Media Luna and ELG. Product diversification is healthy, especially given fluctuations in demand and the prices of metals.

How has the AMLO administration’s approach to the mining industry impacted you?

We have some common interests with the Federal government in Mexico. The President has been clear that he is supportive of environmentally responsible mining, which we support. We also support his goals to eradicate poverty. His moratorium on granting mining concessions has not impacted us since we already had everything we needed. Regarding permitting delays in Mexico, we experienced a two-month delay in securing the permit to allow us to do early works on the south side for Media Luna. Other more permanent delays were experienced by other companies, which does not bode well for permit efficiency. Nonetheless, permit applications differ depending on the quality of the project and permit, as well as environmental impacts, community endorsements and the relationship with the regulators, and we believe we are in good stead on all of those fronts. There are some supply mix, pricing and availability concerns associated with the current administration’s proposed energy reform, which we are currently analyzing.