Assets

Media Luna (100% Owned)

We are looking to the future of our mining operations in Guerrero through our Media Luna Project, located seven kilometres from ELG. Media Luna is an underground deposit that primarily contains gold, copper and silver mineralization, located on the south side of the Balsas River. The skarn hosted deposit was discovered in March 2012.

Our Board of Directors approved the Media Luna Project in March 2022 and construction is well underway, with anticipated commercial production in Q1 2025. With this investment, we will extend the life of mine through at least 2033 and lay a firm foundation for the future growth plans of Torex.

Results of Morelos Complex Technical Report (March 2022)

The results of the feasibility study for the Media Luna Project were included in an updated Technical Report for our Morelos Complex, which was released in March 2022, and includes an integrated life of mine plan and economics for both the ELG Mine Complex and Media Luna.

Highlights of the Technical Report

Key Economics – Base case metal prices

  • Morelos Complex: Cumulative cash flow of $1,418M and after-tax NPV (5% discount rate) of $1,040M
  • Media Luna Project: After-tax NPV (5%) of $458M and after-tax IRR of 16.1%
  • Long-term metal prices: $1,600/oz Au ($1,700/oz in 2022), $21/oz Ag, and $3.50/lb Cu

Key Economics – Spot case metal prices1

  • Morelos Complex: Cumulative cash flow of $2,322M and after-tax NPV (5%) of $1,751M
  • Media Luna Project: After-tax NPV (5%) of $949M and after-tax IRR of 24.9%
  • Spot metal prices: $1,950/oz Au, $25.50/oz Ag, and $4.70/lb Cu as of March 25, 2022

Morelos Complex Summary – Life of Mine

  • Life of mine of 11.75 years commencing April 1, 2022 and ending Q4 2033
  • Annualized gold equivalent (“AuEq”) sold of 374 koz2 including 280 koz of Au
    • Increased exposure to Cu and Ag with annual payable output of 34.8 Mlb Cu and 1,327 koz Ag
  • Total cash cost3 of $809/oz AuEq sold and mine-site all-in sustaining cost3 of $954/oz AuEq sold
  • Annualized revenue of $605M and mine-site EBITDA3 (excludes corporate items) of $298M

Morelos Complex Summary – Process plant operating at full capacity (through 2027)

  • Annualized gold equivalent sold of 450 koz through 2027 when the process plant is expected to operate at full capacity
  • Total cash cost of $779/oz gold equivalent sold and mine-site all-in sustaining cost of $929/oz gold equivant sold
  • Annualized revenue of $733M and mine-site EBITDA of $378M

Capital Expenditures

  • $848M to develop and bring the Media Luna Project into commercial production
    • Includes $85M of underground development during pre-commercial period (Q4 2023 to Q4 2024)
  • Total sustaining capital expenditures3 of $545M over life of mine

Total Mineral Reserves of 5,123 koz AuEq at an average grade of 3.90 gpt AuEq4

  • Economics of the Morelos Complex were based on year-end 2021 Mineral Reserves which included an initial Mineral Reserve for Media Luna of 3,360 koz AuEq based on 23.0 Mt at 4.54 gpt AuEq

Initiatives underway to realize available upside and build-on on solid base case production/cash flow

  • Exploration/Drilling: Significant potential to expand Mineral Reserves in the ELG Underground, within the broader Media Luna area, and across the entire land package, which is 75% unexplored
  • Development of EPO deposit: Potential to be a nearby source of incremental feed over and above the levels anticipated from the Media Luna Project
  • ELG Underground: Potential to increase throughput with the investment in Portal #3 and utilizing bulk mining in specific zones
  • See Notes

    1 See also Table 10 for After-Tax Sensitivities to Key Factors for the Morelos Complex and Media Luna Project.
    2 Gold equivalent (AuEq) sold includes Au and AuEq values for Ag and Cu sold assuming long-term metal prices of $1,600/oz Au ($1,700/oz in 2022), $21/oz Ag, and $3.50/lb Cu. A summary of life of mine payable production values for Au, Ag and Cu can be found in Table 1 including tonnes processed and average processed grades. Expected recovery and payable factors for Au, Ag and Cu can be found in Table 2.
    3 These measures, as well as TCC margin, AISC margin, and sustaining and non-sustaining capital expenditures, are forward looking Non-GAAP Financial Performance Measures or Non-GAAP ratios (collectively, “Non-GAAP Measures”). Please see Table 13 for the equivalent historical non-GAAP measure. For the year ended December 31, 2022, the following historic Non-GAAP Measures were reported in the Company’s management’s discussion and analysis (“MD&A”) for the year ended December 31, 2022, dated February 22, 2023, which is available on the Company’s website (www.torexgold.com) and under the Company’s SEDAR profile (www.sedar.com): EBITDA: $482.8M; TCC: $730/oz; TCC margin: $1,079/oz; AISC: $1,008/oz; AISC margin: $801/oz; sustaining capital costs: $102.9M; and non-sustaining costs: $186.1M. Please note that the AISC and AISC margin do not include Torex corporate G&A and potential sustaining exploration costs, and mine-site EBITDA does not include Torex corporate G&A. Please also see the Cautionary Notes on Non-GAAP Measures below.
    4 Gold equivalent (AuEq) Mineral Reserves account for underlying metal prices and metallurgical recoveries. Breakdown of Mineral Reserves by metal is outlined in Table 11 and a breakdown of Mineral Resources by metal is outlined in Table 12.

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Morelos Property NI 43-101 Technical Report – ELG Mine Complex Life of Mine Plan and Media Luna Feasibility Study

Exploration and Drilling

Growing reserves and resources is one of Torex’s Strategic Pillars. As such, we are evaluating opportunities to extend the mine life at ELG, expand and upgrade resources within the Media Luna Cluster, and test highly prospective targets across the broader Morelos Property. The Company invested $36.5 million in drilling and exploration in 2022 and $38.3 million in 2021.

Drilling in 2022 was successful in replacing more than 60% of reserves mined in 2022 as well as expanding gold equivalent Measured & Indicated resources by 8% and gold equivalent Inferred resources by 2%.

In 2022, drilling at Media Luna resulted in an inaugural Measured Resource of approximately 473,000 gold equivalent ("AuEq") ounces at an average grade of 8.06 gpt AuEq. Additionally, drilling targeting spatial gaps along the existing northern and southern boundaries of the deposit was successful in delivering the required drill density to bring incremental mineralization into the Inferred Resource category. At EPO, infill drilling delivered an inaugural Indicated Resource of approximately 671,000 gold equivalent ounces at an average grade of 5.16 gpt AuEq. Step-out drilling to the south and west of EPO was also successful in extending the mineralized footprint of the deposit.

Details of the year-end 2022 Mineral Reserve and Resource estimates including gold, silver, copper and gold equivalent grades and contained metal can be found in Reserves and Resources.

For 2023, Torex has budgeted $39 million in drilling and exploration, of which $20 million is budgeted to drilling within the Media Luna Cluster, $6 million for infill and step-out drilling within the ELG Underground, $6 million towards near-mine exploration, $2 million for regional exploration, and $5 million towards definition and grade control drilling.

Media Luna accounts for a substantial portion of our 2023 drilling budget of $39 million. Approximately 55,000 metres of drilling is planned for the Media Luna Cluster where we are focused on expanding the overall mineralized footprint of the deposit and launching an inaugural drill program at Media Luna West.

We are also optimistic about the potential to further increase the size of EPO as the deposit remains open to the north, south and west. 2022 drill results and the infill program planned for the first half of 2023 will form the basis of an internal prefeasibility study on EPO. We expect to complete the study in the first half of 2024 with a view to advancing to the mine design stage. EPO has the potential to play a key role in supporting our efforts to fill the mill and maintain consistent gold equivalent production beyond 2027.

At the ELG Underground, drilling will be focused on expanding known mineralized zones, upgrading mineral resources in order to bring them into reserves, and testing several high-potential targets below the open pits.

Press Release Press Release
Torex Gold Reports Results From Drilling at Media Luna (March 8, 2023)
Press Release Press Release
Torex Reports Encouraging Results From Drilling at EPO (March 23, 2023)
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