Slower quarter for Torex, with lower grades
low-grade quarters are now behind, said chief executive, expecting strong end of the year
Torex Gold Resources reported a revenue of US$160.1 million in the September quarter, down from $209.3 million in the same period last year. Net income was $10.5 million, or $0.12 per share, compared to $43.9 million, or 0.51 per share, in 2022.
Production and sales from the Mexico-focused gold miner were down year-on-year, producing 85,360oz of gold in the September quarter (down 30%) and selling 81,752oz of gold (down 32%).
The slower quarter was driven by the processing of lower-grade and stockpiled ore at the El Limón open pit, partially offset by a record mining rate at El Limón Guajes (ELG) underground.
However, the average realised gold price was up year-on-year, at $1,944/oz from $1,715/oz.
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"We expect to close out 2023 on a solid note with the fourth quarter forecast to be the strongest quarter of production, driven by higher open pit grades now that the period of elevated waste stripping is behind us," chief executive Jody Kuzenko said.
The Toronto-headquartered miner remains on track to meet annual production guidance of 440,000-470,000oz. Full-year cost guidance has been revised higher among a strong Mexican peso and higher-than-budgeted mining volumes and plant throughput with lower processed grades, according to Kuzenko.
"As a result, full-year total cash costs guidance has been revised to $840-870/oz gold sold and full-year all-in sustaining costs revised to $1,160-1,200/oz gold sold," he said.
Media Luna progress
In the September quarter, expenditures for the Media Luna project totalled $97.7 million, with a remaining project spend of $507.5 million.
As of the end of September, progress was about halfway with advances in detailed engineering, procurement activities, underground development, and surface construction.
Torex expects commercial production to start at Media Luna at the beginning of 2025, with an estimated production of 280,000oz of gold and 34.8Mlb of copper annually over an 11.75-year mine life.
"While the overall project timeline remains intact, some expenditure has been pushed into 2024 and, as a result, we have lowered our full-year capital expenditure guidance for Media Luna to $360 to $390 million," Jody Kuzenko said. "With $501 million of liquidity (including $209 million in cash) and 15 months of ongoing free cash flow expected from ELG during the remaining project period, we are well positioned to fund the remaining $508 million of expenditures on Media Luna while maintaining at least $100 million on the balance sheet."
According to Torex, all key approvals for the project are now in place after receiving approval from Mexico on an amendment to its environmental permit. The miner switched to in-pit tailings deposition from filtered and dry-stacked tailings.
"With a couple of tough, low-grade quarters now behind us, we continue to deliver the level of operational excellence our shareholders have come to expect from us," Kuzenko added.
"As we continue to make progress on the Media Luna Project, we look forward to a solid end of the year by delivering a strong fourth quarter and achieving annual production guidance for the fifth straight year."
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