
Torex Gold Resources Inc. (TSX: TXG) reports the Company’s financial and operational results for the three months and year ended December 31, 2022.
Jody Kuzenko, President & CEO of Torex, stated:
“Operational consistency and disciplined cost control resulted in another strong year across all measures for Torex. Record gold production of 474,035 ounces was driven by record mill throughput and record underground mining rates. Our steadfast focus on controlling costs resulted in an impressive all-in sustaining costs margin of 44% for the year, with cost guidance achieved despite persistent inflationary pressures.
“In addition to the robust financial and operational results, steady progress was made at the Media Luna Project with the project achieving overall completion of 15% at year-end, including engineering, procurement, surface construction and underground development. First production remains on schedule for Q4 2024, with lead times and costs for schedule-critical procurement packages tracking well to the estimates assumed in the 2022 Technical Report. At the Guajes Tunnel, advance rates during December were an outstanding 7.2 meters per day; as such, the tunnel has now crossed under the Balsas River and breakthrough remains on schedule for Q1 2024. Construction and development activities at Media Luna will increase further over the coming quarters, with 2023 expected to be the peak year of spending on the project.
“Our record operational performance in conjunction with robust margins led to adjusted EBITDA of $479 million and free cash flow generation of $130 million. As a result, the Company’s year-end cash position increased to $376 million, resulting in available liquidity of more than $622 million. With a robust balance sheet and strong forecast cash flow from El Limón Guajes over the next two years, we are well positioned to fund the $750 million of remaining project expenditures at Media Luna, continue to invest in value enhancing exploration and drilling, and maintain $100 million of balance sheet liquidity – all of which are fundamental to support our ambitious plans for growth.”
FULL YEAR 2022 HIGHLIGHTS
FOURTH QUARTER 2022 HIGHLIGHTS
Table 1: Operating and Financial Highlights
Three Months Ended | Year Ended | ||||||||||||
Dec 31, 2022 |
Sep 30, 2022 |
Dec 31, 2021 |
Dec 31, 2022 |
Dec 31, 2021 |
|||||||||
In millions of U.S. dollars, unless otherwise noted | |||||||||||||
Operating Results | |||||||||||||
Lost-time injury frequency1 | /million hours | 0.28 | 0.10 | 0.14 | 0.28 | 0.14 | |||||||
Total recordable injury frequency1 | /million hours | 1.58 | 1.69 | 2.32 | 1.58 | 2.32 | |||||||
Gold produced | oz | 116,196 | 122,208 | 109,411 | 474,035 | 468,203 | |||||||
Gold sold | oz | 121,913 | 119,834 | 109,391 | 473,122 | 468,823 | |||||||
Total cash costs2 | $/oz | 711 | 760 | 764 | 730 | 674 | |||||||
Total cash costs margin2 | $/oz | 1,073 | 955 | 0 | 1,034 | 1,079 | 1,120 | ||||||
All-in sustaining costs2 | $/oz | 1,034 | 1,059 | 1,079 | 1,008 | 928 | |||||||
All-in sustaining costs margin2 | $/oz | 750 | 656 | 719 | 801 | 865 | |||||||
Average realized gold price2 | $/oz | 1,784 | 1,715 | 1,798 | 1,809 | 1,794 | |||||||
Financial Results | |||||||||||||
Revenue | $ | 216.5 | 209.3 | 202.0 | 868.5 | 855.8 | |||||||
Cost of sales | $ | 146.6 | 146.2 | 135.1 | 564.6 | 529.3 | |||||||
Earnings from mine operations | $ | 69.9 | 63.1 | 66.9 | 303.9 | 326.5 | |||||||
Impairment loss | $ | – | – | 41.2 | – | 41.2 | |||||||
Net income | $ | 34.6 | 43.9 | (0.5 | ) | 188.8 | 151.7 | ||||||
Per share – Basic | $/share | 0.40 | 0.51 | (0.01 | ) | 2.20 | 1.77 | ||||||
Per share – Diluted | $/share | 0.40 | 0.51 | (0.01 | ) | 2.19 | 1.71 | ||||||
Adjusted net earnings2 | $ | 38.3 | 34.6 | 32.4 | 167.1 | 180.0 | |||||||
Per share – Basic2 | $/share | 0.45 | 0.40 | 0.38 | 1.95 | 2.10 | |||||||
Per share – Diluted2 | $/share | 0.44 | 0.40 | 0.38 | 1.94 | 2.09 | |||||||
EBITDA2 | $ | 96.0 | 127.8 | 62.4 | 482.8 | 461.6 | |||||||
Adjusted EBITDA2 | $ | 122.9 | 107.8 | 104.6 | 478.5 | 490.8 | |||||||
Cost of sales | $/oz | 1,202 | 1,220 | 1,235 | 1,193 | 1,129 | |||||||
Net cash generated from operating activities | $ | 132.1 | 102.4 | 94.6 | 408.1 | 330.0 | |||||||
Net cash generated from operating activities before changes in non-cash operating working capital | $ | 110.8 | 91.3 | 87.4 | 382.3 | 365.2 | |||||||
Free cash flow2 | $ | 41.4 | 33.5 | 37.3 | 129.8 | 97.9 | |||||||
Cash and cash equivalents | $ | 376.0 | 339.2 | 255.7 | 376.0 | 255.7 | |||||||
Net cash2 | $ | 372.1 | 336.1 | 252.4 | 372.1 | 252.4 | |||||||
Table 2: Reconciliation of Total Cash Costs and All-in Sustaining Costs to Cost of Sales
Three Months Ended | Year Ended | ||||||||||||||||
Dec 31, 2022 |
Sep 30, 2022 |
Dec 31, 2021 |
Dec 31, 2022 |
Dec 31, 2021 |
|||||||||||||
In millions of U.S. dollars, unless otherwise noted | |||||||||||||||||
Gold sold | oz | 121,913 | 119,834 | 109,391 | 473,122 | 468,823 | |||||||||||
Total cash costs per oz sold | |||||||||||||||||
Production costs and royalties | $ | 91.0 | 94.9 | 88.8 | 363.3 | 330.5 | |||||||||||
Less: Silver sales | $ | (1.4 | ) | (0.6 | ) | (0.8 | ) | (3.4 | ) | (2.5 | ) | ||||||
Less: Copper sales | $ | (2.9 | ) | (3.2 | ) | (4.5 | ) | (14.6 | ) | (12.1 | ) | ||||||
Total cash costs | $ | 86.7 | 91.1 | 83.5 | 345.3 | 315.8 | |||||||||||
Total cash costs per oz sold | $/oz | 711 | 760 | 764 | 730 | 674 | |||||||||||
All-in sustaining costs per oz sold | |||||||||||||||||
Total cash costs | $ | 86.7 | 91.1 | 83.5 | 345.3 | 315.8 | |||||||||||
General and administrative costs1 | $ | 5.7 | 5.0 | 6.1 | 23.5 | 25.6 | |||||||||||
Reclamation and remediation costs | $ | 1.4 | 1.4 | 1.1 | 5.4 | 4.5 | |||||||||||
Sustaining exploration costs expensed | $ | – | – | 1.1 | – | 4.0 | |||||||||||
Sustaining capital expenditure2 | $ | 32.3 | 29.4 | 26.1 | 102.9 | 85.3 | |||||||||||
Total all-in sustaining costs | $ | 126.1 | 126.9 | 118.0 | 477.1 | 435.3 | |||||||||||
Total all-in sustaining costs per oz sold | $/oz | 1,034 | 1,059 | 1,079 | 1,008 | 928 | |||||||||||
Table 3: Reconciliation of Sustaining and Non-Sustaining Costs to Capital Expenditures
Three Months Ended | Year Ended | ||||||||||||||||
Dec 31, | Sep 30, | Dec 31, | Dec 31, | Dec 31, | |||||||||||||
In millions of U.S. dollars | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Sustaining | $ | 14.8 | 12.8 | 10.9 | 44.8 | 36.2 | |||||||||||
Capitalized Stripping | $ | 17.5 | 16.6 | 15.2 | 58.1 | 49.1 | |||||||||||
Non-sustaining | $ | 6.6 | 4.3 | 5.7 | 21.6 | 36.8 | |||||||||||
Total ELG | $ | 38.9 | 33.7 | 31.8 | 124.5 | 122.1 | |||||||||||
Media Luna Project | $ | 62.6 | 32.5 | 32.3 | 143.2 | 93.6 | |||||||||||
Media Luna Infill Drilling/Other | $ | 4.1 | 5.4 | 2.9 | 21.3 | 22.0 | |||||||||||
Working Capital Changes & Other | $ | (14.8 | ) | (3.0 | ) | (10.1 | ) | (11.8 | ) | (7.3 | ) | ||||||
Capital expenditures1 | $ | 90.8 | 68.6 | 56.9 | 277.2 | 230.4 | |||||||||||
Table 4: Reconciliation of Average Realized Gold Price and Total Cash Costs Margin to Revenue
Three Months Ended | Year Ended | ||||||||||||||||
Dec 31, 2022 |
Sep 30, 2022 |
Dec 31, 2021 |
Dec 31, 2022 |
Dec 31, 2021 |
|||||||||||||
In millions of U.S. dollars, unless otherwise noted | |||||||||||||||||
Gold sold | oz | 121,913 | 119,834 | 109,391 | 473,122 | 468,823 | |||||||||||
Revenue | $ | 216.5 | 209.3 | 202.0 | 868.5 | 855.8 | |||||||||||
Less: Silver sales | $ | (1.4 | ) | (0.6 | ) | (0.8 | ) | (3.4 | ) | (2.5 | ) | ||||||
Less: Copper sales | $ | (2.9 | ) | (3.2 | ) | (4.5 | ) | (14.6 | ) | (12.1 | ) | ||||||
Add (less): Realized gain (loss) on gold contracts | $ | 5.3 | – | – | 5.3 | (0.2 | ) | ||||||||||
Total proceeds | $ | 217.5 | 205.5 | 196.7 | 855.8 | 841.0 | |||||||||||
Total average realized gold price | $/oz | 1,784 | 1,715 | 1,798 | 1,809 | 1,794 | |||||||||||
Less: Total cash costs | $/oz | 711 | 760 | 764 | 730 | 674 | |||||||||||
Total cash costs margin | $/oz | 1,073 | 955 | 1,034 | 1,079 | 1,120 | |||||||||||
Total cash costs margin | % | 60 | 56 | 58 | 60 | 62 | |||||||||||
Table 5: Reconciliation of All-in Sustaining Costs Margin to Revenue
Three Months Ended | Year Ended | ||||||||||||||||
Dec 31, 2022 |
Sep 30, 2022 |
Dec 31, 2021 |
Dec 31, 2022 |
Dec 31, 2021 |
|||||||||||||
In millions of U.S. dollars, unless otherwise noted | |||||||||||||||||
Gold sold | oz | 121,913 | 119,834 | 109,391 | 473,122 | 468,823 | |||||||||||
Revenue | $ | 216.5 | 209.3 | 202.0 | 868.5 | 855.8 | |||||||||||
Less: Silver sales | $ | (1.4 | ) | (0.6 | ) | (0.8 | ) | (3.4 | ) | (2.5 | ) | ||||||
Less: Copper sales | $ | (2.9 | ) | (3.2 | ) | (4.5 | ) | (14.6 | ) | (12.1 | ) | ||||||
Add (less): Realized gain (loss) on gold contracts | $ | 5.3 | – | – | 5.3 | (0.2 | ) | ||||||||||
Less: All-in sustaining costs | $ | (126.1 | ) | (126.9 | ) | (118.0 | ) | (477.1 | ) | (435.3 | ) | ||||||
All-in sustaining costs margin | $ | 91.4 | 78.6 | 78.7 | 378.7 | 405.7 | |||||||||||
Total all-in sustaining costs margin | $/oz | 750 | 656 | 719 | 801 | 865 | |||||||||||
Total all-in sustaining costs margin | % | 42 | 38 | 39 | 44 | 47 | |||||||||||
Table 6: Reconciliation of Adjusted Net Earnings to Net Income (Loss)
Three Months Ended | Year Ended | ||||||||||||||||
Dec 31, 2022 |
Sep 30, 2022 |
Dec 31, 2021 |
Dec 31, 2022 |
Dec 31, 2021 |
|||||||||||||
In millions of U.S. dollars, unless otherwise noted | |||||||||||||||||
Basic weighted average shares outstanding | shares | 85,843,808 | 85,843,808 | 85,749,183 | 85,831,727 | 85,714,843 | |||||||||||
Diluted weighted average shares outstanding | shares | 86,166,019 | 86,039,606 | 86,161,396 | 86,079,481 | 86,140,607 | |||||||||||
Net income (loss) | $ | 34.6 | 43.9 | (0.5 | ) | 188.8 | 151.7 | ||||||||||
Adjustments: | |||||||||||||||||
Unrealized foreign exchange loss (gain) | $ | (0.9 | ) | 0.3 | 0.9 | (1.2 | ) | (0.7 | ) | ||||||||
Change in unrealized gains and losses on derivative contracts | $ | 25.3 | (20.0 | ) | – | (3.5 | ) | (5.4 | ) | ||||||||
Impairment loss | $ | – | – | 41.2 | – | 41.2 | |||||||||||
Remeasurement of share-based payments | $ | 2.5 | (0.3 | ) | 0.1 | 0.4 | (5.9 | ) | |||||||||
Tax effect of above adjustments | $ | (8.1 | ) | 6.0 | (12.7 | ) | 1.3 | (8.8 | ) | ||||||||
Tax effect of currency translation on tax base | $ | (15.1 | ) | 4.7 | 3.4 | (18.7 | ) | 7.9 | |||||||||
Adjusted net earnings | $ | 38.3 | 34.6 | 32.4 | 167.1 | 180.0 | |||||||||||
Per share – Basic | $/share | 0.45 | 0.40 | 0.38 | 1.95 | 2.10 | |||||||||||
Per share – Diluted | $/share | 0.44 | 0.40 | 0.38 | 1.94 | 2.09 | |||||||||||
Table 7: Reconciliation of EBITDA and Adjusted EBITDA to Net Income (Loss)
Three Months Ended | Year Ended | ||||||||||||||||
Dec 31, | Sep 30, | Dec 31, | Dec 31, | Dec 31, | |||||||||||||
In millions of U.S. dollars | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Net income (loss) | $ | 34.6 | 43.9 | (0.5 | ) | 188.8 | 151.7 | ||||||||||
Finance (income) costs, net | $ | (4.5 | ) | (0.8 | ) | 0.7 | (5.2 | ) | 0.8 | ||||||||
Depreciation and amortization1 | $ | 55.6 | 51.4 | 46.7 | 201.5 | 199.7 | |||||||||||
Current income tax expense | $ | 50.7 | 32.3 | 20.8 | 144.6 | 123.4 | |||||||||||
Deferred income tax (recovery) expense | $ | (40.4 | ) | 1.0 | (5.3 | ) | (46.9 | ) | (14.0 | ) | |||||||
EBITDA | $ | 96.0 | 127.8 | 62.4 | 482.8 | 461.6 | |||||||||||
Adjustments: | |||||||||||||||||
Impairment loss | $ | – | – | 41.2 | – | 41.2 | |||||||||||
Change in unrealized gains and losses on derivative contracts | $ | 25.3 | (20.0 | ) | – | (3.5 | ) | (5.4 | ) | ||||||||
Unrealized foreign exchange (gain) loss | $ | (0.9 | ) | 0.3 | 0.9 | (1.2 | ) | (0.7 | ) | ||||||||
Remeasurement of share-based payments | $ | 2.5 | (0.3 | ) | 0.1 | 0.4 | (5.9 | ) | |||||||||
Adjusted EBITDA | $ | 122.9 | 107.8 | 104.6 | 478.5 | 490.8 | |||||||||||
Table 8: Free Cash Flow
Three Months Ended | Year Ended | ||||||||||||||||
Dec 31, | Sep 30, | Dec 31, | Dec 31, | Dec 31, | |||||||||||||
In millions of U.S. dollars | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Net cash generated from operating activities | $ | 132.1 | 102.4 | 94.6 | 408.1 | 330.0 | |||||||||||
Less: | |||||||||||||||||
Additions to property, plant and equipment1 | $ | (90.8 | ) | (68.6 | ) | (56.9 | ) | (277.2 | ) | (230.4 | ) | ||||||
Interest paid | $ | 0.1 | (0.3 | ) | (0.4 | ) | (1.1 | ) | (1.7 | ) | |||||||
Free cash flow | $ | 41.4 | 33.5 | 37.3 | 129.8 | 97.9 | |||||||||||
Table 9: Net Cash
Dec 31, | Sep 30, | Dec 31, | |||||||||
In millions of U.S. dollars | 2022 | 2022 | 2021 | ||||||||
Cash and cash equivalents | $ | 376.0 | 339.2 | 255.7 | |||||||
Less: Lease obligations | $ | (3.9 | ) | (3.1 | ) | (3.3 | ) | ||||
Net cash | $ | 372.1 | 336.1 | 252.4 | |||||||
Table 10: Unit Cost Measures
Three Months Ended | Year Ended | |||||||||||||||||||
Dec 31, 2022 |
Sep 30, 2022 |
Dec 31, 2021 |
Dec 31, 2022 |
Dec 31, 2021 |
||||||||||||||||
In millions of U.S. dollars, unless otherwise noted | ||||||||||||||||||||
Gold sold (oz) | 121,913 | 119,834 | 109,391 | 473,122 | 468,823 | |||||||||||||||
Tonnes mined – open pit (kt) | 9,505 | 9,980 | 9,836 | 38,451 | 39,684 | |||||||||||||||
Tonnes mined – underground (kt) | 155 | 143 | 95 | 556 | 460 | |||||||||||||||
Tonnes processed (kt) | 1,141 | 1,199 | 1,160 | 4,599 | 4,512 | |||||||||||||||
Total cash costs: | ||||||||||||||||||||
Total cash costs ($) | 86.7 | 91.1 | 83.5 | 345.3 | 315.8 | |||||||||||||||
Total cash costs per oz sold ($) | 711 | 760 | 764 | 730 | 674 | |||||||||||||||
Breakdown of production costs | $ | $/t | $ | $/t | $ | $/t | $ | $/t | $ | $/t | ||||||||||
Mining – open pit | 28.6 | 3.01 | 28.6 | 2.87 | 26.3 | 2.67 | 110.4 | 2.87 | 103.2 | 2.60 | ||||||||||
Mining – underground | 10.9 | 70.19 | 13.2 | 91.89 | 9.1 | 95.51 | 45.9 | 82.53 | 38.7 | 84.01 | ||||||||||
Processing | 38.2 | 33.43 | 38.2 | 31.82 | 40.4 | 34.80 | 151.6 | 32.97 | 158.2 | 35.05 | ||||||||||
Site support | 13.2 | 11.54 | 12.8 | 10.64 | 12.7 | 10.98 | 49.3 | 10.72 | 46.5 | 10.31 | ||||||||||
Mexican profit sharing (PTU) | 3.9 | 3.43 | 5.9 | 4.96 | 4.6 | 3.93 | 23.7 | 5.15 | 16.3 | 3.61 | ||||||||||
Capitalized stripping | (17.5 | ) | (16.6 | ) | (15.2 | ) | (58.1 | ) | (49.1 | ) | ||||||||||
Inventory movement | 6.2 | 5.2 | 3.8 | 9.5 | (11.4 | ) | ||||||||||||||
Other | 0.8 | 1.4 | 1.1 | 4.8 | 2.5 | |||||||||||||||
Production costs | 84.3 | 88.7 | 82.8 | 337.1 | 304.9 | |||||||||||||||
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 Property, an area of 29,000 hectares in the highly prospective Guerrero Gold Belt located 180 kilometres southwest of Mexico City. The Company’s principal asset is the Morelos Complex, which includes the El Limón Guajes (“ELG”) Mining Complex, the Media Luna Project, a processing plant, and related infrastructure. Commercial production from the Morelos Complex commenced on April 1, 2016 and an updated Technical Report for the Morelos Complex was released in March 2022. Torex’s key strategic objectives are to optimize and extend production from the ELG Mine Complex, de-risk and advance Media Luna to commercial production, build on ESG excellence, and to grow through ongoing exploration across the entire Morelos Property.
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