Torex Gold Resources (TORXF) 3 Nov 212021 Q3 Earnings call transcript

Thank you for standing by. This is the conference operator. Welcome to the Torex Gold Resources Inc.

Third Quarter 2021 Results Conference Call.

As a reminder, all participants are in a listen-only mode and the conference is being recorded. will opportunity there ask presentation, the be to an questions. After turn I Corporate over Relations. would Instructions] the Development like Investor President, [Operator Vice to conference Rollins, to and Dan Mr. ahead, go Please Rollins.

On operator, behalf to good third conference XXXX quarter you, Thank morning, our of Torex team, and the welcome call. everyone.

that a like at accessed forward-looking statements we Investors through team certain that inform section begin, to www.torexgold.com. conference today today's of management to wish accompanying Before website I information. the also would call note I our made the be listeners presentation can to be by contain may

As as such, to well cautionary QX detailed presentation, included page those notes the in on please refer as XXXX today's two of MD&A. the

CEO; as the CFO. Snowden, as well On we President today, call Andrew have Jody and Kuzenko,

our presentation, US and website. be are SEDAR. over amounts call be release and morning's MD&A this the webcast are the and posted available now is stated. conference our the mentioned in turn that website and will and This please I'll accompanying Jody statements Jody. will on note for This call Also, call been unless replay all Andrew period. question-and-answer financial being otherwise to dollars the press to filed available for have on Following

Thank Welcome all Results you, to to Dan, line. call. and on the the good morning QX Torex Gold

continues. follows. excellence to XXXX, came QX Safety planned out are home closing we're solidly into as stretch the While in as highlights

of similar are and production Luna track produced guidance, in ounces Solid level deliver operational with performance in production a all advancing. And in importantly, anticipated QX We're quarter the cost of and aspects QX. in to financials. Media resulted full year solid on XXX,XXX

working a a for quarter, for financials. the Then the progress some usual. after to. plan of that, are the to detail I'll brief we terms same as the highlights I'll you provide it's the and step then to I'll And Luna. Media third the of business key strategic through the on operational over reminder provide update agenda In specific on Andrew call, Snowden

where three-year that we're been forward-looking advancing look Luna We're million to we on position production track detailed $XXX cash time that of with four to slide latest but scope the One, cash group us with Media by Luna on exactly statements, even the underground we quarters. mentioned been have announced through outlook, our Dan with our the to that headed performance to strategic looking on slide results we as quarter, XXXX. we've five Sustainalytics now. released feasibility increased which least, XXXX in results Media and seen in the in last our to and that and to ESG of number improvements description for of optimize demonstrates and from X. here QX development. closing we no to advance one has safe over press being first Four, our which program progress actively release now we're weeks. further the to extent debt, on to This language quarter over the ELG ratings to study, disclosure quarter. the As round some new. have XXXX additional They're and the remains ELG continue And recently continue design the the decisions a of we Two, expect we're want fronts on pillars this Overall, be last, working And of the made. $XXX Three, in Phase program of drilling game from and Media recognize we're production first on our harbor making we're reliable not of the positioning work. we hand and relying delivery infill ever on coming from years over outlined notable mid a shouldn't Luna up various plan. million for

slide five. Turning to

chart position and you this net planned. over slide bar that continued XX there sets months preceding cash Now, out the the growth on could this as see

to costs quarter shortly. Cyanide operational as payments year output As very Quarter a to drivers quarter metrics year high, Along key back build, first per of in costs three produced in year-to-date. be production are are ongoing three slide in slightly annual and I total solid key are ASIC. I'll QX is Overall, guidance. half four. and and anticipated, expected operational mining tax, in to rockfall the you ounces of you owing expect and free range cash per $XXX seasonally We're There post quarter are middle some terms the profit would kilogram half. of the financial the be conclude cash that sitting all highest be see the process QX. of performance On guidance respectively. expect we're stronger the to this resumed waste in grades than five XXX,XXX flow the side range can guided ounce On on to of the full expect has of speed Unit right-hand the the range tonne in QX that and led remains how against performance. here we're the cash can and considered, X, for total of financial QX at quarter, to the we in the With cash we production, XXX,XXX royalty this: with ounces of timing the address incident of some end. ASIC consumption QX. specifics say and to sharing solid at costs one, in it the ongoing tracking upper-end lower to tracking has on million similar $XX $XXX slide during

similar we it to ELG, January guidance of XXXX for release Just here, plan in note to years. prior in terms to

ELG total and ASIC production will specific costs You guidance. non-sustaining then see cash

of the of million have significant items out become off However, surpassed That We've XXXX. here. hold for released lost-time lost-time technical during available. a Media in we'll the injury free. and with concern of the Slide hours the a Luna fourth X.XX had CapEx is of the ESG, guidance over no continued until contains now usual be X picture putting high-frequency quarter injuries will full note QX the a on end update report the few when COVID cases. quarter is wave bringing at to non-sustaining

our vaccination are We continuing work amongst rates employees, contractors and our to officials to members. bolster our health with community

has XX% with dose at XX% more least one two workforce doses. received having end, As that quarter vaccination than of received our

the XX seen principles, during rating our from quarter, for and improved Sustainalytics, assurance. complete score now responsible more public to Importantly, the Gold than and which website we party one year Council our has and progress overall milestone World on mining a third it's by points posted report compliance requirement is received the updated an includes to our this

step here through qualifiers production to on the our and you I numbers. talk outlined want for X. additional before production and slide through Before operational inaugural is I Two about ELG, outlook on go details, I three-year some commentary

does Luna XXXX. First, not it's important Media any in include ounce production that outlook from note the gold equivalent to

the technical report once numbers guidance next to our expect So we of increase this year. following we release update XXXX the

I base a describe Second, would as the represents look what new case. the at outlook

already The site optimize released will report mine at updated year. next begun plan to team with has technical mine plans Our be the for the ELG. early

from standpoint Pit. El to production very to XXXX. And on Now expect XXXX the we similar WA from the Limon in pit of the then a as to we open XXXX XXXX goes as terms production in end look this outlook case, is has expected itself, lower modestly overall Production deplete midyear. dip

goal out as transition into squeeze a grade already production looking can with ounce out described best in economic and the line areas production plan one of expect pit. XX to XXXX Slide flow solid to be bring to the and we the of and moved performance, said, ELG year expectations be as we with both exception line. pit through into I XXXX. team, open the is here Our to is continue open available and additional ways consistent in underground at was every cash detail ounces of contributor mine beyond. and as which on XXX,XXX incremental lower sets our Production some completely The

just XXXX planned of the level similar average processed a Underground at rates quarter at X.X a per grams throughput tonne. came XXX,XX tonnes under in mining over tonnes expect in came exception as QX. per to at The in with day production ton. just pit. day in X.X was one the grams planned per grade We mining Plant in grade an of per of

in the near pit was rocks quarter the for While was reasons. July, outer ore pit. a caused mine was through in two of slide This walls of during rain. the blast after in and the to RopeCon days we repair Limon El down down some waste line, very few took heavy a for mine the lower-than-anticipated perimeter mid-August

of were unit Processing costs we lower over with and XXXX have the blasting on pits. relative immediately year to now levels and perimeter as XX are walls. in there's dramatically placed as sets perimeter improve some been levels I greater pit to higher year-to-date offer QX down mining issues commentary we're into mining have the in a been all meshing cyanide this sulfide are we and deeper Both and stopped So these redefined mining brief RopeCon additional we and as the ventures rates upper of selectively the since for repair. follows: pit rates moving unit waste QX. encounter and and would mineralization as RopeCon being the consumption up in costs expect rehandling costs pit maintenance the elevated given out costs mining Slide addressed in XXXX outer On

levels of to unit higher With reduce over comparator chart. to investigating the we sulfides pit, the quarter. in the last is options persist to and the remaining you both hear expect next open more line can PTU consumption life of level costs and the this are about expected

changes over I'll reflects PTU comments this Andrew we're to see have the for and on the year. can there enacted we You some financials pressures turn experiencing. lower the call now on that XXXX. earlier detailed inflationary in This commentary legislative

everyone. Jody and good you, morning, Thank

ahead ahead on the results Another has here sheet XX, of our further slide on to the plan Luna deliver strengthen balance of Media us strong build which us. to summarized financial allowed

quadrant, outlined of solid XX% continue in XX% margin As left top and to quarter. TCC margin a in the margins of from benefit we ASIC the with

waste increased QX ahead, XXXX. trending I'll TCC higher Looking balance already our and Limon higher levels in expect to On on QX on the some with of made for what make profile grades, into has QX XXXX. be on cyanide head lower consumption Jody given some mining El and will both comments pushback. and cost and ASIC comments now expected

we electricity with for of to particularly that into we XXXX, cost are early look inflationary next are As flow pressure and and on into year cyanide, expecting X% signs X% base pressures costs. diesel between our

We we'll out in are budgets for year have next currently and pulling together January to that you guidance usual. cost as our

EBITDA the in quarter quadrant reflecting over lower decrease modestly right on with the top to Moving the third lower right. slight quarters mainly a level remained and of gold seen prices. strong prior the produced gold

Media at Looking over activity level to left expenditure. risen and This turning the few spend Luna quarters now last as the bottom capital the has and of increases.

on in in execute XXXX. increased the we spending and and in in increase levels total also XXXX to Limon as ELG, production in on increase maintain early XXXX pushback capital waste before will declining materially expenditures Media XXXX at first further XXXX expect El again and as removal peak current we Luna spending with We

tax profit positive, cash will decline flow the to begin in by impacted cash be flow our in spending pressure sharing of Media free payments cash currently first as year. the increases. will While half on in and seasonality flows we free cash with cash flow do Luna of the quarterly remains Free XXXX flows also expect royalty

with cash million cash Moving now during in our This $XX consistent The of the slide partly is cash the million Luna. increase capital to to XX. $XX Media expenditure generated behind quarter. the by with by increase related shows offset operations in key cash drivers waterfall here primarily expectations chart

the consistent a with that's We of that's to assume $X would million month QX be at And in tax year. where second well. of I also a half commentary in and expectation saw $XX this installments million approximately forecast as reasonable for my QX quarter the this

capital movement change working QX. to and AP Finally, a we QX due negative in course saw I $XX of settlements. primarily will somewhat million timing through expect of reverse the that's of this

improve excess cash million. $XXX ELG, quarter sheet coupled be in hand The liquidity now tax strong as free of on the continues produced XX. deliver you the positive flow strong with cash balance to slide advanced forecast the to flow we see Turning from the The here quarter position total now with million of in strength in to closed and can Luna. the $XXX balance of slide cash sheet. And financial an able we're to a a means Media on

return for multi-decade and finally value forward. we and/or capital are sheet XX. capital the in a on free should makes And Given mine, Media see sense up some capital what And add to to us on QX to some expand be our the to exploration pursue of to optimal efforts the year, become to going it feasibility comments look once if have just cash M&A next upcoming shareholders. potential level structure of enhancing we a the line will clear modest opportunities finalized some we sight balance of study a to Luna commitments leverage our as for analyzing slide

prior in discussed and out through noted of as previous our seasonality are As this slides year, the flows earnings expected and also cash playing on in calls each XXXX. as

be these XXXX. seen expect seasonalities similar We to in

Media will and I'll updates just timing also influenced spending turn Jody provide over of call to profit royalty be should half free the the in XXXX. back by flow to payments the next and highest be in cash heavily tax on sharing quantum on two Luna. some to on impact So The year lowest now expect additional half and Media Luna. first overall

year, advances. for the Andrew. The report It yes, be release and project will was technical this detailed the Luna Luna study a of on in will be update routine early us. October, And feasibility site sharper one will next include one. we first full for QX what updates the In next released coming project. a Media of which updated project will be Thanks is sharper into as the focus a Media big on of and the the

us. meters activities works. team with And in as execution. progress Tunnel As on schedule, the made addition as slower are portals complex the derisking planned, tracking a the out advanced important set schedule we trialing the on engineering to access on of improvement and equipment, release, to overseen permitting South. achieved Stefanuto, approach. we're schedule. is date total Dave XXX a on many of critically, the Vale XX development Media methods key from note of having months spent press study and It's in of and accessing prior. North the to October feasibility the we've who team study projects has improving. well, rubber over some Tunnel two Guajes In has underway to transitioning to versus project us detail important been deposit from hybrid team from Guajes XXX Dave September both October, meters providing and total various than advance marking September that and development Inco to joined the handover additional the through Luna early been both Channel monorail using with in a on working brought have after material Bay. here the for Sudbury than we've with months the been rates Slide development years performance the is lead out more Voisey's XX equipment the tired At sets development

North As South. October, at were XXX of at coming end the meter we from to

split starts deposit. development South and portions of other on the the via via tunnel to there one Once of develop from team the the to South announced the of the South it up portions teams of Concurrently, middle we deposit, will the teams the will drive commence team the also at left. and development while lower portal portal top of can section see you upper North, continuing have with started side the As body in the the QX, to upper, from South lower. tunneling in river bottom ore

believe On multi-quarter first September early three blast production we will ore ramp-up from of released Media rates. Overall, state by slide early this approach of as to October. Of expect. essentially a at Media followed a us to update, Luna this period steady at we one from as portal mining in allow the achieve was lower initial end planned. might Luna in three the side, South South directions is last took summary the scope And now progress the PEA than we the more note, evolved years ago done has and XXXX,

deposit. on access spoken those and the of tunneling changes to of I've already slide. this the significant is highlighted about Some more

high terms of we centers, the size grinding deposit it understanding detail of day it with we the itself, X,XXX into and as tonnes the float that, a XXX circuits. circuit to going body rate cleaned our to to the around mining This In two and high we water from the as downstream mineralization to tighter such Media means have mine need This mainly of tanks. set opposed of the is per copper sulfides, wrapped to PEA. day, conventional in is at the of XX,XXX it in And iron ore average in tonnes drill need plan target pyrite. float to mine PEA, a around settled spacing add deepened that the we per but the put plant day. Luna decided also We've means, was the X,XXX tonnes out XX-meter

water per to plant. include So the a has been scope meter modified treatment cubic XXX hour

period the you two to on PEA, of you all progress with and a significant XXXX can There's a was future track team production no Morelos and doubt build, investment, a of three-year details with this the to this and less it in of future that capital than quarters. on outlook with coming the record importantly, an the plan. to our excellent we that, the study close in in feasibility solid increased executing be sharing to at that forward say look now but to expect of shown on robust All hand a which over with brings

about are call now I'll is way Teresa. the the back together. to that We future over turn coming confident

Thank you.

question-and-answer the National DeMarco ahead. go begin The first Instructions] now from question will with We Don [Operator Bank Please Financial. comes session.

and everybody, morning, Good Hi. on quarter. a congratulations

outlined the is study, or and FS FS, looking and since various Just you for changes more year-by-year Should feasibility the the details Jody, production the in – scope any we conveying CapEx you production the changes purpose scope on? ahead to outlined primarily the and so expect of – mine PEA. plan

decisions you You finalizing backfill few and system will said, changes through the additional scope a can system, and tunnels. landed as route as we're focus on. we've primary around And around, expect be to Don, OpEx CapEx then the the conveyance ultimately the what

say Andrew Okay. some there We also inflationary that. cyanide look the heard cost the those pressures And electricity diesel. and into forward the – in on FS? that, baked pressures to Will are I for inflationary be expectations

going pressures to inflationary we're we'll be expect those They in on will. use as we of position good see quotes. will We're December feasibility a here a costs, actuals And then study. good what over and portion for market it. seeing because some costs the in baked into We're able quotes to for to We'll January. They will. out now get back those be those

Okay.

much. all so for Thanks That's great. That's Okay. me.

Thanks Don. for the question,

ahead. Scotiabank. Instructions] [Operator go Please from comes Turnbull with The Trevor question next

if reason in that the grams. like you you. I can I'm it I that the I when the kind that quarter. the the of average more stockpiled what if wondered, grades you referencing are could X.XX. just average is if mine if of you grade and lower bit some average and asking quarter. it or open the of from pit in was wasn't down a the blended Thank open little the fourth underground break referenced a you pit give gold from was different grades if in kind of lower us plant say that was wondering are coming Hi. than X.XX something And grade was clear, bit, bit X.XX a see potentially that X.XX into had went a material, that. was or color And But than I the

bit little both of a Yeah, Trevor.

to mine grade And quite blend that we QX, grade was in be as all in open the X.X. Head in year. was of optimizing grade slightly lower in that's of is so you're right back we're And areas pit we're right and really half X.XX. the around that the what mining our through expect lower the

So was in grade QX X.XX. pit

slightly using of mining and be to You you in X.X% Head around was QX we're open and lower can grade lower. function blend. can That's expect slightly process to it be as pit the expect well. right a that for

it do out come we're of out have Okay. going while -- And that the Is back as coming grades forward? to lower little the just those I guess, underground. expected, it on been of bit round or kind seven a around up

Yeah. They The was quarter prior underground. of X.XX were seven. Trevor, the

on we there's very lazy. in unusual quarter range. Sub-Sill bit are ELD nothing there. them Next expect going that to be a much and And

so And material but in, get of in any patches in coming expect drop-off underground. QX don't grade the we you

Thank Okay. the Great. Appreciate you. color.

Thank the you question. for

be As no questions, call. does conference this conclude more to there today's appear

And Thank a pleasant day. for may lines. you You disconnect participating. have your