Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Torex Gold Resources Inc (TORXF, Financial) achieved record quarterly revenue driven by a record average realized gold price.
- The company is on track to meet its production guidance for the sixth consecutive year.
- Costs are trending downwards quarter-over-quarter, with cash costs and all-in sustaining costs both decreasing by approximately $100 per ounce compared to the prior quarter.
- The Media Luna project is 87% complete, with significant progress in engineering, procurement, and construction.
- Torex Gold Resources Inc (TORXF) maintains a strong liquidity position, with available liquidity remaining consistent quarter-over-quarter despite significant capital expenditures.
Negative Points
- Costs are expected to be at the top end of guidance for the year due to higher royalties and profit sharing associated with the strong gold price.
- The tie-in period for the Media Luna project has been rescheduled to February 2025, potentially impacting production timelines.
- 2025 costs are anticipated to be temporarily elevated due to the Media Luna ramp-up and higher gold prices impacting royalties and profit sharing.
- The company faces ongoing challenges with elevated cyanide consumption due to high levels of copper and iron in the ore.
- There is uncertainty regarding the new Mexican administration's stance on mining laws and concessions, although discussions remain ongoing.
Q & A Highlights
Q: Could you elaborate on how the tie-in deferral to February might shorten the time required to complete the tie-in?
A: David Stefanuto, Executive Vice President - Technical Services and Capital Projects, explained that the planned shutdown period in December will be used to install and test the ball mill motors and VFD set points in advance. This preparation could stabilize the ball mill ramp-up and potentially shorten the shutdown by a few days.
Q: What are the implications on 2025 production by doing the tie-in in February? Is positive free cash flow still on track for midyear?
A: Jody Kuzenko, President and CEO, stated that positive free cash flow is still on track for midyear. The tie-in shift from Q4 to Q1 is essentially a swap, with no impact on the Media Luna mine plan or process plant ramp-up schedule.
Q: Why was February chosen for the tie-in, and is there any risk in receiving the switchgear?
A: Jody Kuzenko confirmed that the risk associated with electrical equipment delivery is behind them, as they have everything needed for the tie-ins. The February schedule allows for contractor availability and ensures enough time for execution, with the possibility of a few days' shift.
Q: Have there been any developments with the new Mexican administration regarding the mining industry?
A: Jody Kuzenko mentioned that discussions with the new administration have been productive, focusing on infrastructure and foreign investment. No decisions have been made on critical issues like mining law reform, but the ongoing dialogue is positive.
Q: Is the growth in stockpiles attributed to Media Luna development ore?
A: Jody Kuzenko confirmed that some growth is due to Media Luna development ore, with about 120,000 tonnes currently stockpiled. This will continue to grow, aiding in the commissioning of flotation circuits.
Q: Will the feasibility study for EPO be released to the public?
A: Jody Kuzenko stated that a similar approach to the PFS will be taken, with an internal feasibility study. The focus remains on completing Media Luna and preparing for EPO development.
Q: Are there any updates on M&A activities?
A: Jody Kuzenko indicated that the company is still committed to pursuing the right deal at the right time to create shareholder value, with no significant changes in strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
