(All amounts expressed in U.S. Dollars unless
otherwise stated)
Torex Gold Resources Inc. (the "Company" or "Torex") (TSX:TXG)
reported today the Company’s financial results for the year ended
December 31, 2017.
Fred Stanford, President & CEO of Torex
stated: “We are happy to have 2017 behind us, with its ramp-up
challenges and illegal blockade, now in the rear-view mirror. I
would like to acknowledge the team for their excellent
contribution in solving the inevitable ramp-up
challenges and for their disciplined execution of the strategy to
resume operations under blockade conditions. 2018 will be the year
that the team completes the last 10% of the ramp-up and showcases
the potential of the ELG asset. It will be a year rich in catalysts
with the re-start, completion of the SART plant, completion of the
ramp-up of the processing plant and the Sub-Sill, continued
exploration results from Sub-Sill, and an updated PEA for Media
Luna. It will be a busy and productive year, and we all look
forward to getting on with it.” He added – “A special thanks
to the great many that have supported the team in a myriad of ways
as we worked to by-pass the illegal blockade. That support has
enabled the potential that 2018 provides for Torex shareholders,
employees, and communities.”
Operations Update:
The processing plant is processing between
10,000 – 15,000 tonnes per day. The three day ball mill liner
change has been completed. Recoveries have been on plan at
approximately 86%, and grades have averaged 2.3 g/t, as we blend in
some of the lower grade ore from the stockpile. Ore is being
processed from all three open pits, El Limon, Guajes and El Limon
Sur. Approximately 50% of our employees have been called back to
work, with the remaining employees expected to be called back by
the end of the month. As of last Sunday, 25,000 ounces of gold have
been poured since January 16 when the operations re-start was
initiated. Cash reserves at the beginning of this week were $118
million, including $14 million set aside for reclamation
obligations.
At the February 13 meeting to set a date for the union selection
vote, the Labour Board and the two unions agreed to defer the
meeting to March 15. While this process unfolds, operations
continue to ramp up with excellent support from local communities,
unionized employees, staff employees and contractors.
This release should be read in conjunction with
the Company's year ended December 31, 2017 Financial Statements and
MD&A on the Company's website or on SEDAR.
HIGHLIGHTS
An illegal blockade has been
by-passed
- An illegal blockade (the “Blockade”) of the ELG Mine Complex by
a competing labour union, demanding a change in labour union
resulted in a complete shutdown of operations from November 3, 2017
to January 15, 2018. With community and employee support, an
alternative access to the plant was established, which by-passed
the Blockade, and facilitated the re-start of operations on January
16, 2018. On January 26, 2018, with tensions escalating
between local communities, the state government authorities
intervened and removed the Blockade. The legal process to determine
which union will represent the unionized employees is on-going. The
Company is prepared to work with whichever union the majority of
union eligible employees select.
Plant ramp-up activities now focused on
closing the final 10% gap to design throughput levels
- Gold produced totalled 28,162 ounces for the
quarter and 240,873 ounces for the year.
- Mine production in the quarter, 2,952 kt,
averaged 86,824 tpd. Mine production for the year totalled 26,450
kt, and averaged 86,156 tpd. Mine ore production
in the quarter, 633 kt, averaged 18,618 tpd. Mine ore production
for the year totalled 3,648 kt, and averaged 11,883 tpd.
- Average grade mined in the quarter was 3.03
gpt and 2.50 gpt in the year.
- Plant throughput in the quarter, 428 kt,
averaged 12,588 tpd, or 90% of design capacity of 14,000 tpd. Plant
throughput in the year, 3,710 kt, averaged 12,084 tpd, or 86% of
design capacity in the year.
- Average grades processed in the quarter of
2.72 gpt and 2.43 gpt in the year.
- Gold recovery in the quarter averaged 85% and
86% in the year, consistent with design expectations.
Financing
- On January 29, 2018, the Company announced that it had entered
into an agreement with a syndicate of underwriters led by BMO
Capital Markets, under which the underwriters agreed to purchase,
on a “bought deal” basis, 4,370,000 common shares at a price of
C$12.60 per common share for gross proceeds of approximately C$55.0
million (the “Offering’). The Offering closed on February 7, 2018
and resulted in aggregate net proceeds of C$58.5 million to the
Company. As part of the Offering, the underwriters partially
exercised their over-allotment option and subsequently purchased an
additional 12% of the Offering with the remainder of the
over-allotment option being exercised and closing on February 16,
2018, for aggregate net proceeds of C$60.0 million to the
Company.
Maiden ELG Underground mineral reserves and mine
plan
- The ELG Underground mine plan includes 29
months of production, delivering 480 kt at 11.65 gpt containing
180,000 Au ounces. Total capital required is $23.0 million with the
majority in the first year.
- Step-out exploration drilling for the Sub-Sill
zone continued to demonstrate the potential to add
resources, with high grade intercepts beyond the boundaries of the
current mine plan.
- ELG open pit mineral reserves and resources
remain largely unchanged, except for depletion.
Grade and tonnage reconciliation to the
reserve model for the ELG Open Pits
- Total ounce reconciliation of 89% to the
reserve model for the quarter, and 104% for the year.
- Grade reconciliation of 88% to the reserve
model for the quarter, and 108% for the year.
Media Luna Project progressing
- 25-year common land, lease agreement signed for the use of the
land required for the exploration, construction, and mining of
minerals at Media Luna.
- The Company initiated an in-fill drilling program budgeted at
$15.0 million to upgrade, to the Indicated confidence level, 25% of
the current inferred resource of 7.4 million Au Equivalent ounces
(51.5Mt @4.48g/t Au Eq.). The program will form the basis for a
Media Luna feasibility study scheduled for the second half of
2019.
Financial results
- Net loss totalled $12.6 million, or $0.16
per share, on a basic and diluted basis for the year, and
net loss of $25.0 million, or $0.31 per
share, on a basic and diluted basis for the quarter.
- Adjusted net loss1 totalled $14.3 million, or
$0.18 per share on a basic and diluted basis for the year, and
adjusted net loss1 of $20.0 million, or $0.25 per
share on a basic and diluted basis for the quarter.
- Earnings from mine operations totalled
$54.7 million for the year, and $6.7 million for the
quarter.
- Cash flow from operations totalled
$73.6 million for the year, and cash outflows from operations
of $6.6 million for the quarter.
- Revenue totalled $314.9 million and
cost of sales totalled $260.2 million, or $1,046
per ounce of gold sold for the year ended December 31, 2017.
Revenue totalled $40.8 million and cost of
sales totalled $34.1 million, or $1,086 per ounce of gold
sold for the quarter.
- Gold sold for the year ended December 31, 2017
totalled 248,797 ounces for total proceeds of $311.9 million
at an average realized gold price1 of $1,254 per
ounce. Gold sold for the quarter totalled 31,398
ounces sold for total proceeds of $40.3 million at an
average realized gold price1 of $1,284 per
ounce.
- Cash balances as at December 31, 2017 totalled
$58.8 million (including restricted cash of
$13.9 million).
- Total cash costs1 of $709 per ounce of gold
sold for the year ended December 31, 2017, and $755 per
ounce of gold sold for the quarter.
- All-in sustaining costs1 of $989 per ounce of
gold sold for the year ended December 31, 2017, and
$1,016 per ounce of gold sold for the quarter.
Qualified Persons
Scientific and technical information contained
in this news release has been reviewed and approved by Dawson
Proudfoot, P.Eng., Vice President, Engineering of Torex Gold
Resources Inc. and a Qualified Person under NI 43-101 – Standards
of Disclosure for Mineral Projects.
Conference CallThe Company will
host a conference call today at 9:00 am (ET) where senior
management will discuss the 2017 operational and financial results.
Access the conference call as follows:
Webcast access: A live audio webcast of the
conference call will be available on the Company’s website at
www.torexgold.com.
Telephone access: Please call the numbers
below approximately ten minutes prior to the scheduled start of the
call. Toronto local or international 1 (416) 915-3239 Toll-Free
(North America) 1 800-319-4610 Toll-Free (France) 0 800-900-351
Toll-Free (Switzerland) 0-800-802-457 Toll-Free (United Kingdom) 0
808-101-2791
The webcast will be archived on the Company’s
website.
About Torex
Torex is an intermediate gold producer based in
Canada, engaged in the exploration, development and operation of
its 100% owned Morelos Gold Property, an area of 29,000 hectares in
the highly prospective Guerrero Gold Belt located 180 kilometers
southwest of Mexico City. The Company’s principal assets are the El
Limón Guajes mining complex (the “ELG Mine Complex”),
comprised of the El Limón, Guajes and El Limón Sur open pits, the
El Limón Guajes underground mine including zones referred to as
Sub-Sill, El Limón Deep and 71, and the processing plant and
related infrastructure, which is in the commercial production stage
as of April 1, 2016, and the Media Luna deposit, which is an early
stage development project, and for which the Company issued a
preliminary economic assessment in 2015. The property remains 75%
unexplored.
For further information, please contact:
TOREX
GOLD RESOURCES INC. |
|
Fred Stanford President
and CEO Tel.: (647) 260-1502 Email:
fred.stanford@torexgold.com |
Gabriela Sanchez Vice
President Investor Relations Tel.: (647) 260-1503 Email:
gabriela.sanchez@torexgold.com |
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking
statements" and "forward-looking information" within the meaning of
applicable Canadian securities legislation. Notwithstanding the
Company's efforts, there can be no guarantee that the Company will
not face unforeseen delays or further disruptions of its
operations. Forward-looking information also includes, but is not
limited to, the expected successful completion of the ramp-up,
completion of the SART plant, completion of the ramp-up of the
processing plant and the Sub-Sill, exploration results from the
Sub-Sill and the completion and timing of an updated PEA for Media
Luna and the related in-fill drilling program, the union selection
vote, the expected production from the ELG Underground mine plan
and related capital requirements, and continued safety and
security. Generally, forward-looking information can be identified
by the use of forward-looking terminology such as "plans",
"expects", "estimates", "intends", "anticipates" or "believes" or
variations of such words and phrases or state that certain actions,
events or results "may", "could", "would", "might", or "will be
taken", "occur", or "be achieved". Forward-looking information is
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of the Company to be materially different from
those expressed or implied by such forward-looking information,
including, without limitation, those risk factors identified in the
Company's annual information form and management's discussion and
analysis. Forward-looking information is based on the reasonable
assumptions, estimates, analysis and opinions of management, made
in light of its experience and its perception of trends, current
conditions and expected developments, as well as other factors that
management believes to be relevant and reasonable in the
circumstances at the date that such statements are made, but which
may prove to be incorrect. Although the Company believes that the
assumptions and expectations reflected in such forward-looking
information are reasonable, undue reliance should not be placed on
forward-looking information because the Company can give no
assurance that such expectations will prove to be correct. There
can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. The Company
does not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
1 Refer to “Non-IFRS Financial Performance
Measures” in the Company’s December 31, 2017 Management’s
Discussion and Analysis for further information and a detailed
reconciliation.
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