Torex Gold Resources Inc. (the "Company" or "Torex") (TSX:TXG)
reports that in Q1 2019, 76,500 ounces of gold were sold, at an
average realized price of $1,301 per ounce. 77,800 ounces of
gold were produced. Debt principal was reduced by $18.6
million, and cash balances at the end of the quarter were $119
million, including $26.8 million of restricted cash. The
Company is also pleased to announce that field trials are underway
for the first piece of equipment for the proprietary Muckahi mining
system. The first tunneling blast of the field trials was
taken on March 26th. The round was successfully drilled from
the monorail mounted Muckahi jumbo drill. The second piece of
equipment, the Muckahi service platform, is currently at the
Mexican border and is expected to be in service this
quarter.
Fred Stanford, President & CEO of Torex
stated:
“After so many years in concept development,
machine design, and more recently machine manufacturing, it was
truly rewarding to see this first part of the innovative Muckahi
mining system ‘come to life’ and perform the way it was expected to
perform. This outcome is a credit to all of the people over
the years that believed a different way to mine was possible and
contributed ideas and support to transform that possibility into a
reality. In recent years, this includes our Board of
Directors, Robert Rennie and team from Medatech, and many from
within Torex, including Bernie Loyer for machine design and project
management, Dawson Proudfoot, Danny Lavigne, and Brian Truman for
process design and leadership in the field trials. The team
is looking forward to completing the field trials in 2019. The goal
is to demonstrate the Muckahi mining system capabilities over the
full development cycle for tunneling, including on a minus
30-degree gradient, and to demonstrate the capability of the system
to lower costs in long hole open stope mining. Exciting
times!”
“On the production front, many know that skarn
deposits are variable. We have seen the upside and downside
of that variability in past quarters. Guidance in 2019 was
weighted to H2 in expectation of managing through more of the
downside of variability in H1. In Q1, we mined the bottom of
one pit area and opened up the top of another, with the expected
grade and tonnage variability that comes at the edges of the
deposit. There is also variability in the hardness of the
rock types within the deposit. The weighted average Bond Ball
Mill Work Index (BMWI) for the deposit is 17 kwh/tonne, with the
highest BMWI at 29 kwh/tonne for El Limon hornfels. In H1 we
are mining a disproportionate amount of these hornfels. The
proportion of hornfels will decline through the year, which will be
advantageous for plant throughput rates. An unexpected
variability in Q1, was a ‘slug’ of cyanide soluble iron that is
believed to have originated from the El Limon Sur pit.
Significant concentrations of cyanide soluble iron had not been
encountered before and it increased cyanide consumption rates in
the plant until the ‘pocket’ was mined out. Copper
variability also affected cyanide consumption. In spite of this,
gold recoveries came in at 88.2% for the quarter, above the design
rate of 87%. Such is life when mining a skarn. Character
building when variability goes against us, all smiles when
variability is in our favour.”
“Guidance for 2019 remains unchanged. Gold
production is expected to increase in each quarter of the
year.”
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 and
El Limón Deep, 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 an updated preliminary
economic assessment (“PEA”) in September 2018. The
property remains 75% unexplored.
For further information, please contact:
TOREX GOLD
RESOURCES INC. |
|
Fred
StanfordPresident and CEO Tel.: (647) 260-1502
Email: fred.stanford@torexgold.com |
|
|
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CAUTIONARY NOTES
PRELIMINARY ECONOMIC ASSESSMENT
The Media Luna PEA includes information on
Muckahi. It is important to note that Muckahi is experimental
in nature and has not been tested in an operating mine. Many
aspects of the system are conceptual, and proof of concept has not
been demonstrated. Drill and blast fundamentals, standards
and best practices for underground hard rock mining are applied in
the Muckahi, where applicable. The proposed application of a
monorail system for underground transportation for mine development
and production mining is unique to underground hard rock mining.
There are existing underground hard rock mines that use a monorail
system for transportation of materials and equipment, however not
in the capacity described in the technical report released (the
“Technical Report”) on September 4, 2018,
entitled “NI 43-101 Technical Report ELG Mine Complex Life of Mine
Plan and Media Luna Preliminary Economic Assessment”, which has an
effective date of March 31, 2018 and is available on the Company’s
website at www.torexgold.com and filed on SEDAR at
www.sedar.com. Aspects of Muckahi mining equipment are
currently in the design stage. The mine design, equipment
performance and cost estimations are conceptual in nature, and do
not demonstrate technical or economic viability. The approximate
timeframe to develop and test the concept would be by the end of
2019, and for the mine development activities, by the end of the
second quarter 2023. Further studies would be required to
verify the viability of Muckahi. Muckahi is not intended as a
“trade off study” but is shown to merely demonstrate the potential
benefits Muckahi may have using the Media Luna deposit as an
example. It includes inferred mineral resources that are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the
preliminary economic assessment will be realized. It cannot
be assumed that all or any part of the inferred mineral resources
will ever be upgraded to a higher category. Furthermore, there is
no certainty that the conclusions or results as reported in the
Media Luna PEA will be realized. Mineral resources that are not
mineral reserves do not have demonstrated economic viability.
The ability to develop and test the Muckahi
mining system is dependent on available funding from Torex’s
resources including distributions from its operating subsidiary,
Minera Media Luna, S.A. de C.V. (“MML”). The
$400 million debt facility places restrictions on the amount that
MML may distribute to Torex. There is no assurance that the
Company will be able to complete the development and testing of
Muckahi as planned.
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 results of the Media Luna PEA, the Company will
achieve the full year guidance as initially released, the expected
successful completion of the ramp-up of the processing plant to
consistently produce at design rates, achieving the expected net
benefits (including cost reductions) of the SART plant, expectation
that the proportion of hornfels processed will decline through the
year, which will be advantageous for plant throughput rates, plans
in the second half of 2019, plans to continue to examine the
potential of the Muckahi mining system with the goal of
demonstrating the Muckahi mining system capabilities over the full
development cycle for tunneling, including on a minus 30-degree
gradient, and demonstrating the capability of the system to lower
costs in long hole open stope mining, the expectation that the
cyanide soluble iron is in a ‘pocket’ of the deposit, 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", "believes" or “potential” 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, uncertainty as a result of the preliminary nature of
the PEA and the Company’s ability to realize the results of the
PEA, uncertainty regarding the inclusion of inferred mineral
resources in the mineral resource estimate, uncertainty involving
resource estimates and the ability to extract those resources
economically, or at all, risks associated with skarn
deposits, risks associated with new mining technology, and
those risk factors mentioned in the press release and identified in
the Technical Report and the Company’s annual information form
(“AIF”) and management’s discussion and analysis
(“MD&A”). Forward-looking information are
based on the assumptions discussed in the Technical Report,
the MD&A, the AIF and elsewhere in the Company’s public
disclosure and such other reasonable assumptions, estimates,
analysis and opinions of management made in light of its experience
and perception of trends, current conditions and expected
developments, and other factors that management believes are
relevant and reasonable in the circumstances at the date such
statements are made. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in the forward-looking information,
there may be other factors that cause results not to be as
anticipated. 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.
Accordingly, readers should not place undue reliance on
forward-looking information. The Company does not undertake to
update any forward-looking information, whether as a result of new
information or future events or otherwise, except as may be
required by applicable securities laws.
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