Torex Gold Resources Inc. (the “Company”) (TSX: TXG) announces an
updated resource estimate for the Media Luna project, which
includes an Indicated resource of 2.24 million gold equivalent
ounces at a gold equivalent grade of 5.55 g/t and an Inferred
resource of 4.56 million gold equivalent ounces at a gold
equivalent grade of 4.23 g/t. Of the gold equivalent metal
inventory (comprising the Indicated and Inferred resource
categories), 58% of the contained metal value is attributable to
gold, 34% to copper, and 8% to silver.
A breakdown of the December 2019 resource
estimate by gold, silver, and copper can be found in Table 1
of this press release.
Fred Stanford, President and CEO of Torex Gold,
stated:
“The purpose of the planned 175 hole infill
drill program was to upgrade approximately 13 million tonnes (25%)
of the Inferred resource to the Indicated resource category. The
program was successful, 166 holes were drilled, 12.6 million tonnes
were upgraded, and there was a modest increase in gold equivalent
grade.
“The learnings from the infill program, and
other analyses, have led to an updated geological model, which has
been applied to the area of the Inferred resource as well. This
update has resulted in an increase of 5 million tonnes in the
Inferred resource area, which has been offset by a loss of 8
million tonnes due to the use of a more conservative approach to
smoothing the boundaries of the resource area. A drill program of
25 holes would be required to qualify these tonnes for
consideration in a future resource estimate. We are in the planning
stage of an additional infill drill program with a purpose of
increasing the tonnes in the Indicated confidence class, so as to
increase the mine life in the upcoming feasibility study. We will
also consider whether it is worth drilling the 25 perimeter
holes now or wait until later.
“Over the coming quarters we plan to continue to
advance and de-risk Media Luna. With trade-off studies nearing
completion and the upgraded resource in hand, we expect to complete
a feasibility study in the next 12 to 14 months. On a parallel
path, we have commenced the early field survey and technical study
work in support of the permitting/approval process.
“With the confidence provided by the success of
the infill drill program, part of the de-risking of the Media Luna
project will be an early works program to start excavating the
access tunnel to the deposit. This is a long tunnel. Getting
started early, reduces the risk that this tunnel excavation could
impact the schedule of commissioning Media Luna in early 2024. The
current expectation is to start this excavation in H2 of this year.
We expect to fund the development of Media Luna via cash flow from
El Limón Guajes.”
Table 1: Mineral Resource Statement for Media Luna (as of December
31, 2019) |
|
Tonnes |
AuEq |
AuEq |
Au |
Au |
Ag |
Ag |
Cu |
Cu |
|
(Mt) |
(g/t) |
(Moz) |
(g/t) |
(Moz) |
(g/t) |
(Moz) |
(%) |
(Mlb) |
Indicated |
12.6 |
5.55 |
2.24 |
3.27 |
1.32 |
37.7 |
15.3 |
1.16 |
322 |
Inferred |
33.5 |
4.23 |
4.56 |
2.49 |
2.68 |
23.6 |
25.5 |
0.93 |
686 |
Notes to accompany resource table:
- The effective date of the estimate is December 31, 2019
- Mineral resources are reported above a 2 g/t gold equivalent
(AuEq) cut-off grade; AuEq = Au (g/t) + Cu % *(77.16/49.83) + Ag
(g/t) * (0.64/49.83)
- The assumed mining method is from underground
- Mineral resources are reported using a long-term gold price of
US$1,550/oz, silver price of US$20.00/oz, and copper price of
US$3.50/lb
- Costs per tonne of mineralized material (including mining,
milling, and general and administrative) used is US$75/t.
Metallurgical recoveries average 85% for gold, 75% for silver and
89% for copper
- Mineral resources that are not mineral reserves do not have
demonstrated economic viability
- Mineral resources are classified in accordance with applicable
CIM Standards
- Rounding as required by reporting guidelines may result in
apparent summation differences between tonnes, grade, and contained
metal content
- Mineral resources are reported as undiluted; grades are
contained grades
- The estimate was prepared by Dr. Lars Weiershäuser, P.Geo., an
employee of the Company, who is a “Qualified Person” under NI
43-101
The updated mineral resource estimate for Media
Luna, prepared in accordance with National Instrument (NI) 43-101,
is reported at a gold equivalent cut-off grade of 2.0 g/t. The
resource estimate considers a total of 393 drill holes
(approximately 194,000 metres) of which 166 holes (approximately
70,000 metres) were drilled as part of the recent infill program,
which cost approximately $15 million to complete.
Comparison to the June 2015 Mineral
Resource EstimateThe previous mineral resource model,
which had an effective date of June 23, 2015, contained 51.5
million tonnes at a gold equivalent grade of 4.48 g/t for a total
of 7.42 million gold equivalent ounces. Resources were reported at
a gold equivalent cut‑off grade of 2.0 g/t using metal prices of
$1,470 per ounce gold, $23 per ounce silver, and $3.60 per pound
copper.
Applying the metal prices used in the December
2019 resource to the June 2015 resource model, implies a metal
inventory of 6.90 million gold equivalent ounces (48.8 million
tonnes at a gold equivalent grade of 4.40 g/t). These numbers
compare to the 2019 Indicated resource of 2.24 million gold
equivalent ounces (12.6 million tonnes at a gold equivalent grade
of 5.55 g/t) and Inferred resource of 4.56 million gold equivalent
ounces (33.5 million tonnes at a gold equivalent grade of 4.23
g/t).
The updated resource estimate is supported by a
comprehensive 3D geological model, which has been enhanced through
core logging, chemical analyses, and general geological studies
completed over the last few years. The key changes relative to the
prior resource estimate include a hard boundary between the
mineralized exoskarn package and unmineralized footwall endoskarn,
an increase in resource block size to 5 metres (sub-blocked to 2.5
metres) from 2.5 metres, as well as the definition of high-grade
gold and copper-silver zones within the infill area.
Decreasing the drill hole spacing in the infill
area to 30 metres allowed for the classification of resources to
the Indicated category. Inferred classification for the 2019
resource is predicated on 100 metre drill spacing relative to the
2015 resource estimate for which drill spacing was up to 110
metres. The impact of tighter spacing to inform the Inferred
resource, in combination with more conservative smoothing along the
edges of the resource envelope as well as updated geological model,
resulted in a decrease of approximately 3 million tonnes of the
resource model when comparing the updated resource to the previous
resource using the same metal price assumptions (8 million
tonne decline due to more conservative smoothing offset by a
5 million tonne increase related to previously discussed
changes).
Based on internal estimates, the Company
believes a fair portion of the impacted tonnes from more
conservative smoothing could be brought back into the Inferred
resource category by completing an additional 25 drill holes.
Mineral Resource Estimate
MethodologyThe updated mineral resource estimate prepared
by Torex is based on data from 393 core drill holes (approximately
194,000 metres) completed between 2012 and 2019 within the resource
area. Lithological logging information as well as geochemical
analyses were used to define lithological grade domains. In
addition, high-grade domains for gold as well as for copper and
silver were defined manually. Grades were estimated within these
domains using hard boundaries.
Block grades within the exoskarn domain were
estimated using one-metre capped composites in a three-pass
interpolation plan using inverse distance cubed (ID3) weighting. A
variable anisotropy was applied to ensure that searches were
following the local geology. Grade restrictions were applied where
necessary to avoid high-grade samples overpowering the grade
estimation. Results were evaluated onto blocks of 5.0 metres x 5.0
metres x 5.0 metres (sub-blocked to 2.5 metres x 2.5 metres x
2.5 metres) and classified as Indicated or Inferred based on
drill hole spacings of 30 metres or 100 metres. Results were
validated using standard validation techniques and reported above a
cut-off grade of 2.0 g/t gold equivalent mineral resources are
generally continuous above this cut-off grade.
Table 2 and 3 below illustrate the sensitivity
of the Indicated and Inferred resource estimates to changes in gold
equivalent cut‑off grade.
Table 2: Sensitivity of Media Luna Indicated resource to gold
equivalent cut-off grade (base case of 2 g/t AuEq is
highlighted) |
Cut-Off |
Tonnes |
AuEq |
AuEq |
Au |
Au |
Ag |
Ag |
Cu |
Cu |
(AuEq g/t) |
(Mt) |
(g/t) |
(Moz) |
(g/t) |
(Moz) |
(g/t) |
(Moz) |
(%) |
(Mlb) |
1.0 |
20.1 |
4.01 |
2.59 |
2.28 |
1.47 |
28.4 |
18.4 |
0.88 |
389 |
1.5 |
15.6 |
4.82 |
2.41 |
2.79 |
1.40 |
33.4 |
16.7 |
1.03 |
354 |
2.0 |
12.6 |
5.55 |
2.24 |
3.27 |
1.32 |
37.7 |
15.3 |
1.16 |
322 |
2.5 |
10.4 |
6.23 |
2.09 |
3.72 |
1.25 |
41.5 |
13.9 |
1.27 |
293 |
3.0 |
8.7 |
6.90 |
1.94 |
4.19 |
1.18 |
44.9 |
12.6 |
1.38 |
265 |
3.5 |
7.4 |
7.56 |
1.80 |
4.68 |
1.11 |
47.8 |
11.4 |
1.47 |
239 |
1) The reader is cautioned that the figures
presented in this table must not be misconstrued as a mineral
resource statement. The table includes all mineralized material
within the solid used to identify material for Inferred Resources.
Global tonnage and grades reported at a AuEq cut-off grade based on
metal prices of US$1,550 per ounce of gold, US$20 per ounce of
silver, and $3.50 per pound of copper and metallurgical recoveries
of 85% for gold, 75% for silver, and 89% for copper.
Table 3: Sensitivity of Media Luna Inferred resource to gold
equivalent cut-off grade (base case of 2 g/t AuEq is
highlighted) |
Cut-Off |
Tonnes |
AuEq |
AuEq |
Au |
Au |
Ag |
Ag |
Cu |
Cu |
(AuEq g/t) |
(Mt) |
(g/t) |
(Moz) |
(g/t) |
(Moz) |
(g/t) |
(Moz) |
(%) |
(Mlb) |
1.0 |
56.6 |
3.10 |
5.64 |
1.78 |
3.24 |
18.8 |
34.2 |
0.70 |
869 |
1.5 |
43.6 |
3.65 |
5.12 |
2.13 |
2.98 |
21.3 |
29.8 |
0.81 |
778 |
2.0 |
33.5 |
4.23 |
4.56 |
2.49 |
2.68 |
23.6 |
25.5 |
0.93 |
686 |
2.5 |
26.4 |
4.77 |
4.05 |
2.84 |
2.41 |
25.7 |
21.8 |
1.03 |
599 |
3.0 |
21.0 |
5.30 |
3.57 |
3.21 |
2.16 |
27.6 |
18.6 |
1.12 |
518 |
3.5 |
16.8 |
5.80 |
3.14 |
3.56 |
1.93 |
29.2 |
15.8 |
1.20 |
446 |
1) The reader is cautioned that the figures
presented in this table must not be misconstrued as a mineral
resource statement. The table includes all mineralized material
within the solid used to identify material for Inferred Resources.
Global tonnage and grades reported at a AuEq cut-off grade based on
metal prices of US$1,550 per ounce of gold, US$20 per ounce of
silver, and $3.50 per pound of copper and metallurgical recoveries
of 85% for gold, 75% for silver, and 89% for copper.
Media Luna Geology The Media
Luna deposit is hosted within the Mesozoic carbonate-rich Morelos
Platform, which has been intruded by Paleocene stocks, sills, and
dykes of granodioritic to tonalitic composition. Skarn-hosted
gold-silver-copper mineralization is developed within the
sedimentary rocks along the contacts of intrusive rocks as well as
within altered dykes of the skarn envelope. The main portion of
this mineralized package dips to the southwest at approximately
30°; in the lowest part of the known mineralization, the dip
steepens to approximately 60°, while the northernmost portion of
the deposit dips to the north, resulting in a broadly antiform
geometry of the deposit.
Mineralization at Media Luna is hosted in
exoskarn that developed at the contact of the intrusive
granodiorite and overlying sedimentary rocks; the skarn is
characterized by a mineral assemblage of pyroxene, garnet, and
magnetite. Metal deposition and sulfidation occurred during
retrograde alteration and is associated with a mineral assemblage
comprising amphibole, phlogopite, chlorite, and calcite ± quartz ±
epidote as well as variable amounts of magnetite and sulfides,
primarily pyrrhotite.
Quality Assurance/Quality
ControlAll of the Media Luna analytical work (sample
preparation and analyses) is performed by Bureau Veritas. Sample
preparation is completed in Durango, Mexico. The gold analyses
(fire assay with an atomic absorption or gravimetric finish) are
completed at the laboratory’s facilities in Hermosillo, while
multi-element geochemical analyses are completed at their
analytical facilities in Vancouver. Torex has an analytical quality
assurance/quality control (“QA/QC”) program in place that includes
the inclusion of approximately 5% each of certified reference
materials and blanks. Blind duplicates are not included, but Torex
evaluates the results of Internal Bureau Veritas laboratory
duplicates. Check assays were sent to the ALS Laboratories
(Australian Laboratory Services) in Hermosillo, Mexico, as part of
the QA/QC program
The QA/QC program as designed has been approved
by ASL (Analytical Solutions Ltd) of Ontario, Canada and is
currently overseen by Nicolas Landon, Chief Exploration Geologist
for the Media Luna Project.
Qualified PersonsExcept for the
information contained in paragraphs two to four of this news
release, Dr. Lars Weiershäuser is the qualified person under NI
43-101 for the scientific and technical information contained in
this news release including Tables 1 to 3. Dr. Weiershäuser is
a member of the Professional Geoscientists Ontario (formerly the
Association of Professional Geoscientist of Ontario) (APGO#1504),
has experience relevant to the style of mineralization under
consideration and is an employee of Torex. Dr. Weiershäuser has
verified the data disclosed, including sampling, analytical, and
test data underlying the drill results, and he consents to the
inclusion in this release of said data in the form and context in
which it appears. Clifford Lafleur, a qualified person under NI
43-101 and the Director Resource Management and Mine Engineering of
the Company, has reviewed and approved the scientific and technical
data contained in the second to fourth paragraphs of this news
release.
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 Gold 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 assets are the El
Limón Guajes mining complex (“ELG” or the “ELG Mine Complex”),
comprising the El Limón, Guajes and El Limón Sur open pits, the El
Limón Guajes underground mine including zones referred to as
Sub-Sill and ELD, 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 in September 2018 (the “Technical
Report”). The property remains 75% unexplored.
For further information, please contact:
TOREX GOLD RESOURCES INC. |
Fred Stanford President and CEO Direct: (647) 260-1502
Email: fred.stanford@torexgold.com |
Dan Rollins Vice President, Corporate Development & Investor
Relations Direct: (647) 260-1503 Email:
dan.rollins@torexgold.com |
CAUTIONARY NOTES
Muckahi Mining SystemThe
Technical Report 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. Aspects of Muckahi
mining equipment are currently in the design and test stage. The
mine design, equipment performance and cost estimations are
conceptual in nature, and do not demonstrate technical or economic
viability. The Company has completed the development and the first
phase of testing the concept for the mine development and
production activities and will move to optimization in 2020 to
further verify the viability of Muckahi.
Forward Looking StatementsThis
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 disruptions of its operations including
without limitation, delays caused by blockades limiting access to
the ELG Mine Complex and the Media Luna project or by blockades or
trespassers impacting the Company’s ability to operate.
Forward-looking information also includes, but is not limited to,
information with respect to mineral resource estimates, information
with respect to plans to complete an additional infill drilling
program on the Media Luna deposit with the purpose of upgrading
additional Inferred resources to the Indicated category, plans to
complete an additional 25 hole drill program on the periphery of
the Media Luna deposit with the purpose of qualifying approximately
8 million tonnes of material as mineral resources, plans to
continue to advance the Media Luna project, plans complete
trade-off studies, plans to complete a feasibility study in the
next 12 to 14 months, plans to continue on a parallel path with the
early field survey and technical study work in support of the
permitting/approval process, plans to de-risk the Media Luna
project including an early works program to start excavating the
access tunnels to the deposit, the expectation that the early works
program will reduce the risk that this tunnel excavation could
impact the scheduled commissioning of Media Luna in early 2024 and
the scheduled timing of the commissioning of Media Luna, the
expectation that such excavation will commence in the second half
of 2020, and the expectation that the Company will be able to fund
the development of Media Luna via cash flow from El Limón Guajes.
Generally, forward-looking information can be identified by the use
of forward-looking terminology such as "plans", "expects",
"believes", “future” or variations of such words and phrases or
state that certain actions, events or results “can”, "may",
"could", "would", "might", "be achieved", “appears” or “with the
purpose of”. 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 involving skarns deposits and the analysis
and interpretation of drilling results and those risk factors
identified in the Technical Report and the Company’s annual
information form and management’s discussion and analysis.
Forward-looking information are based on the assumptions set out
herein and discussed in the Technical Report 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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