Torex Gold Resources Inc. press release
Torex Gold Reports Q4 and Full Year 2024 Results
TSX - Toronto Stock Exchange · Gold · Silver · Copper · Canada
2024 marks another solid year of operational and financial results; on track to return to positive free cash flow generation by mid-2025
(All amounts expressed in U.S. dollars unless otherwise stated)
Toronto, Ontario--(Newsfile Corp. - February 19, 2025) - Torex Gold Resources Inc. (the "Company" or "Torex") (TSX: TXG) reports the Company's financial and operational results for the three months and year ended December 31, 2024. Torex will host a conference call tomorrow morning at 9:00 AM (ET) to discuss the results.
Jody Kuzenko, President & CEO of Torex, stated:
"2024 marked another year of consistently strong operational results from Morelos. With gold production of more than 452,000 ounces, we met our annual guidance for the sixth year in a row. The team continued to deliver new operational firsts, achieving a new annual average gold recovery record of 90.6% at the processing plant and a record annual mining rate from ELG Underground of close to 2,100 tonnes per day. In addition, significant progress was made on the Media Luna Project, with first copper concentrate production tracking to plan for the end of March and commercial production expected to be declared shortly thereafter.
"We also set new financial records in 2024. After generating record annual revenue of more than $1.1 billion, our balance sheet remains in excellent condition, with more than $330 million of available liquidity1including $110 million of cash as of year end. The performance of our operations, supported by a record realized gold price, resulted in a record annual adjusted EBITDA1of more than $540 million and a robust all-in sustaining costs margin1of 49%. With only a few months left to go on the Media Luna Project, we are well-positioned to exit the build with only a modest level of net debt, which will be repaid quickly when we pivot to positive free cash flow generation mid-year. With an expanded exploration and drilling program, development activities at EPO on track to commence in the third quarter and an inaugural return of capital program to be formalized mid-year, 2025 is expected to be yet another exciting and prosperous year for Torex as we enter the next chapter at Morelos.
"Against the backdrop of this exceptional performance, we will never forget the profound tragedy and loss we experienced in December with the loss of three of our colleagues. As we continue to look toward the future, we are more resolved than ever to reset the bar on safety leadership and set the highest standards of safety performance in the mining industry, just as our shareholders have come to expect."
1. These measures are non-GAAP financial measures. Refer to footnote 3 under the section "Fourth Quarter 2024 Highlights" and Tables 2 to 11 of this press release for further information and a detailed reconciliation to the comparable measures in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board.
FULL YEAR 2024 HIGHLIGHTS
Working toward next-level safety:On December 5th, 2024, a fatal carbon monoxide gas exposure occurred, which claimed the lives of two employees and one contractor worker at the ELG Underground. In the wake of the tragedy, all operational and project activities at the Morelos Property were suspended for just over a week to allow for inspections by the relevant agencies. The Company also initiated its own internal investigation to determine how, despite multiple levels of safety controls, such an exposure could have taken place, and to prevent a similar incident from ever occurring. In addition, in August, a fatal injury occurred involving a contractor worker within the Guajes Tunnel while conducting work on the overhead conveyor associated with the Media Luna Project. As at December 31, 2024, the lost-time injury frequency ("LTIF") for the Morelos Complex was 0.61 per million hours worked for both employees and contractors on a rolling 12-month basis. Recognizing the Company's previous excellence in safety performance, in October, the Mexican Mining Chamber (CAMIMEX) granted Torex the 'Silver Hard Hat Award' in the Open Pit Mining category (over 500 employees) for the excellent safety record at ELG in 2023.
Production guidance achieved for sixth consecutive year: Delivered annual gold production of 452,523 ounces ("oz"), within the upwardly revised1guidance range of 450,000 to 470,000 oz and above original guidance of 400,000 to 450,000 oz, marking the sixth consecutive year that production guidance has been achieved. The Company also achieved a record annual average gold recovery of 90.6% and a record annual mining rate from ELG Underground of 2,092 tonnes per day ("tpd"). On a gold equivalent ounce basis ("oz AuEq"), the Company produced 461,420 oz AuEq2for the year, within the revised1guidance range of 460,000 to 480,000 oz AuEq2and above original guidance of 410,000 to 460,000 oz AuEq2.
Record annual revenue:Annual gold sold of 455,932 oz at an annual average realized gold price3of $2,254 per oz, contributing to record annual revenue of $1,115.5 million. On a gold equivalent ounce basis, the Company sold 465,829 oz AuEq2for the year. The average realized gold price in 2024 includes a realized loss of $64.1 million or $141 per oz on gold forward contracts. In January 2025, the Company entered into gold put options to sell 155,000 oz of gold in 2025 at a strike price of $2,500 per oz. These options provide full upside exposure to the gold price while providing a floor of $2,500 per oz.
Robust all-in sustaining margins: Total cash costs3of $940 per oz sold, 3% above the upper end of the guided range of $860 to $910 per oz sold. All-in sustaining costs3of $1,156 per oz sold, at the upper end of the guided range of $1,100 to $1,160 per oz sold. Full year costs were impacted by higher gold prices given the $354 per oz increase in average realized gold price relative to guidance (guidance based on a gold price of $1,900 per oz) resulting in increased Mexican profit sharing (year-to-date 2024 impact of $27 per oz) and royalties (year-to-date 2024 impact of $15 per oz), as well as higher consumption of cyanide within the process plant. All-in sustaining costs margin3of $1,098 per oz sold, implying an all-in sustaining costs margin3of 49%. Cost of sales was $647.3 million or $1,420 per oz sold. On a gold equivalent ounce basis, total cash costs were $972 per oz AuEq sold2and all-in sustaining costs were $1,183 per oz AuEq sold2relative to guidance of $900 to $950 per oz AuEq sold2and $1,130 to $1,190 per oz AuEq sold2, respectively.
Strong profitability and record adjusted EBITDA3: Reported net income of $134.6 million, or earnings of $1.57 per share on a basic basis and $1.55 per share on a diluted basis, significantly impacted by deferred income tax expense of $66.5 million, largely due to the 20% depreciation of the Mexican peso, which closed the year at 20.3:1 against the U.S. dollar versus the annual average of 18.3:1. Adjusted net earnings3of $224.4 million, or $2.61 per share on a basic basis and $2.58 per share on a diluted basis. Net income includes a net derivative loss of $46.1 million related to gold forward contracts and foreign exchange collars and forwards entered into to mitigate downside price risk and capital expenditure risk during the construction of the Media Luna Project and on operating expenditures in 2025. Generated EBITDA3of $539.4 million and a record annual adjusted EBITDA3of $541.1 million.
Strong cash flow generation:Net cash generated from operating activities totalled $449.5 million and $458.9 million before changes in non-cash operating working capital, including income taxes paid of $89.0 million. Negative free cash flow3of $122.9 million is net of cash outlays for capital expenditures, lease payments and interest, including borrowing costs capitalized. Negative free cash flow in 2024 was a direct result of $449.0 million invested in the Media Luna Project.
Strong financial liquidity:The Company extended the credit facilities with a syndicate of international banks in the third quarter of 2024, providing a total of $300.0 million through a revolving credit facility maturing in 2027, and added a $150.0 million accordion feature which is available at the discretion of the lenders. The year closed with $331.5 million in available liquidity3, including $110.2 million in cash and $221.3 million available on the credit facilities of $300.0 million, net of borrowings of $65.0 million and letters of credit outstanding of $13.7 million.
Media Luna Project:During 2024, $449.0 million was invested in the project, within the revised annual project guidance of $430.0 to $450.0 million. As of December 31, 2024, physical progress on the Project was approximately 94%, with engineering concluded, procurement substantially complete, underground development tracking well ahead of schedule, and surface construction advancing per plan. First concentrate production is expected at the end of the first quarter of 2025, and the declaration of commercial production shortly thereafter.
Return of Capital to Shareholders: In November, the Company received approval from the Toronto Stock Exchange (the "TSX") of its notice of intention to commence a normal course issuer bid (the "NCIB"). The Company has not yet repurchased any common shares under the NCIB.
Exploration and Drilling Activities: In November, the Company announced assay results from the ongoing 2024 drilling program at EPO4. The results to date support the Company's goal of expanding resources to the north of the deposit and upgrading Inferred Resources to Indicated Resources. In December, the Company also announced further assay results from the Company's 2024 drilling program at ELG Underground5. The results to date support the Company's target of extending the mine life of ELG Underground by identifying new zones of higher-grade mineralization, expanding resources, and replacing and growing reserves.
Q4 2024 HIGHLIGHTS
Safety performance: In addition to the fatal incident in December, there were two lost-time injuries ("LTIs") at the Media Luna Project in the fourth quarter, including a contractor worker who fell from a walkway under construction, and a second contractor worker who was injured while carrying out work on the Guajes Tunnel conveyor belt installation.
Gold production:Delivered gold production of 103,795 oz for the quarter (105,305 oz AuEq2), benefiting from an average gold recovery of 90.5% and impacted by the temporary suspension in December.
Gold sold:Sold 108,647 oz of gold (110,419 oz AuEq2) at a record average quarterly realized gold price3of $2,487 per oz, contributing to quarterly revenue of $295.0 million. The average realized gold price in the fourth quarter of 2024 includes a realized loss of $19.9 million or $183 per oz on gold forward contracts.
Total cash costs3and all-in sustaining costs3: Total cash costs of $902 per oz sold ($932 per oz AuEq sold2) and all-in sustaining costs of $1,085 per oz sold ($1,112 per oz AuEq sold2). All-in sustaining costs margin3were $1,402 per oz sold, implying an all-in sustaining costs margin3of 56%. Cost of sales was $153.5 million or $1,413 per oz sold in the quarter
Net income and adjusted net earnings3:Reported net income of $60.4 million or earnings of $0.70 per share on a basic basis and $0.69 per share on a diluted basis. Adjusted net earnings of $70.6 million or $0.82 per share on a basic basis and $0.81 per share on a diluted basis. Net income includes a net derivative loss of $3.6 million related to gold forward contracts and foreign exchange collars and forwards. In the fourth quarter of 2024, the Company entered into an additional series of zero-cost collars to hedge against changes in foreign exchange rates of the Mexican peso between January 2025 and December 2025 for a total notional value of $28.0 million. In the fourth quarter of 2024, the Company also entered into foreign exchange forward contracts to purchase 924.3 million Mexican pesos ("MXN") for $44.0 million between January 2025 and December 2025 at a weighted average MXN/USD foreign exchange rate of 21.01:1.
EBITDA3and adjusted EBITDA3: Generated EBITDA of $162.8 million and adjusted EBITDA of $154.3 million.
Cash flow generation: Net cash generated from operating activities totalled $122.8 million and $136.3 million before changes in non-cash operating working capital, including income taxes paid of $17.3 million and negative free cash flow3of $10.8 million.
Media Luna Project:During Q4 2024, $100.5 million was invested in the project.
1. 2024 production guidance was revised to reflect higher production, as disclosed in the Company's MD&A dated November 5, 2024. 2. Gold equivalent ounces produced and sold include production of silver and copper converted to a gold equivalent based on a ratio of the average market prices for each commodity sold in the period. Refer to the sections "Gold Equivalent Reporting" for the relevant average market prices by commodity and "2024 Performance and 2025 Guidance" for 2024 guidance assumptions in the Company's MD&A dated February 19, 2025. 3. These measures are non-GAAP financial measures ("Non-GAAP Measures") which are not standardized financial measures under IFRS, the framework used to prepare the financial statements of the Company and might not be comparable to similar financial measures used by other companies. For a detailed reconciliation of each Non-GAAP Measure to its most directly comparable measure in accordance with the IFRS, see Tables 2 to 11 of this press release. For additional information on these Non-GAAP Measures, please refer to the Company's MD&A for the three months and year ended December 31, 2024, dated February 19, 2025. The MD&A and the Company's audited consolidated financial statements and related notes for the year ended December 31, 2024, are available on Torex's website (www.torexgold.com) and under the Company's SEDAR+ profile (www.sedarplus.ca). 4. For more information on EPO drilling results, see the Company's news release titled "Torex Gold Reports Results from the Ongoing 2024 EPO Exploration Program" issued on November 13, 2024, and filed on SEDAR+ at www.sedarplus.caand on the Company's website at www.torexgold.com. 5. For more information on ELG Underground drilling results, see the Company's news release titled "Torex Gold Reports Compelling New Results from the 2024 ELG Underground Drilling Program" issued on December 2, 2024, and filed on SEDAR+ at www.sedarplus.caand on the Company's website at www.torexgold.com.
CONFERENCE CALL AND WEBCAST DETAILS
The Company will host a conference call tomorrow at 9:00 AM (ET) where senior management will discuss the fourth quarter and year-end operating and financial results. For expedited access to the conference call, registrationis open to obtain an access code in advance, which will allow participants to join the call directly at the scheduled time. Alternatively, dial-in details are as follows:
Toronto local or International: 1-647-484-8814 Toll-Free (North America): 1-844-763-8274
A live webcast and replay of the conference call will be available on the Company's website at https://torexgold.com/investors/upcoming-events/. The webcast will be archived on the Company's website.
Table 1: Operating and Financial Highlights
| | | | | | | Three Months Ended | | | Year Ended | | | | | | | | | | | | | | | | | Dec 31, | | | Sep 30, | | | Dec 31, | | | Dec 31, | | | Dec 31, | | In millions of U.S. dollars, unless otherwise noted | | | 2024 | | | 2024 | | | 2023 | | | 2024 | | | 2023 | | | | | Safety | | | | | | | | | | | | | | | | | | | | Lost-time injury frequency1 | | /million hours | | | 0.61 | | | 0.28 | | | 0.31 | | | 0.61 | | | 0.31 | | | Total recordable injury frequency1 | | /million hours | | | 1.48 | | | 1.46 | | | 1.23 | | | 1.48 | | | 1.23 | | | Operating Results - Gold only basis | | | | | | | | | | | | | | | | | | | | Gold produced | | oz | | | 103,795 | | | 119,412 | | | 137,993 | | | 452,523 | | | 453,778 | | | Gold sold | | oz | | | 108,647 | | | 122,130 | | | 138,794 | | | 455,932 | | | 444,750 | | | Total cash costs2 | | $/oz | | | 902 | | | 926 | | | 885 | | | 940 | | | 866 | | | All-in sustaining costs2 | | $/oz | | | 1,085 | | | 1,101 | | | 1,073 | | | 1,156 | | | 1,200 | | | Average realized gold price2 | | $/oz | | | 2,487 | | | 2,313 | | | 1,995 | | | 2,254 | | | 1,952 | | | Operating Results - Gold Equivalent basis | | | | | | | | | | | | | | | | | | | | Gold equivalent produced3 | | oz AuEq | | | 105,305 | | | 122,525 | | | 139,394 | | | 461,420 | | | 459,380 | | | Gold equivalent sold3 | | oz AuEq | | | 110,419 | | | 125,414 | | | 139,828 | | | 465,829 | | | 451,220 | | | Total cash costs2,3 | | $/oz AuEq | | | 932 | | | 969 | | | 893 | | | 972 | | | 882 | | | All-in sustaining costs2,3 | | $/oz AuEq | | | 1,112 | | | 1,139 | | | 1,080 | | | 1,183 | | | 1,210 | | | Financial Results | | | | | | | | | | | | | | | | | | | | Revenue | | $ | | | 295.0 | | | 313.7 | | | 282.4 | | | 1,115.5 | | | 882.6 | | | Cost of sales | | $ | | | 153.5 | | | 170.1 | | | 191.6 | | | 647.3 | | | 600.1 | | | Earnings from mine operations | | $ | | | 141.5 | | | 143.6 | | | 90.8 | | | 468.2 | | | 282.5 | | | Net income | | $ | | | 60.4 | | | 29.2 | | | 50.4 | | | 134.6 | | | 204.4 | | | Per share - Basic | | $/share | | | 0.70 | | | 0.34 | | | 0.59 | | | 1.57 | | | 2.38 | | | Per share - Diluted | | $/share | | | 0.69 | | | 0.34 | | | 0.58 | | | 1.55 | | | 2.34 | | | Adjusted net earnings2 | | $ | | | 70.6 | | | 65.5 | | | 49.1 | | | 224.4 | | | 148.4 | | | Per share - Basic2 | | $/share | | | 0.82 | | | 0.76 | | | 0.57 | | | 2.61 | | | 1.73 | | | Per share - Diluted2 | | $/share | | | 0.81 | | | 0.75 | | | 0.57 | | | 2.58 | | | 1.72 | | | EBITDA2 | | $ | | | 162.8 | | | 155.3 | | | 115.4 | | | 539.4 | | | 422.6 | | | Adjusted EBITDA2 | | $ | | | 154.3 | | | 152.4 | | | 142.6 | | | 541.1 | | | 442.2 | | | Cost of sales - gold only basis | | $/oz | | | 1,413 | | | 1,393 | | | 1,380 | | | 1,420 | | | 1,349 | | | Net cash generated from operating activities | | $ | | | 122.8 | | | 149.5 | | | 120.0 | | | 449.5 | | | 300.8 | | | Net cash generated from operating activities before changes in non-cash operating working capital | | $ | | | 136.3 | | | 137.6 | | | 133.5 | | | 458.9 | | | 340.8 | | | Free cash flow2 | | $ | | | (10.8 | ) | | (0.7 | ) | | (24.3 | ) | | (122.9 | ) | | (185.4) | | | Cash and cash equivalents | | $ | | | 110.2 | | | 114.5 | | | 172.8 | | | 110.2 | | | 172.8 | | | Debt, net of deferred finance charges | | $ | | | 62.9 | | | 57.7 | | | – | | | 62.9 | | | – | | | Lease-related obligations | | $ | | | 78.3 | | | 69.4 | | | 32.0 | | | 78.3 | | | 32.0 | | | Net (debt) cash2 | | $ | | | (33.1 | ) | | (14.9 | ) | | 140.8 | | | (33.1 | ) | | 140.8 | | | Available liquidity2 | | $ | | | 331.5 | | | 346.6 | | | 464.9 | | | 331.5 | | | 464.9 | |
1. On a 12-month rolling basis, per million hours worked. 2. These measures are Non-GAAP Measures. For a detailed reconciliation of each Non-GAAP Measure to its most directly comparable measure in accordance with the IFRS as issued by the International Accounting Standards Board see Tables 2 to 11 of this press release. For additional information on these Non-GAAP Measures, please refer to the Company's MD&A for the three months and year ended December 31, 2024, dated February 19, 2025. The MD&A and the Company's audited consolidated financial statements and related notes for the year ended December 31, 2024, are available on Torex's website (www.torexgold.com) and under the Company's SEDAR+ profile (www.sedarplus.ca). 3. Gold equivalent ounces produced and sold include production of silver and copper converted to a gold equivalent based on a ratio of the average market prices for each commodity sold in the period. Refer to "Gold Equivalent Reporting" on page 6 of the Company's MD&A for the relevant average market prices by commodity.