Canadian Mining Journal


Torex Gold posts ‘extraordinary’ Q3

Torex Gold's El Limon Guajes mining complex, in Mexico. Credit: Torex Gold

Torex Gold’s El Limon Guajes mining complex, in Mexico. Credit: Torex Gold

Mexico-focused Torex Gold Resources is the latest gold miner to report surging profits on the back of a strong gold price.

For its third quarter, Torex poured 131,790 oz. gold at all-in sustaining costs of US$877 per oz. at its El Limon Guajes mine in Guerrero state. At the same time, it sold over 133,000 oz. gold at US$1,884 per oz. – making for a stellar quarter.

The company posted record net earnings of US$60.3 million (US$51.3 million adjusted) on revenues of US$256.5 million. That compares to US$17.1 million in net income on revenues of US$198.2 in last year’s third quarter.

“Q3 was simply extraordinary — a record-breaking quarter across many facets of the business,” said Torex president and CEO Jody Kuzenko in a release. “Gold sales of 133,036 ounces were the highest in our history, as was the realized gold price of US$1,884 per ounce. The record realized margin of US$1,250 per ounce generated during the quarter underpins our best quarterly financial performance ever, including US$163 million of EBITDA, US$173 million of operating cash flow (US$138 million before changes in working capital) and US$124 million of free cash flow.”

The company ended the quarter with a net cash position for first time since beginning commercial production at El Limon Guajes in 2016. The US$77.1 million in net cash represented a US$174 million improvement year over year.

“During Q3, we paid down US$72 million of debt, bringing outstanding debt down to US$155 million,” Kuzenko added. “Post quarter end, we paid down an additional US$50 million against our revolver, which deleverages our balance sheet even further.”

In August, Torex issued revised guidance for the year of 390,000 to 420,000 oz. of gold production at all-in sustaining costs of US$965 to US$1,025 per oz. sold. The new figures account for a temporary suspension of operations in the second quarter due to the pandemic.

The company’s El Limon Guajes mining complex is located at the 290-sq.-km Morelos property, in the Guerrero gold belt, 180 km southwest of Mexico City. The operation includes three open pits and an underground mine.

Morelos also hosts the Media Luna underground project, which Torex is advancing toward first production in early 2024. A feasibility study is due out in the first quarter of 2021, following up on a 2018 preliminary economic assessment that estimated the project would cost US$497 million to build.

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