Torex Gold Resources (TSX: TXG) has reported encouraging results from the 2022 drilling program at EPO, a deposit located to the north of its Media Luna deposit in Mexico. The program was focused on upgrading inferred resources to the indicated category through infill drilling and expanding inferred resources through step-out drilling.
Notable assays from the infill portion included 18.9 grams per tonne gold-equivalent (g/t AuEq) over a core length (not true width) of 32.9 metres 107.7 g/t AuEq over 4.3 metres, 10.8 g/t AuEq over 35.1 metres, 7.3 g/t AuEq over 42.0 metres, and 16.4 g/t AuEq over 17.2 metres.
According to Torex chief executive Jody Kuzenko, these intersections had similar thickness and even better grades than previous drilling in these areas. "Based on the 2022 drill results, we expect a reasonably high conversion rate when upgrading mineral resources from the inferred category to the indicated category," he commented in a media release.
These infill drilling results, together with the ones planned for the first half of 2023, will form the basis of an internal prefeasibility study on EPO, which the company expects to complete in H1 2024.
"Step-out drilling to the south and west of EPO was also successful in extending the mineralized footprint of the deposit approximately 200 metres to the west and 250 metres to the south. Based on the results of the program, we expect to add inferred mineral resources within the area drilled off," Kuzenko added.
For Torex, drilling of the EPO deposit with a view to advancing to the mine design stage is a "strategic priority" given its potential to play a key role in supporting the company's efforts to fill the mill and maintain consistent gold-equivalent production beyond 2027.
"These drill results continue to demonstrate the underlying resource potential of the Morelos property and reinforce our positive outlook on our ability to complement future production from Media Luna,” Kuzenko concluded.
On the south side of the Balsas River, Media Luna is an underground gold-silver-copper deposit that forms part of the company's Morelos complex. It is located 7 km away from its El Limón Guajes (ELG) mine complex, which comprises of three open pits, an underground mine and a processing plant.
In 2022, Torex approved the Media Luna project following a feasibility study showing an after-tax NPV (5%) of $458 million and after-tax IRR of 16.1%. Initial mineral reserves at Media Luna are estimated at 3.36 million oz. AuEq based on 23 million tonnes grading at 4.54 g/t AuEq. Construction of the mine is well underway, with anticipated commercial production in Q1 2025.
Shares of Torex Gold saw a 5% gain on the TSX by 12:30 ET, giving the Toronto-based intermediate gold producer a market capitalization of $1.9 billion.