Torex Gold Resources Inc. [TXG-TSX; TORXF-OTC] has released an updated technical report, including a life-of-mine plan for its producing El Limon Guajes open pits and Sub-sill underground mines in Guerrero State, Mexico.
The report, which was released after the close of trading on September 4, 2018, envisages a 22% increase in the average production to 430,000 ounces through to 2023.
Torex reacted Wednesday September 5 by falling 2.28% or 20 cents to $8.58.
El Limon Guajes is located on the Morelos property, a group of seven mineral claims, which hosts four deposits, El Limon (including El Limon Sur), Sub-Sill, Guajes, and Media Luna. Each has a resource estimate prepared in according with NI 43-101 standards of disclosure.
The Morelos property is a 29,000-hectare mineral claim, approximately 200 km southwest of Mexico City. The property is in the Guerrero Gold Belt. The entire mineral claim is considered to have significant exploration potential.
The El Limon-Guajes Mine (ELG), located north of the Balsas River, includes three open pits and an underground mine. While operating the ELG Mine complex, Torex is carrying out work on the Media Luna deposit to support the development of this mineral resource. The current estimated Media Luna inferred mineral resource is 51 million tonnes at 2.0 g/t gold equivalent cut-off grade.
But with only 31% of the magnetic anomaly explored, the report said it would be prudent to allow for additional tailings capacity to accommodate potential future expansions of the mineral resource and extension of the mine life over the longer term.
An updated Preliminary Economic Assessment for Media Luna indicates an all-in-sustaining cost of $610/oz on a gold equivalent basis (converting copper to gold equivalent). The initial capital cost is estimated at $496 million.
ELG started production in December, 2015 and reached the commercial production stage in March, 2016. Once in full production, the mine was expected to rank amongst the largest and lowest cost gold operations in the world, with expected life-of-mine (LOM) annual production of 370,000 ounces of gold at a LOM all-in-sustaining cost of US$61/oz.
The company now says the life-of-mine plan is forecasting has increased average annual gold production to 430,000 ounces per year from 2019 to 2023.
The technical report includes a Media Luna design utilizing a conceptual new underground mining technology that Torex is developing. The new technology, called the Muckahi Mining System. Torex says the technology has the potential to increase the Media Luna Project net present value by $197 million.
“If proven, the Muckahi technology could be applicable to many other underground deposits,” the company said.
Torex is an intermediate gold producer, based in Canada, and engaged in the exploration, development and operation of the Morelos gold property.