Torex Gold hit by inflation pressure in Mexico
Torex Gold Resources Inc. [TXG-TSX, OTC-TORXF] has provided 2023 operational guidance as well as a 5.0-year production outlook for its Morelos Complex in Mexico.
The Morelos Complex includes production from the ELG Mine Complex as well as the Media Luna project development which is expected to be completed by 2024.
Gold production in 2023 is forecast at between 440,000 ounces and 470,000 ounces. Total cash costs are expected to be in the US$740 to US$780 per ounce of gold sold range this year.
The US$45 an ounce increase in costs relative to 2022 guidance is due to ongoing inflationary pressures, primarily related to key consumables. All-in-sustaining costs are forecast at US$1,080 to US$1,130 an ounce of gold sold in 2023.
The US$100 an ounce increase relative to 2022 guidance reflects higher total cash costs, a greater amount of capitalized stripping related to additional laybacks and a higher level of underground development.
Torex is an intermediate gold producer, engaged in development and exploration at its 100%-owned Morelos Gold Property, which covers an area of 29,000 hectares in the Guerrero Gold Belt, about 180 kilometres southwest of Mexico City.
Within the Morelos Gold Property, the company’s principal assets are the El Limon Guajes (ELG) Mining Complex, which consists of the El Limon, Guajes and El Limon Sur open pits (the ELG Open Pits), The El Limon Guajes underground mine, including zones referred to a Sub-Sill and El Limon Deep (ELD) and the processing plant and related infrastructure.
These operations reached in the commercial production stage in April 1, 2016.
At full production, the mine ranks amongst the largest and lowest cost gold operations in the world.
Torex recently said it has secured upsized and extended credit facilities to support development of its Media Luna project.
The company said a banking syndicate has expanded its credit facility to US$250 million from US$150 million and extended the maturity date of the facilities to 2025 from 2023. This represents another key de-risking milestone for the Media Luna development, the company has said.
The Media Luna deposit is located on the same concession as The Guajes, El Limon and Sub-Sill deposits. Media Luna is hosted in a magnetic anomaly south of the Balsas River that was discovered in March 2012.
Torex has said it planning US$848 million in capital expenditures to bring the Media Luna project into commercial production. That includes US$85 million worth of underground development during the pre-commercial production period from the fourth quarter of 2023 to the fourth quarter of 2024.
On January 16, 2023, Torex shares closed at $17.92 and currently trade in a 52-week range of $18.73 and $8.07.