Torex Gold expands credit facility to US$250 million

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Torex Gold Resources Inc. [TXG-TSX, OTC-TORXF] said Thursday it has secured upsized and extended credit facilities to support development of its Media Luna gold project in Mexico.

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, which is expected to be completed by 2024.

The credit agreement consists of a US$150 million revolving credit facility and a US$100 million term loan. The US$150 million revolving credit facility matures on December 31, 2025 and is subject to quarterly commitment reductions of $12.5 million, starting on March 31, 2024.

The US$100 million term loan facility can be drawn until December 31, 2023, matures on June 30, 2025 and is subject to four equal quarterly repayment instalments starting on September 30, 2024. Both the revolving credit facility and term loan can be repaid in full at any time without penalty.

Torex Gold shares advanced on the news, rising 0.28% or $0.03 to $10.53. The shares are currently trading in a 52-week range of $17.43 and $8.54.

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.

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.

Total sustaining capital expenditures over the life of the mine are forecast at US$545 million.

The Media Luna project consists of a gold equivalent (AuEq) indicated resource of 4.39 million ounces at an average grade of 5.38 g/t. Of the current indicated resource, 60% of the AuEq is attributable to gold, 33% to copper and the remainder to silver.

Inferred resources at the site now stands at 1.46 million ounces of AuEq, according to a recently updated estimate.

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