Torex Gold Resources Inc. [TXG-TSX; OTC-TORXF] established a new quarterly gold production record of 138,100 ounces in the third quarter of 2019.
Production from the Morelos Gold Property in Mexico surpassed the previous record, set in the second quarter of 2019, by 21%.
“With the strong year-to-date performance and expectations for production in the fourth quarter of 2019, the company is well on track to achieve full year guidance of 430,000 ounces sold (+/-7%),” the company said in a press release on October 3, 2019.
Torex Gold shares advanced on the news, rising 3.9% or $0.66 to $17.21 on October 3. The shares are currently trading in a 52-week range of $9.83 and $21.91.
The Morelos Gold Property is an area of 29,000 hectares in the Guerrero Gold Belt, located 180 kilometres southwest of Mexico City in Guerrero State, Mexico. The property is four hours by road from Mexico City.
Within this 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 with expected life-of-mine (LOM) annual production of 370,000 ounces of gold at a LOM all-in-sustaining cost of US$616 per ounce.
In addition, the Media Luna deposit is an early stage development project that 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, and contains an inferred resource of 7.4 million gold equivalent ounces at a grade of 4.48 g/t.
The company issued a Preliminary Economic Assessment for Media Luna in September, 2018. It envisions an underground operation with expected production of 3.9 million ounces of gold equivalent over the life-of-mine at an average all-in-sustaining cost of US$619 per ounce of gold equivalent and an initial capital expenditure of US$496 million.
Meanwhile, production in the third quarter of 2019 beat street estimates due to higher grade and continued high supplementary throughput from the underground Sub-sill deposit.
“I could not be more pleased with the operational results in the third quarter,” said Torex Chief Operating Officer, Jody Kuzenko. “We set ourselves some bold targets on safety and production, and came together as a team to deliver.”
As a result, the company’s total cash balance increased by $52 million in the quarter and total debt was reduced by over $36 million, the company said.
The stellar Q3 results mark a significant change in fortunes for Torex which had to deal with illegal blockades at a key area of the ELG Mine Complex last year.
Hector Astudillo, the Governor of Guerrero State, acted decisively in January 2018, to lift the illegal blockade by the Los Mineros Union and peacefully re-established the rule of law, the company said in a press release.
Published reports said seven Torex Gold employees were kidnapped briefly on Friday (January 26, 2018) and released later the same day prior to a police intervention.