Torex Gold, a leading Canadian gold mining, developing, and exploration company, recently released its Q1 2023 report showing a staggering increase in gold production and net income compared to the same period last year. The company produced 122,918 ounces of gold compared to 112,446 ounces in Q1 2022, with a record milling rate of 13,073 tpd. The mining rate at ELG Underground also reached a record high of 1,738 tpd.
“This represents a strong start to the year and puts the company on track to meet annual production guidance of 440,000 to 470,000 ounces,” Torex explained in the press release.
In the first quarter of 2023, Torex Gold sold 118,455 ounces of gold at an average realized price of $1,899 per ounce. The total sales contributed to the impressive revenue figure of $228.8 million compared to last year’s $207.7 million.
Torex Gold achieved total cash costs of $709 per ounce sold, compared to $748 per ounce in Q1 2022. All-in-sustaining costs totaled at $1,079 per ounce sold, a bit more expensive than this period last year, which averaged $1,034 per ounce. The all-in-sustaining costs margin came to $820 per ounce sold, creating a costs margin of 42%.
“Given the strong cost performance during the quarter, the company is on track to achieve full year total cash costs guidance of $740 to $780 per oz and all-in sustaining costs guidance of $1,080 to $1,130 per ounce,” Torex explained.
“The consistent operational and cost performance that investors have come to expect of Torex continued in the first quarter of 2023, placing the Company in an excellent position to deliver on full year operational guidance for a fifth year in a row,” Jody Kuzenko, the president and CEO of Torex, added.
Torex Gold reported a strong net income of $68.2 million for the quarter, compared to $40 million from Q1 2022. The earnings equaled $0.79 per share on both basic and diluted accounts. The adjusted net earnings came to $50.3 million compared to $37.2 million during the first quarter of last year.
“Our solid production and disciplined cost management, combined with the higher gold price, resulted in adjusted EBITDA1 of $132.7 million and net cash generation from operating activities of $47.0 million. Per usual course of business for first quarters, cash flow was impacted by tax and royalty payments of $85.9 million,” Kuzenko explained.
The net income figures included losses of $26.6 million, primarily related to the company entering the contracting and construction phases of the Media Luna Project. During Q1 2023, Torex Gold’s Media Luna Project expenditure totaled at $66.4 million. Most of these costs went toward continuing development of the Guajes Tunnel and South Portals, allowing the Guajes Tunnel to reach 3,870 meters and the South Portal Lower to reach 1,725 meters by the end of the period.
“Development of the Media Luna Project is tracking to schedule and budget, with the project approximately 24% complete at quarter end. Through the end of March, approximately 34% of project expenditures had been committed, including 22% incurred. As disclosed previously, the Guajes Tunnel has advanced more than four kilometres with breakthrough on track for early Q1 2024, if not before,” Kuzenko continued.
The company hopes the Media Luna Project will reach commercial production by early 2025.
Torex Gold’s earnings before interest, taxes, depreciation, and amortization (EBITDA) in Q1 2023 totaled $102.5 million while the adjusted EBITDA reached $132.7 million. The quarter finished with a net cash figure of $318.4 million with $564 million in available liquidity.
“In terms of the forward look, production during Q2 and Q3 will be closer to the bottom end of the quarterly run-rate implied by full year guidance. Our mine plan for the next two quarters sees the conclusion of mining in the Guajes pit, a heavy focus on waste stripping in the El Limón pit and draw down of stockpiled material,” Kuzenko explained.
He continued to state that the company expects to see high total cash and all-in-sustaining costs for Q2 and Q3, with production costs returning to normal by Q4.
“2023 is an important year for Torex and we are off to an excellent start. With $564 million of available liquidity at quarter-end, strong cash flow from ELG, and continued momentum on production and cost management, we are well-positioned to fund the remaining $683 million of capital on the Media Luna Project while delivering on our commitments and generating solid value for shareholders,” Kuzenko concluded.