Torex Gold Resources (TXG) Q2 2024 earnings summary

Executive summary

• Achieved gold production of 229,316 oz in H1 2024, maintaining strong operational performance and safety metrics (LTIF 0.22 per million hours), and tracking to full-year guidance for the sixth consecutive year.

• Revenue reached $270.3 million in Q2 2024, with adjusted EBITDA of $121.2 million and net cash from operations of $97 million.

• Media Luna Project is 78% complete, with first concentrate production targeted for Q4 2024 and commercial production expected in mid-Q1 2025.

• Ended Q2 with $109 million in cash and $346 million in available liquidity, supporting ongoing capital projects and strategic priorities.

• Maintained a strong balance sheet with minimal drawdown on the revolving credit facility, fully funding the remaining Media Luna spend.

Financial highlights

• Q2 revenue was $270.3 million, with gold sales of 113,513 oz at an average realized price of $2,193/oz.

• Adjusted EBITDA for Q2 was $121.2 million; net income was $1.9 million, impacted by a $51.4 million deferred tax expense.

• Total cash costs were $1,014/oz sold, and all-in sustaining costs (AISC) were $1,239/oz, with a 44% AISC margin.

• Generated $46 million in cash before Media Luna spending; after $108 million spent on Media Luna, free cash flow was negative $62 million for the quarter.

• Available liquidity at quarter-end was $346 million, including a $55 million draw on the credit facility.

Outlook and guidance

• 2024 gold production guidance maintained at 410,000–460,000 oz AuEq, with costs expected at the upper end of guidance due to higher gold prices and Mexican peso strength.

• Media Luna capital expenditures guidance revised to $950 million, up from $874.5 million, mainly due to MXN strength and additional scope.

• Return to positive free cash flow anticipated by mid-2025 as Media Luna capex winds down, with a significant step change expected in Q3 2025 as Media Luna ramps up.

• 2025 will be a transitional year with higher AISC (~$1,300/oz gold equivalent), expected to decline to ~$1,200/oz or below in 2026.

• Goal to maintain a minimum cash balance of $100 million through Media Luna build.