Torex Gold met 2022 cost guidance despite inflation

Mexico-focused Torex Gold achieved full-year cost guidance in 2022 despite significant inflation.

Total cash costs were US$730/oz sold, at the upper end of the guided range of US$695/oz to US$735/oz. All-in-sustaining costs totaled US$1,008/oz, near the mid-point of the guided US$980-1,030/oz range, the company said in a statement.

Torex reported financial and operational results for the three months and year that ended December 31, confirming record annual gold production of 474,035oz, compared to 468,203oz in 2021.

“Full-year gold production surpassed the upper end of the guided range of 430,000oz to 470,000oz, marking the fourth consecutive year that original production guidance has been achieved,” the statement said. 

“During the year, the company also achieved record annual throughput in the mill of 12,600t/d and record annual mining rate from [El Limón Guajes] ELG underground of 1,523t/d.”

Revenue was US$869mn, up from US$856mn, and net income US$189mn, up from US$152mn. 

The Canadian company owns the Morelos mine in Mexico’s Guerrero gold belt, which includes the ELG complex, the Media Luna project, the processing plant, and related infrastructure. Morelos is the company’s only operating mine.

MEDIA LUNA

Earlier this month, Torex said it expects to incur US$390mn-440mn of capital expenditures at its Media Luna project in 2023, which is forecast to be the peak investment year.

Media Luna expenditures incurred in 2022 totaled US$125mn from the commencement of construction on April 1 last year, with a remaining project spend of US$750mn.

“Expenditures during this period were primarily focused on continued development of the Guajes tunnel and South Portals, with development of the Guajes tunnel reaching 3,250m and South Portal Lower reaching 1,423m by the end of the year,” the statement added.

“It will be a key year in the development of Media Luna. With a solid plan in hand, a strong balance sheet, robust forecast cash flow from ELG ... we're well positioned to advance our strategic priorities,” CEO Jody Kuzenko said Thursday during a conference call.

“Steady progress was made at the Media Luna project with the project achieving overall completion of 15% at year-end, including engineering, procurement, surface construction, and underground development,” Kuzenko said in the statement. 

“First production remains on schedule for 4Q24, with lead times and costs for schedule-critical procurement packages tracking well to the estimates assumed in the 2022 technical report,” she added.