Torex Gold Resources Inc.

Great. Thanks everyone for joining us this morning. My name is Cosmos Chiu. I’m a research analyst at CIBC. Welcome to the thirty-eighth Annual Mining Conference Americas. I’d like to thank the Denver Gold Group for inviting me to kick it off this year. And of course, we have five very interesting companies presenting with very interesting assets in the Americas.

So some key numbers: 203, that’s the number of issuers presenting this year. 1.26 trillion, that’s the aggregate market cap of the companies that are presenting this year. 18%, that’s the increase in number of one-on-one meetings.

So without further ado, I’ll introduce my first speaker here, my good friend, Andrew Snowden, President and CEO of Torex Gold. It’s a twenty-minute session, so I think hopefully Andrew will leave us a bit of time in the end for Q&A. Of course, you can type the questions into the app. I can see it or ask it, or I’ll ask those questions on your behalf. So without further ado, Andrew.

Okay. Good morning, everyone. Thank you for being here today to listen to the Torex story. To me, the Torex story is a very clear one, one that’s really focused on three key pillars: strong execution, visible growth, and disciplined capital allocation. And maybe just briefly on each of those topics.

Firstly, on strong execution. We’ve developed a strong reputation here over the past ten years of operations of being a very reliable, dependable, consistent producer, where we hit our production guidance year after year, and 2026 will be no different. We’re on track to have a very strong second half of the year here, and we’ll comfortably be hitting our 2026 guidance. We also have a number of levers for growth across our portfolio, and I’ll make a few comments around growth through the course of the presentation today.

And then finally, disciplined capital allocation. Our business is generating strong free cash flow. At today’s spot price, we’ll be generating about $600 million of free cash flow this year. And so we have the cash to be able to invest in growth opportunities which provide the best return for our shareholders, while also returning significant capital back to our shareholders.

Now, for those who are less familiar with Torex, I’ll just provide a quick overview of who we are as a company. We’re an intermediate gold, silver, and copper producer, market cap of about 6.3 billion Canadian, 4.5 billion US dollars. And today we’re very attractively valued. We’re trading at 0.7 times consensus NAV and a free cash flow yield based on consensus of about 15%.

And you can think of us as a company of significant size and scale. Our flagship Morelos property, which you can see in red on the slide here, is in Guerrero State, Mexico, roughly about 350 kilometers southwest of Mexico City. From that asset, we’re producing close to 450,000 ounces this year, and we’ve got a significant resource base, 30 million ounces across the company’s properties, including 10 million ounces within the Morelos complex. We produce that gold at healthy margin, 54% AISC margin for this year, and generating significant free cash flow, as I mentioned earlier.

Now, the company has changed materially over the last twelve months. A year ago, we finished the construction of the Media Luna underground mine, which is the second underground mine at our Morelos property, and that mine has ramped up exceptionally well since then, and we actually hit design levels in Q1 of this year, a full year ahead of schedule. We also completed two acquisitions in the second part of last year, which transitioned us from being a single asset company to having a portfolio of assets through the mining life cycle. And thirdly, we also declared our inaugural return of capital program in November of last year, which we upsized a few months ago in May, where we’ll be returning $350 million to shareholders this year through a combination of dividends, which is about a 1% yield, and significant share buybacks, taking advantage of our current valuation and where we’re currently trading.

Now, the Morelos property I mentioned is our flagship asset, and where that asset is today is we’re producing 450,000 ounces a year for the next ten-year mine life. But we have several growth levers within that property to be able to continue to extend the mine life and to increase production.

Firstly, with drilling and on the resource potential of the property. We’re actually investing a record $50 million on drilling through the course of this year to be able to continue to add to the mine life at both our ELG underground mine and our Media Luna underground mine, and investing across the Media Luna cluster. And in fact, we issued a press release, I think it was Wednesday of last week, highlighting some recent drill results within the Morelos property. And that actually highlighted a new potential mineralized corridor called the San Miguel Corridor, which is just across the bottom of that property, all the way from Media Luna West to Media Luna East, and we’ll be continuing to invest in that property, and it has the potential to add significantly to our resource base.

Now, the first example of us actually turning this drilling into additional ore and additional material is a new mine that we’re building this year called Media Luna North. That’ll be the third underground mine that we’ll have on our property. The first ore is expected in December of this year. And that will actually shift us as a company from being mine-constrained today to being plant-constrained, which is a much more comfortable place to be, and actually provides lots of optionality for us to increase our production at Morelos looking forward.

And so that’s our next growth lever: looking at how can we increase throughput at our plant at Morelos to increase production. And we’re currently advancing two separate studies. One is a de-bottlenecking process that could increase throughput and production by about 10%. That will be low capital investment, in and around $10 million of investment that could achieve that throughput increase. And we expect we could see the benefits of that as early as late 2027, so late next year.

The second opportunity that we’re advancing is a larger expansion of our processing plant to really unlock the installed capacity of our current grinding circuit, which could bring us up to 14,500 tons per day, so overall a 35% increase in throughput. And we expect the capital cost of that will be in the region of $100 million. And that’s engineering work that we’re working on now to be able to be decisional as early as the first half of next year. And so in summary, Morelos is our flagship asset, 450,000 ounces a year for the next ten years, with significant levers for us to be able to grow that asset, both in terms of mine life extension and production.

We also have growth opportunities more broadly within our portfolio, and I’ll talk now about the Los Reyes gold-silver development project in Sinaloa. We actually issued the PEA on Los Reyes back in July, and that highlighted the strong economics of this project, as we demonstrated a fourteen-year mine life potential there with 161,000 ounces of production for the first eleven years of that mine life. A low-cost operation with an estimated all-in sustaining cost of $1,600 an ounce, and a very manageable capital investment, $515 million to bring that project online, which can be very comfortably funded from our existing Morelos property. It accounts for about ten months of free cash flow from our existing operation.

We’re committed to continue to advance this project, so the PEA was issued in July. We immediately started work on our pre-feasibility study, which will be issued in the second half of next year. Our feasibility study will then come out in 2028, followed by a two-year construction period in 2029 and 2030.

Elsewhere in our portfolio, we also have five exploration assets in our pipeline. Two in Nevada, Gryphon and Medicine Springs, in an established mining district, as well as three in northern Mexico, one in Sonora and two in Chihuahua. And the goal here isn’t just to invest dollars in exploration for exploration’s sake. It’s to have these opportunities in our pipeline to compete for capital, to compete for dollars against the rest of the growth opportunities within our portfolio, and we’ll advance each of these opportunities based on their merits and based on the drilling results that we get from these properties. And we’re actually drilling across four of these five properties this year.

And so when you piece all of that together, the disconnect in our valuation becomes more apparent. You can see here where we’re currently trading and some key metrics against our peer group. And we’re not just waiting here for the market to re-rate our shares. We’re focused on execution to be able to bring forward our catalysts so that the market can understand what we have here as a company and how we can drive the share price higher.

I’ll say a part of this valuation disconnect is also the discomfort that the investment community has at times on operating in Mexico. We’ve operated in Mexico very safely, very securely for the last ten years. We know how to permit in Mexico. We’ve been able to get all the permits that we need to be able to operate and advance our projects as required. And the permitting landscape in Mexico is turning very positively here of late. In fact, over the last twelve months, we’ve probably had more permits granted in Mexico than we have over the previous eight years.

And so the catalysts we’ll be focused on here to help drive that share price re-rate are really in a number of key areas. We touched on these through the course of my remarks today. First, focused on growth at Morelos, both in terms of extending the mine life as well as increasing throughput and production at our flagship asset. We’re also committed to continuing to advance the Los Reyes project through study stage and into production by 2031, as well as advancing our various pipeline of exploration assets to drive that long-term upside. We’ll continue to be committed to returning strong cash flow to our shareholders through that combination of dividends and share buybacks, as I mentioned.

And also just to note that we are in the process of applying for a US listing on the New York Stock Exchange. So for those investors who prefer to invest through the US exchange versus the TSX, we expect to be finalized with that listing here in the next few months.

And so with that, in summary, Torex is a scaled, highly profitable company with strong free cash flow. And that strong free cash flow here will enable us to focus on those growth levers I talked about through the course of the presentation today, both in terms of advancing and extending the mine life at Morelos, increasing production there, as well as advancing our various projects within our pipeline. And so that’s the Torex story. With that, I’ll hand the microphone back to Cos for any questions.

Thanks, Andrew, for a very good presentation. Any questions coming from the audience? If not… oh, there’s one there maybe. But maybe I’ll kick it off first. Andrew, as you mentioned, recently you had released some exploration results potentially identifying a new corridor. Could you maybe elaborate on some of those results and why that matters? When could it matter? And when could we start seeing it incorporated into the greater plans?

Thank you, Cos. Maybe I’ll just bring back up the property slide here. So you’re right, Cos, and as I mentioned earlier, we did release our latest Morelos drilling results on Wednesday of last week. And the particularly exciting part of that news release was the potential here of this new San Miguel corridor that I mentioned. Our exploration team have conceptually been quite excited about this corridor for some time now. We’ve been doing some drilling there for the past several years. But the results were still very early for us to be able to declare this a potential new discovery within the property. But as our exploration team continue to advance the drilling, it’s becoming increasingly likely that this San Miguel fault that really runs just to the bottom end of our property here is a source of mineralized fluid within our property, and this area has the potential to add significantly to our resource base.

And so because of these exciting results we’ve had today, actually next year we’re likely to invest significant capital in this corridor and drill out across the full corridor from west to east. And this corridor is actually different from the current Media Luna fluid source, which is more faults running north to south. Here we’re looking east to west, and so we’ll look across and drill across that fault to be able to really understand the full potential. And so if all goes to plan here, we’ll do that drilling through the course of 2027, with the potential of declaring an inaugural resource in that area by Q1 of 2028, and then advancing the project from there.

The really exciting optionality with the San Miguel corridor is because of its proximity to Media Luna, it’s likely that we’ll be able to link in that San Miguel corridor into much of the existing infrastructure we have at Media Luna, including the material handling system. We’ve got the Guajes Tunnel, which is the connection from the Media Luna deposit all the way to our processing plant, a seven-kilometer underground tunnel under a river. And so that will allow all of the material we find in this Media Luna cluster area to be able to get brought and handled into our processing plant very effectively. And so that will allow us to actually bring on this resource into production much earlier than if this was obviously a greenfield find within a property. And so we’re looking forward to advancing that through the course of next year with a goal of providing more information at the beginning of 2028.

Thanks, Andrew. Was there a question coming from the audience? If not, I’ll continue, Andrew. As you mentioned, the second half is gonna be better than the first half. And you kinda touched on it, but could you maybe elaborate once again on what’s happening in the second half that will improve upon what happened in the first half?

Sure. No, thank you, Cos. We’ve actually had a lot of questions, I’ll say over the past several months, about our production profile this year. And in fact, our expectation in 2026 was always the first half of the year would be softer, so we hit about 200,000 ounces in the first half of the year, and we’re expecting to increase that significantly here through the back half of the year. And that’s really driven by grade.

And although in an ideal world, we would look for our production profile to be flat quarter over quarter, this year our mine plan was somewhat constrained by the fact that with the Media Luna build last year, our pace plan only came on in September. Because our pace plan came on in September and was commissioned through until the beginning of the year, we still had a number of open stopes that we had to backfill to be able to then give us flexibility in the mine plan. And so our mine sequence through the course of 2026 did not have the typical flexibility we’ll have going forward, and it meant that we were mining more secondary stopes, lower grade stopes through the first half of the year, and we’ll be mining higher grade stopes here through the second half of the year.

And that is all tracking to plan. We’re sitting here in late September, and Q3 is tracked exactly to plan, exactly how we’ve talked to the market, where we’ll be stepping up production quite significantly on where we were at Q2, and are very comfortable with hitting in and around the midpoint of our production guidance for 2026.

Great. Thanks, Andrew. I think that’s all the time we have. It’s a first presentation, so thanks again for keeping us on time, on budget.

Perfect. Okay, thank you everyone. I appreciate your time. [audience applauding]