Torex releases three-year guidance for ELG, Media Luna plans

Torex Gold Resources (TSX: TXG) has released its multi-year production outlook for the El Limon Guajes (ELG) gold mining complex in Mexico, about 180 km southwest of Mexico City.

The mid-range guidance is for 450,000 oz. gold in 2022; 225,000 oz. gold in 2023; and 325,000 oz. in 2024 (excluding Media Luna). ELG is targeted to produce about 450,000 oz. of gold this year.

Output will come from ELG's open pits through mid-2024 and stable mining rates from the ELG underground through to at least the end of 2024, and likely longer as exploration continues, the company said. Mill throughput will be maintained by processing lower grade stockpiled material until the Media Luna mine comes onstream early in 2024.

The site of the Media Luna gold-silver-copper deposit to be in production in early 2024. Credit: Torex Gold Resources.

Torex is working on a feasibility study for Media Luna, due out in the first quarter of 2022. This deposit is mineable from underground and contains copper and silver as well as gold. According to a preliminary economic assessment completed in 2018, the mine has the potential to produce 350,000 oz. of gold-equivalent annually over a 10-year mine life.

The after-tax numbers in the PEA outlined a net present value (at a 5% discount rate) of US$582 million and an internal rate of return of 27%, based on a gold price of US$1,200 per oz., a silver price of US17 per oz. and a copper price of US$3 per lb.

The estimated capital outlay for Media Luna would be US$496 million for the underground development and modifications to the ELG mill, which will produce copper-gold-silver concentrate as well as gold-silver dor?(C). All-in sustaining costs were earlier given as US$619 per gold-equivalent ounce.

Torex upgraded the resources at Media Luna in April to 20.9 million indicated tonnes grading 3.21 grams gold per tonne, 31.7 grams silver per tonne, and 1.07% copper, plus 18.9 million inferred tonnes grading 2.11 grams gold per tonne, 28.2 grams silver per tonne, and 1.04% copper.