From September 2018 to September 2019, Torex Gold Resources’ (Torex Gold) share price doubled. What has been the basis of this success?

Torex Gold’s share price performance over the last 12 months reflects the transition of our El Limón Guajes mine to steady state operation following the resolution to an illegal blockade in early-2018. Since then, the mine has lived up to its potential, delivering record gold production in Q3 2019, following a record quarter in Q2 2019. The operational performance in combination with a resurgent gold price has allowed Torex to generate strong cash flow, which we have directed towards strengthening our balance sheet, advancing our proprietary Muckahi Mining System and de-risking our Media Luna project.

The operational performance in 2019 has been anchored by better than expected output from the open pits and Sub-Sill underground deposit. Exploration continues to find more resources from Sub-Sill and ELD. These higher-grade underground deposits provide a nice sweetener to the open pits, which are already relatively high-grade with a reserve grade of 2.9 g/t gold. The process plant has performed excellently in terms of recoveries, and we are making steady progress at achieving targeted throughput of 13,000 mt/d.

How does Torex Gold plan to make the transition from production at El Limón Guajes to the Media Luna in the future?

Our goal is to start-up underground mining activities at our Media Luna project in 2024, which is roughly when we anticipate the start of processing of lower grade stockpiles from El Limón Guajes. We expect to generate more than enough cash to retire our debt and to fund the development of Media Luna. We plan to commence a feasibility study on Media Luna in early-2020, which will incorporate several trade-off studies carried out over the last year. With a gold-equivalent inferred resource of 7.4 million oz at a gold-equivalent grade of over 4.4 g/t, we believe Media Luna has the potential to extend the cash flow potential of our operation by more than a decade. To date, the resource is contained within a third of the area of the targeted magnetic anomaly.

The first blast of Torex Gold’s Muckahi Mining System (Muck-ah-high) took place in April 2019. What is the strategy for the development and implementation of this technology?

Muckahi is a very different approach to material and personnel transport in an underground mine. The primary innovation is conveying muck from the tunneling face or production stope, directly to surface or the shaft-loading pocket. To make conveyors practical, innovation was required to steepen the ramps from a conventional 7 degrees to 30 degrees.  30-degree ramps cannot be excavated with rubber-tired equipment, so a further innovation was required to create the equipment that could do this. The adoption of a roof mounted monorail system was another critical innovation that made it possible to move equipment without rubber tires through the mine. The strategy for development is first to prove that the machines we have designed can achieve their purpose and then to demonstrate that when the machines are integrated into a mining system, the system performs at the design rate.

The first two machines tested were the equivalent of a conventional drill jumbo and a scissor truck.  These two pieces had to operate from and be transported on the overhead monorail system. Once these pieces of equipment had been successfully proven in a flat tunneling application, they were tested in a steep ramp application. That test was also successful. Testing of the monorail mounted mucking equipment is just getting underway now, as is the ‘tramming conveyor,’ which operates on the monorail system to transport muck. Testing is also underway to confirm the drilling and blasting techniques that will produce a muck ‘product’ in open stope mining that is sufficiently fragmented to be ‘conveyable.’  Testing on all fronts has been encouraging. 

The first big implementation decision has been taken. With the functional capabilities of the equipment proving up as per design, a decision has been made to dedicate the ELD deposit to testing the machines together as an integrated system. The work in the ELD deposit is just getting underway.  Once the integrated system is demonstrated we anticipate using it as one of the cornerstones of our growth strategy.

Has Torex Gold been receiving global interest in Muckahi, and which type of companies have been contacting you? 

We have been receiving questions from various sources, especially from base metal miners. If there is potential to reduce costs by 30%, make an all-electric mine which produces much less greenhouse gases and produce less waste rock that must come to surface, you are going to attract interest from industry. We will wait until we prove Muckahi before giving definitive answers to the questions posed.

Muckahi will fit in any type of underground mine, except a block cave operation, given fragmentation is the key variable to control. We believe we can potentially triple the productivity of an underground mine given the ability to achieve continuous mucking at the face, conveyors to transport ore directly from the stope to surface and fewer stopes in cycle.

What does the near-term future hold for Torex Gold, and what would the Company like to achieve?

We have achieved full year gold production of 430,000 oz (+/- 7%) in 2019 and will look to replicate a similar performance over the next few years. The solid cash flow from El Limón Guajes is expected to provide the capital required to advance Media Luna to production and prove out Muckahi. We believe Muckahi gives Torex Gold a spectacular platform from which to grow. We want to deliver on these aspects while maintaining the social processes that have been successful to date. We try to create a work experience where people willingly give their best, and the workplace is organized such that teams giving their best can be safe and highly productive. We also seek to provide external stakeholders with an experience of the Company that results in them wanting to see us succeed.