Can you provide an update on Torex Gold’s most significant achievement in 2022?

We closed off another record year on production, delivering on the high end of our guidance range. With prudent cost management also in place despite inflationary challenges, we achieved our fourth consecutive year delivering on operational guidance.

Beyond our success on the operating front, we continue to deliver on our strategy, which was articulated in 2021 under six key pillars, which are: (1) Optimize and Extend ELG: This is comprised of our El Limón Guajes producing assets, which include open pit and underground mine deposits on the north side of the Balsas River. (2) De-risk and Advance Media Luna: an underground mining project that represents our future in Guerrero. (3) Grow Reserves and Resources: Our property is 29,000 hectares, 75% of which remains unexplored. (4) Prudent Capital Allocation: As of early 2023, Torex is sitting on C$340 million in cash, no debt, operating cash flow from ELG, and a credit facility pinned for C$250 million.

The two other areas of strategic focus for us are continued excellence on ESG, and lastly, we continue to embrace innovation.

What is the significance of Media Luna to Torex’s future growth plans?

Every company is founded on a flagship asset, and the combination of ELG and Media Luna on our Morelos Property represents the future from which we will grow. When we released our feasibility study, we took our maiden reserve on Media Luna and it revealed 3.3 million oz au eq at about 4.5 g/t. The interesting thing about Media Luna is that 30% of the value of that ore body sits in copper. As a result, Torex will be transitioning from being a gold producer with some copper byproduct to being a true gold-copper producer. Media Luna is going to be a big underground mine, producing 7,500 t/d at peak capacity. It will be one of the largest gold underground operating mines in Mexico, and a generator of value for us.

Media Luna extends our mine life out to 2033; and with the magnetic anomaly that hosts the Media Luna deposit only about a third drilled off, we believe we will be mining in Guerrero for decades to come.

Do you see opportunities for accretive M&A deals in the current environment?

Our primary goal is to keep our eye on the ball in terms of delivering Media Luna on time, on schedule and on budget. However, we also want to diversify away from single asset risk. When valuations are depressed, it is an opportune time to look at other companies that have quality assets, and whose share prices are in similar situations to ours. In these instances, it could be appropriate to do some kind of merger of equals to get to scale and diversify away from single asset risk. Given the strength of our balance sheet, we can be patient, prudent, and opportunistic when it comes to M&A and make the right deal at the right time that will accrue value to our shareholders. That is our strategy, and it is playing out positively for us.

Does the market use ESG as an effective mechanism to weigh investment risks and opportunities?

The problems with ESG come when the market reduces it to a carbon conversation. It needs to be a holistic conversation that is bred into the DNA of a company. The other area the market gets wrong is that for the most part only the quantitative components of ESG are considered. The important parts of ESG are much more qualitative. For example, when we took our maiden reserve at Media Luna, we were getting checks and boxes on ESG matrices, but the reality of that decision means that Torex will now make generational change in an area of the world that needs economic development the most. Parents who envision their children with options for education, well-paying jobs, or the permanent establishment of a wage economy in support of eradication of poverty are positive community impacts that should be recognized in an ESG framework.