Torex stays the course for 2022 production with a small increase to mining costs

Canada’s Torex Gold has maintained its 2022 production guidance at its El Limon Guajes mining complex in Guerrero, Mexico, while announcing an expected small year-on-year increase to its cost of mining. 

Nathan Richardson
 Torex Gold's El Limon mine in Mexico

Torex Gold's El Limon mine in Mexico


The miner expected the operations, which are part of its Morelos Property, would produce 430,000-470,000 ounces this year, which is in line with a three-year outlook released in September. 

There are "no surprises" there, BMO Capital Markets analyst Ryan Thompson said. 

Torex's total cash costs for the year were set at US$695-US$735/oz, which compares with US$680-US$720/oz in 2021. 

The increase was driven by higher labour rates, higher electricity consumption, and other consumables, Torex said. 

"These factors will be partially offset by a higher level of mined waste capitalised versus expensed," the company added. 

All-in sustaining costs guidance was set at US$980-US$1,030/oz, which was up from US$920-US$970/oz in 2021, Torex said. 

Thompson said the cost guidance was in line with BMO's. 

Torex's sustaining capital expenditures in 2022 were guided at US$85 million to US$105 million, of which US$50 million to US$60 million was related to capitalised waste stripping, the miner said. In 2021, sustaining capex was US$75-US$90/oz. 

"The year-over-year increase in both capitalised waste and sustaining capital expenditures is directly attributable to the pushback of the El Limon open pit," Torex said. 

"The pushback will result in a greater level of waste mined in 2022 as well as additional equipment rebuilds, which are required to extend the life of the open-pit fleet into mid-2024 when open-pit reserves are expected to be depleted," the company added. 

TSX-listed Torex last traded at C$13.10.

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