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On Thursday, Desjardins initiated coverage on Torex Gold Resources (TXG:CN) (OTC: OTC:TORXF) with a positive outlook, assigning a Buy rating and setting a price target of C$60.00. The firm’s analysis highlights Torex’s ownership of the Morelos complex in Guerrero, Mexico, noting the company’s solid operational performance and its potential for extending the mine’s life through ongoing exploration efforts. The company’s stock has demonstrated remarkable strength, with a 130% return over the past year and currently trading near its 52-week high of $36. According to InvestingPro analysis, the stock appears fairly valued based on its comprehensive Fair Value model.
The Morelos complex, a single-asset gold and copper production site, has been a focal point for Torex Gold. Desjardins analysts underscored the near completion of the Media Luna project within the complex. This development is particularly noteworthy as the first concentrate from Media Luna was produced in March, signaling a significant step forward for Torex. The company’s operational success is reflected in its strong financial metrics, with revenue growth of 26% and an impressive gross profit margin of 59% in the last twelve months.
Desjardins anticipates a potential increase in Torex Gold’s stock value as the company approaches commercial production. The expectation is that Torex will become free cash flow positive in the second half of 2025, which could serve as a catalyst for the stock’s re-rating in the market.
The analysts at Desjardins have given Torex Gold an "Above-average Risk" rating. This designation reflects the inherent risks associated with the mining industry, particularly for companies like Torex that operate with a single asset. Despite this, the firm’s outlook remains optimistic based on the company’s track record and future prospects.
Investors and market watchers will likely keep an eye on Torex Gold as it progresses towards commercial production and seeks to capitalize on its exploration and development activities. The company’s financial performance in the latter half of 2025 will be a critical period for evaluating the success of its current projects and the efficacy of its growth strategy. With analysts forecasting EPS of $2.89 for FY2025 and the company maintaining a healthy current ratio of 1.05, Torex Gold appears well-positioned for its next phase of growth.
In other recent news, Torex Gold Resources has reported significant progress in its operations and future plans. The company achieved a production of 453 thousand ounces of gold in 2024, aligning with its revised guidance of 450 to 470 thousand ounces. This adjustment followed a postponed shutdown of the processing plant for the Media Luna project’s commissioning to the first quarter of 2025. Torex Gold has also scheduled the release of its financial results for February 19, 2025. For the year 2025, the company projects production between 400 and 450 thousand gold equivalent ounces, with capital expenditures expected to be significantly lower than in 2024, ranging from $90 to $100 million. Additionally, Torex Gold plans to enhance its drilling and exploration investment by 50% in 2025, aiming to fund 125 kilometers of drilling. Raymond (NSE:RYMD) James has maintained its Outperform rating for Torex Gold with a Cdn$34 target, noting the company’s progress on the Media Luna underground project, which is 94% complete. The project is on track to begin producing copper concentrate by the end of the first quarter of 2025.
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