DexCom earnings beat by $0.03, revenue topped estimates
Introduction & Market Context
Torex Gold Resources Inc . (TSX:TXG) presented its Q1 2025 results on May 8, 2025, highlighting a transformative quarter marked by the substantial completion of its Media Luna project construction and the subsequent declaration of commercial production. The quarter represented a planned transition period as the company integrated the new project into its operations, resulting in temporarily lower production but setting the stage for future growth.
The gold producer’s shares have been performing well, trading near the upper end of its 52-week range of $19.01 to $49.07, reflecting investor optimism about the company’s growth prospects despite a recent 3.28% decline to $45.45 as of May 7.
Quarterly Performance Highlights
Torex Gold reported payable production of 59,630 gold equivalent ounces (AuEq) in Q1 2025, significantly lower than previous quarters due to a planned four-week tie-in period for Media Luna upgrades. Despite this temporary production dip, the company maintained strong financial metrics with all-in sustaining costs (AISC) of $1,405/oz AuEq sold, resulting in a healthy AISC margin of 50%.
As shown in the following chart, gold equivalent production declined significantly in Q1 2025 compared to previous quarters, reflecting the planned disruption:
Revenue for the quarter reached $170 million with adjusted EBITDA of $92 million. The company reported net cash used in operating activities of $10 million, which included royalties paid of $11 million and taxes paid of $102 million. Torex ended the quarter with $198 million in available liquidity, including $107 million in cash.
The company’s performance against its 2025 guidance shows that despite the transition quarter, Torex remains on track to meet its annual targets:
Management noted that production is expected to increase in later quarters of 2025, while AISC is projected to peak in Q2 before improving. The company remains confident in achieving its full-year 2025 guidance of 400,000 to 450,000 oz AuEq at an AISC of $1,400 to $1,600 per oz AuEq sold.
Media Luna Project Update
The Media Luna project reached a significant milestone with the declaration of commercial production after the quarter end. The processing plant tie-ins were completed safely and on schedule, with 83 tie-ins and 136 systems successfully commissioned during the quarter.
The company provided the following progress update and timeline for the Media Luna project:
Management is now focused on ramping up the mine to 7,500 tonnes per day by mid-2026. Mining rates are expected to climb following the paste plant commissioning in Q2 2025. The company reported that underground development rates are ahead of plan, recoveries and concentrate quality are improving, and the workforce transition is substantially completed.
Financial Position & Outlook
Torex Gold’s financial performance in Q1 2025 reflected the temporary impact of the Media Luna tie-in period, but the company maintained strong AISC margins thanks to high gold prices. The following chart illustrates the company’s financial performance trends:
The company’s cash flow was impacted by significant capital expenditures and tax payments during the quarter, as illustrated in this waterfall chart:
Torex ended Q1 with a net debt position of $175 million after drawing $130 million on its debt facility during the quarter. Management expects the balance sheet and liquidity position to improve as the company transitions back to positive free cash flow by mid-2025.
To manage financial risks, Torex has implemented a prudent capital allocation strategy that includes hedging against foreign exchange volatility while maintaining full upside exposure to gold prices:
Reserves, Resources & Exploration
Torex Gold reported a 7% year-over-year increase in mineral reserves, primarily due to inaugural reserves at EPO. The company’s base case production profile is now solidified above 450,000 koz AuEq through 2030.
The following chart illustrates the drivers of mineral reserve growth in 2024:
Similarly, the company’s measured and indicated resources saw an addition of 388 koz AuEq:
Exploration results continue to show promise, with multiple high-grade intercepts returned from the 2024 drilling program at Media Luna West and strong initial results from Media Luna East. This drill plan map highlights the resource potential on the south side of the Morelos Property:
Forward-Looking Statements
Looking ahead, Torex Gold is positioned for growth as the Media Luna project ramps up to full production. The company expects production to increase in the coming quarters while maintaining strong margins supported by high gold prices. The return to positive free cash flow anticipated by mid-2025 should strengthen the balance sheet and provide flexibility for future growth initiatives.
With mineral reserves now supporting a production profile above 450,000 koz AuEq through 2030 and continued exploration success in the Media Luna cluster, Torex Gold appears well-positioned to deliver on its strategic pillars of optimizing production, growing reserves and resources, and pursuing disciplined growth while maintaining its commitment to responsible mining practices.
Full presentation:
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