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Torex Gold Resources Inc . (TSX:TXG) has transitioned to positive free cash flow in June following the completion of its Media Luna project, according to the company’s Q2 2025 presentation delivered on August 7. Despite facing operational challenges including ten days of processing plant downtime during the quarter, the company reported strong recovery in June and July, positioning it for improved performance in the second half of the year.
Quarterly Performance Highlights
Torex Gold reported Q2 2025 payable production of 82,856 ounces of gold equivalent (AuEq), significantly impacted by the processing plant downtime. Revenue reached $254 million with adjusted EBITDA of $118 million. The company posted all-in sustaining costs (AISC) of $2,103 per ounce sold, resulting in an AISC margin of 36%.
As shown in the following chart detailing quarterly production and key financial metrics:
"Q2 represents the final quarter of negative free cash flow, with the company generating $44 million in free cash flow in June alone," noted Jody Kuzenko, President and CEO. The company ended the quarter with $209 million in available liquidity, including $103 million in cash.
Year-to-date, Torex Gold has produced 142,486 ounces of gold equivalent at an AISC of $1,796 per ounce, maintaining a strong AISC margin of 42% supported by record gold prices. The company has maintained its 2025 production guidance of 400,000 to 450,000 ounces of gold equivalent.
The following chart illustrates the company’s financial performance, highlighting the transition to positive free cash flow:
Operational Progress
The Media Luna mine continues to ramp up according to plan, with mining rates exceeding 5,300 tonnes per day (tpd) in June against a target of 7,500 tpd. Meanwhile, the ELG Underground mine exceeded its target of 2,800 tpd in April after a slower than expected start to the year.
The processing plant demonstrated strong recovery after the May downtime, with throughput in June exceeding the nameplate capacity of 10,600 tpd, reaching 11,200 tpd.
As illustrated in the following operational performance charts for processing:
Mining rates at both Media Luna and ELG Underground show steady progress:
The company has made significant progress on the Media Luna project timeline, with commercial production achieved and a focus on reaching targeted mining rates:
"Strong operational momentum through June and July sets the stage for a solid second half of 2025," said Kuzenko. "AISC is expected to materially improve with increased production and economies of scale as Media Luna continues to ramp up."
Financial Position and Outlook
Torex Gold’s balance sheet shows a net debt position of $127 million as of June 30, 2025, following a $35 million draw on its debt facility during the quarter to support annual profit-sharing payments and final months of elevated capital expenditures during the Media Luna ramp-up.
The company’s current financial position is illustrated in the following chart:
Higher metal prices have had mixed impacts on the company’s performance, as shown in the following analysis:
"Balance sheet and liquidity position is expected to improve with strong free cash flow generation going forward, supported by the backdrop of a robust gold price environment," said Andrew Snowden, CFO.
The company has implemented prudent risk management strategies, including foreign exchange zero-cost collars and forwards to protect operating costs from market volatility during the Media Luna ramp-up year. Additionally, gold puts provide downside protection at $2,500 per ounce while maintaining full upside exposure.
Strategic Growth Initiatives
Torex Gold has increased its 2025 exploration and drilling budget by 50% year-over-year to $45 million, with a focus on expanding its project pipeline. The company has added one development stage and four exploration stage projects to its portfolio.
The company’s project pipeline expansion strategy is outlined below:
A significant portion of the exploration budget ($26 million) is allocated to the Media Luna Cluster for infill and expansionary drilling at EPO, advanced exploration at Media Luna West, and inaugural drill programs at Todos Santos and Media Luna East.
"We’re taking a disciplined approach to growth with a small, tuck-in deal for an all-cash consideration of C$36 million to acquire Prime Mining, which owns the Los Reyes Project in Sinaloa, Mexico," said Dan Rollins, Senior Vice President of Corporate Development and Investor Relations. "The project boasts a sizeable mineral resource with substantial exploration upside across its large, underexplored land package."
The company’s unit cost performance shows the influence of the Media Luna ramp-up:
With the transition to positive free cash flow and the completion of major capital projects, Torex Gold appears positioned to capitalize on high gold prices while advancing its growth strategy through the remainder of 2025 and beyond.
Full presentation:
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