Torex Gold Resources Inc.

Thank you for standing by. This is the conference operator. Welcome to the Torex Gold Resources, Inc. First Quarter 2022 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference calls, may signal an operator by pressing star and zero. I would now like to turn the conference over to Dan Rollins, Senior Vice President, Corporate Development and Investor Relations. Please go ahead, Mr. Rollins.

Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our Q1 2022 conference call. Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be found under the investor section of our website at www.torusgold.com. I'd also like to note that certain statements to be made today by the management team may contain forward-looking information. As such, please refer to the detailed cautionary notes on page two of today's presentation, as well as those included in the Q1 2022 MD&A. On the call today, we have Jody Kazanko, President and CEO, as well as Andrew Snowden, CFO. Following the presentation, Jody and Andrew will be available for the question and answer period. This conference call is being webcast and will be available for replay on our website. This morning's, last night's press release and the accompanying financial statements and MD&A are posted on our website and have been filed on CDAR. Also note that all amounts mentioned in this call are U.S. dollars unless otherwise stated. I'll now turn the call over to Jody.

Well, thank you, Dan, and good morning to all on the line. Welcome to the Torex Gold Q1 2022 results call. I'll open my remarks this morning by saying that we had a very strong start to the year on all fronts. We delivered modestly higher production than anticipated. The team's done an excellent job in keeping control on costs, despite the current inflationary environment. While it's early in the year, we're well positioned to deliver on full year production and cost guidance. And I think probably most notably at the end of the first quarter, We released our updated technical report, which outlines the future of mining the Morelos property, which in turn forms the foundation for future growth for TORAPS. In terms of the agenda for the call, it's the same as usual. I'll provide a brief reminder of the strategic pillars that we continue to execute on. Then I'll step you through the key business and operational highlights specific to the first quarter. Then over to Andrew Snowden for some detail on the financials. And after that, I'll provide a progress update on the MediaLuna project and exploration. Dan's already touched on the forward-looking statements in the Safe Harbor language, so I'll head straight to slide four. Before we get into the substance of the quarterly update, I wanted to refresh everyone on our strategic pillars, which reflect the long-term vision of TOREX and the long-term plan. We're working on all of them, but I would say the three across the top really came to the forefront in this quarter. If you look at the top left there, as demonstrated by the 2021 year-end reserve update, we were successful in further extending and optimizing operations at ELG. With the addition of the pushback at the El Limón pit, we now have open pit mining out to the end of 2024, and we're looking to extend this even further. In terms of advancing and de-risking Medelluna, the technical report was released as planned, tunnel development to access the ore body is progressing, and With board approval secured on March 31st, procurement on long lead purchases is moving ahead. And finally, on grow reserves and resources, in addition to ongoing reserve growth at ELG Underground, we delivered our first reserve statement for Medialuna, effectively tripling the mine life of our Morales asset, with reserves now out to the end of 2033. Turning to slide five, this sets out some key operational and financial highlights. Production in Q1 was just over 112,000 ounces. We had slightly better grades and consistent mill throughput, offsetting lower recoveries. Those low recoveries were due to pockets of lower recovery ore mined from the Wahez pit and processed in the quarter. We delivered adjusted EBITDA of over $110 million with operating cash flow of $47 million. Recall, Operating cash flow and free cash flow is subject to annual seasonality with taxes and royalties paid out in Q1 and the PTU Mexican legislative bonus paid out in Q2. Andrew will detail some of this in his comments. Even accounting for the large tax payment and capex spend, we closed the quarter with $237 million in cash and still no debt. And I've already mentioned that we delivered the updated technical report as planned Certainly, quarter one was an intensive work quarter for our small team, but the work all got done somehow, and it was done exceptionally well. Moving to slide six, the theme here is that we're well positioned to deliver on full-year operational guidance. Three key areas of note on this slide. First, we're on track to deliver your full-year production guidance. We expect the levels of production over the remaining three quarters to be higher than the 112,000 ounces delivered in Q1. just part of the mine sequencing plan. Second, total cash costs and ASIC are also tracking to the plan with boats expected to decline over the remainder of the year driven by higher production and continued cost discipline and cost control. Third, spending on Medialuna is noted here at $20.8 million at the end of the quarter and this requires some explanation. It's approximately $26 million lower than what was set out in the feasibility study. This is not a cause for concern. There are two main contributors to the Q1 spend level. First, there's been some redistribution of spend from Q1 to later quarters, and we've had slower development rates than planned through South Portal lower, which I'll touch on when I get to my commentary about the project. With the project now formally board approved and the team moving through procurement on some long lead capital intensive purchases, we're still very much forecasting to deliver on our capital expenditure guidance for 2022. Turning now to slide seven, which sets out some highlights on ESG, we had another excellent quarter from a safety perspective with no lost time injuries. And we're now sitting at just over 8 million hours lost time injury free. Remarkably, in April, we hit one full year without a lost time injury. That's all employees and all contractors, and we're now operating with a lost time injury frequency of zero. There is an adage in the industry that when you get safety right, everything else follows, and that has certainly held true in the case of Torex. I'd also call your attention to the community relations commentary in the bottom right-hand side of this slide. While working with and maintaining mutually productive relationships with our host communities is definitely an all year round job, in quarter one, we started the year with the successful annual renewal of all 11 of our community development agreements, so set the stage quite nicely. Turning now to some details on operational performance. Slide nine, really does illustrate the continued consistency that we've achieved in production across the board and quarter one was no different. The production of 112,000 ounces of gold was up just slightly over the prior two periods. Plant performance there is notable at 12,600 tons per day and stable performance for the last four quarters. Bottom left, you can see process grade came in at 3.47 grams per ton, just slightly higher than anticipated. driven by the grade profile out of the open pits. And looking at the bottom right there, the underground mining rate, we said in Q4 that the underground mining rate was impacted by COVID absences, and it would come back up in Q1 as we got a handle on that, and it has. We've returned to our usual rate of just over 1,260 tons per day out of that underground. Slide 10 outlines the unit cost performance through Q1 of 2022 relative to full year 2021. As you can see there, initiatives to hold the line on costs are helping to offset the inflationary pressures we and all of our peers are seeing in the market. Open pit and underground mining costs are relatively consistent with full year 2021 results. Processing costs were lower given lower cyanide consumption. In the quarter, we came in at just under three kilograms a ton. The variability in cyanide consumption requires a long and detailed explanation, but it has to do with the mineralogy of the ore we are seeing. This is a bit difficult to predict, but I will say that we expect consumption levels to remain variable over the coming quarters given the variability in the mineralogy but we're forecasting it to be somewhere between three and four kilograms a ton. And those last lines at the bottom of the table on PTU require some explanation. The higher level of PTU reflects updated guidance from the Mexican government on the levels to be paid out. As a result, we've accrued an additional $2.6 million of profit share and payments in quarter one related to a true-up required on the 2021 payout. Now that said, this year's payout is still substantially less than the payout in 2021. I'll now pass it over to Andrew to review the quarterly financial results.