Torex Gold Resources Inc.

Thank you for standing by. This is the conference operator. Welcome to the Torex Gold Resources, Inc. third quarter 2021 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 call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Dan Rollins, 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 third quarter 2021 conference call. Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be accessed through the investor section of our website at www.torexgold.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 Q3 2021 MD&A. On the call today, we have Jody Kozenko, 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 press release and the accompanying financial statements and MD&A are posted on our website and have been filed on CDAR. Also, please note that all amounts mentioned in this call are U.S. dollars unless otherwise stated. I will now turn the call over to Jody.

Thank you, Dan, and good morning to all on the line. Welcome to the Torex Gold Q3 results call. Well, we're solidly into the home stretch to closing out 2021. Q3 came in as planned. Highlights are as follows. Safety excellence continues. Solid operational performance in the quarter resulted in solid financials. We're on track to deliver full-year production and cost guidance. With 111,000 ounces produced in Q3, and a similar level of production anticipated in Q4. And, importantly, all aspects of MediaLuna are advancing. In terms of the agenda for the call, it's the same as usual. I'll provide a brief reminder of the strategic plan we are working to, then I'll step you through the key business and operational highlights specific to the third quarter, then over to Andrew Snowden for some detail on the financials, and after that, I'll provide a progress update on MediaLuna. As Dan mentioned, to the extent that we're making forward-looking statements, we're relying on the Safe Harbor language in slide two. Overall, we're advancing on the strategic pillars that we've been working to for some time now. This slide shouldn't look new. They're outlined here. With five years of notable progress in the corridor, one, we recently announced our first-ever three-year production outlook, which demonstrates reliable production from ELG now through to mid-2024, and we're looking to even further optimize that plan. Two, we continue to advance the MediLuna feasibility study, which remains on track for delivery in Q1 of 2022. And in the quarter, we press released a detailed description of various scope and design decisions that have been made. Three, we're actively drilling on a number of fronts and expect to release results from phase one of the ELG underground program, and the first round of 2021 infill results from the MediLuna program over the coming weeks. Four, we continue to up our game on ESG performance and disclosure and have seen additional improvements in our ratings with Sustainalytics being the latest group to recognize our work. And last but not least, our cash position has increased by over $140 million over the last four quarters. We're closing this quarter with $220 million of cash on hand and no debt, positioning us exactly where we want to be as we head into MediLuna development. Turning to slide five. Now, this bar chart on this slide sets out that net cash position over the preceding 12 months, and you can see the continued growth there as planned. As anticipated, the back half of the year is seasonally stronger in terms of cash build, owing to the timing of tax royalty, and profit sharing payments in the first half. Along the right-hand side of the slide are some key operational and financial metrics for the quarter and year to date. Overall, with 111,000 ounces produced in Q3 and free cash flow of $29 million in the quarter, I would say that ongoing solid operational performance has led to ongoing solid financial performance. On slide six, you can see here some specifics on how we're tracking against annual guidance. On production, we're sitting at 359,000 ounces at quarter end. We're tracking to the upper end of the guided production range as we expect Q4 output to be very similar to Q3. Quarter three total cash costs and ASIC are $727 and $900 per ounce respectively. Unit costs are expected to be the highest during quarter four. There are three key drivers of this. One, slightly lower process grades in Q4 than Q3. Cyanide consumption remains high. You can expect it to be in the five kilogram per ton range. And waste mining has resumed full speed post a rockfall incident that I'll address shortly. With all of this considered, we expect to conclude the year in the middle of the guidance range on total cash costs in ASIC. Just to note here, in terms of 2022 guidance for ELG, we plan to release it in January, similar to prior years. You will see then production, total cash costs, ASIC, and ELG-specific non-sustaining guidance. However, we'll hold off putting out non-sustaining CAPEX guidance for Medialuna until the technical report is released at the end of Q1 of 2022. That is when the full picture will become available. Slide seven contains the usual update on ESG. A few items of note here. We've had no lost time injuries in the quarter and have now surpassed over 3.75 million hours lost time injury free. COVID continued to be a significant concern during the quarter with the fourth wave bringing a high frequency of cases. We are continuing to work with health officials to bolster vaccination rates amongst our employees our contractors, and our community members. As that quarter ends, 70% of our workforce has received at least one vaccination dose, with more than 30% having received two doses. Importantly, during the quarter, we received an updated rating from Sustainalytics, which has seen our overall score improve by more than 10 points. And a milestone, our year one public progress report on compliance to the World Gold Council responsible mining principles is now complete and it's posted to our website and this includes the requirement for third-party assurance. Before I step you through additional production and operational details, I want to talk about some commentary on our inaugural three-year production outlook for ELG and it's outlined here in slide eight. Two qualifiers before I go through the numbers. First, it's important to note that the outlook does not include any gold equivalent ounce production from Medialuna in 2024. So we expect the 2024 numbers to increase once we update this guidance following the release of our technical report next year. Second, the outlook represents the look at what I would describe as the new base case. Our team at site has already begun to optimize the mine plans for ELG. The updated mine plan will be released with the technical report early next year. Now, in terms of the outlook itself, overall, we expect 2022 to look very similar from a production standpoint to 2021. Production in 2023 is expected to dip modestly as production from the OAHES open pit ends mid-year. And then, on this case, 2024 goes lower as we deplete the Eliement pit. Our team, as I said, is already looking at ways to bring incremental production and cash flow into the mine plan in both 23 and 24. The goal line here is to squeeze every economic ounce available out of the open pits, and we expect ELG Underground to continue to be a contributor through the transition year and beyond. Slide 10 sets out some additional detail on production performance. which with one exception can best be described as solid and completely in line. Production of 111,000 ounces was consistent with our expectations as we moved into lower grade areas of the open pit. We expect a similar level of production in Q4. Plant throughput came in at 12,500 tons per day with an average processed grade of just under 3.5 grams per ton. Underground mining rates came in as planned at just over 1,200 tons per day at a grade of 6.7 grams per ton. The one exception to planned mining in the quarter was in the pits. While ore mine was in line, waste mine during the quarter was lower than anticipated for two reasons. Ropecon was down for repair through to mid-August, and in July, we took a blast in El Limon near the pit perimeter after a few days of very heavy rains. This caused some rocks to slide down the outer walls of the pit, so we immediately stopped all mining in the upper benches and have since redefined the blasting perimeter and selectively placed meshing on the outer pit walls. Both of these issues have now been addressed, rope con and the pit perimeter, and we expect waste mining rates in the pit to improve dramatically in Q4. Slide 11 sets out year-to-date unit costs, and I would offer brief commentary as follows. On mining, unit costs are up over 2020, as mining rates were lower this year in Q2, and there's been some additional maintenance and re-handling costs with rope con being down for repair. Processing costs are elevated relative to 2020, given higher cyanide consumption levels, as we encounter greater levels of sulfide mineralization as we're moving deeper into the pits. With the higher level of sulfides expected to persist over the remaining life of the open pits, we are investigating options to reduce both consumption levels and unit costs, and you can expect to hear more about this next quarter. PTU is the last comparator line in the chart. You can see there we have lower PTU in 2021. This reflects the legislative changes enacted earlier this year. I'll now turn the call over to Andrew for some detailed comments on the financials and commentary on inflationary pressures that we're experiencing.