Torex Gold Resources Inc.

Thank you for standing by. This is the conference operator. Welcome to the TORX Gold's second quarter 2025 results conference call and webcast. As a reminder, all participants are in a 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, then zero. I would now like to turn the conference over to Dan Rollins, Senior Vice President, Corporate Development and Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. On behalf of the Torex team, welcome to our Q2 2025 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.torresgold.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 Q2 2025 MD&A. On the call today, we have Jody Kosanko, President and CEO, and Andrew Snowden, CFO. Following the presentation, Jody, Andrew, and I will be available for the question and answer period. This conference call is being webcast and will be available for replay on our website. Last night's press release and the accompanying financial statements and MD&A are posted on our website and have been filed on CDR+. 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.

Thank you, Dan, and good morning to all on the line. We'll take you through the detailed results over the next 20 minutes, of course, but I wanted to open this call with some high-level commentary about the quarter. In some ways, quarter two was exactly what we wanted. Our safety performance was impeccable. We had no lost-time injuries in the quarter, and we made very good progress on our next-level safety program, including continued implementation of the fatal risk standards and critical controls, first in our underground operations and then over the surface facilities. Second, and importantly, as planned, we declared commercial production at our Medialuna project on May 1st, which is a major milestone for the organization. You can take from this that the process plant ramped up through the first part of the quarter as expected, as did the Medialuna mine. Both good news. And notably, in June and July, we announced two M&A transactions back-to-back. The all-cash acquisition of Raina Silver and the all-share acquisition of Prime Mining. Really, this is years' worth of work coming together within a month of one another. Dan will provide more details on this shortly. Now, all that said, in other ways, the quarter was not what we wanted at all. Even though ramp-up at the process plant was tracking very well through the early part of May, at the end of the month, we had a capacitor failure in the electrical house that feeds the variable frequency drives of the ball mill. This took us down for 10 days while we sourced a replacement from Europe. So production was not what we wanted it to be at all. It came in at 83,000 ounces gold equivalent for the quarter and 142,000 ounces year to date. This means that for the first time in years, we're going to be on the back foot here to deliver annual production guidance of 400 to 450,000 ounces. We think we can do it. We've got a plan to do it, but we have our work cut out for us for sure. This disappointing production result and the fact that the MediLuna mine is still in ramp up translated into what I would describe as forgettable performance on all unsustaining costs. Andrew will take you through that in his section. And finally, on non-sustaining CapEx, we've had to adjust annual guidance upwards by $70 million for various reasons I'll describe later in the call. But largely, it's a reflection of the extended project period from the delays we encountered late last year and a ramp-up plan that has us maintaining aggressive development rates at MediLuna Underground to achieve that 7,500 tons per day six months ahead of the schedule we set out for ourselves in the technical report. All of that said, we look forward, and there's plenty to look forward to here. With the May downtime behind us, June and July production at the process plant was excellent. Tons per day was above 11,100 for both months, And finished production for June was 37,000 ounces gold equivalent and 45,000 ounces gold equivalent in July. Both real step-ups from what we saw in the early part of quarter two. Secondly, the extra capital on Medialuna means that we're largely on track with the PACE plant commissioning, which is happening now, and the third and fourth ore passes at the Medialuna mine, both of which support achieving the targeted mining rates at Medialuna. And notwithstanding the challenges in the quarter, importantly for us, we finally turned the corner on free cash flow. June was our first positive month and quarter three very much tracking to be our first positive quarter. Now, getting into the details here, starting on slide four, which sets out our strategic pillars, which would be familiar to everyone, they remain unchanged. One area of the strategy that came into sharp focus here in the quarter was centered around disciplined growth and capital allocation in two ways. First, with the announced acquisitions of Reina Silver and Prime Mining, and second, We expect to further advance the work in this aspect of our strategy later this year when we announce our inaugural return of capital policy, which we remain very much committed to. I want to underscore here and be clear that with the free cash flow we have anticipated out of Medialuna, we're not thinking that M&A and capital returns are exclusive propositions. This is very much an end conversation for Torex. We intend to proceed with both. The rest of the progress on the various aspects of the strategy will be covered off through the remainder of today's update. Turning now to slide five, you can see our quarterly production illustrated on the chart. I've already spoken to the drivers behind the weaker production and higher ASICs for the quarter. We expect quarterly results will return to normalized levels in the second half here, and we think this will reinforce to our shareholders the margin and cash flow capability of Morelos. We already got a glimpse of this potential in June with gold equivalent production over 37,000 ounces and our first month of positive free cash flow since completing the MediLuna build. Slide six shows how we're progressing on delivering on full year guidance. With a strong second half in sight, we're maintaining our annual production and cost guidance. Note here that we expect to be at the lower end of production guidance and the higher end of the cost range. The second point to note on this slide, as I mentioned at the outset, is non-sustaining CapEx has increased to $160 to $170 million for the year, largely due to costs associated with finalizing the MediLuna project. This increase comes in a couple of categories. One, the main driver is scope transfer from 2024 to 2025 and demobilization and remobilization costs following the December fatalities. Associated with that scope transfer and the fatalities was the extension of the mining infrastructure construction period that is now drawing to a close. With the scope shift and extended project period comes additional indirects for this extra time so you can see how it builds on itself. And over top of those things, we have a continued aggressive mine development plan at Medialuna, all to support accelerating those mining rates to 7,500 tons per day. Over top of that, we had no room to reallocate non-sustaining capex from EPO to Medialuna, as progress on EPO is maintaining pace. That study and concurrent mine development will consume its $30 to $35 million budgeted this year. I'd note here that there's been no change to sustaining capex guidance. That's very much on pace. The final point of note on this slide, when comparing our year-to-date performance to performance at guidance metal prices, You can see the impact that elevated gold price is having on our costs as we now report on a gold equivalent basis. I mean, it's a good problem to have, but an important one to note in the context of where we sit today compared to where we thought we would be when we set guidance at $2,500 an ounce gold price. Andrew will take you through this in more granularity. Got some new slides here on operational performance, and the first of them is on slide seven. You can see there on the chart on the left Setting aside the 10 days of downtime at the mill in May, the processing plant is ramping up exceptionally well. Throughput in both June and July surpassed 11,100 tons per day, well above the nameplate capacity of our upgraded mill, which is at 10,600 tons per day. On the recovery side at the right, you can see the metallurgical results. The plant has also been hitting its stride since the conclusion of the commissioning period late March. Recoveries for gold, silver, and copper have consistently been achieving their targeted levels. What you will notice in the chart on the top right is that copper and silver recoveries in June were significantly lower than previous months. There's a reason for this. With the mining of our last open pit, Elie Mansour, drawing to its close, we processed open pit material in the month of June, which, as you know, is lower in copper content. Our upgraded processing facilities were designed with the ability to batch process our ore, switching between the leaching circuit and the copper and iron sulfide flotation circuits as the metallurgy in the ore dictates. This June was our first true test of that capability, and I'm quite pleased to say it went smoothly and according to plan. Once we had processed the available high-grade open pit ore, we redirected feed back through the flotation circuits and quickly reestablished our targeted recoveries. which returned to levels more reflective of where we were in April and May on copper, certainly. To my mind, this is a really good demonstration of the flexibility we've built for ourselves with the new processing facilities. Last note here is that remaining open-pit ore has been stockpiled to be used to top up the mill, if and as required, until EPO comes online, or preferably towards the end of mine life. Moving now to mining, on slide 8, you can see both mines continue to perform very well. MediLuna is stepping up nicely towards the targeted 7,500 tons per day by mid-26. More on this in a moment. And over at ELG Underground, after a slower start to the year, mining rates picked up and are at or above targeted rates of 2,800 tons per day. Recall, we expect to be mining at these rates at ELG Underground for this year and next. supporting our need to fill the mill through the construction of EPO before returning to more typical levels of 1,500 to 2,000 tons per day at ELG underground as EPO ramps up in late 26 and starts producing in 2027. I should also note that we're not reporting open pit mining rates on this slide as that part of our operations is now behind us. With the last blast having occurred on July 30th, Today, at Morelos, we're now mining 100% underground. Turning to progress and milestones remaining on Medelluna, what's left here? It's set out on slide nine. First is the delivery of PACE to be able to get backfilling and open up more stopes in the underground. Construction of the PACE plant and PACE distribution is all but complete, with wet commissioning of the PACE plant itself and the associated distribution infrastructure currently underway. I expect PACE to begin flowing in the coming weeks. I would note commissioning of this infrastructure is just a few weeks behind schedule. It's a very sequential, stepwise, and detailed process. People tend to think here just about the PACE plant, but it's about the plant, the GIHO pumps, the big positive displacement pumps, the water line, the tailings line to the PACE plant that has to go seven kilometers through the tunnel, 750 meters vertical delta to get to the PACE plant, and then the PACE distribution lines on the back end. That all has to be hydrostatic tested, tested under pressure, water tested, and then solids introduced. I'm pleased to say that first tailings is scheduled to be introduced August 19th and binder about a week after that. Second important milestone here is the completion of the two remaining ore passes in the underground, one at the end of August and the other at the end of November. Once these ore passes are completed and in combination with the base backfill, we expect to open up more stoves, allowing us to hit the targets we've set out for ourselves here. 6,000 tons per day by the end of quarter three, then a step up to 6,500 by the end of the year, and 7,500 tons a day consistently by mid-2026. Moving on here to slide 10 sets out the sketch of our next mine on the Morelos property, EPO. It's advancing quite nicely. In May, we took our first development blast for the access ramp off the Wajas Tunnel. Those of you who were on the mine tour saw this as we drove through the tunnel from the north side to the south side. We've now developed about 230 meters into that tunnel, so just about halfway to the deposits. Importantly, we also submitted our permit application in May and received approval for SummerNet in July for a modification to our MIA integral for the construction of the new waste dump to support EPO construction. Additionally, the feasibility study continues to progress with a number of key items finalized during the quarter, including mine design parameters, mine sequencing, an integrated mine plan, and integrated scheduling with Medialuna. Recall that EPO will utilize many of Medioluna's ore handling systems, so it's important that we have these two mines working in harmony together. We completed field tests and test work programs covering aspects of geotechnical issues, hydrogeological issues, and metallurgical programs, all of which have now been built into the integrated mine design. We also assessed various trade-off studies on key elements of the infrastructure design, including ore handling, or bin or waste path sizing, mine fleet composition, and ventilation requirements. Through the back half of the year, we'll start to place orders for long lead time items. In short, things are progressing very well at EPO, and we're on track for initial production in late 2026. And with that, I'll pass the call over to Andrew to discuss our financials.