Torex completes El Limón-Guajes technical report

Wednesday, September 5, 2018


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TORONTO, Ontario, September 4, 2018 - Torex Gold Resources Inc. (the "Company" or "Torex") (TSX:TXG) announces completion of an updated Technical Report (TR) including a life of mine plan (LOM) for its producing El Limon Guajes (ELG) Mines, that has increased average annual gold production to 430,000 ounces per year, from 2019 to 2023. The TR also contains an updated Media Luna Preliminary Economic Assessment (PEA), with an after-tax NPV (5%) of $582M, and an after-tax IRR of 27%. For purposes of illustration, the TR includes a Media Luna design utilizing a conceptual new underground mining technology that Torex is developing. The new technology, called the Muckahi Mining System (Muckahi), shows the potential to increase the Media Luna Project, NPV by $197M. If proven, the Muckahi technology could be applicable to many other underground deposits.

Fred Stanford, President and CEO of Torex stated: "With the ELG, ramp-up to steady state nearing completion, this TR incorporates the ramp-up learnings and illustrates that ELG is an asset that produces in the lowest quartile of all in sustaining costs per ounce. The TR also lays out the ground work for growth through the ELG Underground (ELG UG) mine and Media Luna deposit, and through the advancement of the conceptual Muckahi technology.

The updated Media Luna PEA delivers a healthy after-tax IRR of 27%, and an NPV (5%) of $582M. The CAPEX estimate is similar to the 2015 estimate, with costs updated to reflect the changes in design and three years of inflation. Additional metallurgical test work is underway with the intention of demonstrating that metal recoveries can be increased. Infill drilling is ongoing for this project, with the objective of upgrading 1.85M of the 7.4M Inferred Au Eq. ounces (25%), to the Indicated confidence category. We look forward to the completion of this infill drilling and the advancement to the next levels of technical studies.

As expected, the Muckahi Mining System illustrates a potential for material improvement over conventional mining technologies. Using Media Luna as a demonstration example, the study indicates that utilizing Muckahi produces an improvement of 19% in after-tax IRR from 27% to 46%. (30% less underground mining capital, 20% less mine operating cost, and 60% reduction in time to achieve commercial production.) After many years of thought and design effort, the Muckahi Mining System is now shifting to the underground testing phase. Manufacturing of the first of the prototype machines is underway, testing underground is scheduled to commence in Q1/19. We look forward to having a proof of concept before the Media Luna feasibility study work requires a commitment to mining method. A technical session to review the technology is scheduled for September 17th, 2018, between 10 am and 2 pm (ET). Please contact Gabriela Sanchez for invitation details.

In conclusion, producing the TR has been a significant undertaking for a dedicated team. I thank them for grinding through the details and illustrating the potential of Torex through the ELG Open Pits, ELG Underground, Media Luna, the Muckahi technology, and other Morelos Property exploration targets. We look forward to the resetting of financial models and having many more investors join us as we create value from these assets."

The supporting Technical Report for the Company's 100% owned Morelos Property in Southwest Mexico, entitled "NI 43-101 Technical Report ELG Mine Complex Life of Mine Plan and Media Luna Preliminary Economic Assessment", which has an effective date of March 31, 2018, has been filed with SEDAR and posted on the Company's website.

A preliminary economic assessment should not be considered a prefeasibility study or feasibility study, as the economics and technical viability of the Media Luna Project have not been demonstrated at this time. The Media Luna PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. It cannot be assumed that all or any part of the inferred mineral resources will ever be upgraded to a higher category. Furthermore, there is no certainty that the conclusions or results as reported in the Media Luna PEA will be realized. Mineral resources that are not mineral reserves do not do not have demonstrated economic viability. The Media Luna PEA includes information on Muckahi. It is important to note that Muckahi is experimental in nature and has not been tested in an operating mine. Many aspects of the system are conceptual, and proof of concept has not been demonstrated.