- Torex released its preliminary Q1 results just recently, reporting gold production of ~112,400 ounces, a 13% decline year-over-year, but well above estimates.
- Unfortunately, this was overshadowed by an updated study on Media Luna which saw capex increase materially from prior estimates, and my inflation-adjusted upfront capex estimates.
- With significant liquidity and operating cash flow, Torex is in a decent position to fund Media Luna construction, but it will have a $250+ million funding shortfall.
- This is not a deal-breaker, and I don't see any risk to obtaining this capital, but the moderate decline in ML economics has led to a dip in fair value, and my low-risk buy zone being revised from US$10.40 to US$9.50.
For further details see:
Torex Gold: A Strong Q1 Overshadowed By Less Favorable ML Economics