Posted in | Gold | Mining Equipment

Torex Gold Resources Successfully Completes the First Blast with Muckahi Mining System, Reports Q1 2019 Production Results

Torex Gold Resources Inc. has announced that 76,500 ounces of gold were sold in the first quarter of 2019, at an average realized price of $1,301 for each ounce of gold.

As much as 77,800 ounces of gold were generated in the process. Debt principal was decreased by $18.6 million, with cash balances toward the end of the quarter being pegged at $119 million, which also included $26.8 million of limited cash. Torex Gold Resources Inc. is also happy to report that field tests are ongoing for the initial piece of equipment intended for the proprietary Muckahi mining system. On March 26th, 2019, the initial tunneling blast of the field trials was undertaken, and from the monorail mounted Muckahi jumbo drill, the round was effectively drilled. The Muckahi service platform—the second piece of equipment—is presently at the Mexican border and is anticipated to remain in service this quarter.

After so many years in concept development, machine design, and more recently machine manufacturing, it was truly rewarding to see this first part of the innovative Muckahi mining system ‘come to life’ and perform the way it was expected to perform. This outcome is a credit to all of the people over the years that believed a different way to mine was possible and contributed ideas and support to transform that possibility into a reality. In recent years, this includes our Board of Directors, Robert Rennie and team from Medatech, and many from within Torex, including Bernie Loyer for machine design and project management, Dawson Proudfoot, Danny Lavigne, and Brian Truman for process design and leadership in the field trials. The team is looking forward to completing the field trials in 2019. The goal is to demonstrate the Muckahi mining system capabilities over the full development cycle for tunneling, including on a minus 30-degree gradient, and to demonstrate the capability of the system to lower costs in long hole open stope mining. Exciting times!

Fred Stanford, President and CEO,  Torex Gold Resources Inc.

On the production front, many know that skarn deposits are variable. We have seen the upside and downside of that variability in past quarters. Guidance in 2019 was weighted to H2 in expectation of managing through more of the downside of variability in H1. In Q1, we mined the bottom of one pit area and opened up the top of another, with the expected grade and tonnage variability that comes at the edges of the deposit. There is also variability in the hardness of the rock types within the deposit. The weighted average Bond Ball Mill Work Index (BMWI) for the deposit is 17 kWh/tonne, with the highest BMWI at 29 kWh/tonne for El Limon hornfels. In H1 we are mining a disproportionate amount of these hornfels. The proportion of hornfels will decline through the year, which will be advantageous for plant throughput rates. An unexpected variability in Q1, was a ‘slug’ of cyanide soluble iron that is believed to have originated from the El Limon Sur pit. Significant concentrations of cyanide soluble iron had not been encountered before and it increased cyanide consumption rates in the plant until the ‘pocket’ was mined out. Copper variability also affected cyanide consumption. In spite of this, gold recoveries came in at 88.2% for the quarter, above the design rate of 87%. Such is life when mining a skarn. Character building when variability goes against us, all smiles when variability is in our favour. Guidance for 2019 remains unchanged. Gold production is expected to increase in each quarter of the year.

Fred Stanford, President and CEO,  Torex Gold Resources Inc.

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