Torex Gold’s Earnings Call: Strong Performance Amid Challenges

Torex Gold ((TSE:TXG)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Torex Gold showcased a largely positive sentiment, driven by strong operational performance and significant free cash flow generation. The company successfully reduced its debt, marking a pivotal moment in its financial strategy. However, this optimism was slightly tempered by increased costs associated with higher gold prices and anticipated significant payments in the near future.

Media Luna Ramp-Up Success

The Media Luna underground project is progressing ahead of schedule, with production ramping up to nearly 6,150 tonnes per day, surpassing expectations. This advancement is a testament to Torex Gold’s strategic execution and operational efficiency.

Record Free Cash Flow Generation

Torex Gold reported a remarkable $113 million in free cash flow, marking the first quarter of substantial free cash flow since the commencement of the Media Luna build. This milestone underscores the company’s robust financial health and operational success.

Debt Reduction and Capital Return

Utilizing its free cash flow, Torex Gold repaid $75 million of debt and introduced an inaugural return of capital policy. This policy includes a dividend and a share buyback program, signaling confidence in its financial stability and commitment to shareholder value.

Processing Plant Performance

The processing plant exceeded its nameplate capacity, achieving over 11,000 tonnes per day. It also recorded impressive recovery rates of 94% for gold and 95% for copper, highlighting the plant’s operational excellence.

Safety Achievements

Torex Gold reported no lost-time injuries during the quarter, achieving a lost-time injury frequency rate of 0.42 per million hours worked. This industry-leading figure reflects the company’s commitment to maintaining a safe working environment.

Gold Price Impact on Guidance

The higher gold prices have pressured Torex Gold’s production and cost guidance. This has led to increased costs due to higher royalties and profit-sharing payments, impacting the reported gold equivalent production.

Sustaining Capital Guidance Adjustment

The company increased its sustaining capital guidance by $15 million. This adjustment is due to additional underground development required to support the ongoing ramp-up of the Media Luna project.

Seasonal Free Cash Flow Constraints

Looking ahead, Torex Gold anticipates significant outflows in Q1 2026, including annual payments of approximately $90 million for taxes and royalties, and $35-40 million for profit sharing, which may constrain free cash flow.

Forward-Looking Guidance

During the Q3 2025 conference call, Torex Gold emphasized its strong financial performance and strategic progress. The company is on track to meet the lower end of its production guidance and the upper end of its cost guidance, despite challenges posed by higher gold prices. Torex remains focused on growth and stability, supported by a solid liquidity position and strategic expansion through recent acquisitions.

In summary, Torex Gold’s earnings call reflected a positive outlook, underscored by strong operational achievements and financial milestones. While challenges such as increased costs and future payments loom, the company is well-positioned for sustained growth and stability, with strategic initiatives and a robust financial framework in place.