Torex Gold Resources (TORXF) AI Stock Analysis

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Positive Factors

Cash Flow

With Media Luna now in commercial production, Torex is expected to generate positive free cash flow.

Earnings

Torex's Q1 earnings were ahead of expectations, with EPS of $0.42 beating estimates.

Operational Efficiency

Gold recovery of 90.4% exceeded the forecast, highlighting the company's operational efficiency and potential for increased profitability.

Negative Factors

Production Challenges

Torex's Q1 production of 59.6koz AuEq was in line with estimates and included a significant amount of gold, silver, and copper, indicating a strong start for the year despite challenges.

Production Timing

The company remains on track to ramp up to commercial production in the coming weeks, with mining rates expected to steadily increase throughout the year.

Torex Gold Resources (TORXF) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.92B

Dividend YieldN/A

Average Volume (3M)28.52K

Price to Earnings (P/E)22.3

Beta (1Y)0.59

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees883

SectorBasic Materials

Sector Strength62

IndustryGold

Share Statistics

EPS (TTM)0.41

Shares Outstanding86,205,444

10 Day Avg. Volume29,352

30 Day Avg. Volume28,525

Financial Highlights & Ratios

PEG Ratio-5.72

Price to Book (P/B)1.52

Price to Sales (P/S)0.00

P/FCF Ratio-12.77

Enterprise Value/Market Cap0.93

Enterprise Value/Revenue0.64

Enterprise Value/Gross Profit5.84

Enterprise Value/Ebitda1.31

Forecast

1Y Price Target

$42.08

Price Target Upside24.46% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering7

Torex Gold Resources Business Overview & Revenue Model

Company DescriptionTorex Gold Resources Inc. operates as an intermediate gold producer in Mexico. It primarily holds a 100% interest in the Morelos Gold property that covers an area of 29,000 hectares located southwest of Mexico City. The company's principal assets include the El Limón Guajes mining complex comprising the El Limón Guajes open pits, the El Limón Guajes underground mine, and the processing plant and related infrastructure, and the Media Luna deposit, which is an advanced stage development project. It also mines for silver, copper, and carbon deposits. The company was formerly known as Gleichen Resources Ltd. and changed its name to Torex Gold Resources Inc. in April 2010. Torex Gold Resources Inc. was incorporated in 1980 and is headquartered in Toronto, Canada.

How the Company Makes Money

Torex Gold Resources Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 2.45%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

The earnings call reflected significant achievements, including achieving commercial production at Media Luna and successful workforce transitions. However, these were balanced by higher costs expected in Q2 and a substantial debt drawdown. Overall, the sentiment is hopeful for improved performance in the latter half of 2025 as production stabilizes and costs decline.

Q1-2025 Updates

Positive Updates

Commercial Production Achieved at Media Luna

Torex Gold achieved commercial production at Media Luna on schedule with construction substantially complete and mining and mill throughput exceeding required thresholds.

Successful Workforce Transition

Successfully transitioned or recruited nearly 500 employees for Media Luna operations, maintaining a high level of local community recruitment.

7% Reserve Growth

Achieved a 7% year-over-year growth in mineral reserves, primarily due to EPO inclusion and ELG Underground depletion replacement.

Safety Program Enhancement

Launched a next-level safety program to re-establish Torex Gold as an industry leader in safety after a carbon monoxide incident.

Strong Liquidity Position

Ended the quarter with nearly $200 million in available liquidity and $107 million in cash.

Negative Updates

Higher Costs Due to Commissioning Phase

Higher costs from Media Luna's commissioning phase are expected to impact Q2, with all-in sustaining costs peaking above the upper guidance range.

Debt Drawdown

The company drew down $113 million on its debt facility due to lower production, Media Luna spending, and significant tax outflows.

Lower Production and Ore Grade

Q1 production was lower due to a four-week processing plant tie-in period, and ore grades were lower as open pits wind down.

Company Guidance

During the Torex Gold Q1 2025 conference call, the company provided detailed guidance on various financial and operational metrics. The call highlighted the completion of major milestones, including the conclusion of construction and the commencement of commercial production at the Media Luna project on April 26th. Torex's all-in sustaining costs were reported at $1,405 per ounce for the first quarter, with expectations for costs to peak in Q2 due to the sales of higher-cost production from the commissioning phase. The company ended Q1 with $107 million in cash and drew $113 million on its credit facility to manage high tax and royalty payments during the quarter. Torex anticipates an increase in production levels through Q2 as Media Luna ramps up, with production stabilizing in Q3. The company expects to return to positive free cash flow by mid-2025 and plans to outline a return of capital policy to shareholders later this year. Additionally, Torex reported a 7% year-over-year growth in mineral reserves and is planning a significant increase in exploration activities with a budget of $45 million for 2025.

Torex Gold Resources Financial Statement Overview

Summary

Torex Gold showcases strong profitability with a gross profit margin of 44% and an EBIT margin of 42% TTM, though revenue has seen a modest decline. The balance sheet is robust, featuring a low debt-to-equity ratio of 0.17 and an equity ratio of 75.6%, although ROE is moderate at 7.79%. Cash flow management is a concern due to negative free cash flow impacted by high capital expenditures, despite efficient profit-to-cash conversion.

Income Statement

Positive

The company demonstrates strong profitability with a consistent gross profit margin around 44% and a robust EBIT margin of 42% TTM (Trailing-Twelve-Months). Revenue growth has been modest, with a decline of 5.95% in the most recent annual period, but overall growth from 2020 to 2024 is evident. Net profit margin in the TTM period is 12.44%, indicating stable profitability despite slight fluctuations.

Balance Sheet

Positive

The balance sheet is solid with a low debt-to-equity ratio of 0.17 TTM, showing conservative leverage. The company maintains a healthy equity ratio of 75.6%, reflecting strong asset coverage by equity. Return on equity is lower at 7.79% TTM, suggesting room for improvement in generating returns from shareholders' equity.

Cash Flow

Positive

Operating cash flow to net income ratio is strong at 2.76 TTM, indicating efficient conversion of profits to cash. However, free cash flow is negative at -$199.1M TTM, impacted by high capital expenditures, posing a risk to liquidity. Free cash flow to net income ratio is also negative, highlighting the need for better cash management.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.05B	1.12B	882.60M	868.50M	855.80M	789.20M
	Gross Profit
465.00M	468.20M	484.60M	303.90M	326.50M	257.20M
	EBIT
441.50M	407.20M	453.10M	276.50M	298.50M	218.10M
	EBITDA
511.30M	542.70M	432.80M	488.10M	460.20M	399.30M
	Net Income Common Stockholders
130.50M	134.60M	204.40M	188.80M	151.70M	109.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
106.50M	110.20M	172.80M	376.00M	255.70M	206.20M
	Total Assets
2.22B	2.14B	1.84B	1.59B	1.36B	1.25B
	Total Debt
279.60M	141.20M	32.00M	3.90M	3.30M	43.40M
	Net Debt
173.10M	31.00M	-140.80M	-372.10M	-252.40M	-130.70M
	Total Liabilities
541.20M	508.90M	340.70M	303.20M	258.50M	306.30M
	Stockholders Equity
1.67B	1.63B	1.50B	1.29B	1.10B	946.10M
Cash Flow		Free Cash Flow
-199.10M	-112.20M	-178.70M	130.50M	99.50M	199.70M
	Operating Cash Flow
359.80M	449.50M	300.80M	408.10M	330.00M	342.10M
	Investing Cash Flow
-542.00M	-562.70M	-498.30M	-280.50M	-203.70M	-177.60M
	Financing Cash Flow
178.70M	53.60M	-7.90M	-7.70M	-44.90M	-150.00M

Torex Gold Resources Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TORXF		$2.92B	22.29	8.12%	―	―	―
Sector *	51 Neutral	$2.02B	-1.14	-21.37%	3.64%	2.88%	-30.57%
SSRM		$2.59B	31.94	2.71%	0.76%	―	―
OCANF		$3.35B	11.49	16.21%	0.62%	―	―
DPM	79 Outperform	C$3.58B	12.06	19.71%	1.06%	10.57%	24.23%
OLA	76 Outperform	C$4.94B	40.45	-0.28%	―	72.95%	97.10%
EQX		$3.17B	11.19	8.27%	―	―	―

* Basic Materials Sector Average

Performance Comparison

TORXF

Torex Gold Resources

33.81

18.16

116.04%

SSRM

SSR Mining

12.74

7.60

147.86%

OCANF

OceanaGold

4.77

2.55

114.86%

TSE:DPM

Dundee Precious Mtl

21.21

10.48

97.67%

TSE:OLA

Orla Mining

15.18

9.66

175.00%

EQX

Equinox Gold

6.94

1.68

31.94%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.