Torex Gold Resources (TXG) AI Stock Analysis

• Market Cap: $3.86B
• Dividend Yield: N/A
• Average Volume (3M): 299.23K
• Price to Earnings (P/E): 21.1
• Beta (1Y): 1.10
• Revenue Growth: 20.97%
• EPS Growth: -24.55%
• Country: CA
• Employees: 883
• Sector: Basic Materials
• Sector Strength: 65
• Industry: Gold
• EPS (TTM): 0.56
• Shares Outstanding: 86,205,444
• 10 Day Avg. Volume: 297,863
• 30 Day Avg. Volume: 299,226
• PEG Ratio: 0.21
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.54
• Enterprise Value/Market Cap: 0.16
• Enterprise Value/Revenue: 0.15
• Enterprise Value/Gross Profit: 1.32
• Enterprise Value/Ebitda: 0.29
• 1Y Price Target: $57.71
• Price Target Upside: 28.22% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 70 Outperform
• Price Target: C$49.00 ▲(8.86%Upside)

Torex Gold Resources' strong financial performance and promising earnings call outlook are key strengths, supported by solid technical indicators. However, liquidity challenges due to high capital expenditures and a moderate valuation slightly offset the overall score.

Positive Factors

Debt Management

The ramp up of Media Luna sets the stage for a return to positive free cash flow, allowing Torex to pay down debt and return capital to shareholders.

Earnings Performance

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

Despite challenges, Torex's Q1 production of 59.6koz AuEq was in line with estimates, indicating a strong start for the year.

Reserve Replacement

ELG Underground successfully replaced reserves, increasing 1% to 662koz AuEq, now having a reserve life through early 2029.

Torex Gold Resources Business Overview & Revenue Model

Company Description

Torex Gold Resources Inc. (TXG) is a Canadian-based intermediate gold producer engaged in the exploration, development, and operation of its wholly-owned Morelos Gold Property in the prolific Guerrero Gold Belt in Mexico. The company's principal asset is the El Limón-Guajes Mining Complex (ELG), which includes the ELG Open Pits, the ELG Underground, and the processing plant and related infrastructure. Torex is also advancing its Media Luna project, an advanced-stage development project located south of the ELG Complex. The company's mission is to responsibly produce gold and contribute positively to the communities and environments in which it operates.

How the Company Makes Money

Torex Gold Resources generates revenue primarily through the sale of gold produced from its mining operations. The company's ELG Mining Complex is the primary source of its gold production, where ore is extracted, processed, and refined into gold doré bars that are sold to gold refiners and bullion banks. These sales constitute the main revenue stream for Torex. Additionally, the development of the Media Luna project is expected to provide future revenue streams as it progresses towards production. Torex's revenue is influenced by the global gold market prices, production volumes, and operational efficiencies. The company also engages in strategic partnerships and contracts with local suppliers and communities to support its mining operations and ensure sustainable development.

Torex Gold Resources Financial Statement Overview

Summary

Torex Gold Resources demonstrates robust profitability and operational efficiency with strong gross and EBIT margins. The balance sheet is solid, showcasing a low debt-to-equity ratio. However, challenges in cash flow management due to high capital expenditures pose liquidity risks, which slightly dampen the overall financial performance.

Income Statement

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

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

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.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.05B	1.12B	882.60M	868.50M	855.80M	789.20M
	Gross Profit
465.00M	468.20M	282.50M	303.90M	326.50M	257.20M
	EBIT
441.50M	407.20M	249.40M	276.50M	297.80M	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
172.80M	110.20M	172.80M	376.00M	255.70M	206.20M
	Total Assets
1.84B	2.14B	1.84B	1.59B	1.36B	1.25B
	Total Debt
32.00M	141.20M	32.00M	3.90M	3.30M	43.40M
	Net Debt
-140.80M	31.00M	-140.80M	-372.10M	-252.40M	-130.70M
	Total Liabilities
340.70M	508.90M	340.70M	303.20M	258.50M	306.30M
	Stockholders Equity
1.50B	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 Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 45.01
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TXG, the sentiment is Positive. The current price of 45.01 is above the 20-day moving average (MA) of 44.12, above the 50-day MA of 43.41, and above the 200-day MA of 33.13, indicating a bullish trend. The MACD of 0.78 indicates Positive momentum. The RSI at 51.95 is Neutral, neither overbought nor oversold. The STOCH value of 34.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TXG.

Torex Gold Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OGC	81 Outperform	$4.63B	11.40	16.21%	0.62%	35.81%	693.32%
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	73 Outperform	$4.33B	11.26	8.27%	―	60.05%	―
TXG	70 Outperform	$3.86B	21.05	8.12%	―	20.97%	-24.55%
SSRM	69 Neutral	$3.54B	31.02	2.71%	0.76%	-16.65%	―
Sector *	51 Neutral	$2.04B	-1.15	-21.37%	3.64%	2.88%	-30.57%

Torex Gold Resources Corporate Events

Torex Gold Proposes Amendment to Strengthen RSU Plan Governance

Torex Gold Resources Inc. announced an amendment to its restricted share unit plan, which will be presented to shareholders at the upcoming annual meeting. The amendment, prompted by feedback from a proxy advisory firm, aims to restrict the board’s ability to amend the plan’s amendment section, addressing concerns about potential future changes in Toronto Stock Exchange rules. This move reflects Torex’s commitment to corporate governance and shareholder engagement.

The most recent analyst rating on (TSE:TXG) stock is a Buy with a C$37.75 price target. To see the full list of analyst forecasts on Torex Gold Resources stock, see the TSE:TXG Stock Forecast page.

Torex Gold Reports Promising Drilling Results at ELG Underground

Torex Gold Resources Inc. has announced promising results from its 2024 and initial 2025 drilling programs at the ELG Underground, indicating high-grade mineralization and the potential for extending the mine’s life. The company aims to sustain production levels above 450,000 gold equivalent ounces annually beyond 2030 by expanding resources and replacing mined reserves. The exploration efforts, which include a significant increase in drilling activity and budget, are focused on identifying new zones of mineralization and enhancing the understanding of geological trends, which could have positive implications for Torex’s operational longevity and market positioning.

The most recent analyst rating on (TSE:TXG) stock is a Buy with a C$37.75 price target. To see the full list of analyst forecasts on Torex Gold Resources stock, see the TSE:TXG Stock Forecast page.

Torex Gold Achieves Key Milestones in Q1 2025, Eyes Positive Cash Flow

Torex Gold Resources reported its Q1 2025 financial and operational results, highlighting the successful completion of key milestones such as the tie-ins at the processing plant and the commencement of commercial production at the Media Luna project. Despite a planned four-week shutdown, production levels met expectations, and the company anticipates increased production in the coming quarters. The first quarter saw high cash outflows due to tax and royalty payments and final capital spending on Media Luna, resulting in a $130 million credit facility draw. However, Torex expects to quickly repay this debt as production ramps up amid high gold prices, aiming to return to positive free cash flow and maintain its annual guidance.

Torex Gold Achieves Commercial Production at Media Luna

Torex Gold Resources Inc. has announced the achievement of commercial production at its Media Luna mine, marking its transition to a dual gold and copper producer. This milestone was reached with strong operational performance and financial management, allowing the project to be funded almost entirely through cash generated from existing operations. The company is now focused on ramping up the underground mine to its design capacity, with expectations of positive cash flow generation by mid-2025, enhancing its growth prospects in Mexico and beyond.

Torex Gold Achieves Key Milestones in Q1 2025, On Track for Annual Targets

Torex Gold Resources reported its Q1 2025 production results, achieving significant milestones such as completing processing plant tie-ins and producing its first copper concentrate. The company produced 59,630 ounces of gold equivalent and is on track to meet its annual production guidance of 400,000 to 450,000 ounces. The successful commissioning of the Guajes Tunnel conveyor and progress in the Media Luna Underground project are expected to enhance production rates, with a forecasted improvement in Q2 and a return to positive free cash flow later in the year.

Torex Gold Extends Reserve Life and Boosts Production Outlook

Torex Gold Resources has reported its year-end 2024 mineral reserves and resources for the Morelos Complex, highlighting a solidified annual production of at least 450,000 gold equivalent ounces through 2030, with a reserve life extending to at least 2035. The company plans to enhance its production profile beyond 2030 through extensive drilling and exploration, particularly focusing on the EPO Underground deposit, which saw a significant increase in inferred resources. This strategic focus on extending reserve life and optimizing production underscores Torex’s commitment to maintaining its competitive position in the mining industry.