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Torex Gold Resources (TSE:TXG)
TSX:TXG

Torex Gold Resources (TXG) AI Stock Analysis

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Torex Gold Resources

(TSX:TXG)

Rating:70Outperform
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 (TXG) vs. iShares MSCI Canada ETF (EWC)

Torex Gold Resources Business Overview & Revenue Model

Company DescriptionTorex 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 MoneyTorex 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 Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: -0.97%|
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 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
75
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
80
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
65
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.05B1.12B882.60M868.50M855.80M789.20M
Gross Profit
465.00M468.20M282.50M303.90M326.50M257.20M
EBIT
441.50M407.20M249.40M276.50M297.80M218.10M
EBITDA
511.30M542.70M432.80M488.10M460.20M399.30M
Net Income Common Stockholders
130.50M134.60M204.40M188.80M151.70M109.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
172.80M110.20M172.80M376.00M255.70M206.20M
Total Assets
1.84B2.14B1.84B1.59B1.36B1.25B
Total Debt
32.00M141.20M32.00M3.90M3.30M43.40M
Net Debt
-140.80M31.00M-140.80M-372.10M-252.40M-130.70M
Total Liabilities
340.70M508.90M340.70M303.20M258.50M306.30M
Stockholders Equity
1.50B1.63B1.50B1.29B1.10B946.10M
Cash FlowFree Cash Flow
-199.10M-112.20M-178.70M130.50M99.50M199.70M
Operating Cash Flow
359.80M449.50M300.80M408.10M330.00M342.10M
Investing Cash Flow
-542.00M-562.70M-498.30M-280.50M-203.70M-177.60M
Financing Cash Flow
178.70M53.60M-7.90M-7.70M-44.90M-150.00M

Torex Gold Resources Technical Analysis

Technical Analysis Sentiment
Positive
Last Price45.01
Price Trends
50DMA
43.41
Positive
100DMA
38.22
Positive
200DMA
33.13
Positive
Market Momentum
MACD
0.78
Positive
RSI
51.95
Neutral
STOCH
34.59
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

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSOGC
81
Outperform
$4.63B11.4016.21%0.62%35.81%693.32%
TSDPM
79
Outperform
C$3.58B12.0619.71%1.06%10.57%24.23%
TSOLA
76
Outperform
C$4.94B40.45-0.28%72.95%97.10%
TSEQX
73
Outperform
$4.33B11.268.27%60.05%
TSTXG
70
Outperform
$3.86B21.058.12%20.97%-24.55%
69
Neutral
$3.54B31.022.71%0.76%-16.65%
51
Neutral
$2.04B-1.15-21.37%3.64%2.88%-30.57%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:TXG
Torex Gold Resources
44.75
23.71
112.69%
TSE:SSRM
SSR Mining
16.88
10.02
146.06%
TSE:EQX
Equinox Gold
9.44
2.39
33.90%
TSE:OGC
OceanaGold
6.63
3.57
116.81%
TSE:OLA
Orla Mining
14.59
9.15
168.20%
TSE:DPM
Dundee Precious Mtl
20.09
9.46
88.99%

Torex Gold Resources Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
Torex Gold Proposes Amendment to Strengthen RSU Plan Governance
Neutral
May 26, 2025

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.

Business Operations and Strategy
Torex Gold Reports Promising Drilling Results at ELG Underground
Positive
May 20, 2025

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.

Business Operations and StrategyFinancial Disclosures
Torex Gold Achieves Key Milestones in Q1 2025, Eyes Positive Cash Flow
Positive
May 7, 2025

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.

Business Operations and Strategy
Torex Gold Achieves Commercial Production at Media Luna
Positive
May 1, 2025

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.

Business Operations and StrategyFinancial Disclosures
Torex Gold Achieves Key Milestones in Q1 2025, On Track for Annual Targets
Positive
Apr 10, 2025

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.

Business Operations and Strategy
Torex Gold Extends Reserve Life and Boosts Production Outlook
Positive
Mar 19, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.