Torex Gold is developing the Morelos Gold Project in Mexico. The feasibility study shows it will be a robust project producing an average of 375,000 ounces of gold per year over its mine life of 10.5 years. Torex is focusing exploration efforts on expanding resources at the nearby Media Luna Area, which has returned promising drill results indicating potential to increase the project's mine life and annual production. The project has strong economics even at lower gold prices, but Torex will need to manage risks such as permitting, financing, and construction to bring the mine into production as planned in 2015.
2. Safe Harbour Statement
This presentation contains "forward-looking information" within the meaning of applicable Canadian securities legislation.
Forward-looking information includes, but is not limited to, information regarding future exploration and development plans
concerning the Morelos gold project, including expected drilling results, updated mineral resource and reserve estimates,
completion of the 2012 drill program and technical studies, obtaining permits and licenses, project commissioning, executing
land agreements and negotiating road allowances, and the Company’s feasibility study (including realization of estimated mineral
reserves; expectation that the Morelos gold project will be profitable with positive economics; recoveries; grades; annual
production; receipt of all approvals; parameters and assumptions underlying mineral resource and reserve estimates and
financial analysis; and gold prices). Generally, forward-looking information can be identified by the use of terminology such as
"plans", "expects", "estimates", "intends", "anticipates", or "believes" or variations of such words or state that certain actions,
events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is
subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of
activity, performance or achievements to be materially different from those expressed or implied by such forward-looking
information, including, without limitation, risks related to: unexpected events and delays impacting completion of the 2012 drill
program, technical studies and updated mineral resource and reserve estimates; exploration results not being consistent with
expectations; required permits, licenses and approvals not being obtained on a timely basis; estimated mineral reserves and
annual production not being realized; parameters and assumptions underlying mineral resource and reserve estimates and
financial analysis being incorrect; and risk factors disclosed in the Company’s annual information form and management’s
discussion and analysis for the year ended October 31, 2011. Forward-looking information is based on reasonable assumptions,
estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions
and expected developments, as well as other factors that management believes to be relevant and reasonable in the
circumstances at the date such statements are made. Although the Company has attempted to identify important factors that
could cause actual results to differ materially from those contained in forward-looking information, there may be other factors
that cause results not to be as anticipated. There can be no assurance that such information will prove to be accurate, as actual
results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place
undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
Additional technical information is contained in the Company’s feasibility study entitled “Morelos Gold Project, Feasibility Study,
Form 45-106F1 Technical Report, Guerrero, Mexico”, dated September 4, 2012 (the “Feasibility Study”). The technical
information contained in this presentation is based upon the information contained in the Feasibility Study and prepared by or
under the supervision of the authors of the Feasibility Study, who are each qualified persons for the purposes of National
Instrument 43‐101.
2
3. Executing on Our Strategy
High grade open pit project...
Our strategy hasn’t changed:
– Build a mine
• Near-term, high grade open pit project at
feasibility stage
– Find another one on the same property
• Exciting new discovery to define at Media Luna
which provides near-term expansion potential
...with significant expansion potential
3
4. Torex Gold – A quick introduction
A large 29,000 ha land package...
...in a great geological neighbourhood
4
5. Adding Value Through The Drill Bit
We have exploration targets all over the place...
...the current focus is the Media Luna Area (MLA)
5
6. Why focus on the Media Luna Area?
Great results and relatively close to the mill...
...we want to advance it very quickly
6
7. Media Luna Results With Average Thickness and Grade
At 5m thick X 5g/t it could be larger than the north...
...at 17.4m thick by 5g/t it could be impressively large
7
8. Skarn Variability But Consistent Skarn
Every hole hit skarn at the intrusive contact...
...except one that hit a dike
8
9. Potential For Easy Access
The magnetite skarn...
...has been mapped on the face of the hill
9
10. Easy To Tell The Difference Between Ore and Waste
White marble waste is clearly differentiated...
ML-08
514.54-516.55m: 17.7 g/t Au; 13 g/t Ag; 0.91% Cu Magnetite –Pyrrhotite -
Chalcopyrite, in px skarn
...from the black magnetite skarn
10
11. The Upside Potential
Currently focusing in ML, MLW and TS...
Todos Santos
Magnetite outcrops
in Todos Santos
Media Luna West Media Luna
...with many more magnetic anomalies in close proximity
11
12. Exploration - Next Steps
A mix of drilling to see how big this system could be...
• How big could it be:
- Seek to extend the strike length on ML and MLW
- Test Todos Santos and another of the magnetic anomalies of a
slightly different magnetic signature
• Resource drilling:
- Targeting to have an initial resource by Q1/14
• Currently working through options to deliver more drill meters
per year than the 100,000 meters we can expect with our
current fleet of 10 diamond drill rigs
...and drilling to support a maiden resource estimate
12
13. Strategy Plank #1 – Build The Northern Mine
The BFS confirms robust project…
Production Start Q1 2015
P & P Mineral Reserves 48.8 mt @ 2.61g/t
LOM Strip Ratio (Waste:Ore) 5.6:1
Mill head grade 2.61 g/t Au
Mill recovery 87.4 Au
Mine Life 10.5 years
Annual Production 2015 128 koz Au
Annual Production 2016 246 koz Au
Average Annual Production 2017-24 375 koz Au
Peak annual production 494 koz Au
Cash Costs net of Ag credits US$421/oz Au
Capex up to commercial production without revenue credits US$675 M
Capex up to commercial production net of revenue credits US$552 M
Capex after commercial production US$86 M
...now pushing forward to build it
13
14. What Will This Simple Mine And Mill Produce?
An after tax IRR of 24.2%...
...with exploration potential to extend the mine life
14
15. Robust Project Economics
Significant returns for stakeholders…
US$1,276/oz (1) US$1,500/oz US$1,750/oz US$2,000/oz
(Base Case) (2)
Cumulative Cash $1,558 $2,121 $2,747 $3,374
Flow US$M
After Tax NPV @ $900 $1,262 $1,679 $2,096
5% (US$ mm)
After Tax IRR 24.2% 28.9% 34.6% 39.8%
(%)
Capex Payback 3.6 3.2 2.8 2.5
(Years)
2017 EBITDA (3)
$276 $336 $417 $497
(US$ mm)
(1) Average gold price LOM
(2) Base case assumed metal prices in US$:
Gold: 2015 - $1,500/oz, 2016 - $1,407/oz, 2017 - $1,315/oz, 2018 and beyond - $1,250/oz
Silver: 2015 - $27.75/oz, 2016 - $25.00/oz, 2017 - $25.00/oz, 2018 and beyond - $22.00/oz
(3) Represents EBITDA from first full year of production
...irrespective of commodity price
15
16. Managing Risks Through Construction
Fortunately it is a simple project, just a mine and a mill...
• Permitting risks
• Village relocation risks
• Financing risks
• Schedule risks for the mine access roads
• CAPEX escalation risks
• Staffing risks
...we’ll anticipate and manage schedule and cost risks
16
17. Managing Risks: Receiving Permits On Schedule
Respect the permitting process and do the best we can...
El Limon pit
North North pit
Guajes pit
1K tph Rope- Con
14,000 tpd mill Dry stack
tailings
Water containment
...to design a mine that the regulators will be pleased to
17
approve
18. Managing Risks: Village Relocation
The process proceeds on schedule…
New location accepted
Community layout accepted
Housing prototypes accepted
Community support buildings
designed
Next steps:
• Families select their building lot
• Families select their preferred
home design
• With the design decisions
complete move forward with the
municipal permitting process
...for a successful completion by the end of 2014
18
19. Managing Risks: Financing
Balancing dilution and debt encumbrances to provide...
Completed equity financing for C$380 million in October 2012
Hired an in-house advisor that has done debt financing many times
before
– Ron Gagel, former CFO of FNX and Aur Resources
Process is well in hand to provide project debt financing
– Established dialogue with 10 financial institutions including banks, export credit
agencies and equipment suppliers
– RFP was delivered by mid-September
– Proposals received and currently under evaluation by Management
– Preliminary agreements expected by the end of November followed by the bank’s
due diligence process
– Final agreements expected in Q2 / 2013
...a financing solution that is best for this project
19
20. Managing Risks: Schedule For The Mine Access Roads
Roads are on the critical path to commercial production...
• Contractors mobilized the
day the permits arrive El Limon pit
Access Road to
El Limon
• Design to allow multiple
access points for
construction
• Daily accountability for
performance. Everyone
needs to know how
important the roads are
...we’ll anticipate challenges early and be prepared
20
21. Managing Risks: Cost Control
Manage scope and schedule creep...
• Settle on the design before starting construction
- Involve the operators in the design
• Choose a very good builder
- M3 has an excellent track record in Latin America
• Lock down prices on expensive components early
• Plan well in advance to allow time competitive bidding
• Relentless focus on cost containment
...we’ll anticipate and manage schedule and cost risks
21
22. Managing Risks: Staffing, Getting the Right People
A great project and an engaging leadership model...
Recruitment of Operation Management team:
Mine Manager, 10+ years experience
Mill Manager, 22+ years of experience
General Manager, 35+ years of experience
COO, 17+ years of experience
Vice-President of Human Resources
M3 selected as EPCM
Mine access road contractors selected
...makes it much easier to attract good people
22
23. What We’ve Accomplished
Since starting from scratch three years ago...
Established two field camps and one prep lab
Completed over 100,000 meters of resource drilling
Developed government relations and obtained extensive community support
Secured water rights
Resolved Ejido land access issues and signed long-term land lease
agreements with Ejidos
Expanded resource from 3 mm oz (M&I) and 0.9 mm oz (Inferred) to over
4.8 mm oz Au (M&I)) and 0.6 mm oz Au (Inferred)
Completed bankable feasibility study
Announced new Media Luna discovery south of Balsas River
Completed C$380 million equity financing
...much has been achieved
23
24. Torex Gold – Investors have done well
Torex has outperformed peers in a difficult market...
Courtesy of BMO Capital Markets; Source: FactSet; Note: Shown in USD and adjusted for reinvested dividends
Developer Peers include: Andina, Belo Sun, Detour, Eco Oro, Exeter, Gabriel, Guyana Goldfields, International Tower Hill, Keegan, Orezone, Probe, Rainy River, Romarco, Rubicon, Sabina and Victoria
Producers include: African Barrick, Agnico-Eagle, Alacer, Alamos, AngloGold Ashanti, Argonaut, AuRico, Aurizon, Avocet, Banro, Barrick, Buenaventura, Centamin, Centerra, CGA, Cluff, Dundee Precious Metals, Eldorado, Gold Fields, Goldcorp,
Golden Star, Great Basin, Harmony, IAMGold, Jaguar, Kingsgate, Kinross, Lake Shore, New Gold, Newcrest, Newmont, OceanaGold, Osisko, Perseus, Petropavlovsk, Polyus, Primero, Randgold, Resolute, San Gold, SEMAFO, Teranga, and Yamana
...the benefit of a high grade, high margin, high return project
24
25. Torex Gold – An experienced team
Most have done this before...
Terry MacGibbon, B.Sc., P.Geo., ICD.D Fred Stanford, P.Eng
Chairman of the Board, President & CEO
Chairman of the SHE Committee, Director
Andrew Gottwald, CA
Fred Stanford, P.Eng. Chief Financial Officer
President & CEO, Director
Alejandro Kakarieka,
Andrew Adams, B.Sc., ACA (UK) VP Exploration
Chairman of the Audit Committee, Director
Gabriela Sanchez, MBA
Jim Crombie, BSc., Mining Eng. VP Investor Relations
Director
Anne Stephen,
Frank Davis, B.Comm., MBA, JD, ICD.D VP Human Resources
Chairman of the Corporate Governance
Committee, Director Dawson Proudfoot, P.Eng.
VP Engineering
David Fennell, LL.B.
Chairman of the Compensation Committee, Gene Snider, BSc Mining Eng., MBA
Director Project Manager
Michael Murphy, MBA, Msc. Andres Recalde,
Director Director Community Relations
...and all enjoy getting it done
25
26. Torex differentiated within peer group
Torex will continue to add value…
• Continued upside potential
– Torex continues to spend aggressively on exploration
– Potential to increase current 4.8 mm oz (Measured & Indicated) and 0.6 mm oz
(Inferred) resource north of river
– Pursuing encouraging drill results south of river to define new deposit
• A simple project with robust economics
– High grade equals high margins and high returns
– Very competitive capital and operating costs
– It is harder to break a high grade project
• We can finance development
– Capex scale within our capability to finance
– High interest from project finance banks based on project economics
– $380 million equity finance completed in October 2012
...regardless of market weakness
26
28. The Guerrero Gold Belt: a growing mining district
Surrounding Projects
Com pany Project Status
M&I: 4.8 moz Au @ 2.79 g/t
Torex Morelos
Inferred: 620 koz Au @ 2.0 g/t
Inferred: 68.2 koz Au @ 1.49 g/t
Cayden Mina Verde
(0.2 g/t cut-off grade)
Surface sampling yielded grades of
Citation Biricu
up to 1.27 g/t Au
P&P: 8.7 moz Au Eq @ 0.86 g/t
Goldcorp Los Filos M&I: 2.1 moz Au Eq @ 1.31 g/t
Inferred: 4.4 moz Au Eq @ 0.87 g/t
Initial 2,500 drill program scheduled
Minaurum Vuelcos del Destino
for H2 2012
New strike Ana Paula 5.06 g/t Au over 103 metres
Reserves:
173 koz Au Eq @ 5.18 g/t
Nyrstar Campo Morado
165 mm lbs Zn @ 7.21%
29 mm lbs Cu @ 1.26%
Tarsis Erika 1.14 g/t Au over 10.25 metres
28
29. Morelos: A World-Class Deposit
4
New Liberty
3 Perama Hill
Meadow Bank
Massawa Morelos
Grade (g/t)
Golden
2 Meadows
Haile
5 Central Pit 1
Tocantinzinho Esaase Ashanti
Amulsar North America
1 Kiaka Toroparu
Bombore Africa
Shahuindo Blackwater
South America
4 Volcan
Rest of World
--
-- 2 4 6 8 10 12
Resource (mm oz Au)
3 Morelos
Grade (g/t)
Geita
Pueblo Viejo
Donlin Creek
2
Rosia Montana
1 Malartic Detour Lake
Livengood
Metates Snowfield KSM
--
-- 5 10 15 20 25 30 35 40 45 65
50
Source: BMO Capital Markets
Resource (mm oz Au)
Morelos is one of the highest grade open pit development operations and
is located in a proven mining jurisdiction close to existing infrastructure
30. Moving 600 meters north
True to skarn form, the gold grades are variable...
...with very interesting silver and copper values
30
31. Reserves
85% of M&I Resource was converted to reserve...
Tonnes Gold Grade Gold Silver Silver
Reserve (millions) (g/t Au) Ounces Grade Ounces
Category (g/t Ag)
Proven 10.5 2.93 994,000 3.67 1,245,000
Probable 38.2 2.52 3,096,000 4.53 5,569,000
Total 48.8 2.61 4,090,000 4.35 6,813,000
P&P
...more can be converted with additional drilling
31
32. Morelos Mineral Resource Estimate at a 0.5 g/t Au
Cutoff Grade. Effective date is 4 May, 2012
Deposit Resource Tonnes Gold Grade Gold Ounces
Category (Mt) (g/t) (000’s)
El Limon M&I 32.1 3.04 3,135
Guajes M&I 21.7 2.42 1,689
Total M&I 53.8 2.79 4,824
El Limon Inferred 8.3 2.0 543
Guajes Inferred 2.5 1.0 77
Total Inferred 10.7 2.0 620
Cut-off Grade (g/t) Tonnes Grade (g/t) Ounces (gold)
0.4 56.9 2.66 4,869,000
0.5 53.8 2.79 4,824,000
0.6 51.5 2.89 4,783,000
0.7 49.4 2.98 4,740,000
0.8 47.1 3.09 4,684,000
0.9 44.7 3.22 4,617,000
32
33. Key expenditures before and after commercial
production in US$
Capex required up to Capex required after
commercial production commercial production
Expenditures (With Contingency)
Plant & Infrastructure 452 M 15 M
Mine Access Roads 27 M 2M
Initial Mine Equipment Fleet 48 M 46 M
Mining Ore & Waste 65 M
Processing Ore inc. G&A 38 M
Royalties, and Treatment 3M
Owner’s Costs 42 M
Sub-total 675 M 63 M
Credits
Metal value produced (incl. 81,000 oz Au) (123 M)
Total net of revenue credits 552 M
Sustaining capex 23 M
Total Capex after commercial production 86 M
33
35. Operating Cash Costs
Cash costs net of silver revenue
US$421 / oz
(After the declaration of commercial production and without the
production tail at the end of mine life)
(Includes 2.5% royalty to the government)
Mining cost per tonne US$1.90 / tonne
(After the declaration of commercial production and without the
production tail at the end of mine life)
US$12.16 / tonne
Mining cost per tonne to the Mill
(((Strip ratio 5.4 avg.) + 1) X $1.90) (After the declaration of
commercial production and without the production tail at the end of
mine life)
Milling cost per tonne US$14.19 / tonne
(After the declaration of commercial production and without the
production tail at the end of mine life)
G&A per tonne
US$2.92 / tonne
(After the declaration of commercial production and without the
production tail at the end of mine life)
(Includes land lease payments)
35
36. Torex’s Competitive Advantage – Low Cash Cost
Competitive grade advantage leads to low costs that…
$1,000
$904
$800 $742
$643
$572
$600 $531
$421
$413
$400
$200
--
Latin North Australia South Africa World Torex LOM
Torex
America America Average Average Average
Average Average
Source: 2012 Thomson Reuters GFMS Gold Survey
...even ongoing industry cost pressures can’t break
36
39. Who is going to build it?
A project that is going to be built...
M3 Engineering of Tucson, Arizona
Lead consultant, responsible for overall document process and infrastructure design
AMEC MiningEl& Metals Consulting of Sparks, Nevada
Limon
Responsible
Pit for resource estimation
SRK Canada of Toronto, Ontario
Responsible for mine design
SRK Denver, CO
Responsible for mine geotech and hydrogeology
AMEC Earth and Environment Consulting Missisauga, ON
Responsible for waste management design and hydrology
Golder Associates
Responsible for environmental impact social assessment
IDEAS, Hidrogeologos Consultores of Hermosillo, Sonora
Responsible to confirm and secure the water supply
Processing facilities
Grupo GAP
Responsible for Ejido negotiations
...attracts good people
39
40. 2012 has been a transformational year
Major advances toward production...
Task 2012 2013 2014 2015
Land lease agreements
New resource estimate
Bankable feasibility study
Permits
Construction decision
Construction
Commissioning
Production
Exploration results
...and rapid advance on the exploration program
40
41. What do we have to work with?
Lots of cash on hand to do everything that...
• Approx. $410 million cash
December 31, 2012
TXG: C$14.08
• No debt 604 million shares issued
Market cap $1.2B
• Large, high-grade, open pit gold deposit
...has to be done before a construction decision
41
42. The strategy has delivered for investors
The junior gold space has been a tough market...
Belo Sun 69%
Torex 38%
Spot Gold 19%
Probe (1%)
Lydian (11%)
Detour (23%)
Dalradian (37%)
Colossus (47%)
Sabina (50%) Note: Relative performance shown in Canadian Dollars
Source: BMO Capital Markets, Bloomberg and Company Reports
Orezone (54%) Indludes data from December 1, 2010 through Jan. 21, 2013
Rubicon (58%)
Guyana Goldfields (59%)
Rainy River (61%)
Romarco (61%)
Gabriel (68%)
Eco Oro (68%)
Exeter (75%)
International Tower Hill (76%)
Victoria Gold (78%)
...Torex investors have weathered the storm
42
43. Analyst Coverage
BMO Capital Markets RBC Dominion Securities Inc.
Analysts: Andrew Breichmanas, P.Eng Analyst: Dan Rollins, CFA
Tel. (416) 359 8387 Tel. (416) 82-9893
Email: Andrew.breichmanas@bmo.com Email: dan.rollins@rbccm.com
Scotia Capital
Dundee Securities Corporation Analyst: Trevor Turnbull, MBA, MSc
Analyst: Ron Stewart Tel. (416) 863 7427
Tel. (647) 428-8324 Email: Trevor_Turnbull@scotiacapital.com
Email: Ron.Stewart@dundeesecurities.com
Stifel Nicolaus
GMP Securities Analyst: Josh Wolfson, CFA
Analyst: George Albino Tel. (416) 815 3080
Tel. (416) 943 6187 Email: jwolfson@stifel.com
Email: galbino@gmpsecurities.com
Macquarie Research TD Securities
Analyst: Pierre Vaillancourt Analyst: Daniel Earle
Tel. (416) 848 3647 Tel. (416) 308 7906
Email: pierre.vaillancourt@macquarie.com Email: daniel.earle@tdsecurities.com
43
44. TSX: TXG, TXG.WT.A
For further information:
Gabriela Sanchez, VP Investor Relations
email: gabriela.sanchez@torexgold.com
Mobile: (416) 357-6673
www.torexgold.com
