Torex Gold Resources Q4 Earnings Call Highlights

Core Insights - Torex Gold Resources reported a transformational 2025 with successful ramp-up of the Media Luna operation, achieving record margins and free cash flow while transitioning to a debt-free balance sheet [7][10]. Production and Performance - The company achieved gold and copper recoveries of 90% and 92% respectively, with silver recoveries improving towards a design level of 85% [1] - Production in the second half of 2025 was strong, with management expecting to maintain these levels going forward, and 2026 production slightly weighted to the latter half due to grade and stope sequencing [2] - Torex reached commercial production at Media Luna in May 2025, ramping up to 7,000 tonnes per day, exceeding the targeted 6,500 tonnes per day, and is on track to reach 7,500 tonnes per day by mid-2026 [3] Financial Highlights - Torex reported record margins of 51% for 2025 and 57% in Q4, attributed to a strong second half and favorable metal prices [9] - The company generated record fourth-quarter free cash flow of $166 million and fully repaid its debt, achieving a debt-free status six months post-commercial production [10] - Adjusted EBITDA for the year was reported at $730 million, with significant cash deployed towards acquisitions, capital expenditures, and shareholder returns [11] Strategic Focus and Guidance - The 2026 guidance includes gold equivalent production of 420,000 to 470,000 ounces, reflecting a full year of production from Media Luna at steady-state mining rates [13] - Non-sustaining capital for 2026 is budgeted at $100 million to $105 million for Media Luna North and $65 million to $70 million for optimization projects [15] - The company plans to allocate $77 million for exploration in 2026, focusing on Morelos and early-stage projects in Nevada and Chihuahua [24] Capital Allocation and Shareholder Returns - Torex returned $44 million to shareholders in the second half of 2025 through dividends and share buybacks, with ongoing plans for capital returns supported by cash flow [25] - The company has entered an automatic share purchase plan to continue buybacks during blackout periods, having repurchased over 400,000 shares in 2026 year-to-date [25]