TORONTO, Ontario, June 14, 2010 — Torex Gold Resources Inc. (the “Company”) (TSX:TXG) announce today its financial results for the three and six months ended April 30, 2010.
SIGNIFICANT EVENTS AND TRANSACTIONS
- During the quarter ended April 30, 2010, the Company completed a public offering of 50 million common shares issued at a price of $1.00 per common share for gross proceeds of $50 million. After deducting the agents’ fees and expenses of the offering, the Company received net proceeds of $47 million.
- On February 24, 2010, the Company acquired, from a subsidiary of Goldcorp Inc., the remaining 21.2% of the Morelos Gold Project, for $52 million. As a result of this transaction the Company now holds 100% of the Morelos Gold Project, through its wholly-owned subsidiaries.
- The Company began trading its common shares and warrants on the Toronto Stock Exchange (the “TSX”) and delisted its common shares from the TSX Venture Exchange on February 24, 2010.
- On February 28, 2010 and March 1, 2010, the Company reactivated two key land access agreements at the Morelos Gold Project with Rio Balsas Ejido and Puente Sur Balsas Ejido. The signing of these agreements allowed immediate access to a portion of the highly prospective lands that are the focus of the Company’s exploration program. Subsequent to the quarter end, the Company entered into a one-year land access agreement with the Rio Balsas Ejido.
- During the quarter ended April 30, 2010, the Company entered into several agreements to enable drilling, sampling, processing, and surveying to begin. Additional personnel have been added at both the head office and locally in Mexico. The first drill rig was mobilized to site in April with an additional drill expected to be mobilized in June 2010. The first batch of drill results are expected to be released at the end of the third fiscal quarter. A number of consulting firms have been engaged to assist with the completion of a pre-feasibility study, which is scheduled to be completed in September 2010.
- On April 29, 2010, the name of the Company was changed to Torex Gold Resources Inc. from Gleichen Resources Ltd. and Mr. Terry MacGibbon was appointed as Non-Executive Chairman of the Company.
- The net losses for the three and six months ended April 30, 2010 increased to $3,263,000 or $0.01 per common share and $7,414,000 or $0.04 per common share compared with losses of $168,000 or $0.01 per common share for the three months and $203,000 or $0.01 per common share for the six months ended in 2009. The increase in losses for the three and six months ended April 30, 2010 is due to increased corporate activity related to the transformation from a shell company to a company with a development stage asset and a corresponding growth in employees, including an increase in stock-based compensation expense resulting from grants of stock options and restricted share units to directors, employees and consultants during the six months ended April 30, 2010 and an increase in exploration and project development activities.
- As at April 30, 2010, the Company had $64.7 million of cash on hand and a working capital position of $64.6 million. The Company completed a $50 million equity offering as described below to partially fund the purchase of the remaining interest in the Morelos Gold Project. The shortfall of approximately $5 million, between the purchase price of the remaining interest and the net funds raised in the offering was funded from cash on hand. The incurrence of this difference together with corporate, exploration and project development expenditures for the quarter ended April 30, 2010 resulted in a decrease of approximately $7 million of cash on hand from January 31, 2010.
A complete set of the Company’s Financial Statements, Notes to the Financial Statements and Management’s Discussion and Analysis for the three and six months ended April 30, 2010 will be posted on the Company’s website at www.torexgold.com and will be filed on Sedar at www.sedar.com.
Torex Gold Resources Inc. is a well funded, growth oriented Canadian mining company engaged in the exploration and development of precious metal resources with a focus on gold. It owns 100% of the Morelos Gold Project, an advanced stage gold exploration property, located 180km southwest of Mexico City.
For further information, please contact:
TOREX GOLD RESOURCES INC.
President and CEO
Tel. (647) 260-1502
Vice President Investor Relations
Tel. (647) 260-1503
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This press release contains “forward looking statements” and “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to future exploration and development plans concerning the Morelos Gold Project, including expected timing for mobilizing drills on the project, expected drilling results and the within which the Company expects to receiving drilling results, anticipated timing for the completion of a pre-feasibility study and other technical studies on the project. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “estimates”, “intends”, “anticipates” or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, or “will be taken”, “occur”, or “be achieved”. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made at the date that such statements are made. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including the risk factors disclosed elsewhere in the Company’s public disclosure. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained herein is presented for the purposes of assisting investors in understanding the Company’s expected financial and operating performance and the Company’s plans and objectives and may not be appropriate for other purposes. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.