June 8, 2016
Torex Pours 29,995 Gold Ounces in May and 92,460 Ounces YTD Aided by a Positive Reconciliation Against the Geological Model
TORONTO, Ontario, June 8, 2016 - Torex Gold Resources Inc. (the “Company” or “Torex”) (TSX:TXG) announced updates on operations and geological model reconciliation at its El Limon-Guajes Mine (ELG) in southwest Mexico.
Fred Stanford, President & CEO of Torex stated: “The team on site continues to deliver excellent safety and environmental performance, and to exceed production expectations. In May they routinely operated the processing plant at design throughput levels and produced 29,995 ounces of gold, or 1,000 ounces per day. The Guajes deposit has also exceeded the expectations of the geological model, in both grade and tonnes. We have now processed over one million tonnes through the plant and can compare what the plant received against what was predicted by assays from blast-hole samples, and from there relate through to the geological model. In summary, since the plant was ‘bedded down’ at the end of February, when data became reliable, the plant has received 12% more gold ounces than was predicted by the geological model. Of this 12% increase in gold ounces, ‘10’ came from increased grade, and ‘2’ came from increased tonnage. Skarns are known to be variable and there is no reason to expect that this one will be any different; however, it is encouraging to note that as we work deeper into the Guajes deposit the positive reconciliation has strengthened. In conclusion, a big “thank you” to all Torex/MML teams, for their consistent performance in turning intentions into reality.”
- The plant produced 29,995 Au oz in May 2016
- Plant throughput was ahead of plan, averaging 11,468 tpd during May, or 82% of design capacity. The current peak daily throughput was achieved on May 9th at 16,429 tpd, or 17.4% above design capacity
- The tailings filtration plant delivered an average of 11,651 tpd, matching the cadence of the grinding circuit
- Average gold recovery for the month of May at 75%, was lower than previous performance. The cause was tracked back to an undiagnosed failure of equipment and a lack of accuracy in the measurement of cyanide concentrations. Both issues are now understood and corrected. During the first week of June recovery has averaged 87.6%
- Commercial production, for accounting purposes, started April 1, 2016
- At the end of May, the Company had approximately 0.9 million tonnes of ore stockpiled (The pace of mining has been reduced in order to draw down the stockpile.)
- The El Limon crusher and RopeCon are fully commissioned
- Pre-stripping at El Limon continues.
Reconciliation of Mine Production to the Mineral Reserve Model
For March, April and May, 860,000 tonnes were processed through the plant. Of that 860,000 tonnes, 73% came from Guajes and the rest came from the North Nose deposit.
The same blast-hole sampling processes were used to estimate mined grade for both Guajes and North Nose. The tonnes delivered by the mine to the processing plant are assigned the grade that was estimated by the blast-hole sampling processes.
The processing plant calculates the received head grade based on the ounces contained in all of the streams that exit the plant, plus ‘live’ in process inventory.
Since the head grade is calculated from streams that exit the plant, the data was not considered reliable until the ‘lock-up’ of gold in the processing plant had been ‘bedded down’. This was estimated to be complete by the end of February 2016.
For March, April, and May, the blast-hole sampling processes underestimated the gold delivered to the processing plant by a weighted average of 8%.
||Mine Estimated Au Grade Delivered To The Plant (g/t)
||Process Plant Calculated Au Head Grade (g/t)
||Plant Au Grade Relative To The Mine Estimated Au Grade
For the benches mined to date at Guajes, the geological model predicted 1.023 million tonnes of ore, containing 76,000 ounces of gold. Based on the grade estimates of the blast-hole sampling processes, 1.043 million tonnes were mined from those benches with an expected 79,000 ounces of gold. This equates to the blast-hole sampling processes increasing the ore tonnage mined from those benches by 2%, at an estimated 2% higher grade, for a combined increase of 4% in estimated total ounces.
The grade received by the processing plant indicates that the blast-hole sampling processes have been under estimating grade by 8%. This calculates through to the geological model under estimating grade by 10% and total ounces underestimated by 12% given that more tonnes were mined than predicted by the geological model.
The table below indicates the Guajes bench by bench comparison of what was predicted by the geological model versus that mined according to the blast-hole sampling processes. (The 8% factor from the processing plant ‘actuals’ is not included in the table.) The table illustrates the variability that is frequently inherent in a skarn deposit. It also illustrates that the reconciliations have been more positive as mining gets to the heart of the deposit.
||Mineral Reserves Model
(2015 LOM plan)
|Delivered to Plant/Stockpiles
||Delivered to Plant/Stockpiles
relative to Reserve Model
Reconciliation Factors (F1)
|| Ore (t)
The rest of the processed ore came from the North Nose deposit (approximately 1.5% of the mineral reserve), which is unusual for the property in that it is exposed, weathered, and oxidized. It was also on very steep terrain and that steep terrain made it difficult to get diamond drill holes into the upper part of the deposit that was exposed on surface. As a result of the topography and the exposed nature of the upper part of the deposit, channel samples were used extensively in that area.
Reconciliation was positive in the diamond drilled areas, less so for the channel sampled areas. This area is all mined out and the results have been included in the 2016 mineral reserve update. The North Nose tonnes remaining in stockpile are expected to be 8% higher in grade than what was accounted for in the 2016 mineral reserve update. (See news release dated May 12, 2016)
Scientific and technical information contained in this news release has been reviewed and approved by Dawson Proudfoot, P.Eng., Vice President, Engineering of Torex Gold Resources Inc. and a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
Torex is an emerging intermediate gold producer based in Canada, engaged in the exploration, development and exploitation of its 100% owned Morelos Gold Property, an area of 29,000 hectares in the highly prospective Guerrero Gold Belt located 180 kilometers southwest of Mexico City. Within this property, Torex has the El Limon-Guajes (ELG) Mine, which started production in December 2015, and the Media Luna Project, at an advanced stage of exploration, with a positive PEA completed in July of 2015. The property remains 75% unexplored.
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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, the continued positive reconciliation results compared to the geological model, achieving gold recoveries as planned and achieving mine and plant production as planned,. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “estimates”, “intends” or “indicates” or variations of such words and phrases or state that certain actions, events or results “may” or “could” be achieved. 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 those risk factors identified in the Company’s annual information form and management’s discussion and analysis. Forward-looking information is based on the 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 that such statements are made, but which may prove to be incorrect, including without limitation, the accuracy of mineral reserve and mineral resource estimates and the assumptions on which the mineral reserve and mineral resource estimates are based, blast-hole sampling underestimates grade by 8% and continued uninterrupted access to the mine site. Although the Company believes that the assumptions and expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because the Company can give no assurance that such expectations will prove to be correct. 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. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
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