Media Luna

Media Luna is an underground deposit which primarily contains gold, silver, and copper mineralization. The deposit is located on the south side of the Balsas River, approximately 7 kilometres from the El Limón Guajes processing plant, which is situated on the north side of the river. The deposit was discovered in March of 2012. Excavation of a 7-kilometre access tunnel under the Balsas River is expected to commence in H2 2020.

Following completion of a 175-hole infill drill program in 2019, the deposit hosts an Indicated resource 2.24 million gold equivalent ounces at a gold equivalent grade of 5.55 g/t (1.32 million gold ounces at a grade of 3.27 g/t) and an Inferred resource of 4.56 million gold equivalent ounces at a gold equivalent grade of 4.23 g/t (2.68 million gold ounces at a grade of 2.49 g/t). The current resource estimate is contained in approximately 30% of the area of the targeted magnetic anomalies. The effective date of the latest resource estimate is December 31, 2019 (see table below).

Mineral Resource Statement as of December 31, 2019 – Media Luna

Tonnes AuEq Au Ag Cu AuEq Au Ag Cu
(Mt) (g/t) (g/t) (g/t) (%) (Moz) (Moz) (Moz) (Mlb)
Media Luna
Measured - - - - - - - - -
Indicated 12.6 5.55 3.27 37.7 1.16 2.24 1.32 15.3 322
Total Measured & Indicated 12.6 5.55 3.27 37.7 1.16 2.24 1.32 15.3 322
Inferred 33.5 4.23 2.49 23.6 0.93 4.56 2.68 25.5 686

Notes to accompany resource table

  1. The effective date of the estimate is December 31, 2019
  2. Mineral resources are reported above a 2 g/t gold equivalent (AuEq) cut-off grade; AuEq = Au (g/t) + Cu % *(77.16/49.83) + Ag (g/t) * (0.64/49.83
  3. The assumed mining method is from underground
  4. Mineral resources are reported using a long-term gold price of US$1,550/oz, silver price of US$20.00/oz, and copper price of US$3.50/lb
  5. Costs per tonne of mineralized material (including mining, milling, and general and administrative) used is US$75/t. Metallurgical recoveries average 85% for gold, 75% for silver and 89% for copper
  6. Mineral resources that are not mineral reserves do not have demonstrated economic viability
  7. Mineral resources are classified in accordance with applicable CIM Standards
  8. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade, and contained metal content
  9. Mineral resources are reported as undiluted; grades are contained grades
  10. The estimate was prepared by Dr. Lars Weiershäuser, P.Geo., an employee of the Company, who is a “qualified person” under NI 43-101

A subsequent infill drill program is expected to be completed in 2020, with a target of upgrading an additional 7 to 9 million tonnes of resources from the Inferred category to the Indicated category. The drill program is expected to be completed in time to be included in a feasibility study, which is anticipated to be finalized in Q1 2021.

The conceptual design contained in a positive Preliminary Economic Assessment (PEA) announced in September 2018 envisioned an underground operation with expected production of 3.9 million ounces of gold equivalent over the life of the project at an average all-in sustaining cost of US$619/oz (gold equivalent basis). The initial (upfront) capital expenditure associated with the project were estimated at US$496 million. The updated Media Luna PEA delivered an estimated after-tax IRR of 27%, and an estimated NPV (5%) of US$582M and was based on the prior Inferred resource update which had an effective date of June 23, 2015 (see table below).

Results of Preliminary Economic Assessment for Media Luna (September 2018)

Additional technical information on the 175-hole drill program and mineral resource estimate with an effective date of December 31, 2019, may be found in the news release dated January 13, 2020, titled “Torex Announces Updated Media Luna Resource Estimate” available on SEDAR at www.sedar.com and on this website under “News” and updates in the Company’s continuous disclosure documents also available on www.sedar.com and elsewhere on this website.

Additional technical information is contained in the technical report entitled "Morelos Property, NI 43-101 Technical Report, ELG Mine Complex Life of Mine Plan and Media Luna Preliminary Economic Assessment, Guerrero State, Mexico" dated effective March 31, 2018, and filed on September 4, 2018 (the "Technical Report"). The technical information contained in this presentation is based upon the information contained in the Technical Report which is available on SEDAR at www.sedar.com and the Company's website at www.torexgold.com and as updated in the Company's continuous disclosure documents also available on www.sedar.com and www.torexgold.com.

A preliminary economic assessment should not be considered a prefeasibility study or feasibility study, as the economics and technical viability of the Media Luna Project have not been demonstrated at this time. The Media Luna PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. It cannot be assumed that all or any part of the inferred mineral resources will ever be upgraded to a higher category. Furthermore, there is no certainty that the conclusions or results as reported in the Media Luna PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.