Torex Gold Resources (TSE:TXG) outlined a “transformational” 2025 and provided updated production, cost, and capital allocation priorities during its fourth-quarter and full-year 2025 results conference call. Management highlighted the successful ramp-up of the Media Luna operation, record margins and free cash flow, and the company’s transition to a debt-free balance sheet.
Leadership transition framed as continuity
President and CEO Jody Kuzenko opened the call by emphasizing succession planning and operational systems as core elements of Torex’s strategy. Kuzenko said the planned leadership transition, announced weeks earlier, is intended to provide continuity for shareholders and stakeholders.
CFO Andrew Snowden, who is set to become CEO in June, echoed the theme of continuity. He credited Kuzenko’s tenure with completing Media Luna and positioning the company for the next phase, including free cash flow generation and a return of capital program.
2025 operational performance: Media Luna ramp-up and safety metrics
Kuzenko said Torex reached commercial production at Media Luna in May 2025 and ramped up “ahead of plan,” exiting the year at 7,000 tonnes per day versus a targeted 6,500 tonnes per day. The company remains on track to reach design rates of 7,500 tonnes per day by mid-year 2026, which management said would be six months ahead of the schedule outlined in the feasibility study.
She said 2025 production was strong in the second half as mining rates improved and plant throughput remained “strong and stable.” Management expects production to remain around second-half 2025 levels going forward, with 2026 production weighted slightly to the back half due to grade and stope sequencing as the mill rate increases to 7,500 tonnes per day by mid-year.
Torex also highlighted improved metallurgical performance at the process plant. Management said gold and copper recoveries ramped quickly and consistently achieved design levels of 90% and 92%, respectively, while silver recoveries were said to be improving toward a design level of 85%.
On safety, Kuzenko said Torex’s “next level safety program” was appraised across the business and cited a lost time injury frequency of 0.07 per million hours worked for employees and contractors, compared to a Mexican mining industry average of 3.61 (as most recently reported). She described 2025 as among the safest years on record at the Morelos Complex.
Financial results: record margins, debt repayment, and cash flow seasonality
Snowden said Torex delivered record margins of 51% for 2025 and 57% in the fourth quarter, attributing performance to a strong second half and the prevailing metal price environment. He said fourth-quarter costs were slightly higher quarter-over-quarter due mainly to the first quarter of paste backfill at Media Luna and the effect of higher metal prices on royalties.
Management said the company generated record fourth-quarter free cash flow of $166 million and fully repaid debt accumulated during the Media Luna project. Kuzenko underscored that Media Luna was funded from cash flow with “no streams, no royalties, no equity raise,” and said Torex was debt-free six months after commercial production. Snowden added that Torex repaid the remaining $30 million of debt in January, leaving the company debt-free.
Snowden reported record adjusted EBITDA of $730 million for the year. He said cash was deployed toward several priorities, including $27 million in cash for the acquisition of Reyna Silver, over $350 million of capital expenditure (largely tied to completing Media Luna), and $44 million returned to shareholders through dividends and share buybacks.
Snowden also cautioned that Torex typically experiences first-half cash flow seasonality due to heavier tax, royalty, and profit-sharing payments. He outlined expected payments including:
- A 1% royalty payment in March of about $12 million
- An 8.5% mining tax payment in March expected to be about $55 million
- An annual income tax true-up in March expected to be about $20 million
- Quarterly tax installments of at least $60 million in Q1 related to fiscal 2026, plus the quarterly 2.5% royalty
- Employee-related payments, including about $30 million paid in January for the long-term incentive plan and a $35 million profit-sharing payment expected in Q2
At year-end, the company reported total liquidity of $426 million, including $120 million in cash, along with access to a $350 million credit facility maturing in June 2029 and a $200 million accordion feature subject to lender discretion.
2026 guidance, five-year outlook, and project spending priorities
Management reiterated 2026 guidance issued the prior month, calling for gold equivalent production of 420,000 to 470,000 ounces, up from 383,000 ounces in 2025. Kuzenko said the increase primarily reflects a full year of production from the plant with Media Luna at steady-state mining rates.
All-in sustaining costs were described as largely in line with the $1,783 per ounce gold achieved in 2025, though elevated versus earlier years due to the impact of higher metal prices on taxes, government royalties, and Mexico’s legislated profit sharing.
Kuzenko said non-sustaining capital in 2026 includes $100 million to $105 million for Media Luna North project costs and $65 million to $70 million for optimization and efficiency projects across Morelos, citing a planned conveyor connecting the Guajes Tunnel to the Guajes Crusher that is expected to reduce rehandling costs by more than $1 per tonne mined from Media Luna.
Using guided assumptions of $4,000 per ounce gold, $45 per ounce silver, $4.90 copper, and a 19:1 Mexican exchange rate, management forecast about $450 million of free cash flow in 2026. Kuzenko added that at current metal prices, the company was forecasting free cash flow “upwards of $700 million” for 2026.
On the five-year outlook through at least 2030, Kuzenko pointed to a more stable production profile that she said is improved from a prior outlook of 450,000 to 500,000 gold equivalent ounces per year through 2029. She attributed the change to Media Luna’s accelerated ramp-up, continued mine life extension at ELG Underground from exploration success, and mill throughput consistently above design levels.
Los Reyes security considerations, Media Luna North timeline, and exploration plans
Kuzenko said the Los Reyes PEA is progressing and remains on track for completion by mid-year 2026. Torex has budgeted $18 million in 2026 to complete the PEA, begin a pre-feasibility study (PFS), and conduct 20,000 meters of drilling. However, she said delivery of the PEA is not dependent on resuming drilling, given drilling completed to date.
In response to a question on security in Sinaloa, Kuzenko said Torex would not resume drilling at Los Reyes until it has “complete confidence” the work can be conducted safely and sustainably. She said if field teams cannot access the site for a prolonged period, the PFS timeline could shift from mid-2027 toward the end of 2027, depending on the timing of environmental baseline work, drilling, and additional technical sampling. She added that Torex is working with local communities and all three levels of government to establish conditions to restart fieldwork.
On Media Luna, Kuzenko said the ramp-up is effectively complete, noting the difference between 7,000 and 7,500 tonnes per day is “not really that significant.” She pointed to the commissioning of the final waste pass and progress on paste plant performance and power reliability as supportive of continued ramp-up and potentially exceeding 7,500 tonnes per day.
For Media Luna North, Torex said total project capital is now expected to be $108 million to $113 million versus a pre-feasibility estimate of $82 million, driven primarily by a decision to purchase the mining fleet outright rather than lease it. Kuzenko said underground development is about 40% complete and procurement is at roughly 30% of orders placed, including long-lead items. Management expects first mine production by year-end 2026, followed by a ramp-up through 2027.
Kuzenko described Media Luna North as a “low-risk” tuck-in project with minimal construction required because it ties into existing Media Luna ore and waste handling systems, and she said the company does not expect Media Luna North’s ramp-up to disrupt Media Luna production due to integrated mine planning.
Exploration spending for 2026 is budgeted at a record $77 million. Kuzenko said approximately $43 million will be allocated to Morelos for more than 113,000 meters of drilling, with a continued focus on replacing reserves and expanding resources at ELG Underground and the Media Luna Cluster, along with work on regional targets Atzcala and El Naranjo. Additional planned work includes $12 million in Nevada—primarily 7,500 meters of drilling at Gryphon and 2,500 meters at Medicine Springs (where Torex said it earned 100% ownership in January)—and $4 million for 5,000 meters of drilling at Batopilas and early-stage targeting at Guigui.
Snowden said capital allocation priorities remain focused on extending mine life and expanding margins at Morelos, advancing growth projects including Los Reyes and early-stage exploration, maintaining a minimum cash balance of $200 million, and returning capital to shareholders. He said Torex returned $44 million in the second half of 2025 through Phase I of its return of capital program, including a quarterly dividend of CAD 0.15 per share and share repurchases. Torex bought more than 800,000 shares in 2025 at an average price of CAD 57 per share, and has repurchased more than 400,000 shares in 2026 year-to-date at an average price just under CAD 67 per share. The company also declared its second quarterly dividend at CAD 0.15 per share and entered an automatic share purchase plan to continue buybacks during blackout periods.
About Torex Gold Resources (TSE:TXG)
Torex Gold Resources Inc is an intermediate producer of gold and other precious metals, engaged in the exploration, development, and exploration of its wholly owned Morelos Gold Property. The property consists of 29,000 hectares in the Guerrero Gold Belt, located 180 kilometres southwest of Mexico City and approximately 50 kilometres southwest of Iguala. Within this property, the company has two assets: the El Limon-Guajes Mine, an open pit gold deposit located north of the Balsas river, and the Media Luna Project, which is at an advanced stage of exploration.
