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TSX: TXG; TXG.WT.A Growing the Morelos Gold Project January, 2013

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Page 1: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

TSX: TXG; TXG.WT.A

Growing the Morelos Gold Project

January, 2013

Page 2: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Safe Harbour Statement

This presentation contains "forward-looking information" within the meaning of applicable Canadian securities legislation.Forward-looking information includes, but is not limited to, information regarding future exploration and development plansconcerning the Morelos gold project, including expected drilling results, updated mineral resource and reserve estimates,completion of the 2012 drill program and technical studies, obtaining permits and licenses, project commissioning, executingland agreements and negotiating road allowances, and the Company’s feasibility study (including realization of estimated mineralreserves; expectation that the Morelos gold project will be profitable with positive economics; recoveries; grades; annualproduction; receipt of all approvals; parameters and assumptions underlying mineral resource and reserve estimates andfinancial analysis; and gold prices). Generally, forward-looking information can be identified by the use of terminology such as"plans", "expects", "estimates", "intends", "anticipates", or "believes" or variations of such words or state that certain actions,events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information issubject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level ofactivity, performance or achievements to be materially different from those expressed or implied by such forward-lookinginformation, including, without limitation, risks related to: unexpected events and delays impacting completion of the 2012 drillprogram, technical studies and updated mineral resource and reserve estimates; exploration results not being consistent with

2

program, technical studies and updated mineral resource and reserve estimates; exploration results not being consistent withexpectations; required permits, licenses and approvals not being obtained on a timely basis; estimated mineral reserves andannual production not being realized; parameters and assumptions underlying mineral resource and reserve estimates andfinancial analysis being incorrect; and risk factors disclosed in the Company’s annual information form and management’sdiscussion and analysis for the year ended October 31, 2011. Forward-looking information is based on reasonable assumptions,estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditionsand expected developments, as well as other factors that management believes to be relevant and reasonable in thecircumstances at the date such statements are made. Although the Company has attempted to identify important factors thatcould cause actual results to differ materially from those contained in forward-looking information, there may be other factorsthat cause results not to be as anticipated. There can be no assurance that such information will prove to be accurate, as actualresults and future events could differ materially from those anticipated in such information. Accordingly, readers should not placeundue reliance on forward-looking information. The Company does not undertake to update any forward-looking information,except in accordance with applicable securities laws.

Additional technical information is contained in the Company’s feasibility study entitled “Morelos Gold Project, Feasibility Study,Form 45-106F1 Technical Report, Guerrero, Mexico”, dated September 4, 2012 (the “Feasibility Study”). The technicalinformation contained in this presentation is based upon the information contained in the Feasibility Study and prepared by orunder the supervision of the authors of the Feasibility Study, who are each qualified persons for the purposes of NationalInstrument 43‐101.

Page 3: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Executing on Our Strategy

Our strategy hasn’t changed:

– Build a mine

• Near-term, high grade open pit project at feasibility stage

High grade open pit project...

feasibility stage

– Find another one on the same property• Exciting new discovery to define at Media Luna which provides near-term expansion potential

3

...with significant expansion potential

Page 4: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Torex Gold – A quick introduction

A large 29,000 ha land package...

4

...in a great geological neighbourhood

Page 5: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Adding Value Through The Drill Bit

We have exploration targets all over the place...

5

...the current focus is the Media Luna Area (MLA)

Page 6: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Great results and relatively close to the mill...

Why focus on the Media Luna Area?

6

...we want to advance it very quickly

Page 7: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

At 5m thick X 5g/t it could be larger than the north...

Media Luna Results With Average Thickness and Grade

7

...at 17.4m thick by 5g/t it could be impressively large

Page 8: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Skarn Variability But Consistent Skarn

Every hole hit skarn at the intrusive contact...

8

...except one that hit a dike

Page 9: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Potential For Easy Access

The magnetite skarn...

9

...has been mapped on the face of the hill

Page 10: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Easy To Tell The Difference Between Ore and Waste

White marble waste is clearly differentiated...

ML-08

10

...from the black magnetite skarn

514.54-516.55m: 17.7 g/t Au; 13 g/t Ag; 0.91% Cu Magnetite –Pyrrhotite -Chalcopyrite, in px skarn

Page 11: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

The Upside Potential

Currently focusing in ML, MLW and TS...

Magnetite outcrops in Todos Santos

Todos Santos

11

...with many more magnetic anomalies in close proximity

Media LunaMedia Luna West

Page 12: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

A mix of drilling to see how big this system could be...

Exploration - Next Steps

• How big could it be:- Seek to extend the strike length on ML and MLW- Test Todos Santos and another of the magnetic anomalies of a slightly different magnetic signature

...and drilling to support a maiden resource estimate 12

• Resource drilling:- Targeting to have an initial resource by Q1/14

• Currently working through options to deliver more drill meters per year than the 100,000 meters we can expect with our current fleet of 10 diamond drill rigs

Page 13: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Strategy Plank #1 – Build The Northern Mine

The BFS confirms robust project…

Production Start Q1 2015

P & P Mineral Reserves 48.8 mt @ 2.61g/t

LOM Strip Ratio (Waste:Ore) 5.6:1

Mill head grade 2.61 g/t Au

Mill recovery 87.4 Au

Mine Life 10.5 years

13

...now pushing forward to build it

Annual Production 2015 128 koz Au

Annual Production 2016 246 koz Au

Average Annual Production 2017-24 375 koz Au

Peak annual production 494 koz Au

Cash Costs net of Ag credits US$421/oz Au

Capex up to commercial production without revenue credits US$675 M

Capex up to commercial production net of revenue credits US$552 M

Capex after commercial production US$86 M

Page 14: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

What Will This Simple Mine And Mill Produce?

An after tax IRR of 24.2%...

14

...with exploration potential to extend the mine life

Page 15: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Robust Project Economics

Significant returns for stakeholders…

US$1,276/oz (1)

(Base Case) (2)US$1,500/oz US$1,750/oz US$2,000/oz

Cumulative Cash Flow US$M

$1,558 $2,121 $2,747 $3,374

After Tax NPV @5% (US$ mm)

$900 $1,262 $1,679 $2,096

After Tax IRR 24.2% 28.9% 34.6% 39.8%

15

...irrespective of commodity price

After Tax IRR(%)

24.2% 28.9% 34.6% 39.8%

Capex Payback(Years)

3.6 3.2 2.8 2.5

2017 EBITDA (3)

(US$ mm)$276 $336 $417 $497

(1) Average gold price LOM(2) Base case assumed metal prices in US$:

Gold: 2015 - $1,500/oz, 2016 - $1,407/oz, 2017 - $1,315/oz, 2018 and beyond - $1,250/ozSilver: 2015 - $27.75/oz, 2016 - $25.00/oz, 2017 - $25.00/oz, 2018 and beyond - $22.00/oz

(3) Represents EBITDA from first full year of production

Page 16: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Managing Risks Through Construction

Fortunately it is a simple project, just a mine and a mill...

• Permitting risks

• Village relocation risks

• Financing risks

16

...we’ll anticipate and manage schedule and cost risks

• Financing risks

• Schedule risks for the mine access roads

• CAPEX escalation risks

• Staffing risks

Page 17: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Managing Risks: Receiving Permits On Schedule

Respect the permitting process and do the best we can...

El Limon pit

Guajes pit

North North pit

17

...to design a mine that the regulators will be pleased to approve

14,000 tpd mill Dry stack tailings

Water containment

1K tph Rope- Con

Page 18: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Managing Risks: Village Relocation

The process proceeds on schedule…

� New location accepted� Community layout accepted� Housing prototypes accepted� Community support buildings

designed

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...for a successful completion by the end of 2014

Next steps:• Families select their building lot • Families select their preferred

home design• With the design decisions complete move forward with the municipal permitting process

Page 19: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Managing Risks: Financing

� Completed equity financing for C$380 million in October 2012

� Hired an in-house advisor that has done debt financing many times before

– Ron Gagel, former CFO of FNX and Aur Resources

� Process is well in hand to provide project debt financing

Balancing dilution and debt encumbrances to provide...

� Process is well in hand to provide project debt financing

– Established dialogue with 10 financial institutions including banks, export credit agencies and equipment suppliers

– RFP was delivered by mid-September

– Proposals received and currently under evaluation by Management

– Preliminary agreements expected by the end of November followed by the bank’s due diligence process

– Final agreements expected in Q2 / 2013

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...a financing solution that is best for this project

Page 20: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Managing Risks: Schedule For The Mine Access Roads

• Contractors mobilized the day the permits arrive

• Design to allow multiple access points for

Roads are on the critical path to commercial production...

El Limon pitAccess Road to

El Limon

access points for construction

• Daily accountability for performance. Everyone needs to know how important the roads are

20

...we’ll anticipate challenges early and be prepared

Page 21: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Managing Risks: Cost Control

Manage scope and schedule creep...

• Settle on the design before starting construction

- Involve the operators in the design

• Choose a very good builder

21

...we’ll anticipate and manage schedule and cost risks

- M3 has an excellent track record in Latin America

• Lock down prices on expensive components early

• Plan well in advance to allow time competitive bidding

• Relentless focus on cost containment

Page 22: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Managing Risks: Staffing, Getting the Right People

A great project and an engaging leadership model...

�Recruitment of Operation Management team:

�Mine Manager, 10+ years experience

�Mill Manager, 22+ years of experience

�General Manager, 35+ years of experience

22

...makes it much easier to attract good people

�General Manager, 35+ years of experience

�COO, 17+ years of experience

�Vice-President of Human Resources

�M3 selected as EPCM

�Mine access road contractors selected

Page 23: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

What We’ve Accomplished

� Established two field camps and one prep lab

� Completed over 100,000 meters of resource drilling

� Developed government relations and obtained extensive community support

� Secured water rights

� Resolved Ejido land access issues and signed long-term land lease

Since starting from scratch three years ago...

� Resolved Ejido land access issues and signed long-term land lease agreements with Ejidos

� Expanded resource from 3 mm oz (M&I) and 0.9 mm oz (Inferred) to over 4.8 mm oz Au (M&I)) and 0.6 mm oz Au (Inferred)

� Completed bankable feasibility study

� Announced new Media Luna discovery south of Balsas River

� Completed C$380 million equity financing

23

...much has been achieved

Page 24: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Torex Gold – Investors have done well

Torex has outperformed peers in a difficult market...

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...the benefit of a high grade, high margin, high return project

Courtesy of BMO Capital Markets; Source: FactSet; Note: Shown in USD and adjusted for reinvested dividendsDeveloper Peers include: Andina, Belo Sun, Detour, Eco Oro, Exeter, Gabriel, Guyana Goldfields, International Tower Hill, Keegan, Orezone, Probe, Rainy River, Romarco, Rubicon, Sabina and VictoriaProducers include: African Barrick, Agnico-Eagle, Alacer, Alamos, AngloGold Ashanti, Argonaut, AuRico, Aurizon, Avocet, Banro, Barrick, Buenaventura, Centamin, Centerra, CGA, Cluff, Dundee Precious Metals, Eldorado, Gold Fields, Goldcorp, Golden Star, Great Basin, Harmony, IAMGold, Jaguar, Kingsgate, Kinross, Lake Shore, New Gold, Newcrest, Newmont, OceanaGold, Osisko, Perseus, Petropavlovsk, Polyus, Primero, Randgold, Resolute, San Gold, SEMAFO, Teranga, and Yamana

Page 25: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Torex Gold – An experienced team

Most have done this before...

Terry MacGibbon, B.Sc., P.Geo., ICD.DChairman of the Board,

Chairman of the SHE Committee, Director

Fred Stanford, P.Eng.President & CEO, Director

Andrew Adams, B.Sc., ACA (UK)Chairman of the Audit Committee, Director

Terry MacGibbon, B.Sc., P.Geo., ICD.DChairman of the Board,

Chairman of the SHE Committee, Director

Fred Stanford, P.Eng.President & CEO, Director

Andrew Adams, B.Sc., ACA (UK)Chairman of the Audit Committee, Director

Fred Stanford, P.EngPresident & CEO

Andrew Gottwald, CAChief Financial Officer

Alejandro Kakarieka,VP Exploration

Gabriela Sanchez, MBA

Fred Stanford, P.EngPresident & CEO

Andrew Gottwald, CAChief Financial Officer

Alejandro Kakarieka,VP Exploration

Gabriela Sanchez, MBA

25

...and all enjoy getting it done

Jim Crombie, BSc., Mining Eng.Director

Frank Davis, B.Comm., MBA, JD, ICD.DChairman of the Corporate Governance

Committee, Director

David Fennell, LL.B.Chairman of the Compensation Committee,

Director

Michael Murphy, MBA, Msc.Director

Jim Crombie, BSc., Mining Eng.Director

Frank Davis, B.Comm., MBA, JD, ICD.DChairman of the Corporate Governance

Committee, Director

David Fennell, LL.B.Chairman of the Compensation Committee,

Director

Michael Murphy, MBA, Msc.Director

Gabriela Sanchez, MBAVP Investor Relations

Anne Stephen,VP Human Resources

Dawson Proudfoot, P.Eng.VP Engineering

Gene Snider, BSc Mining Eng., MBAProject Manager

Andres Recalde,Director Community Relations

Gabriela Sanchez, MBAVP Investor Relations

Anne Stephen,VP Human Resources

Dawson Proudfoot, P.Eng.VP Engineering

Gene Snider, BSc Mining Eng., MBAProject Manager

Andres Recalde,Director Community Relations

Page 26: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Torex differentiated within peer group

• Continued upside potential

– Torex continues to spend aggressively on exploration

– Potential to increase current 4.8 mm oz (Measured & Indicated) and 0.6 mm oz (Inferred) resource north of river

– Pursuing encouraging drill results south of river to define new deposit

• A simple project with robust economics

Torex will continue to add value…

• A simple project with robust economics

– High grade equals high margins and high returns

– Very competitive capital and operating costs

– It is harder to break a high grade project

• We can finance development

– Capex scale within our capability to finance

– High interest from project finance banks based on project economics

– $380 million equity finance completed in October 2012

26

...regardless of market weakness

Page 27: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

TSX: TXG, TXG.WT.A

Appendix

Page 28: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

The Guerrero Gold Belt: a growing mining district

Surrounding Projects

Company Project Status

Torex MorelosM&I: 4.8 moz Au @ 2.79 g/t

Inferred: 620 koz Au @ 2.0 g/t

Cayden Mina VerdeInferred: 68.2 koz Au @ 1.49 g/t

(0.2 g/t cut-off grade)

Citation BiricuSurface sampling yielded grades of

up to 1.27 g/t Au

P&P: 8.7 moz Au Eq @ 0.86 g/t

28

Goldcorp Los Filos

P&P: 8.7 moz Au Eq @ 0.86 g/t

M&I: 2.1 moz Au Eq @ 1.31 g/t

Inferred: 4.4 moz Au Eq @ 0.87 g/t

Minaurum Vuelcos del DestinoInitial 2,500 drill program scheduled

for H2 2012

New strike Ana Paula 5.06 g/t Au over 103 metres

Nyrstar Campo Morado

Reserves:

173 koz Au Eq @ 5.18 g/t

165 mm lbs Zn @ 7.21%

29 mm lbs Cu @ 1.26%

Tarsis Erika 1.14 g/t Au over 10.25 metres

Page 29: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Morelos: A World-Class Deposit

Meadow Bank

Morelos

Haile

Blackwater

Golden Meadows

Esaase

Bombore

CentralAshanti

Kiaka

Massawa

New Liberty

Volcan

Toroparu

Tocantinzinho

Shahuindo

Pit 1

Amulsar

Perama Hill

--

1

2

3

4

-- 2 4 6 8 10 12

Grade (g/t)

4

5North America

Africa

South America

Rest of World

Morelos is one of the highest grade open pit development operations and

is located in a proven mining jurisdiction close to existing infrastructure

Source: BMO Capital Markets

-- 2 4 6 8 10 12

Resource (mm oz Au)

Donlin Creek

Metates

Detour Lake

LivengoodMalartic

Snowfield KSM

Pueblo Viejo

Geita

Rosia Montana

--

1

2

3

-- 5 10 15 20 25 30 35 40 45 50

Grade (g/t)

Resource (mm oz Au)

Morelos

65

Page 30: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Moving 600 meters north

True to skarn form, the gold grades are variable...

30

...with very interesting silver and copper values

Page 31: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Reserves

85% of M&I Resource was converted to reserve...

Reserve

Category

Tonnes

(millions)

Gold Grade

(g/t Au)

Gold

Ounces

Silver

Grade

(g/t Ag)

Silver

Ounces

Proven 10.5 2.93 994,000 3.67 1,245,000

31

...more can be converted with additional drilling

Probable 38.2 2.52 3,096,000 4.53 5,569,000

Total

P&P

48.8 2.61 4,090,000 4.35 6,813,000

Page 32: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Morelos Mineral Resource Estimate at a 0.5 g/t Au Cutoff Grade. Effective date is 4 May, 2012

Deposit Resource

Category

Tonnes

(Mt)

Gold Grade

(g/t)

Gold Ounces

(000’s)

El Limon M&I 32.1 3.04 3,135

Guajes M&I 21.7 2.42 1,689

Total M&I 53.8 2.79 4,824

El Limon Inferred 8.3 2.0 543

Guajes Inferred 2.5 1.0 77

32

Guajes Inferred 2.5 1.0 77

Total Inferred 10.7 2.0 620

Cut-off Grade (g/t) Tonnes Grade (g/t) Ounces (gold)

0.4 56.9 2.66 4,869,000

0.5 53.8 2.79 4,824,000

0.6 51.5 2.89 4,783,000

0.7 49.4 2.98 4,740,000

0.8 47.1 3.09 4,684,000

0.9 44.7 3.22 4,617,000

Page 33: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Key expenditures before and after commercial production in US$

Capex required up to commercial production

Capex required after commercial production

Expenditures (With Contingency)

Plant & Infrastructure 452 M 15 M

Mine Access Roads 27 M 2 M

Initial Mine Equipment Fleet 48 M 46 M

Mining Ore & Waste 65 M

Processing Ore inc. G&A 38 M

33

Processing Ore inc. G&A 38 M

Royalties, and Treatment 3 M

Owner’s Costs 42 M

Sub-total 675 M 63 M

Credits

Metal value produced (incl. 81,000 oz Au) (123 M)

Total net of revenue credits 552 M

Sustaining capex 23 M

Total Capex after commercial production 86 M

Page 34: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Production Summary

Summary of the annual mine production plan

Years

Ore mined

Ore milled

Head Grade

Gold Production

Head Grade

Silver Production Waste Strip

ratio (Mt) (Mt) (Au g/t) (k oz) (Ag g/t) (k oz) (Mt)

2013 4.53 NA

2014 0.26 1.431 2.501 11.00 41.9

2015 2.13 2.28 2.01 128 4.58 110 13.01 6.1

2016 3.66 3.75 2.32 246 6.63 267 25.57 7

2017 5.19 5.04 2.36 333 6.3 345 29.07 5.6

2018 4.88 5.04 2.22 316 5.54 293 32.46 6.7

34

2018 4.88 5.04 2.22 316 5.54 293 32.46 6.7

2019 5.20 5.04 2.33 324 3.69 185 31.33 6

2020 5.06 5.04 2.43 345 3.48 183 31.06 6.1

2021 5.04 5.04 2.34 332 3.08 163 31.14 6.2

2022 4.94 5.04 3.07 434 3.74 191 26.50 5.4

2023 5.12 5.04 3.47 494 3.96 204 19.51 3.8

2024 4.97 5.04 2.97 424 3.23 168 12.99 2.6

20252 1.22 1.31 2.9 107 2.79 38 2.07 1.7

20262 0.12 - - - - - 0.71 6.1

20272 0.41 0.52 3.68 54 7.64 49 0.88 2.1

20282 0.57 0.58 2.44 39 4.35 30 0.59 1

Total 48.77 48.77 2.61 3,573 4.35 2,227 272.40 5.6

Page 35: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Operating Cash Costs

Cash costs net of silver revenue

(After the declaration of commercial production and without theproduction tail at the end of mine life)

(Includes 2.5% royalty to the government)

US$421 / oz

Mining cost per tonne

(After the declaration of commercial production and without theproduction tail at the end of mine life)

US$1.90 / tonne

35

Mining cost per tonne to the Mill

(((Strip ratio 5.4 avg.) + 1) X $1.90) (After the declaration ofcommercial production and without the production tail at the end ofmine life)

US$12.16 / tonne

Milling cost per tonne

(After the declaration of commercial production and without theproduction tail at the end of mine life)

US$14.19 / tonne

G&A per tonne

(After the declaration of commercial production and without theproduction tail at the end of mine life)

(Includes land lease payments)

US$2.92 / tonne

Page 36: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Torex’s Competitive Advantage – Low Cash Cost

Competitive grade advantage leads to low costs that…

$531$572

$742

$904

$643

$600

$800

$1,000

$421

36

...even ongoing industry cost pressures can’t break

$413

--

$200

$400

LatinAmericaAverage

NorthAmericaAverage

AustraliaAverage

South AfricaAverage

WorldAverage

Torex LOM

Source: 2012 Thomson Reuters GFMS Gold Survey

Torex

$421

Page 37: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Metallurgical Recoveries

Ore Type

Average

Au grade

g/t

Extraction EquationExtraction

%

Prograde (Skarn)(+Gouge) 2.93 y= 2.2771*ln(x) + 87.057 89.48

Retrograde (skarn) (+Mass Sulfides) 3.55 y= 5.4671*ln(x) + 77.314 84.24

37

Retrograde (skarn) (+Mass Sulfides) 3.55 y= 5.4671*ln(x) + 77.314 84.24

Oxides (Oxide + Marble) 2.78 y= 3.1185*ln(x) + 82.235 85.42

Breccia 3.43 y= 15.453*ln(x) + 48.282 67.33

Hornfels (+Vein Material) 1.42 y= 90 90

Intrusive 1.61 y= 1.3912*ln(x) + 82.376 83.04

Total 2.61Weighted Average on Contained Gold = 87.40

Page 38: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Mill Design (A simplified flow sheet)Cyanide Leach , Carbon-in-Pulp Recovery

38

Page 39: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Who is going to build it?

A project that is going to be built...

El Limon Pit

M3 Engineering of Tucson, ArizonaLead consultant, responsible for overall document process and infrastructure design

AMEC Mining & Metals Consulting of Sparks, NevadaResponsible for resource estimation

SRK Canada of Toronto, OntarioResponsible for mine design

SRK Denver, CO

39

...attracts good people

Processing facilities

SRK Denver, COResponsible for mine geotech and hydrogeology

AMEC Earth and Environment Consulting Missisauga, ONResponsible for waste management design and hydrology

Golder AssociatesResponsible for environmental impact social assessment

IDEAS, Hidrogeologos Consultores of Hermosillo, SonoraResponsible to confirm and secure the water supply

Grupo GAPResponsible for Ejido negotiations

Page 40: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

2012 has been a transformational year

Major advances toward production...

2012 2013 2014 2015Task

Land lease agreements

New resource estimate

Bankable feasibility study

Permits

��������

����

40

...and rapid advance on the exploration program

Exploration results

Permits

Construction

Construction decision

Commissioning

Production

Page 41: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

What do we have to work with?

Lots of cash on hand to do everything that...

• Approx. $410 million cash

• No debt

December 31, 2012

TXG: C$14.08

604 million shares issued

41

...has to be done before a construction decision

• No debt

• Large, high-grade, open pit gold deposit

604 million shares issuedMarket cap $1.2B

Page 42: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

The strategy has delivered for investors

The junior gold space has been a tough market...

69%

38%

19%

(1%)

(11%)

(23%)

(37%)

(47%)

Belo Sun

Torex

Spot Gold

Probe

Lydian

Detour

Dalradian

Colossus

42

...Torex investors have weathered the storm

Note: Relative performance shown in Canadian Dollars

Source: BMO Capital Markets, Bloomberg and Company Reports

Indludes data from December 1, 2010 through Jan. 21, 2013

(47%)

(50%)

(54%)

(58%)

(59%)

(61%)

(61%)

(68%)

(68%)

(75%)

(76%)

(78%)

Colossus

Sabina

Orezone

Rubicon

Guyana Goldfields

Rainy River

Romarco

Gabriel

Eco Oro

Exeter

International Tower Hill

Victoria Gold

Page 43: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

Analyst Coverage

BMO Capital Markets

Analysts: Andrew Breichmanas, P.EngTel. (416) 359 8387Email: [email protected]

Dundee Securities Corporation

Analyst: Ron StewartTel. (647) 428-8324Email: [email protected]

RBC Dominion Securities Inc.

Analyst: Dan Rollins, CFATel. (416) 82-9893Email: [email protected]

Scotia Capital

Analyst: Trevor Turnbull, MBA, MScTel. (416) 863 7427Email: [email protected]

43

Email: [email protected]

GMP Securities

Analyst: George AlbinoTel. (416) 943 6187Email: [email protected]

Macquarie Research

Analyst: Pierre VaillancourtTel. (416) 848 3647Email: [email protected]

Stifel Nicolaus

Analyst: Josh Wolfson, CFATel. (416) 815 3080Email: [email protected]

TD Securities

Analyst: Daniel EarleTel. (416) 308 7906Email: [email protected]

Page 44: Growing the Morelos Gold Project - Issuer Directedg1.precisionir.com/.../NA019094/TorexJan2013Presentation.pdf · Growing the Morelos Gold Project January, 2013 . Safe Harbour Statement

TSX: TXG, TXG.WT.A

For further information:

Gabriela Sanchez, VP Investor Relations

email: [email protected]

Mobile: (416) 357-6673

www.torexgold.com