Torex Gold’s Media Luna resources up by nearly a quarter

The asset’s updated mineral resource estimate is pegged now at 4.39 million of gold-equivalent ounces, at an average grade of 5.38 grams per tonne. That compares to the 3.54 million gold-equivalent ounces Torex reported in April 2021.

Of the updated indicated resource, 60% of the gold-equivalent estimate is attributable to gold, 33% to copper and the remainder to silver, the Toronto-based miner said.

Inferred gold resources dropped, consequently, by 47% to 780,000 ounces, Torex said.

“The conversion rate from the inferred category to the indicated category was solid, with indicated mineral resources increasing by 4.5 million tonnes and inferred resources declining by 4.9 million tonnes,” it said.

BMO Capital Markets analyst Ryan Thompson said the update had a positive impact on the bank’s net asset value granted to the miner’s underground deposit.

“Our estimated Media Luna NAV increased to $712m, 12% higher than our prior estimate of $633 million,” Thompson wrote in a note to investors.

“With the technical report expected in the coming weeks, we are leaving our target price unchanged as we expect more fine-tuning of our model in the near future,” he said.

Further growth expected

The company plans to spend $19 million this year in exploration at Media Luna, which it expects will add further resources to the asset, located in Mexico’s western state of Guerrero.

Torex is looking at both a conventional mine design for Media Luna as well as at a mine plan that would use the company’s proprietary Muckahi mining system.

The conceptual design in the preliminary economic assessment (PEA) for the asset envisions an underground operation with expected average annual gold equivalent production of about 350,000 ounces over a 10-year mine life. 

The company said it intends to advance Media Luna from advanced stage development to first production in the first quarter of 2024.