# MD&A

Source Brief: https://evesgoldminers.com/research/source-briefs/torex-gold-resources-inc-2026-05-05-md-and-a-d18038a0
Original source: https://d1vqu5ynjuwmto.cloudfront.net/assets/files/12474/torex_mda_2026_q1_-_filing.pdf
Original published: 2026-05-05
EGM generated: 2026-09-04
Company: TOREX GOLD RESOURCES INC (TXG)

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## Extracted Document Text

# MD&A

Source: https://d1vqu5ynjuwmto.cloudfront.net/assets/files/12474/torex_mda_2026_q1_-_filing.pdf
Published: 2026-05-05T00:00:00+00:00
Fetched: 2026-05-12T16:31:19.076+00:00
Source artifact: d18038a0-c96f-4449-81ff-bba7c8a307fb
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## Content

# MD&A
MANAGEMENT’S DISCUSSION
AND ANALYSIS
FOR THE THREE MONTHS ENDED MARCH 31, 2026
This Management’s Discussion and Analysis of the financial condition and results of operations (“MD&A”) for
Torex Gold Resources Inc. (“Torex” or the “Company”) was prepared as at May 5, 2026 and should be read in
conjunction with the Company’s unaudited condensed consolidated interim financial statements and related notes
for the three months ended March 31, 2026. It should also be read in conjunction with the Company’s audited
consolidated financial statements and annual MD&A for the year ended December 31, 2025. This MD&A contains
forward-looking statements that are subject to risks and uncertainties as discussed under “Cautionary Notes”.
This MD&A also includes the disclosure of certain non-GAAP financial measures. Refer to “Non-GAAP Financial
Performance Measures” which identifies the non-GAAP financial measures discussed in this MD&A for further
information, including a reconciliation to the comparable measures in accordance with IFRS Accounting
Standards (“IFRS”) as issued by the International Accounting Standards Board. All dollar figures included herein
are United States dollars (“U.S. dollar”) unless otherwise stated.
HIGHLIGHTS
• Safety performance: The Company recorded no lost-time injuries during the quarter and exited the quarter
with a lost-time injury frequency (“LTIF”) of 0.00 per million hours worked for both employees and contractors
on a rolling 12-month basis.
• Gold production: Production of 100,874 gold equivalent ounces1 (oz AuEq), including 73,647 oz Au for the
quarter. The Media Luna underground mine achieved a quarterly average design throughput of 7,500 tonnes
per day ("tpd") nine months ahead of the schedule set out in the technical report and three months ahead of
the most recent forecast. In addition, performance at ELG Underground remained consistently strong as
mining rates averaged more than 3,000 tpd. Production was influenced by mine sequencing and maintenance
activities at the processing plant. Consistent with annual guidance, quarterly production is expected to remain
at similar levels during Q2 before increasing in the second half of the year. The Company is on track to
achieve annual production guidance of 420,000 to 470,000 oz AuEq1.
• Record quarterly revenue: Gold equivalent ounces sold of 109,222 oz AuEq1 at a record quarterly average
realized gold price2 of $4,784 per oz AuEq1, contributing to revenue of $539.3 million. Revenue for the quarter
includes a net loss of $24.0 million for price adjustments on provisionally priced concentrate sales (a realized
gain of $8.1 million on final sales settlements during the first quarter and an unrealized loss of $32.1 million on
provisional sales pending final settlement) due to lower metals prices at the end of the quarter. In the first
quarter of 2026, the Company recognized a net derivative gain of $6.9 million (an unrealized gain of
$21.3 million and a realized loss of $14.4 million) on quotational period hedges entered into to mitigate price
risk on provisionally priced sales.
• Robust all-in sustaining margins2: Quarterly all-in sustaining costs of $1,917 per oz AuEq sold1, relative to
guidance of $1,750 to $1,850 per oz AuEq sold1. All-in sustaining costs margin2 of $2,867 per oz AuEq sold,
implying a record quarterly all-in sustaining costs margin2 of 60%. Cost of sales was $226.7 million or
$2,076 per oz AuEq sold. Costs during the quarter reflect the impact of the higher market price for gold, silver
and copper on royalties, Mexican profit sharing and land access agreements, known as temporary occupation
agreements (“TOAs”), with local communities.
• Record profitability and adjusted EBITDA2: Reported record quarterly net income of $207.5 million or
earnings of $2.18 per share on a basic basis and $2.16 on a diluted basis. Adjusted net earnings of
$199.7 million or $2.10 per share on a basic basis and $2.08 per share on a diluted basis. Generated record
quarterly EBITDA of $358.1 million and record adjusted EBITDA of $358.6 million.
• Strong cash flow generation: Net cash generated from operating activities totalled $209.8 million and
$174.2 million before changes in non-cash operating working capital, including income taxes and royalties
paid of $164.5 million, reflecting the annual true-up of corporate income taxes, the annual payment of mining
taxes, the annual payment of the 1% royalty, the quarterly payment of the 2.5% royalty, and instalments for
income taxes for 2026. Free cash flow2 of $157.3 million is net of cash outlays for capital expenditures, lease
payments, and interest.
1
Torex Gold Resources Inc. | TSX: TXG
• Strong financial liquidity: In January 2026, the Company fully repaid the remaining $30.0 million drawn on
the credit facility. The Company has a fully undrawn credit facility of $350.0 million with a maturity date in
June 2029 and a $200.0 million accordion feature that is available at the discretion of the lenders. The quarter
closed with a $466.9 million in available liquidity2, including $130.0 million in cash and $336.9 million available
on the $350.0 million credit facilities, net of letters of credit outstanding of $13.1 million.
• Return of Capital to Shareholders3: In May, the Company announced an enhanced return of capital
program targeting the return of $350.0 million to shareholders during 2026, through a combination of share
repurchases and dividends. During the first quarter, the Company leveraged strong cash flow generation to
return $121.2 million under its return of capital program.
Dividends: During the first quarter of 2026, the Company paid dividends of $10.4 million. In May 2026,
the Company declared its next quarterly dividend of C$0.16 per common share (“Torex Share”), an
increase of 7% over the prior quarterly dividend, which is payable on June 4, 2026 to shareholders of
record on May 21, 2026.
Share Repurchases: During the first quarter of 2026, the Company repurchased 2,141,801 Torex Shares
for $110.8 million (C$151.4 million) at an average price per share of $51.73 (C$70.69) under the
Company’s normal course issuer bid (“NCIB”).
• Media Luna North Project: During the quarter, $14.7 million of non-sustaining capital expenditures were
incurred relating to Media Luna North. Development of the main access ramp and haulage drift at Media Luna
North continued to track well. First production at Media Luna North remains on track for late 2026 with the
declaration of commercial production shortly thereafter.
• Exploration and Drilling Activities4: In April, the Company announced results from the ongoing drilling and
exploration program within the ELG Underground and Media Luna Cluster. Results to date support the
Company’s objective of expanding resources while enhancing and extending the current production profile of
the Morelos Complex.
ELG Underground: The discovery of mineralized structures at the El Limón Sur trend and mineralization
encountered beyond the boundary of defined resources at both the Sub-Sill and El Limón West trends,
continue to demonstrate the upside resource potential of ELG Underground.
Media Luna Cluster: Results support the potential to expand resources to the south and east of the
Media Luna mine. In addition, surface mapping suggests potential continuity between these zones which
will be the focus of follow-up drilling.
• Year-end Mineral Reserves & Resources5: In March, the Company released its 2025 mineral reserves and
resources update.
Morelos: Mineral reserves for Morelos increased 4% prior to depletion (5% decrease net of depletion),
with gains from drilling success at ELG Underground and Media Luna partially offsetting depletion and the
reductions in reserves associated with updates to the geological model at Media Luna North. At Media
Luna West, an inaugural Inferred Resource of 506 koz AuEq was delineated with an average grade of
5.11 grams per tonne ("gpt") AuEq.
Los Reyes Project: The acquisition of Los Reyes added 2,047 koz AuEq of Indicated Resources and
765 koz AuEq of Inferred Resources to the Company's overall resource inventory.
Record investment in exploration and resource drilling of $77.0 million is planned for 2026, focusing on
enhancing and extending the production profile at the Morelos Complex, advancing and de-risking Los Reyes,
and surfacing value across its early-stage exploration properties.
2
Torex Gold Resources Inc. | TSX: TXG
• CEO Transition: On February 4, 2026, the Company announced that Jody Kuzenko, President and Chief
Executive Officer (“CEO”), will retire from the Company immediately following the Annual and Special
Shareholder Meeting on June 17, 2026. As part of the Company’s long-term succession planning, Andrew
Snowden, Chief Financial Officer ("CFO"), will assume the role of President and CEO at that time. The
Company is in the final phase of its CFO search and will announce a replacement in due course.
• Appointment of New Director: In April, the Company announced the appointment of Mr. Jacques Perron to
the Board of Directors. Mr. Perron is a seasoned director with over 40 years of experience in the mining sector
and has extensive technical and operations experience.
1 Gold equivalent ounces produced and sold include production of silver and copper converted to a gold equivalent based on a ratio of the average
market prices for each commodity sold in the period. For the three months ended March 31, 2026, market prices averaged $4,873/oz gold, $84.33/oz
silver, and $5.83/lb copper, and AuEq (oz) = Au (oz) + 1,000 * (84.33 / 4,873) x Ag (koz) + 1,000,000 x (5.83 / 4,873) x Cu (mlb). Guidance for 2026
assumed metal prices of $4,000/oz gold, $45.00/oz silver, and $4.90/lb copper, and AuEq (oz) = Au (oz) + 1,000 * (45.00 / 4,000) x Ag (koz) + 1,000,000
x (4.90 / 4,000) x Cu (mlb).
2 These measures are non-GAAP financial measures with no standardized meaning under IFRS and might not be comparable to similar financial
measures disclosed by other issuers. Refer to “Non-GAAP Financial Performance Measures” for further information and a detailed reconciliation to the
comparable IFRS measures.
3 For more information on the Company's return of capital program, see the Company’s news release titled “Torex Gold Reports Enhanced Return of
Capital Program” filed on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.torexgold.com.
4 For more information on the Morelos exploration and drilling results, see the Company’s news release titled “Torex Gold Provides Q1 2026 Morelos
Drilling & Exploration Update” issued on April 30, 2026, and filed on SEDAR+ at www.sedarplus.ca and on the Company’s website at
www.torexgold.com.
5 Mineral reserve and mineral resource estimates for the Morelos Complex can be found in tables 26 and 27, respectively, of this MD&A. AuEq values
account for underlying metal prices and metallurgical recoveries used in reserve and resource estimates. For additional information on the mineral
reserve and mineral resource estimates for the Morelos Complex, please see the Company’s annual information form for the year ended
December 31, 2025, or the Company’s news release titled “Torex Gold Reports Year-end 2025 Reserves & Resources” issued on March 24, 2026, and
filed on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.torexgold.com.
3
Torex Gold Resources Inc. | TSX: TXG
OPERATING AND FINANCIAL HIGHLIGHTS
Table 1.
Three Months Ended
Mar 31, Dec 31, Mar 31,
In millions of U.S. dollars, unless otherwise noted 2026 2025 2025
Safety
Lost-time injury frequency1 /million hours 0.00 0.07 0.59
Total recordable injury frequency1 /million hours 0.61 0.73 1.52
Operating Results - Gold Equivalent basis
Go

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