Torex hits record as high-grade gold booked in Mexico

[Ben Graham]

New high-grade structures discovered by Torex Gold Resources (TSX: TXG) during drilling at its ELG underground mine in Mexico could help the company achieve a goal of extending the deposit’s operating life beyond 2029.

Highlight hole LS-414 cut 21 metres grading 27.99 grams gold per tonne and 4.9 grams silver from 66 metres depth, Torex said Monday in a statement. Another hole, LS-424, cut about 27 metres at 16.99 grams gold and 2.5 grams silver from 153 metres downhole.

Extending ELG’s life would allow Torex to keep annual production above 450,000 gold equivalent oz. beyond 2030.

“Results demonstrate the underlying resource potential of the ELG deposit, with potential to expand and upgrade resources” later this year, National Bank Financial mining analyst Don DeMarco said in a note Monday.

Torex shares rose 4.3% to a record C$61.71 Monday morning in Toronto, boosting the company’s market value to about C$5.3 billion ($3.8 billion). The stock has more than doubled this year along with rising gold prices.

Resource extensions

Assay results released Monday cover the 25,163 metres that were drilled between February and July. Torex has now reported results for about three-quarters of its planned 48,000-metre full-year drilling program.

Toronto-based Torex expects to spend $12 million this year on drilling at ELG, where four rigs are now deployed. Results so far confirm the grades and continuity of mineralization within the resource and show high-grade mineralized resource extensions, the company said.

The high-grade mineralization found during the latest round of drilling runs along two second order structures running parallel to both the El Limón Sur and Sub-Sill trends. The discovery of these new structures “shows that the mineralized potential of this deposit is yet to be fully defined and indicates a strong potential to continue to expand resources and replace reserves year after year,” Torex said.

Other drilling highlights include hole LS-403 along the El Limón Sur trend, which cut 29 metres grading 6.98 grams gold and 22.7 grams gold from 96 metres downhole, and hole SST-406 along the Sub-Sill trend, which intersected 15 metres at 3.25 grams gold and 9.5 grams silver from 31 metres depth.

“We continue to be impressed by the drilling results at ELG underground,” CEO Jody Kuzenko said. “The discovery of second order mineralized structures parallel to the El Limón Sur and Sub-Sill trends underpins our belief that we have yet to unlock the full geologic potential of this deposit.”

Strong indication

High grades offer “a strong indication that we will be able to add to the resource inventory with our year-end mineral reserves and resources update in March 2026,” she added.

Located about 180 km southwest of Mexico City, in the Guerrero gold belt, ELG is part of Torex’s 290-sq.-km Morelos complex. Besides ELG underground, Morelos also includes the ELG open-pit and Media Luna underground mines, the development-stage EPO underground deposit, a processing plant and related infrastructure.

Commercial production at ELG began in April 2016. The mine churned out 452,523 oz. of gold last year, helping Morelos retain its title as Mexico’s largest gold producer.

ELG underground has measured and indicated resources of about 8.5 million tonnes grading 4.65 grams gold and 8.4 grams silver for contained metal of about 1.3 million oz. gold and 2.3 million oz. silver. Measured and indicated resources for all of Morelos total about 45.7 million tonnes grading 3.21 grams gold and 26.5 grams silver for contained metal of 4.7 million oz. gold and 38.9 million oz. silver.