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VANCOUVER - Torex Gold Resources Inc. [TXG-TSX; TORXF-OTC] has announced plans to build an 8.5-megawatt solar power plant at its Morelos Gold property in Mexico, a move that is expected to deliver US$20 million in energy savings.
The new plant is expected to reduce Scope 2 greenhouse gas emissions by up to 8.6% using 2019 as the baseline year. With a 29,000-hectare footprint, Torex has an abundant amount of space for a solar installation. A projected cost of US$5 million associated with the installation of the solar plant (including transportation of equipment, earthworks, installation and commissioning, and permitting costs) have been included in the company's 2021 sustaining capital guidance of $70 to $85 million.
Torex said it has entered into a commercial lease agreement with Norwegian company Scatec, a leading publicly-traded global renewable energy producer, allowing for the use of Scatec's Release solution to build the solar plant.
Factoring in the total installed cost of the new solar plant in conjunction with the ongoing lease fee to Scatec for a total of 20 years, yields an average energy cost of $0.078 per kilowatt hour and total accumulated savings of US$20 million. Payback of the solar plant occurs approximately at year seven.
On Friday, Torex Gold shares eased 2.9% or $0.50 to $16.54. The shares are currently trading in a 52-week range of $25.52 and $14.81.
Torex is an intermediate gold producer, engaged in development and exploration at its 100%-owned Morelos Gold Property, which covers an area of 29,000 hectares in the Guerrero Gold Belt, about 180 kilometres southwest of Mexico City.
Within the Morelos Gold Property, the company's principal assets are the El Limon Guajes (ELG) Mining Complex, which consists of the El Limon, Guajes and El Limon Sur open pits (the ELG Open Pits), The El Limon Guajes underground mine, including zones referred to a Sub-Sill and El Limon Deep (ELD) and the processing plant and related infrastructure.
These operations reached in the commercial production stage in April 1, 2016.
At full production, the mine ranks amongst the largest and lowest cost gold operations in the world.
In a recent press release, the company said that with a strong start to the year, it is well-positioned to achieve full-year production guidance of 430,000 to 470,000 ounces of gold in 2021.