Thank you for standing by. This is the conference operator. Welcome to the Torex Gold Resources Inc. Fourth Quarter and Year-End 2020 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions.
To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Dan Rollins, Vice President of Corporate Development and Investor Relations. Please go ahead, Mr. Rollins.
Thank you, operator. Good morning, everyone. On behalf of the Torex team, welcome to our Fourth Quarter and Year-end 2020 Conference Call. Before we begin, I wish to inform listeners that a presentation accompanying today's conference call can be found under the investor section of our website at www.torexgold.com. I'd also like to note that certain statements to be made today by the management team may contain forward-looking information.
As such, please refer to the detailed cautionary notes on page two of today's presentation, as well as those included in the Q4 and year-end 2020 MD&A. On the call today, we have Jody Kuzenko, President and CEO, as well as Andrew Snowden, CFO. Following the presentation, Jody and Andrew will be available for the question and answer period. This conference call is being webcast, and will be available for replay on our website.
This morning's press release and the accompanying financial statements and MD&A are posted on our website and have been filed on SEDAR. Please note that all amounts mentioned in this call are US dollars, unless otherwise stated. I'll now turn the call over to Jody.
Thank you, Dan, and good morning to all on the line. Welcome to the Torex Gold Q4 and Year-end 2020 Results Conference Call. There are two new aspects to our call this quarter. The first is the slide deck, setting out the key highlights and results visually to make it easier to follow along. The second is that Andrew Snowden will be joining us for the first time on this call in his capacity as CFO.
We welcomed Andrew to Torex at the start of January, and I know that he is no stranger to many of you. The agenda for the call is not new. I will step you through a quick overview of the pillars making up our strategic plan, key highlights for the quarter, an ESG and operations update, then I will turn the floor over to Andrew for a summary of financial performance.
Finally, I'll close with an update on Media Luna, exploration, and other key projects. Starting with slide four. This slide sets out the pillars that form the foundation of our strategic plan to deliver both business excellence, and over time, enhanced shareholder returns. There are five areas of focus. They're not in order of importance and don't imply sequence. We think of them as parallel paths. I won't take you through each of the sub-bullets in detail.
The plan is to optimize and extend ELG with a specific focus on stability of production and cash flow in the coming years and delivering a smooth transition period between ELG and Media Luna in late 2023. We plan to advance and de-risk Media Luna, optimizing the economics and bringing the project on in Q1 of 2024. Muckahi testing and commercialization, that's ongoing.
We're looking to shift to revenue generation from our proprietary innovation. The last two points there are building on ESG excellence and closing the valuation gap. Slide five sets out the key highlights for the year, and there were certainly many of them. Amidst a very challenging COVID context, the team came up large again in Q4 to deliver some outstanding results.
With gold production at 130,000 ounces in the quarter, it was effectively a mirror image of Q3. We closed out the year with over 430,000 ounces produced. This outstanding production in Q3 and Q4 was bolstered by a strong realized gold price and ongoing discipline around cost containment, all of which led to pretty impressive financial performance shown on the right-hand side of this slide.
We closed the year with cash and short-term investments of $206 million, with only just over $40 million left on our revolving credit facility to pay down. This will be looked after this quarter. We rounded out the year with record operating cash flow of $342 million, generating $137 million of cash flow in Q4 alone.
Margins were healthy as well, with TCC coming at $672 an ounce for the year and AISC at $924 an ounce. Overall, we came in with a solid beat to our guidance that we revised after COVID interruption in Q2. We were into the lower end of original guidance on both production and AISC. Turning to slide six, this one sets out some ESG highlights for the quarter, and I'd like to draw three points to your attention. First is COVID.
It continues to be a serious concern in Mexico and for our operations. Last count for the All-In since the start number stands at 147 cases, with almost half of those, a full 68, occurring in the first weeks of 2021 during that critical post-holiday period. To manage this, our screening methods continue to be applied with rigor.
Our health team is processing some 10,000 screens per month with a view to keeping the virus off-site. Our rapid response COVID tracing has been applied successfully when individuals have displayed symptoms on-site. This is working. A positive sign in our data is that the weekly case count just last week dropped to one.
This shows a serious inflection point in the curve, and we will keep doing what we are doing to manage COVID-19 for the duration. On safety performance, we proudly crossed 10 million hours lost time injury-free in November, but picked up a lost time injury in December when a diamond drill contractor pinched his finger. We closed out the year with an impressive lost time injury frequency of 0.15.
That's over 1 million person-hours. Finally, on ESG more broadly, we saw ratings improvements from various agencies on the back of a very concerted effort to improve our disclosure, and you can see some detail on that in the top right-hand quadrant of this slide. Turning now to operational performance on Slide eight. In terms of production, you can see this slide sets up some key highlights.
From the open pits to the underground to the process plant, there really were no weak links in the chain. Execution was phenomenal. The team delivered an excellent second half to close out the year. In the quarter, the open pits produced an impressive 18,000 tons per day. Not to be outdone, Sub-Sill and El Limón Deep, which we're now thinking about as a combined underground, broke a record high this quarter and delivered 1,300 tons per day and 22,000 ounces.
This demonstrates the ongoing potential of that asset and bolsters our confidence in this goal of 20,000 ounces a quarter for the duration. The process plant closed out at 12,560 tons per day. We were closing in on a quarterly record when some unplanned maintenance in the form of a torn feeder belt and damaged SAG liners took the plant down for 80 hours through Christmas Eve.
That notwithstanding, solid production and cost control allowed us to deliver robust margins on both total cash costs and AISC, shown in the bottom right quadrant of that slide. Moving to Slide nine. One of the areas that we made significant progress on through 2020 is cost discipline. This was at all levels of the organization. To my mind, this shows up quite nicely in the unit cost analysis.
You can see here that the unit costs in all areas were largely flat or even improved, offsetting both inflationary and COVID cost pressures. We're expecting this to continue into 2021. The one area where we did see pressure was the level of profit paid to our employees through the mandated profit-sharing.
The higher payment is consistent with our strategy of aligning the economic interests of the company with the economic interests of our employees and, by extension, the economic interests of our host community, which is very important for uninterrupted operations in Guerrero. I will now pass the call over to Andrew for an update on the financial performance.
Thank you, Jody, and good morning, everyone. First time for me on this call, as Jody noted, after taking on the CFO role at the start of the year. For those on the call I haven't spoken with yet, I look forward to connecting with you over the coming days and weeks.
Turning now to our results on Slide 11, you'll see 2020 was a year of records for Torex, as we managed through challenges associated with COVID-19 to deliver on our 2020 objectives and an exceptional operational performance. This operational performance, in combination with a resurgent gold price, really underpinned our strongest annual financial performance ever. Gold sales of 437,000 ounces for the year at a realized gold price of $1,771 an ounce resulted in revenue of $789 million. That's a 23% increase from last year and the highest revenue in our history.
This revenue generation, coupled with the strong cost discipline that Jody just mentioned, resulted in the company generating record EBITDA of $413 million and record operating cash flow of $342 million. Our Q4 earnings were also impacted by a deferred income tax recovery of approximately $50 million in the quarter. This recovery was driven by three main factors.
Firstly, there was higher accounting depreciation versus tax depreciation in the quarter. This just reflects the Sur pits that were mined in the quarter and the higher capitalized stripping costs associated with those pits. Secondly, as many of our investors are aware, the tax base of our assets are denominated in pesos. The deferred tax is calculated on a U.S. dollar basis. The strengthening of the peso we saw through the course of Q4 increased the U.S. dollar tax base, which gave rise to a deferred tax recovery.
Thirdly, there was also the recognition of tax losses in Canada during the quarter. Those three factors combined did contribute to that deferred tax recovery I mentioned. I also want to draw your attention to the quarterly cash flow on the bottom half of these charts, and you can see the seasonal nature of these cash flows, which is typically focused on the second half of the year.
This isn't just due to COVID-19, but I'll talk more about that later on in my commentary. Turning now to Slide 12. You'll see that we ended the year with $206 million of cash and short-term investments, a $45 million increase in cash from the start of the year, and overall, $183 million increase in net cash.
As you can see from the cash waterfall here, our increase in cash was due to our strong operating performance reflected in our EBITDA, partly offset by three main uses of cash. Firstly, we paid $103 million in taxes during the year. This includes income tax and the 7.5% mining royalty tax. Of that $103 million, approximately $40 million related to taxes outstanding at the end of 2019, which were paid in early 2020. Secondly, we invested a total of $165 million in capital expenditure in the year.
On the sustaining side, that was $81 million, which was focused on capitalized stripping of around $44 million and $37 million on equipment and infrastructure. On the non-sustaining side, our investments were focused on Media Luna early works, which was approximately $50 million. El Limón Deep, which was $20 million. Sub-Sill for $6 million, and Mulatos for $8 million.
I do also want to highlight that of this CapEx, about $25 million of this was sitting in accounts payable at year-end. Although this was incurred during the year, the cash impact of this capital will be seen in the first quarter of 2021. Finally, but most importantly for us, we paid down $140 million of debt during the year. This means we ended the year with only $40 million of debt and in a net cash position of $162 million.
As I mentioned earlier, that's $183 million increase year-over-year and $382 million improvement over the past two years. The impact this strong cash generating year had on our balance sheet is shown on slide 13. Our balance sheet has never been stronger, with over $350 million of available liquidity.
Of our remaining, $40 million of debt, I expect we will be paying that down during the course of Q1 and become debt-free. I am also in the process of looking to refinance that credit facility to move away from the project finance type covenants we have in place, to a more standard corporate-type facility.
With this robust balance sheet and the strong ongoing cash flow expected from ELG, Torex will be well positioned to fully fund and bring Media Luna into production in early 2024. Given our balance sheet, we did not enter into any new commodity or foreign exchange hedges during the quarter, although this will be revisited through the year as we get more clarity on timing of our Media Luna capital expenditure. As disclosed in our MD&A, though, we do still have a hedging book in place for hedges placed last year.
On the commodity side, we have several zero-cost collars in place for 8,000 ounces of gold a month, through to and including the end of September. That's an average floor of $1,467 an ounce and an average ceiling of $2,142 an ounce. The ceiling here is lower at the start of the year and increases through the course of Q3.
For foreign exchange, we have contracts for a notional value of 20 million outstanding at the end of the year at an average rate of MXN 19.5, and these will be settled in the first half of 2021. At today's rate, these are marginally out of the money. That's overall around half a million dollars. I want to end my commentary now on slide 14, just to provide a bit more context to the seasonality in our cash flows that I mentioned earlier.
The chart here, just to highlight, this is just for illustrative purposes only. There's no Y-axis here which provides dollars. This is really just to give those on the call a sense for the timing of our key cash flows. We are required to make various payments under local tax and royalty regulations in Mexico.
As you can see from the slide here, there's two payments which are made regularly through the year on a monthly or quarterly basis. Firstly, in red here on the chart, there's a 2.5% revenue-based mining royalty. Payment of this is made quarterly. We also have in dark blue, the monthly income tax installments. In 2021, I expect these will average between $7 million and $8 million a month.
In addition to these items, there are also certain annual payments, which are generally made in the first two quarters each year. Firstly, there's the final income tax payment, so this trues up those installments I mentioned earlier to the final tax bill. For the 2020 year, I expect this will be about $13 million, and that will be paid in March of 2021, impacting Q1.
Secondly, there's the 0.5% revenue-based extraordinary mining royalty. For 2020, I expect that will be approximately $5 million, again, paid in March of 2021. Thirdly, there's the 7.5% special mining royalty. For 2020, I expect that to be around $30 million, paid in March 2021. Fourthly, the Mexican employee profit sharing, which is based broadly on 10% of taxable income and is payable by May of each year. I expect that will impact Q2 of 2021.
Sorry, just one minor correction there. When I mentioned the half a percent mining royalty, that's actually $5 million I expect in 2021. I think I may have said a higher number. I know lots of information here to digest, but I thought it was important just to highlight for investors the timing and nature of these payments as you look to set expectations for quarterly cash flows into 2021. That concludes my remarks, and I'll pass the call back to Jody.
Thank you, Andrew. Turning now to slide 16, setting out some highlights of our key projects. First, engineering work continues on the sizing of the pit layback in El Limón. We expect to be decisional on that mid-year of this year. Portal three to our El Limón underground is at 60 meters of advance.
It's on schedule to arrive below the existing Sub-Sill in El Limón ore bodies in Q3. Some of you may recall from our discussions that this opens up a new platform for us for exploration in the underground. It also cuts our haul distances from the underground to our process plant roughly in half. Media Luna early works is progressing as planned.
Specifically, we are just above 70 meters at the Guajes tunnel and constructing the cement and steel infrastructure that will be required for the monorail-based equipment. In that tunnel, our three-boom jumbo has now been commissioned, and we're planning for stepwise increases in rates from now until June, targeting that 10 meters a day in the second half of the year once we're set up to work in the four quadrants of that tunnel.
Muckahi testing at ELD is progressing with a specific focus on the operability and rates associated with the 15-tonne muck boxes, how we fill them, how we move them over one another, how we dump them on the level and on the steep ramp, all with a view to measuring cycle time. Last, but certainly not least, we are exploration and infill drilling.
We've got six rigs in the underground at ELG, seven at Media Luna, and we're now setting up to explore several well-supported targets in the broader land package, all with the goal of organic growth to see us bolstering reserves and maximizing the full potential of that Morelos asset. Overall, a strong close to an eventful but excellent 2020 with the same taking shape for 2021. Those are our comments for this morning. I'll turn the call back over to Operator.
Thank you. We'll now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, press star then two. We'll pause for a moment as callers join the queue. Our first question is from Li Hua with Scotiabank. Please go ahead.
Hi, everyone. Congratulations on another great quarter. I just have a quick question for Andrew regarding the tax expense. Thank you for the additional color you just gave, Andrew. I think one of the three factors you mentioned is the tax loss you have realized. Is it possible to give some guidance or color on that for 2021 on a quarter-by-quarter basis?
Yes, Andrew here. Thank you for the question there. From a tax loss perspective, we recognized approximately $14 million in the fourth quarter of 2020, and that's for historic tax losses that now we're comfortable that we will utilize going forward. That is a one-off adjustment. We won't be recognizing additional tax losses on the balance sheet going forward. Those losses that we've just recognized this quarter will now be utilized going forward over the next two to three years.
Oh, great. Thanks. The other factor you mentioned was the depreciation. Do you think that's also going to stay consistent in 2021? Because I know the other one you mentioned, the tax effect, you backed that out in your adjusted earnings, right?
That's right. The other two factors, and maybe I'll just speak to each of those briefly in turn. On the translation impact on the Mexican tax base, we do disclose in our MD&A what that tax base is, looking at movements in the peso through the course of the year, you should be able to estimate the impact that will have on our financial statements, although, as you mentioned, we do back that out of our adjusted earnings.
On the depreciation versus tax base, I expect actually in 2021, that will be very consistent with 2020. Overall, I expect our depreciation charge through the course of 2021 to be fairly consistent with where we were in 2020, I'd expect that similar impact to be seen through the course of this year.
Great. Thanks.
There appear to be no further questions. That being the case, this concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.