All right, it's 10:00 A.M. on the dot, I think, so says the clock, and so I think we'll get going out of respect for all your time. My name's Jody Kuzenko. I'm the President and CEO of Torex Gold, and I wanna welcome everybody in this room and online to our Analyst and Investor Day. This day has been over a year in the making, and so we're very excited to be debuting EPO and tell you how that fits into the mine plan, and the other feature of the day is, a couple of months ago, we released our five-year exploration update, and so Esteban Urqueta Jacobs is here to step you through that, all of the interesting geology we have ahead of us.
I know it's a busy time of year with the kids going back to school and all the associated activities and all of that, so I really did wanna express our appreciation for taking the time to be here in person, and certainly for the people online as well. Now, we start every meeting at Torex with a safety share, and the reason we do that is twofold: one, to keep safety top of mind, and number two, to share our experiences with one another so that we can learn from each other and maybe manage risk better for ourselves or those around us. On a day like today, normally I would not do that, but given the events of last week, I did wanna take a few minutes to share what we learned from that.
Early the morning of Thursday, August 29th , I'd come off a day of marketing in San Francisco and got the call close to 4:00 A.M. that no mining leader ever wants to get. We had a contractor injury in the Guajes Tunnel, and it was of a fatal nature. The employee passed away, and the circumstances were such that this particular employee was assigned to do some work on both the conveyor and in the back, in the Guajes Tunnel, and he was operating something called a telehandler. And for those of you who don't know what that is, it's a piece of equipment where you have a cab, a fairly small cab, with a window to the right and a small space between the cab and what we call a boom. And so this boom extends telescopically.
It has a man basket at the end of it so that employees can stand in it safely and do work on the back, a six-and-a-half meter lift, or on the conveyor that we were working on. This particular employee was in the cab of the telehandler, and for reasons unknown to us, and we may never know, his hard hat came off and found itself between the cab and the boom, sort of in the area of the boom. And in that moment, he made the decision to reach for his hard hat. So he reached outside of the window of the cab to be able to get it and had to reach quite a way to do that, and as he did that, he inadvertently toggled the joystick that operates the boom in the cab.
And so he hit it with some other part of his body, but as he hit that, the boom lowered over top of him, and he died from crushing injuries from the waist up. He was 40 years old. He had three children, comes from the north of Mexico. Now, we think at Torex, safety shares are the best when they're applicable to people in the room, right? That's the point of sharing them, so that you can make different decisions maybe. And I don't expect that most people in this room will be operating a telehandler anytime soon, but I do expect that most people in this room will be driving a car.
Cars go at great speeds down highways, and who among us hasn't, while you're driving 100 km an hour down the highway, reached over to the passenger seat, reached to the back seat to give a kid a soother or a bottle, or to get something that you absolutely need? And so what I would encourage you in this room, the next time that you're about to do that, just take that extra split second and think about that decision, and think about this story and about this safety share, and make the better decision. If you really need what you're reaching for, pull over, get it, get back in the car safely, or maybe just don't reach for it all. Right? One thing to think about as you move forward. So we remember, we respect, and we move forward, and that's what we're doing here today.
Here's the agenda for today's session. I get the easy part. I only have a couple of slides. I'll kick things off with how EPO integrates into the mine plan, where we started with the technical report in 2022, where we are today, and where we're headed into the future. Alex Hemmingsen, here sitting to my left, will provide a brief overview on the key aspects of the EPO design. He's one of the principal engineers who worked on it. Dave Stefanuto is not a stranger to many of you. He's been on our quarterly calls since we've been deep into construction on Media Luna. He'll provide a brief update on the project, which really will be an up-to-the-minute supplemental update from the information we provided in our quarterly update in July.
Andrew Snowden, our CFO, will then provide a bit of a finance update, including how to start looking at modeling, how we're going to be handling copper con and revenue recognition in the flow sheet. And then I've already mentioned Esteban Urqueta Jacobs, who recently joined the team. He'll provide an exploration update before we close the session with Q&A. And just on the topic of Q&A, as you know, Torex will welcome all questions and all inquiries. We're always happy to get them. Given that we have 45 slides to get through, I'd like to get through that and ask you to hold your questions to the end. People in the room can ask them. We'll pass the mic around. It's a fairly small room, so maybe we don't even need to do that.
People online can enter your questions into the question box, and Dan and Laura are back there. They'll curate the questions and get them up to us, and we'll give you the best answers that we can. I also see that lunch is set up there, so if you're not comfortable asking the questions in the room, we're pleased to answer any questions offline later. So turning to slide five, I wanted to start the presentation to reorient everyone on where we were expecting to be for Morelos when we released the technical report. Hard to believe it's some 2.5 years ago now. At that point, we had sufficient reserves from the ELG open pits, ELG underground, and that big surface stockpile to keep the mill full at 10,600 tons per day. Don't forget the mill.
As we do the cut-out at the end of this year, capacity will be ten six. At this time, we could keep the mill full through 2027 , and after that, the only source of feed was from Media Luna. The dip in gold equivalent production shown there in 2028 reflected the reality that we were looking at, and it was what we could economically demonstrate back in March of 2022 . Since then, we've been very hard at work to address the drop-off in production, primarily through drilling at ELG Underground and EPO, and this is the result. Moving to slide six, you can see the work that we've done is evident in our updated life of mine production profile, and this is what we call the reserve case. This is based only on proven and probable reserves.
It now supports gold equivalent production in excess of 450,000 ounces per year through 2030, and can keep the mill full at 10,600 tons per day through early 2035. The improvement in the mine plan reflects a number of key factors. First, the inaugural reserves for EPO, which Alex will talk about in a moment. Two, reserve replacement and continued growth at ELG Underground. We love that little asset. It's been working for us since 2017. It just continues to grow. Three, at ELG Underground as well, we have improved mining rates. In the technical report, we built in a rate at 1,400 tons per day, and this revised mine plan reflects the rate of 2,000 tons per day, which we've well established that we're capable of doing at ELG Underground.
Four, one of the things that continues to be our mission is just continuing to push out the lower grade stockpile. If I have my druthers, that stockpile gets processed at the end of mine life, years and years away, but it is available to us to top up mill feed as we need it. On an annualized basis, we now forecast annual gold equivalent production of 422,000 ounces through 2035, versus the 375 through 2033 that existed in the technical report. Think more production for longer. That's what we've been able to do here with EPO. Turning now to slide seven, I call this the resource case. The focus of our team now turns to further extending the production profile at Morelos. Now, we're in this area.
That's what we're interested in, and that's what Esteban will talk to you about today. The chart shown here is for, and I wrote this down, is for illustrative purposes only, as these mineral resources have not been deemed to be economic and should not be construed as mineral reserves. So that's definitely the resource case, but you can see where we're headed with the light blue here. The figure shows that by continuing to drill off and upgrade resources at ELG Underground, where we now have a long history of doing that, and assuming some of the inferred resources at EPO, which are in close proximity to development as we get to the deposit, we have the potential to maintain annual gold equivalent production in excess of four hundred and fifty thousand ounces a year for a decade, if not longer.
And if it sounds like I exhaled there, I did. It is really nice to have 10 years worth of production out in front of us. Now, this scenario could even be further improved if we're able to add and upgrade additional resources at Media Luna proper. We're gonna get back in there in 2025 . And if we can demonstrate the economics at both Media Luna West and Media Luna East and at Todos Santos, all of these deposits are right in the Media Luna cluster. The takeaway from this slide is to show the next area of focus. We wanna demonstrate Morelos as a consistent, low-cost, 450,000 ounce-500,000 ounce producer for the next decade and a decade after that as well. Now, summing up the impact of bringing EPO into the mine plan is illustrated in our updated outlook on slide eight.
This is one of my favorite slides, has been for a year or so now, because it really shows what we're up to at Torex. We make a plan, we deliver on that plan, and we make a new and improved plan, and then we deliver on that. So you can see the evolution of how production and cash flow looks year over year. This has been through some pretty hard work and steady adherence to our long-term strategy. You've all seen the six pillars, everyone in this room, and three of the pillars really come together here. Bring Media Luna into production this year and ramp up to full production through 2025. Continue to integrate and optimize Morelos as we bring those deposits on from the Media Luna cluster and grow reserves and resources.
We've bolstered the exploration team for the purpose of doing just that, and we will bolster budget as we move into 2025, given that the heavy lift on Media Luna CapEx is behind us. I should point out here that the key change to this revised outlook sits in 2028, right? Where we now expect to produce between 450 and 500 thousand ounces of gold equivalent. It's a marked improvement over the 350 to 400 we were looking at just last year, and over the 337 we were looking at when we put out the technical report, so feeling pretty good about where we're situated. And with that, I'll turn the microphone over to Alex Hemmingsen.
He is the Principal Mine Engineer, one of many folks who worked on the study, and he was delighted to have been nominated to speak to you all this morning about that. And I will also move my step stool here, because the rest of the team doesn't need it. So just give us a moment.
Thanks for the introduction, Jody, and good morning to everyone here and on the webcast. I guess I'm in charge here, right? So starting off on slide 10, as Jody noted in her opening remarks, bringing EPO into the combined Morelos mine plan is expected to both extend and enhance the production profile over and above the plan that we released back in early 2022. With now three sources of underground feed, we expect to push out the processing of lower grade stockpiles to the end of mine life, which supports keeping the mill full through to early 2035. Any future upside, of course, is dependent on the success of our exploration program over the coming years.
Developing the EPO project is expected to be quite straightforward, with a sizable portion of the $81.5 million related to solely underground development. The lean upfront budget is reflective of our ability to leverage the major investment that we made in infrastructure at the Media Luna project. Permitting is also not expected to be an issue, given the minimal surface impact and the fact EPO is located within the currently permitted footprint at Morelos. Flipping to slide 11, with the completion of the internal PFS, we have declared our inaugural gold equivalent probable reserves of 781,000 ounces, with contained metal values balanced between gold and copper, making up over 90% of those reserves. They're based on the same metal prices as year-end 2023 and are converted from the 2023 year-end indicated resources that we had last year.
In addition to indicated resources, there are over 700,000 ounces of inferred gold equivalent, and as we will discuss later in the presentation, converting these resources will be a key focus for us in the coming years. Slide 12, moving on to capital expenditures for EPO. You can see a lean upfront capital of $81.5 million during the project period. A majority of these costs, roughly $50 million, are related to direct expenditures, half of which are associated with underground development required to access the deposit. We're able to keep these costs lean by leveraging the significant investment, as I mentioned, made in infrastructure at the Media Luna project, including the Guajes Tunnel, conveyor and material handling system, the paste plant, mining equipment, processing plant upgrades, and infrastructure related to ventilation, power, and water.
Additionally, we're expecting to use the existing teams at Morelos to support the underground development of the project, reducing or eliminating the need for any contractors. Recall that when we designed Media Luna, it was with future upside in mind with the adjacent resources. We built in additional mechanical capacity in that major infrastructure, and now with EPO and any opportunities in the future, we will be able to benefit from that foresight. Here on slide thirteen, we see an image of the mine plan. This image here shows the relative simplicity of EPO in terms of access and development. Over the last several months, while completing the PFS, we've reviewed several design options, with the one shown here being the most ideal, as it again allows us to leverage the infrastructure we've constructed at Media Luna.
The plan for developing EPO, again, is simple and is as follows: There's an access ramp off the Guajes Tunnel that lasts for roughly 650 meters that leads into a north ventilation adit that breaks into the north side of the mountain. Additionally, there will be a drift developed over from Media Luna, which is roughly a kilometer long, which will act as a haulage tunnel to move material to and from EPO. Not shown here or not labeled here are roughly 2,500 m of additional development, including ramps, level development, and raises that are included in the upfront capital expenditure estimate, 550 m of which are vertical. Much like Media Luna, EPO will be a long-hole open stoping operation, leveraging battery electric equipment, some of it new and some of it shared.
Ore and waste mined at EPO, as mentioned, will be trucked through the haulage drift shown here and transferred to the Media Luna material handling system, which will then convey it back under the river through the Guajes Tunnel. Future work will look at the possibility of alternative conveyances in this drift. Mining rates for the life of the mine are roughly 1,680 tons per day, but we have designed the mine to exceed capacity of that up to 2,300 tons per day, noting that incremental capital will be required to achieve this. The ability to operate EPO at higher levels provides flexibility in and around future ore blending with ELG Underground and Media Luna.
With EPO reserves now part of our total feed, we are in a position where we are now mill constrained and not mine constrained, as we previously noted in the 2022 technical report. Turning to slide 14, where we talk about the flow sheet, ore from EPO will be processed through the upgraded ore processing facility, which remains on track for a four-week shutdown in November of this year to tie in the copper and iron sulphide flotation circuits, install variable frequency drives in the ball mill, and make other required changes to support the new flow sheet. The ore from EPO, as I mentioned before, will be blended with material from Media Luna before being conveyed under the river through Guajes and mixed with ELG underground material to produce a precious metal-rich concentrate, as well as a doré.
A difference to note on this slide is the lower copper and gold recoveries for EPO, which reflects slight differences in the mineralization, and we are currently undertaking studies to understand how these recoveries might be improved. A majority of the silver and copper will be recovered in the copper concentrate; however, gold is split evenly between the concentrate and the doré. On slide 15, where we cover operating sustaining costs. Underground mining costs over the life of EPO are expected to average roughly $51 a ton, and these costs are roughly 30% higher than Media Luna. This is reflective of the addition of truck haulage through that haulage drift and the lower overall mining rate. For the entirety of the Morelos Complex, process costs are expected to average roughly $37 a ton, and G&A, $14 a ton.
Based on current reserves and omitting the cost of bringing any future reserves into the production plan, sustaining CapEx is expected to total roughly $66 million over the life of EPO. Turning to slide 16 now, we get to some of the fun, where the pre-feasibility study has shown us positive, economically sound mine plan. For EPO, we believe there is still solid potential in increasing reserves and extending the mine plan going forward. As you can see in the figure on this slide, in yellow, we see that we have a lot of inferred blocks near field to EPO development and reserve blocks within the mine plan. The bulk of this inferred tonnage is in currently designed production levels adjacent to reserves. However, some satellites will require additional development to access.
Drilling from surface has already commenced as part of the 2024 exploration program to upgrade a portion of these inferred reserves. However, we expect that future drilling, likely from underground, where it is more cost-efficient and effective, will look to upgrade additional resources in the future. Finishing off on Slide 17 with our next steps, we have already commenced an internal feasibility study, which we expect to complete mid-next year. The year-end 2024 resource estimate for EPO will form the basis for this plan. Once in hand, the feasibility study will be used to support development in the second half of 2025, which is expected to pave the way for first production in late 2026.
As I mentioned at the beginning of this presentation, we do not expect permitting to be a major issue as EPO falls within the currently permitted footprint, and surface impact is minimal. We expect the required amendments to be achieved through the cadence of normal annual updates, and of course, true to the Torex way, we will look to ways to optimize future production and lower our costs. With that said, I'd like to pass the call over to Dave Stefanuto for an update on Media Luna.
Thanks, Alex, and good morning, everyone. I'm gonna provide a mid-quarter update on the Media Luna project, which really builds off the second quarter update that we provided at the end of July. Starting on slide nineteen, I wanna reaffirm that post the capital true-up we provided a couple of months ago, the project continues to be on budget and on schedule for first concentrate production by year-end. We're still monitoring some of our critical risks, which is associated with delivery of key electrical equipment and gear, which includes our E-houses and some of our electrical switch gear. As Jody mentioned during the quarterly call, if for some reason we do run into troubles with our vendors, we are prepared to shift the shutdown to early 2025. We'll continue to run at full production at ELG through that period.
Recall, the reason that we had a heavy period of waste development in 2022 was really to provide us with a little bit of insurance, so that in the event that we needed to make this decision, it wouldn't have any impact on our production and our operations through project completion. Turning to slide 20, this outlines the status of the project at quarter end. Since reporting the Q2 update, we've been making steady and improving progress on the project. So engineering really now is in a support mode. The majority of the engineering has been completed, and it's supporting our construction installation. Procurement is winding down. We've issued all of our purchase orders and contracts. The focus right now is making sure that the remaining equipment and commodities arrive at site on time.
We've got a very strong presence in our vendor shops to make sure that that happens. Underground development and construction is advancing to plan, as our Torex crews, who took over from our primary contractor in March, have been averaging over a kilometer of development monthly. As a matter of fact, in the last two months, we hit the highest rates of development on the project we have since the start. Surface construction continues to advance. We focus on the processing plant, our water treatment plant, our paste plant, and then our 230 kV switchyard. Now, just as important as the construction is our operational readiness. That's advancing to plan as well, with a focus on the underground and production mining, which has been handed over to our operations team in mid-August from the project.
Further handoffs are gonna occur as we complete individual systems on both the underground and the surface assets. The team continues to develop the standard operating procedures and maintenance procedures, as well as developing the spare parts inventories for the new assets that we're constructing. In addition, our workforce transition is progressing well, with over 80% of our open pit workforce agreeing to work in our underground mine. Recruitment for the unfulfilled roles is going very well, with no issues in terms of hiring and staffing. I wanna note that we have a lot of experience in this, and within Mexico, we are considered an employee of choice, an employer of choice, so people are looking to come to work for Torex.
To date, we've hired 218 of the 399 people that we need to support our underground operation, as per our plan. As our open pit miners were transitioned to the underground, we did backfill those roles with a contractor as we continue to operate the open pits. For those reasons, we do expect those costs to be slightly higher in 2025, and that's something Andrew will talk to a little bit later. And then finally, with these new employees, we do have an extensive training program underway on various pieces of equipment. So we are bringing in new battery electric fleet, scoops, jumbos, bolters, haul trucks, and all of this is on track, meeting our internal expectations as well. And again, with strong support from our vendors. Just talking a little bit about the underground development itself.
On the mining front, we took our first production blast in Media Luna on August twenty-fourth. This was a huge milestone for both the project and the operations team. Definition drilling is well underway in terms of the first seven stopes of production that we expect to hit this year. The remaining forty stopes will be drilled off by the end of this year, and then early next year, we'll finish drilling off the balance of the stopes that'll get into production towards the end of 2025. So really, we're seeing very good reconciliation, no major issues other than some spatial compliance that's gonna be refined with our final stope design. In terms of the ore handling system, that's advancing.
We're just actually working on our last ore pass construction as we speak, finishing rock breaker stations, transfer conveyors, ore bins, and feeders above the Guajes Conveyor, and that's all progressing as planned to support commissioning in the next couple of months. The conveyor belt itself for the Guajes Conveyor is continuing in terms of construction. We've got approximately five kilometers of belt installed on the conveyor as we speak right now, and it remains on track to support initial commissioning for the flotation plant this year. Finishing off with a bit of an update on surface construction, as I noted earlier, we are planning for a four-week shutdown of the processing plant, and it's on track to commence in November, with the expectation of first concentrate production by year-end.
With the majority of the equipment in place, the focus on the construction team is really finalizing the piping and electrical configurations for that equipment, and then getting ready for pre-commissioning and commissioning of those systems. Construction of our paste plant is also on track for construction completion by the end of the year. As you can see in the picture, significant steel erection has been completed, and concurrently, we're doing our mechanical and electrical installation at the same time. We expect the commissioning of this will take place in early 2025 , and the idea there is commission all the major systems, and then by mid-quarter one, start optimizing the paste plant recipe to support those first stopes that need to be backfilled. On the electrical side, five out of our eight e-houses, which were critical delivery items, have been delivered.
We have the remaining ones, which will be delivered in October. Switchgear is also just in time. As I mentioned, we actually have presence in the vendor shops, making sure that they're meeting their commitments, and with that, I'm gonna pass the call over to Andrew.
Perfect. Thanks, Dave, and good morning, everyone. So I'm just looking to start my updates today, just really pausing briefly on our balance sheet. I mean, Dave talked through and reminded us all on the update to our final Media Luna budget of $950 million, which we updated back in July. But just as my regular reminder is that we are fully funded for the Media Luna build. You can see here a summary of our balance sheet at the end of June. We're more than fully funded for the build, even at the end of June, and that allows our balance sheet to maintain $100 million of cash, which is our strategic goal, as well as having a $21 million funding surplus.
Just to comment, that $100 million cash target that we have is not a requirement of our credit facility or from our banks. We do not have a minimum liquidity requirement from our banks anymore, and so really, you should look at that as being a $121 million buffer, and that will only continue to increase as the year progresses. While we're talking about the balance sheet, I also just want to briefly pause on hedging. Firstly, on gold hedging, I think everyone's aware that we did enter into a gold hedging program to support the Media Luna build. At the end of June, we had 71,000 ounces of gold forward contracts still open.
Most of those will be closed out through the course of Q3, and heading into Q4 here, we'll have about 27,000 ounces remained open. All of that hedging program will be closed out through the course of this year, and we have no intent to extend any gold hedging through into 2025 or beyond, and so our gold hedging program will be done. On peso hedging, though, I think as everyone's well aware, that is a cost we have been battling through the course of the last couple of years, just with the significant volatility we have seen with the peso. And so I did talk on our Q2 earnings call about some of the protection we put in place with some peso hedging through the course of July.
Since then, we've actually added to that hedging program, and at the end of, actually, as of today, we have about $72 million of peso hedges in place for 2025. And they're in the form of zero cost collars with a floor of 19.6 and a cap of 21.4. That $72 million represents about 35% of our expected peso operating cost exposure next year, and we will look to add to that. I think we're looking to build that up to close to 50% when the opportunity arises, and then there may well be an opportunity today, just given where the peso is. Now just talking to copper concentrates.
And so this is just one key area that is a real shift in our revenue and cost profile looking forward. I mean, just as a reminder, today, doré makes up about 98% of our revenue, so the sale of doré is predominantly the product that we sell. Once we turn on the new Media Luna flow sheet, and we start processing Media Luna ore as our primary feed, we will start to produce a significant amount of gold-rich copper concentrate. And so in that world, post the Media Luna switch on, doré production will really decline to make up about 25%-30% of our annual revenue.
It will be a bit higher next year, just given we'll have some open pit material we'll still be processing, but over the life of mine, it will average about 25%-30%, which means that copper concentrate will really be the primary revenue generator of our on our income statement, and that will support about 70%-75% of our revenue. With the copper concentrate production, there is a whole new kind of sales process associated with that, which is much more complex than is true for doré, and when I say more complex, it's complex as it relates to doré rather than complex in comparison to other base metals producers. You know, many of us here have a base metals background, and this is very similar to the process that many of our peers follow.
And so the new process that we will have added on to our sales channel looking forward is once we produce the copper concentrate, we will then be trucking that, and we selected the port of Manzanillo as being the port of choice, at least for 2025. We selected the port of Manzanillo really because of the existing infrastructure they have in place to manage the dry bulk material that we'll be shipping, the secure warehouses they have in place, and the strong trader presence that they have in place today.
But there will be opportunities looking forward to optimize that by selecting and looking at closer ports to potentially truck the material to, albeit there will likely be some capital investment we'll have to make to be able to set things up efficiently at those other ports in Mexico. So that trucking will take about two days of transit time to get to the warehouse in Manzanillo, and then the copper concentrate will have to build up into a five or 10 thousand-ton lot before it can be taken to the ship for shipment. And so that accumulation of the lot will take about one to two months. Once the material is then loaded onto a ship, the ship will then sail to the smelter's port of destination.
Again, that shipping process will take about one to two months before ultimately then there's final settlement following the weights and measures done at the port of destination. So a much kinda longer and more involved kinda process to sell the copper concentrate. We are also now in the final stages of concluding contracts for 2025 and beyond. Initially, for 2025, that will primarily be with traders, and so about 80% of our product next year will be sold to traders, about 20% to smelters, and then over time, that will balance out between those two key sales channels. I just wanna spend a moment just talking about the impact that will have, first on our revenue and then on our costs.
For traders, I don't expect there will be any significant impact to our revenue recognition and working capital. Generally speaking, I expect that we'll recognize the revenue once we deliver the copper concentrate to the warehouse in Manzanillo, and that we will elect to receive advanced payment on that copper concentrate, and so we'll be receiving weekly payments once that product is delivered to the port. I think that will be a fairly quick turnaround, fairly consistent with what we see with doré today. On the smelter sales, though, there will be a more pronounced change in the sales and working capital there. On revenue recognition, that I expect will only be able to be recognized once the material is loaded onto the vessel at the port of Manzanillo.
And so given we would be accumulating five to 10 thousand tons, and ideally it will be 10 thousand tons, because it's more cost-effective for shipping, that could result in some lumpy revenue recognition for smelter sales. On the working capital side, although typically we would not receive payment on sale to smelters until a product arrives at the destination port, I do expect we will have a financial institution intermediary between ourselves and the smelter to be able to receive payment shortly after it arrives at the port in Mexico to manage any working capital impact there. Turning to costs, and so this whole kind of sales process that I walked through will have some incremental change to our cost structure around selling.
Overall, this slide summarizes the key areas of cost, which really results in or is attributable to the trucking, the warehousing, the shipping, the assaying, and the treatment and refining charges associated with that material. In total, I would expect all of those costs to combine to about $300 per dry metric ton. So for 2025, that will be about $20 million for the year, and as our copper concentrate production increases, that could increase to $30 million for the year. The largest element of that cost, as you can see on this slide, does relate to the trucking for that 1,000-kilometer, one-way trip to the port of Manzanillo.
Now, just to highlight, in our income statement, the charges or the elements of these costs that we pay directly and that we're invoiced for directly will be recognized as operating costs. There are a number of these costs which will be incurred by the end customer, so by the trader or the smelter. They will be netted against revenue in our income statement. For our MD&A reporting purposes, though, to be transparent and to allow comparison against our peers, we will be adding those costs back to our revenue and including them all within TCC. And so the TCC will capture all of these costs, and our reported realized price will adjust for the costs which are netted against revenue. And so that's really one key change to our cost base looking forward.
The other key change I think everyone's, you know, very aware of, is really the switch from the, higher volume, lower grade, open pit material to, to lower volume, higher grade Media Luna underground ore. Overall, that will support us continuing to be a low-cost operator. I expect our life of mine cost base on an all-in sustaining cost perspective to be below $1,200 an ounce over the life of mine. But as was mentioned earlier, I do expect our costs in 2025 to be higher due to the ramp-up of Media Luna before we start achieving some of the economies of scale and efficiencies in 2026 and beyond. And so we will issue our formal guidance in January of next year, as we typically do.
But I will suggest that you start thinking about our All-In Sustaining Costs next year as being in the range of $1,300 an ounce, in that range. And for modelling purposes, I would suggest you use about $1,350 an ounce for now, and we'll provide more formal guidance on that in January. And so that wraps up my comments, and so over to Esteban for the update on exploration.
Thank you, Andrew. As a background, I'll say I'm an exploration geologist, and I joined Torex just a few months ago, mainly to assist Raul Guerra, our VP Exploration, on executing on our exploration strategy and to support Dan Rollins in identifying quality projects to acquire. Exploration has become a key pillar of the company's long-term strategy, and the importance placed on it reflects a fundamental shift in the business view on exploration from a few years ago. Over the last few years, we have reinforced our exploration team, hiring a VP of Exploration and two senior directors. The refreshed exploration team conducted a thorough reassessment of the geological context of the Morelos Property. That has led to a reinterpretation of the context of the Morelos Property based on previous study and legacy data, resulting in a refined geological model for Morelos.
Furthermore, we have developed a Torex exploration system, a comprehensive system to identify, evaluate, and rank our targets. The system represents another step change in our focus on exploration that has the potential to unlock significant value for our shareholders over the coming years. Moving on to our exploration strategy. As a result of the newly developed exploration system, our project pipeline, that we can see on the triangle, for the Morelos property is both robust and balanced, with quality projects at different stages of exploration, ensuring to deliver on a multi-year exploration strategy. Furthermore, this systematic approach allows for an unbiased pipeline management, rapid target prioritization, as well as an effective budget allocation. As part of our evolution on the exploration front, earlier this year, we released our inaugural five-year exploration outlook, which is focused on three key areas.
Firstly, maintaining another annual gold equivalent production of at least four hundred and fifty thousand ounces, where EPO is a prime example of such a success. Secondly, extending the life of the Morelos Complex beyond 2035 , something we see as being quite achievable. Finally, achieving at least one Tier Two discovery at Morelos Property. Our goal moving forward is to provide a similar update annually on exploration to demonstrate how we have advanced the various projects that we will see later during the presentation through our exploration pipeline. Continuing with our strategy, to date, we have mined over 3.5 million ounces of gold equivalent and have close to ten million ounces gold equivalent across all resource categories. With resources only coming from a small subset of the targets, as around 75% of the whole property remains to be drill tested. This map...
Over there shows the result of the targeting process based on the refined geological model that we have come up with. Our near-term focus remains on expanding resources at ELG Underground and the Media Luna cluster to support an annual gold equivalent production target. Medium-term focus is on advancing new targets and to carry out initial drill testing at El Naranjo and Atzcala projects, that we will see later during the presentation, and advancing regional targets through our pipeline. Moving on to our 2024 exploration program. Over the last few years, we have spent around $30 million annually on exploration, which reflects our commitment to exploration activities. As previously outlined, this year's budget is focused on the Media Luna cluster, underground exploration at the ELG, and advancing the best-ranked regional targets.
Pending board approval, we expect the annual exploration budget to increase during 2025, and potentially again in 2026, as we pivot back to positive free cash flow by mid-next year. Moving to our new structural understanding of the whole Morelos property, we can see our updated structural architecture and its relationship with the intrusive bodies and mineralization across the district. The main north-south structures are the main controls for both the ELG cluster to the north and the Media Luna cluster to the south. These areas actually are located over there as they crosscut with northwest structures, so we find higher grades along these intersections. We have also recognized, as mentioned before, El Naranjo and Atzcala properties that we're currently working on. Regarding mineralization, our current understanding comprises copper replacement deposits and intermediate sulfidation systems in addition to skarn mineralization.
These mineralization events overlap, enriching both gold and copper content. The updated property-wide geological understanding has been the basis for our target process, and has been successful in defining the previously shown property-wide project pipeline. Zooming into our mining district scale, the north-south corridor that we see over there controls basically the clusters that we saw before, and the highest grade are found where these clusters crosscut northwest structures, as we see over there. Another compelling exploration feature is that all of our projects and mines fall within high magnetic anomalies, as we can see both at Media Luna cluster and at ELG cluster to the north. Moving to ELG underground. Based on our refined geological understanding at ELG underground, we have focused on key ore-controlling north-northwest trending structural corridors, like we can see over there.
We have been successful in identifying high-grade mineralization where these corridors intersect northeast-trending structures, as we can see on the El Limon South trend, which is our main mineralized trend, also at the Sub-Sill trend and the newly discovered El Limon West trend. This approach has resulted in 570,000 ounces of gold-equivalent resources being added to the measured and indicated categories prior to depletion in 2023. This strong resource growth subsequently allowed us to extend the reserve life of the ELG Underground operation by two years. This year's drilling is focused on expanding mineralization and upgrading resources and reserves to extend the mine life, to extend the mine life. Finally, for 2025, we're targeting at a minimum to replace mine reserves and resources.
Here we have a section of ELG Underground, from El Limon South, which is the main trend that we saw on the previous, mine plan view. We can see that the main ore shoots to the south and over the north, are where the structures, the northwest, northeast structures actually crosscut the north-south main trend. Advanced exploration drilling in the southern North Shoot indicates that mineralization is open both to the south and at depth. While on the North Shoot, there is potential to extend inferred resources up to level 500. From there, and is currently under resource delineation. In summary, results to date suggest that the exploration upside is open along all trends, and likely others to be identified as we continue to refine our understanding of the mineralization controls and structural architecture of the cluster.
Moving to Media Luna cluster. We're actively advancing drilling, and we expect to unlock the full potential of the cluster to support our goal of extending the life of the Morelos Complex beyond 2035, and maintain annual gold production of gold equivalent production on target. At Media Luna proper, drilling is expected to resume next year, with the goal of expanding reserves and resources with a similar focus as at EPO. Drilling programs at new targets, such as Media Luna West, Media Luna East, and Todos Santos, are in place. We're continuing to drill at Media Luna West this year. Initial drill at Todos Santos is about to commence by mid-September, and an expected initial drill program is to commence at Media Luna East next year. Now, focusing on EPO.
EPO has been the key focus of drilling over the last few years, and drilling has been aimed on expanding and upgrading resources to bring into the mine plan. With our initial goals achieved, the focus now shifts on upgrading inferred resources and expanding resources to the north. We can see the inferred resources and the potential expansions to the north, where we have very good high-grade results. As noted, a good portion of the 721,000 ounces of gold equivalent resources in the inferred category are located in close proximity to planned underground development, reflecting a nearer term opportunity to increase reserves at EPO. Here we can see a section in the plan view of what I was trying to explain before. The current results at EPO North are portrayed...
Oh, and the section over here, and we can see that the mineralized intercepts are high grade, and they're at the fringes of the dikes that we're cross-cutting with very good grades, and the section is almost north-south over there. The square blocks over there represent our previous drilling results of 2023, and the circles is actually drill holes that we have completed during this year, although the results are still pending. Resource expansion drilling results of the current resource outline confirm economic mineralization following this northwest trend, and the cross-section shows that mineralization is closely related to dike margins that are deemed related to mineralization fields. Vertical continuity of the economic intercepts is recognized for over 100 meters, as we can see on drill hole 942 over there, which should allow long-hole mining. Moving now to Media Luna, Media Luna West.
Based on our new structural model, we're currently drilling along east-west sections to crosscut the main north-south mineralized trend. Drilling results show that mineralization is hosted in vertically displaced structural blocks, and we can see a structural block here at four hundred level, separated by a fault, where we can actually see the eastern block at five hundred level. Grades on the western block and on the eastern block are actually quite similar. So we can assume that we have vertical extension based on that. As high-grade mineralization remains open in all directions, an aggressive resource delineation drilling program is foreseen for 2025 . So moving on to our regional targets that we actually saw on the pipeline before, and that's the map over there.
We have several targets at different stages of exploration, advancement, to continue to explore over the coming years, so we have a multi-year project pipeline over the Morelos property. Current areas of focus are the best ranked El Naranjo over there to the west of Media Luna West and Atzcala, that big area over there, that we will see in more detail on the following slides, so here we have... Oh, there. Here we have the regional targets, and particularly the El Naranjo, surface map. We have been working on target selection over the last few months, and have identified at least five key targets, which are currently being ranked. Drill testing of the highest ranked targets will commence shortly, likely by the end of September, which with 3,000 meters of initial drill testing to be completed this year.
They aim to test for oxidized mineralization at shallow levels and for Media Luna-style mineralization at deeper levels, which is the main trap for mineralization at the Media Luna cluster. Moving to the Atzcala high ranked project. Currently at target selection stage, we have identified at least ten areas with favorable alteration hosted on breccia complexes, as we can see over there. Those are the breccias, and this is the geochemistry, which is very positive. And that's the alteration, those little pink blobs that we have over the area. It is very important to note that both geology and alteration features show that the mineralized systems are fully preserved, so the potential is quite high. The three best ranked targets show evidence of oxidized mineralization at surface.
Furthermore, the quality of the project supports fast-tracking the initial drill testing of the highest ranked targets for 2025. Finally, with the drill pace having picked up, we're well on track to deliver on our 2024 drill programs. As such, we expect the next several months to be pretty rich with drilling news flow, which will culminate in a year-end 2024 mineral reserves and resources being released towards the end of March next year. So please stay tuned. With that, I will hand the podium back over to Jody for her closing remarks.
Great. Can you hear me here? Is this mic on, please? I don't like to stand behind the podium. I always feel like the neighbor on Tool Time or something like that, without a step stool. I'm gonna take you to a close. Thank you, Esteban. You can see why we're pretty excited about the Morelos asset, really twenty-nine thousand hectares, and we've only scratched the surface. It remains 75% unexplored, so we're on a mission to change that over the next couple of years here as capital frees up and we're out of this intensive capital period. I just wanna take you to a wrap now.
We've had a good year-to-date performance on the share price, 70% up year- to- date, but we think there is lots of room left, and we do really have a catalyst-rich environment ahead of us, both near term and in the longer term, and these are some of the things you can expect. You can see here in terms of near term, we're at really point three today, finished the internal PFS on EPO, and with a view to enhancing the IRR of Media Luna. You'll notice that we didn't include IRR and NPV in our material, but you have all of the information to do that. We didn't, by design, put out an NI 43-101.
Our technical team is busy finishing the Media Luna project, and so that is job one, but you have all of the information you need to calculate that. We're almost done bullet point two there, fund the development of Media Luna through internal cash flow, and I just wanna pause for a moment here. Andrew touched on the point that as at the end of quarter two, we had $346 million in available liquidity, against about $224 million left to spend on Media Luna. And we did that while protecting the shareholders' equity. We didn't do a raise, we didn't do a stream, we didn't do a royalty. We're not getting over-leveraged here. We did it what I would describe as the old-fashioned way. We produced the gold to generate the cash to pay for the project.
Not too many companies our size can say that they were able to do that, so it's something that I think sets us apart from the peer group, says a little bit of something about who we are, and really is quite an accomplishment. We're really proud of that. Bullet point number one there is almost coming to conclusion. Nobody will be happier than this man, Dave, when that comes to the end this year, as we start to produce copper concentrate. Looking forward to ramping that up through 2025 and 2026. It's a 7,500 ton a day mine, big mine. It's gonna take time to ramp that up. To get to that level, we need to turn somewhere between 90 and 100 stopes a year. So Dave talked a little bit about what we have in inventory. We're just starting.
We hope to have forty stopes drilled off by the end of this year, and then continue that through Q1, and really start to get into the cycle. We're gonna have to develop a good cadence there and some good systems, and then I think the one that I'm most excited about is on the bottom here, in near term, transition to positive free cash flow, make money again, middle of the year next year. You know that our cash flow is cyclical. We have got big tax payments in Q1. We've got our employee legislated bonus to pay out in Q2, so middle of the year next year, we expect to return to positive free cash, and we are all looking forward to that.
In terms of long-term value creation, 10 years ahead of us at 450-500 , and so we get our eyes on the horizon with some of the, prospective targets that Esteban talked about. So we're looking how to fill the mill now, past 2030 , past 2034 , and looking for the next Media Luna. And as we return to free cash, that gets us over to the bottom one on the long-term list. It's time to return capital to shareholders. We have shareholders who have been with us since the beginning. And so we will be looking at a sustainable dividend program, probably coupled with a share buyback, depending on what the share price is doing at the time. The timing on that, probably in the middle of the year, next year, as we return to positive free cash flow.
We're, you know, a first things first kind of company. Then I think the question I get most frequently now is: What are you gonna do with all your money? At spot prices, Media Luna will generate $350 million a year of free cash, not EBITDA or some other metric, free cash. And so it won't be long before we buy something. Now, the benefit we have is that we can be patient and prudent. We always wanted to be doing M&A from a position of strength, not a position of weakness. You don't wanna be backed into a deal and have to buy something 'cause you don't know where your production and cash flow is coming from. We now know we do.
And so the job for us, and Dan is leading up this charge, is to make the right deal at the right time to make a lot of money for our shareholders. And so we've embarked on an aggressive plan of growth organically here through Media Luna and EPO, and we'll pile on to that with Media Luna West, Media Luna East, and Todos Santos. You heard a little bit about that from Esteban. It's now time for inorganic growth. So exciting times for Torex, a catalyst-rich year ahead, and feels like really five years worth of work coming together. You know, it's not an overnight game.
We knew through those tough years, there would be some long strides, and I kept saying to the team, "Be patient, it will come," really in the back of my mind, hoping it would, in fact, come. Here, it's coming now. So we're pretty pleased about where we are. Before I open up the floor for questions, I did wanna take a moment to acknowledge my team. A day like today doesn't come together without a lot of hard work, both in the background and in the foreground, from the technical team, the exploration team, our comms team, and it's not easy to get up here and speak in some language other than your mother tongue.
You know, if I had to do this presentation in Spanish, you would all be weeping by now, myself included, and so I really appreciate the efforts there, Esteban. Thanks, team, for your work, and with that said, I'll open up the floor to questions, or Dan, if there's anything in the question box, please do let us know. Anita?
Just wait for the mic.
So right off the hop, your last comment on looking to acquire, will you wait until midyear next year when you're free cash flow positive? Or, that was a question 'cause the ship might sail by then, but...
Yeah, I mean, I do think with the way the gold price is running, Anita, there is going to be some movement and some consolidation, and I'm mindful of the fact that while we have this position of strength now, I don't wanna be the one left standing when the music stops either. And so it's not really tied to turning to positive free cash flow.
Okay, and then, so the second question would be: What are the... And you may have gone over this before, but I'm new to the story. So, what are the parameters that you're looking for in terms of, size, jurisdiction, quartile on cash costs, operating, non-operating? Like, give us an idea of what you think would be a good fit.
Yeah, geographically, we're looking at the North-South corridor, Canada, United States, Mexico, maybe some areas in Latin America, but we really wanna stay in the North-South corridor. We have a small team, and we don't really know anything about operating in Africa or any places too far afield. And I think that if you're gonna buy something, you should be able to unlock some additional value, and so we feel like we're pretty strong there. I certainly haven't ruled out Mexico. We make a lot of money there, and if you can manage the jurisdictional risk and the security risk, which I think we've demonstrated quite well, that we have that figured out, certainly some optionality in Mexico. I think that maybe is a region that's ripe for some consolidation.
In terms of cost quartile, you heard Andrew say we're gonna be in the $1,100-$1,200 range moving forward. Don't wanna get something that's an albatross around our neck, that we're making money in one area just to fund another operation. In terms of stage of the project, no matter what happens, we will add some early-stage exploration plays. We bolstered our exploration team for that purpose, and then the other, whether we buy an operator or a project, is an "it depends" conversation. It depends what's available. I do know for sure that we're open to an operator as long as it meets our criteria technically and from a cost perspective and geographically.
But we've also now assembled what I would describe as a world-class project team, and so I think there is the potential for value to be unlocked if we pick up the next one. I don't know that I wanna do another billion-dollar project. I mean, I've lost hair over this one, and so maybe something a little smaller and a little bit more manageable, but that's certainly what's on the list. And one of the things that didn't get much airtime today is that Media Luna is copper-rich, as is EPO, and so as we start with Media Luna, we're gonna be producing 45 million pounds of copper a year, which gives us a nice, natural segue to consider copper in M&A. Could we buy something that maybe is an asset tucked into a bigger company, that we could add to our copper profile?
So that gives you a little bit of an indication of what our hunting grounds are.
... Second question, with respect to your reserve, the conversion from M& I to reserves seems like the grade that was excluded was around three point six six gram per ton, which is pretty high. So could tell me what the dilution rates are, or is there another reason why that specific, you know, parcel of reserve resources did not get converted?
I specifically told Alex to be ready for this question, so I'll hand over the mic.
It's mostly just a factor around drill density, is mostly the reason why those resources weren't converted. And then other reasons would be because of marginal effects on incremental increases in economics. Those would be the two main factors.
Meaning some of it was too far?
Mm-hmm.
Okay. So and the question on dilution rates.
So yeah, so dilution is done on an ELG basis, not to go in the weeds. So, on average for the entire deposit, including paste, you're looking somewhere around 8%.
Okay. And then my other question on my. It seems like the whole complex, you've updated the CapEx, sorry, the process costs and the G&A, like you've given us an idea of what that is, the whole complex included. You've given us the new mining costs per ton for EPO. And you did have a CapEx update. So what was the. Like, was there any impact on the Morelos proper mining costs? Like, it seems like those are still the same. So I'm just curious where that actually and how did. If it's the same, then how did it, how did those mining costs manage to stay the same?
Yeah. So, I mean, the way to look at it going forward will be, I mean, the EPO, we released the mining cost there for about $51 a ton. Media Luna, I would think about that as being about $40-$41 a ton, in that range. And then ELG Underground, which will be the remaining feed, I think you can look at that to be consistent with what we've seen over the last few years. And so the overall Morelos costs will be a combination of those, which will somewhat be dependent on where the feed source comes on from, between ELG Underground, EPO, and Media Luna.
I would just think about it, that combination within all-in sustaining costs, as we spoke about, would get us to continue to be in that $1,100-$1,200 dollar range from an all-in perspective.
It's $41 a ton for Media Luna?
For Media Luna, it's about $10 below EPO.
Okay, sorry, 'cause somewhere here it says 30% less, and-
Yeah, so it's, so in that kinda 25%-30% range. Yeah.
Okay. All right. Thank you.
The only other thing I would add on mining costs, Anita, is that we're actually moving in a specific zone in Sub-Sill at ELG Underground to long-hole open stoping. The deposit steepens up quite nicely and is amenable to that. Moving forward, I don't know how much we're going to do there, we're not quite sure, but that will certainly have an impact on mining costs from cut and fill to long hole. Other questions in the room? Thanks for your questions. Those are good ones.
Yeah, Jody, we have... Oh, we just have a couple online, maybe we can get to answer them first. During the one-month mill transition, will feed be rerouted to maintain the same level of throughput? I can take that one, since we're here. So for the throughput, we'll actually take the whole mill down for four weeks, so there'll be no milling or processing operations. Once the tie-ins are done, we'll integrate the copper flotation, iron sulfide flotation with the water treatment plant, then we'll fire it back up. So the guidance for this year actually is based on eleven months of production, not twelve months. So the plant will be down, just to confirm, for four weeks, and then we'll fire it back up. Still on track to hit first copper concentrate production before the end of the year.
What is the average size of the Media Luna stopes? Dave, this is a good one for you, but I can start it off by saying they vary from small to large, but Dave can give you a little bit more color.
Sure. I think the average size of the stopes is around 35,000 tons, Hergen. If you think physically about 35 m by 25 m by about 20 m or so in terms of stope size, and those are the 80-90 stopes or 90-100 stopes we'll be turning over annually. A lot of work and a lot of planning to keep up with that.
Yeah, sure. Just to follow up on the mining cost differences between EPO and Media Luna, is that largely due to just the trucking instead of using a conveyor? And I guess, you know, you're kind of doing some trade-off studies about potentially switching that to a conveyor and, you know, do you have any idea of, like, what the cost would be for that, and what kind of resource growth do you really need to make that worthwhile at EPO?
Yeah, so no cost to share right now. Obviously, there would be a capital and op cost trade-off there. That- that's done, so we're, we're working on that right now in the background. In terms of resources, what we're looking at right now is more of a timeframe as opposed to a number. So because we have so many feeds from these, these various sources on the Morelos property, we're looking for how long that conveyor would be active versus for a, for a specific number on how much we need to put on it.
I see. Thanks.
That'll be part of the feasibility study. I mean, we're getting going on that now. Some of it's, some of the work is already underway, and so that will happen over the next three quarters. It'll be concluded just in time to start development at EPO, middle of th``e year next year. Wayne?
Hey, Wayne Lam at RBC. Just wondering, maybe a follow-up on the mining unit costs. I thought they were closer to $34 per ton in the fees. Are there additional, like, leasing costs that are included in that $41 per ton?
To anyone?
... Yeah, so in the feasibility study, Media Luna, I think it was about $35 a ton. I think that's absolutely right. I think since then, obviously, there's some inflationary costs that we're building into that, and so my latest view would be closer to that $40 a ton, looking forward, based on the current assessment on our cost base.
A question about leasing?
Sorry, I missed the question on leasing, Wayne.
No, I was just wondering what the additional costs were to get to the $40 per ton, so that's good.
Yeah.
So then there's been some kind of inflationary component on the mining side versus the 2022 study, but then on the processing side, you guys are saying it's still supposed to be $37 per ton, which is in line with the 2022 study. But then does that also factor in, you know, potential increased use of cyanide for the, you know, complex metallurgy at EPO? How are you guys looking at, you know, the inflationary impact on the processing side?
Yeah. Yeah, so just before I pass over to Jody on the processing side, the other factor on the mining side will be the peso impact. So on the mining costs, a lot of the costs there are obviously manpower, and as we saw on the Media Luna capital project, we assumed a peso exchange rate of 20. You know, I'm currently thinking of something closer to in the 18-19 range, when I'm quoting that, and so if we do see something maintained around the level we're seeing today, there may be some opportunity there to on the mining cost. On the processing side, I'll pass over to Jody on that.
Yeah, and we factored reagent use as we moved to Media Luna feed into the forecasted processing costs, and cyanide use, for example, is gonna be roughly flat. Don't forget, we have the flotation circuits, where we're gonna pull the soluble iron out of the solution, and that soluble iron is the biggest consumer of cyanide now. We don't have the capability of doing that today, and so we've been around the edges with blending and using the mock reactor to try to blow air into the solution to rust the soluble iron before it consumes cyanide. So without getting myself into too much metallurgical trouble here, I can see Miguel at the back. He is our metallurgist. If you have very detailed metallurgical questions, I would suggest that you ask them to him over lunch.
But the short answer to your question is the consumption volumes on cyanide should remain roughly flat as we transition to Media Luna feed because there are puts and takes in that, given the new capability to deal with the soluble iron as we turn on the flotation circuits.
Okay, got it. And then maybe on that slide that you guys have now with the updated production profile, do you kind of have more detail on what the split will be, I guess, on contribution from that reserve case? Just trying to figure out, like, on the reserves for the ELG Underground, you know, does that take you to, call it, 2028? And then, just wondering, like, the 1,680 average from EPO, how does that increase over time to offset the depletion on the reserves currently at ELG Underground?
That's a pretty big and detailed question, and so what I would say in terms of reserves, let's start with the ELG Underground. We have about 680 in reserves today, about 1.4 in M&I, and so we'll continue that mine at about 2,000 tons a day. The 1,680 for EPO, we had to pick a number to size the mine to, and so the way I think about it moving forward, Wayne, is of the 10,600 in capacity, we'll get somewhere between 7,000-7,500 at Media Luna, and the balance will be a split between EPO and ELG Underground. It's not gonna be a precise mathematical exercise.
Where we mine from will depend on what we learn on how to optimize our blend to maximize margins, number one, to maintain payables and reduce deleterious elements, number two, and what the mining reality is in any of those given mines. How many areas do we have open? Are we in any trouble anywhere? That sort of thing, and so I would take all of these as indicative, as opposed to precision math, as we move forward past 2027. The idea behind having three feed sources is to give us that optionality contingency, so that we can move higher grade material through and displace that lower grade stockpile.
Okay, great. And then maybe just one on the power consumption. Prior to inclusion of EPO, you guys were at 65 MW, and the permitted is 75 MW. Does the 75 that you guys have designed for, does that include the 8.5 from the solar, and is that still on the table?
Yeah. Solar is still on the table, so the seventy-five is exclusive of that. That's grid power. We're doing two tie-ins, one to the low-voltage line to get us to about 45 MW, and then one to the high-voltage line to get us to that 75 MW. And when you go, I'm gonna caution you again on power consumption. You have to make assumptions when you're doing those models, and that mostly assumes that all things are on at all times, and that's not the way it's gonna work either. Ventilation, milling, all of those big power draws won't all be on at all times, but that's kind of how you calculate it. Over to solar, that's the additional eight and a half megs that will come on. It's gonna be only available in daylight, right?
And so you can't really bank on that as you're doing your power demand and power draw studies. That's still on the table. It has been delayed a little bit, only because we were really focused on Media Luna, and I didn't wanna distract the team in terms of doing the solar installation. That'll be back on the list of things to do early next year. I expect that power to be available probably middle of the year, next year, but it doesn't systematically and consistently displays the draw from the grid, and it won't until we experiment with some sort of fixed battery storage solution, which will probably be the next iteration in our energy strategy.
Okay, great. And then maybe just one last question. Media Luna seems to be going pretty well, but there has been some commentary of late in terms of, you know, potential, you know, deferral of the tie-in. And just wondering, in terms of those electrical components or the E-houses, at what point in time, you know, do you have to make a decision, if you don't get those components in place or delivered from the suppliers, where you have to make a decision on deferring that tie-in?
We're gonna hang on to it until we can't anymore. You're looking at Dave, but I'll answer that one. We're gonna hang on to this schedule until we're in absolute checkmate, and remember, the priority for us is the state of readiness to go into the tie-in period. We want that tie-in period to last four weeks and not a day longer, because any lost days of production, we cannot get back, so as that date becomes closer and closer, if we are not comfortable of our state of readiness to keep that tie-in period to the four weeks, then we'll make the decision in real time to move it over. I don't wanna make that decision today. I don't wanna make it in October. It'll be in real time.
Okay, but is there any guidance on the length of time that you would need? Well, okay, I guess.
It depends who lets us down, right, Wayne? And so, and that's another reason to wait on making the decision to defer, because how long we are going to defer for will depend on what the catalyst for the deferral is, right? Today, we don't have one, so today we're working very much towards a mid-November date. But if and as one emerges over the next eight weeks that we can't problem-solve around, we'll make the decision to defer. We'll let the market know. Remember, this isn't a greenfield build, and it... We'll just continue to produce out of ELG, and because we have an integrated project development team, we won't be hemorrhaging cash, paying out a big EPCM bill as we are waiting for these last parts or last things to come in. We'll produce out of ELG.
The EPCM size is very small, and we'll just continue to drive on and turn it on and take the downtime when we're ready to do it.
Okay, great.
Yeah.
Thanks for taking my questions.
Thank you. Any other questions in the box, Laura?
Yeah, this one's, Andrew. I think you can take it. It's, what are your views on continuing the peso hedging program, once Media Luna is, completed?
Okay, thanks, Dan. And so I did talk to that just through my commentary in that, we have now extended our peso hedging program through 2025 . Historically, the peso hedging program had been to help protect Media Luna capital as best as we could through those pressures. Now we're turning to entering into a hedging program to protect our operating costs, and for now, the focus is on 2025 . But at this stage, I would expect that that hedging program would continue, just given what, especially what we've seen with the peso volatility over the last couple of years. I think it does make sense to have a clearer line of sight on what exchange rate to expect there. So hopefully that answers the question for whoever asked that on the call.
All right. Well, that's a wrap, folks. Thank you for your time and your attention. I think we have lunch outside, Laura? We do. She's nodding, and so I'd encourage you to stick around, ask any follow-up questions that you would like to, not just of me, but certainly of my team. We're all going to be around. So thanks very much for coming. Thank you for your interest in Torex, and we look forward to good things ahead. Stay safe, everybody. Have a great day.