TRX Gold Corporation (TSX: TRX) (NYSE American: TRX) (the “Company”
or “TRX Gold”) is pleased to announce the completion of the
expanded processing plant to 2,000 tonnes per day (“tpd”), and also
reported its results for the third quarter of 2024 (“Q3 2024”) for
the three months ended May 31, 2024. Financial results are
available on the Company’s website at www.TRXgold.com.
Project highlights include:
-
Immediate and positive impact on milling capacity:
The newly expanded 2,000 tpd processing facility is now operational
and is currently undergoing wet commissioning. During this
commissioning phase, the expanded processing plant has been
consistently achieving, on average, 1,750 tpd of mill throughput,
reaching a maximum of 1,873 tpd, a 116% increase over Q3 2024, and
is ramping up towards final commissioning. Average weekly gold
production has also increased to 616 ounces over this same period,
an increase in weekly production of 60%, on average, from Q3 2024
production levels. This weekly production run rate is expected to
continue over the remainder of July and August 2024, during final
plant commissioning and ramp-up. The Company is currently
finalizing some minor welding work on the carbon-in-leach (“CIL”)
tanks, and some ancillary electrical work on the agitators and
intertank screens. Once the additional CIL tanks are completed and
fully commissioned, it is expected that the expanded processing
plant will begin to achieve 2,000 tpd of processing capacity.
-
Built-in capacity for future growth: As part of an
initial phase of the plant expansion project, during Q3 2024, the
Company completed construction of the new crushing circuit. The
expanded crushing system is now operational and has been fully
commissioned. The crushing circuit has been consistently achieving
an average of 2,000 tpd of crushed material, reaching a maximum of
2,470 tpd. The new crushing plant, combined with the old crushing
circuit, is rated to process 3,600 to 4,800 tpd of ore at full
capacity with new equipment comprising: run-of-mine bin, apron
feeder, conveyors, vibrating grizzly, primary jaw crusher and
secondary and tertiary cone crushers. The crushing plant
configuration is designed to produce a finely crushed ore ‘product’
suitable for the existing and future ball mills to improve grind
size for a more efficient, cost-effective processing of sulphide
ore. The new circuit is expected to help drive increased throughput
and recovery percentages and demonstrates the Company’s overall
design philosophy of simplicity, redundancy and durability, making
it a key component to support future growth.
-
Benefitting from economies of scale: This marks
Buckreef Gold’s third successful expansion project aimed at
increasing annual gold production in a de-risked, self-funded and
phased approach. Moreover, through this latest expansion, the
project is expected to benefit from greater economies of scale,
resulting from higher processing plant throughput and higher
overhead cost absorption.
Operational and Financial Highlights
-
Strong operating cash flow year-to-date: During Q3
2024, the Company poured 4,628 ounces of gold, and sold 4,515
ounces of gold at an average realized price1 of $2,270 per ounce,
resulting in positive operating cash flow of $3.1 million. For the
nine-month period, the Company poured and sold 13,622 and 13,361
ounces of gold respectively, at an average realized price1 of
$2,079 per ounce, resulting in positive operating cash flow of $9.3
million.
-
Strong gross profit margins: During the quarter,
the Company recognized revenue of $10.1 million, cost of sales of
$5.8 million, gross profit of $4.4 million (43%) and Adjusted
EBITDA1 of $3.9 million. Year-to-date, the Company recognized
revenue of $27.5 million, cost of sales of $16.2 million, gross
profit of $11.3 million (41%) and Adjusted EBITDA1 of $9.1
million.
-
Prudent capital management: The Company maintained
its liquidity by actively managing expenditures during the quarter,
while advancing the processing plant expansion to 2,000 tpd. The
Company used operating cashflow during Q3 2024 to continue to fund
the plant expansion, while maintaining a cash balance of
approximately $7.7 million and a positive adjusted working capital
position of $1.7 million.
-
Delivering on target: The total capital cost of
the full mill expansion was budgeted to be approximately $6.0
million, which was completed on time and on budget.
TRX Gold’s CEO, Stephen Mullowney commented: “We
are excited with the direction the Buckreef Gold Project is headed,
as we are already seeing improved performance from the new crushing
circuit and expanded milling facility, during its wet
commissioning. We carefully managed our capital during the year to
ensure the processing plant expansion was funded from organically
generated cash flow. We look forward to completing our 2025 budget
which is anticipated to focus on continued operational improvements
and an increased focus on exploration at the Buckreef Gold
Project.”
Qualified Person
Mr. William van Breugel, P.Eng, BASc (Hons),
technical advisor to TRX Gold Corporation, is the Company’s
Qualified Person under National Instrument 43-101 “Standards of
Disclosure for Mineral Projects” (“NI 43-101”) and has reviewed and
assumes responsibility for the scientific and technical content in
this press release.
Q3 2024 Results Conference Call and
Webcast Details
When: Tuesday, July 23 at 11:00 AM ESTWebcast
URL: https://shorturl.at/BFNqWConference call numbers:Canada/USA
TF: 1-844-763-8274International Toll: +1-647-484-8814A replay will
be made available for 30 days following the call on the Company’s
website.
Figure 1: Buckreef Gold aerial view of new crushing
circuit (Q2 2024)
Figure 2: Buckreef Gold ore moving
through new crushing circuit (Q3 2024)
Figure 3: Buckreef Gold’s new 1,000 tpd
ball mill (Q3 2024)
Figure 4: Buckreef Gold Tailings Storage
Facility Expansion at TSF 2.2 (Q2 2024 – first lift completed and
TSF is now fully operational)
About TRX Gold Corporation
TRX Gold is rapidly advancing the Buckreef Gold
Project. Anchored by a Mineral Resource published in May 20202, the
project currently hosts an NI 43-101 Measured and Indicated Mineral
Resource of 35.88 MT at 1.77 g/t gold containing 2,036,280 ounces
of gold and an Inferred Mineral Resource of 17.8 MT at 1.11 g/t
gold for 635,540 ounces of gold. The leadership team is focused on
creating both near-term and long-term shareholder value by
increasing gold production to generate positive cash flow. The
positive cash flow will be utilized for exploratory drilling with
the goal of increasing the current gold Resource base and advancing
the Sulphide Ore Project which represents 90% of current gold
Resources. TRX Gold’s actions are led by the highest ESG standards,
evidenced by the relationships and programs that the Company has
developed during its nearly two decades of presence in Geita
Region, Tanzania.
For investor or shareholder inquiries,
please contact:
Investors Christina Lalli Vice
President, Investor RelationsTRX Gold Corporation+1-438-399-8665
c.lalli@TRXgold.comwww.TRXgold.com
Non-IFRS Performance
Measures
The company has included certain non-IFRS
measures in this news release. The following non-IFRS measures
should be read in conjunction with the Company’s unaudited interim
consolidated financial statements for the three and nice months
ended May 31, 2024, filed on SEDAR+ and with the Securities and
Exchange Commission (“SEC”), as well as the Company’s audited
consolidated financial statements included in the Company's Annual
Report on Form 40-F and Annual Information Form for the year ended
August 31, 2023. The financial statements and related notes of TRX
Gold have been prepared in accordance with International Financial
Reporting Standards (“IFRS”). Additional information has been filed
electronically on SEDAR+ and with the SEC and is available online
under the Company’s profile at www.sedarplus.ca and the Company’s
filings with the SEC at www.sec.gov and on our website at
www.TRXgold.com.
Average realized price per ounce of gold
sold
Average realized price per ounce of gold sold is
a non-IFRS measure and does not constitute a measure recognized by
IFRS and does not have a standardized meaning defined by IFRS.
Average realized price per ounce of gold sold is calculated by
dividing revenue by ounces of gold sold. It may not be comparable
to information in other gold producers’ reports and filings.
|
Three MonthsEnded May 31,2024 |
Three MonthsEnded May 31,2023 |
Nine MonthsEnded May 31,2024 |
Nine MonthsEnded May 31,2023 |
Revenue per financial statements |
$ |
10,148 |
$ |
9,317 |
$ |
27,536 |
$ |
29,133 |
Revenue recognized from OCIM prepaid gold purchase agreement |
|
(674) |
|
(743) |
|
(2,090) |
|
(1,485) |
Revenue from gold spot sales |
|
9,474 |
|
8,574 |
|
25,446 |
|
27,648 |
Ounces of gold sold |
|
4,515 |
|
4,810 |
|
13,361 |
|
16,068 |
Ounces of gold sold from OCIM prepaid gold purchase agreement |
|
(342) |
|
(434) |
|
(1,122) |
|
(867) |
Ounces from gold spot sales |
|
4,173 |
|
4,376 |
|
12,239 |
|
15,201 |
Average realized price (gross) |
$ |
2,248 |
$ |
1,937 |
$ |
2,061 |
$ |
1,813 |
Average realized price net OCIM prepaid gold purchase
agreement |
$ |
2,270 |
$ |
1,959 |
$ |
2,079 |
$ |
1,819 |
Cash cost per ounce of gold
sold
Cash cost per ounce of gold sold is a non-IFRS
performance measure and does not constitute a measure recognized by
IFRS and does not have a standardized meaning defined by IFRS. Cash
cost per ounce may not be comparable to information in other gold
producers’ reports and filings. Upon declaration of commercial
production of the 1,000+ tpd processing plant in Q1 2023,
capitalization of mine development costs ceased, and depreciation
of capitalized mine development costs commenced. As the Company
uses this measure to monitor the performance of our gold mining
operations and its ability to generate positive cash flow,
beginning in Q1 2023, total cash cost per ounce of gold sold starts
with cost of sales related to gold production and removes
depreciation.
Adjusted EBITDA
Adjusted EBITDA is a non-IFRS performance
measure and does not constitute a measure recognized by IFRS and
does not have a standardized meaning defined by IFRS. Adjusted
EBITDA may not be comparable to information in other gold
producers’ reports and filings. Adjusted EBITDA is presented as a
supplemental measure of the Company’s performance and ability to
service its obligations. Adjusted EBITDA is frequently used by
securities analysts, investors and other interested parties in the
evaluation of companies in the industry, many of which present
Adjusted EBITDA when reporting their results. Issuers present
Adjusted EBITDA because investors, analysts and rating agencies
consider it useful in measuring the ability of those issuers to
meet their obligations. Adjusted EBITDA represents net income
(loss) before interest, income taxes, and depreciation and also
eliminates the impact of a number of items that are not considered
indicative of ongoing operating performance.
Certain items of expense are added, and certain
items of income are deducted from net income that are not likely to
recur or are not indicative of the Company’s underlying operating
results for the reporting periods presented or for future operating
performance and consist of:
- Change in fair value of derivative
financial instruments;
- Accretion related to the provision
for reclamation;
- Share-based compensation expense;
and
- Tax adjustments
related to a prior period tax assessment (2012-2020).
The following table provides a reconciliation of
net income (loss) and comprehensive income (loss) to Adjusted
EBITDA per the financial statements for the three and nine months
ended May 31, 2024.
|
Three Months EndedMay 31, 2024 |
Three Months EndedMay 31, 2023 |
Nine Months EndedMay 31, 2024 |
Nine Months EndedMay 31, 2023 |
Net (loss) income and comprehensive (loss) income per financial
statements |
(1,656) |
(374) |
226 |
4,736 |
Add: |
|
|
|
|
Depreciation |
534 |
376 |
1,446 |
863 |
Interest and other non-recurring expenses |
338 |
327 |
1,256 |
1,368 |
Income tax expense |
1,714 |
1,719 |
3,786 |
4,383 |
Change in fair value of derivative financial instruments |
2,724 |
730 |
925 |
(1,670) |
Share-based payment expense |
280 |
541 |
1,493 |
1,939 |
Adjusted EBITDA |
3,934 |
3,319 |
9,132 |
11,619 |
The Company has included “cash cost per ounce of
gold sold” and “Adjusted EBITDA” as non-IFRS performance measures
throughout this news release as TRX Gold believes that these
generally accepted industry performance measures provide a useful
indication of the Company’s operational performance. The Company
believes that certain investors use this information to evaluate
the Company’s performance and ability to generate cash flow.
Accordingly, they are intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.
Forward-Looking and Cautionary Statements
This press release contains certain
forward-looking statements as defined in the applicable securities
laws. All statements, other than statements of historical facts,
are forward-looking statements. Forward-looking statements are
frequently, but not always, identified by words such as “expects”,
“anticipates”, “believes”, “hopes”, “intends”, “estimated”,
“potential”, “possible” and similar expressions, or statements that
events, conditions or results “will”, “may”, “could” or “should”
occur or be achieved. Forward-looking statements relate to future
events or future performance and reflect TRX Gold management’s
expectations or beliefs regarding future events and include, but
are not limited to, statements with respect to continued operating
cash flow, expansion of its process plant, estimation of mineral
resources, ability to develop value creating activities,
recoveries, subsequent project testing, success, scope and
viability of mining operations, the timing and amount of estimated
future production, and capital expenditure.
Although TRX Gold believes the expectations
expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of
future performance. The actual achievements of TRX Gold or other
future events or conditions may differ materially from those
reflected in the forward-looking statements due to a variety of
risks, uncertainties and other factors. These risks, uncertainties
and factors include general business, legal, economic, competitive,
political, regulatory and social uncertainties; actual results of
exploration activities and economic evaluations; fluctuations in
currency exchange rates; changes in costs; future prices of gold
and other minerals; mining method, production profile and mine
plan; delays in exploration, development and construction
activities; changes in government legislation and regulation; the
ability to obtain financing on acceptable terms and in a timely
manner or at all; contests over title to properties; employee
relations and shortages of skilled personnel and contractors; the
speculative nature of, and the risks involved in, the exploration,
development and mining business. These risks are set forth in
reports that TRX Gold files with the SEC and the various Canadian
securities authorities. You can review and obtain copies of these
filings from the SEC's website at http://www.sec.gov/edgar.shtml
and the Company’s profile on the System for Electronic Document
Analysis and Retrieval (“SEDAR+”) at www.sedarplus.ca.
The disclosure contained in this press release
of a scientific or technical nature relating to the Company’s
Buckreef Project has been summarized or extracted from the
technical report entitled “The National Instrument 43-101
Independent Technical Report, Updated Mineral Resource Estimate for
the Buckreef Gold Mine Project, Tanzania, East Africa for TRX Gold”
with an effective date (the “Effective Date”) of May 15, 2020 (the
“2020 Technical Report”). The 2020 Technical Report was prepared by
or under the supervision Mr. Wenceslaus Kutekwatekwa (Mining
Engineer, Mining and Project Management Consultant) BSc Hons
(Mining Eng.), MBA, FSAIMM, of Virimai Projects, and, Dr Frank
Crundwell, MBA, PhD, a Consulting Engineer, each of whom is an
independent Qualified Person as such term is defined in NI 43-101.
The information contained herein is subject to all of the
assumptions, qualifications and procedures set out in the 2020
Technical Report and reference should be made to the full details
of the 2020 Technical Report which has been filed with the
applicable regulatory authorities and is available on the Company’s
profile at www.sedarplus.ca. The Company did not complete any new
work that would warrant reporting material changes in the
previously reported Mineral Resource (“MRE”) and Mineral Reserve
statements during the prior reporting period. The MRE and economic
analysis was previously conducted under the 2003 CIM Code for the
Valuation of Mineral Properties which may be different than the
November 2019 guidelines.
The information contained in this press release
is as of the date of the press release and TRX Gold assumes no duty
to update such information.
1 Refer to “Non-IFRS Performance Measure” section.2 See
Forward-Looking and Cautionary Statements
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/2de1e5e7-25e0-4ce0-9e43-ecf2455071b7
https://www.globenewswire.com/NewsRoom/AttachmentNg/7150a967-3592-453c-a4b9-6459ecaf664e
https://www.globenewswire.com/NewsRoom/AttachmentNg/9ffc4330-bf94-4ef6-a5f0-2408900344e8
https://www.globenewswire.com/NewsRoom/AttachmentNg/c1b8bb31-0602-4fc7-8ddd-df6ea2b26d1f
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