Ready, Set, Go - Newly Expanded Mill at Buckreef Gold is Operational TRX Gold Reports Third Quarter 2024 Results
Ready, Set, Go - Newly Expanded Mill at Buckreef Gold is Operational
TRX Gold Reports Third Quarter 2024 Results
TORONTO, July 15, 2024 -- 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 EBITDA 1 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 EST
Webcast URL: https://shorturl.at/BFNqW
Conference call numbers:
Canada/USA TF: 1-844-763-8274
International Toll: +1-647-484-8814
A 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 Relations
TRX Gold Corporation
+1-438-399-8665
www.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 Months
Ended May 31,
2024
Three Months
Ended May 31,
2023
Nine Months
Ended May 31,
2024
Nine Months
Ended 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
Ended
May 31,
2024
Three
Months
Ended
May 31,
2023
Nine Months
Ended
May 31, 2024
Nine
Months
Ended
May 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
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