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TRX Gold Reports Year-End 2023 Results

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TRX Gold Reports Year-End 2023 Results

 

 

 

 

 

TRX Gold Corporation (TSX:TNX) (NYSE American:TRX) reported its results for the year end August 31, 2023 and fourth quarter. Financial results are available on the Company’s website at www.TRXgold.com.

 

Highlights include:

  • Record annual gold production (20,759 ounces), revenue ($38.3 million), operating cash flow ($17.3 million), adjusted EBITDA1 ($13.7 million), net income ($7.0 million) and gross profit margin (47%).
  • Successful and safe completion of 1,000 tonnes per day mill expansion for $6.4M, on time and on budget.
  • Continued growth ahead through procurement of an additional 1,000 tpd mill for 2024 installation and expansion through to 2,000 tpd.
  • Exploration success extending known strike length mineralization on the Main Zone by 500 meters and successfully intersecting high-grade gold mineralization on the Anfield Zone.

 

TRX Gold’s CEO, Stephen Mullowney comments: “2023 was an important year for TRX Gold as it was a year that we transitioned into growth mode. This growth will continue in 2024 with yet another plant expansion, which is expected to come online in the second half of the year. This expansion is expected to provide the financial capital for a robust exploration program aimed at increasing Mineral Resources over time. Importantly, we have been able to enter a growth phase while properly managing capital―and we will continue to do so ― in order to grow the project and its value while minimizing shareholder dilution.”

 

Shubo Rakhit, Chairman of the Board, continues: “On behalf of the Board of Directors, I would like to congratulate management and the Buckreef Gold team on their dedication and commitment towards achieving all of the Company’s ambitious objectives. This includes a disciplined approach to allocating capital and executing on time and on budget. We look forward to a further expansion of our processing plant, increased gold production and more exploration in 2024. Our objectives for the next twelve months are clear, and we have a dedicated and focused team to get the job done.”

 

Extended Highlights for Q4 and Year Ended 2023 include:

  • A year of continued growth: TRX Gold delivered on all its objectives for fiscal 2023, demonstrating an exceptional ability to manage capital, minimize shareholder dilution and mitigate project risk. The Company reinvested $17.8 million during the year to successfully grow Buckreef Gold by expanding the processing plant from 360 tpd to 1,000+ tonnes per day, procuring an additional 1,000 tpd ball mill to increase future annual throughput, advancing construction of a significantly expanded tailings storage facility to accommodate higher production volumes, and investing in further infrastructure, capital assets and studies to support the long term growth of Buckreef Gold.
  • Milestone financial metrics: For the year ended August 31, 2023, the Company reported record annual production and financial metrics. The Company recorded revenues of $38.3 million, cost of sales of $20.1 million, gross profit of $18.2 million, gross profit margin of 47%, net income of $7.0 million, and Adjusted EBITDA2 of $13.7 million. On the production side, Buckreef Gold poured 20,759 ounces of gold, in line with full year production guidance, and sold 20,864 ounces of gold. Both are annual operating records and resulted in positive operating cash flow for the Company of $17.3 million. For the fourth quarter, the Company recognized revenue of $9.2 million, cost of sales of $5.1 million, generating gross profit of $4.1 million, gross profit margin of 44%, quarterly net income of $2.3 million and Adjusted EBITDA2 of $2.8 million. Buckreef Gold poured 4,965 ounces of gold and sold 4,796 ounces of gold, resulting in positive operating cash flow for the Company of $2.7 million.
  • Successful advancement of the project’s 3rd mill expansion: During the fiscal year, the Company used cash flow from operations to order an additional 1,000 tpd ball mill to advance the short-term objective of increasing Buckreef Gold’s current average annual throughput by 75-100%. In October 2023, the ball mill arrived on site and earthworks have since commenced. The expanded plant has a targeted completion date in the second half of fiscal 2024 and is expected to benefit production in Q4 2024.
  • A major win for sulphide ore processing: During the year the Company successfully processed a bulk sample of 6,500 tonnes of sulphide ore through the existing milling facility, achieving an indicative gold recovery of 88.7%. This is a significant achievement, (approximately 90% of Buckreef Gold’s gold mineral resource is held in sulphide / ‘fresh’ material), thus unlocking significant economic potential for the project. This bulk sample test indicates that the Company can likely process sulphide ore through its existing processing plant, thus potentially minimizing capex for future plant expansions.
  • Continued success at the drill bit: During the year, the Company drilled 11,171 meters of exploration, infill and sterilization drilling, excluding grade control drilling. Buckreef Gold announced positive near surface drilling results from the Anfield and Eastern Porphyry Zones which are in close proximity to the Buckreef Main Zone and present an opportunity to host future mineral resources outside of the Buckreef Main Zone. Buckreef Gold also announced an extension of the Buckreef Main Zone South by an additional 200 meters, increasing the strike length of the Buckreef Main Zone deposit, or known gold mineralization, to over 2.0 kilometers.

 

Figure 1: Buckreef Gold Mine Main Pit Q4 2023

 

Figure 2: Buckreef Gold Mill Processing Facility Q4 2023

 

Fiscal 2024 Outlook – Planning for More Growth

  • The Company continues to advance a third mill expansion aimed at increasing the current average annual throughput by 75-100%, with an addition to the existing carbon-in-leach plant. As demonstrated with the first plant upgrade, construction will seamlessly integrate into the existing operating plant. This includes an expansion of the crushing circuit and installation of a 1,000 tpd ball mill. The new 1,000 tpd ball mill arrived on site in early October 2023 and earthworks have commenced for the ball mill plinth, tank line foundation and bund wall, which will support the additional leach tanks. All other significant long-lead items have been ordered, including crushing equipment, interstage screens and agitators. Buckreef Gold is targeting an expected completion date of the expanded 2,000 tpd plant, in the second half of fiscal 2024.
  • Annual gold production at Buckreef Gold is projected to be between 25,000 – 30,000 ounces at total average cash cost3 of $800 – $900 per ounce. Gold production is planned to be lower in the first half of F2024 due to the ramp-up and commissioning of the 2,000 tpd processing plant during Q3/Q4 2024. Higher production and lower cash cost per ounce are expected in H2 F2024 once the ramp-up is complete and the processing plant achieves steady state operation at nameplate capacity of 2,000+ tpd.
  • Operating cash flow from the 2,000+ tpd processing plant will be predominantly reinvested in the Company with a focus on value enhancing activities, including: (i) exploration and drilling with a focus on potential mineral resource expansion at Buckreef Main (northeast and south), Buckreef West, Anfield, Eastern Porphyry extension; (ii) re-evaluation of Bingwa and Tembo; (iii) additional capital programs focused on further plant expansions and production growth; and (iv) enhanced CSR/ESG programs.

 

Qualified Person

 

Mr. Andrew Mark Cheatle, P.Geo., MBA, ARSM, 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.

 

About TRX Gold Corporation

 

TRX Gold is rapidly advancing the Buckreef Gold Project. Anchored by a Mineral Resource published in May 20204, 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.

 

Posted November 30, 2023

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