TORONTO, July 15, 2024 (GLOBE NEWSWIRE) -- 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 (http://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
price(1) 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 price(1) 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 EBITDA(1) 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 2020(2), 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
c.lalli@TRXgold.com (mailto:c.lalli@TRXgold.com)
www.TRXgold.com (http://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 | Three | | |
| | Months | Months |Nine Months|Nine Months|
| | Ended May | Ended May | Ended May | Ended May |
| | 31, | 31, | 31, | 31, |
| | 2024 | 2023 | 2024 | 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|Three Months| Nine Months| Nine Months|
| | Ended| Ended| Ended| Ended|
| |May 31, 2024|May 31, 2023|May 31, 2024|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 (http://www.sedar.com).
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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6459ecaf664e
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