Ready, Set, Go - Newly Expanded Mill at Buckreef Gold is Operational
TRX Gold Reports Third Quarter 2024 Results | |
TORONTO, Ontario, 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.
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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.
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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.
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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-todate, 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.
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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.
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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.”