Fiscal 2023 GOLD PRODUCTION
Key highlights for year-end 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 EBITDA 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 EBITDA1 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 (“H2”) of fiscal 2024 (“F2024”) 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.
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 cost 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.
1 Refer to “Non-IFRS Performance Measures” section. 2 Refer to “Non-IFRS Performance Measures” section.
