Expanded Mill Delivers Quarterly Production Growth
TORONTO, April 14, 2023 (GLOBE NEWSWIRE) -- TRX Gold Corporation (TSX:TNX) (NYSE American:TRX) (the “Company” or “TRX Gold”) today reported its results for the second quarter of 2023 (“Q2 2023”) for the three months ended February 28, 2023. Financial results will be available on the Company’s website on April 14, 2023.

Key highlights for Q2 2023 include:

Newly expanded mill running smoothly: Q2 2023 represents the first full quarter of gold production from the newly expanded 1,000+ tonne per day (“tpd”) processing plant at Buckreef Gold, following commercial production declaration in November 2022. The Buckreef Gold team continues to prove that the project can be grown in a phased manner, thanks to an efficient local work force and strong reliable supply chain which has enabled the Company to minimize costs and deliver milestones on time and on budget.
Gold production growth on target: Buckreef Gold recorded its highest quarterly production to date of 5,636 ounces of gold and sold 5,505 ounces of gold, resulting in positive operating cash flow for the Company of $4.8 million. Year to date, Buckreef Gold poured and sold 11,030 and 11,258 ounces of gold, respectively, both half-year production records, resulting in positive operating cash flow of $11.4 million. At mid-year, the Company is on track to meet its annual gold production guidance for fiscal 2023 of 20,000 to 25,000 ounces of gold, at total average cash costs1 of $750 - $850 per ounce.
A high-margin gold operation: In Q2 2023, the Company recognized revenue of $10.1 million, cost of sales of $5.2 million, gross profit of $4.9 million, gross profit margin of 49% and Adjusted EBITDA1 of $4.3 million. Year to date, the Company recognized revenue of $19.8 million, cost of sales of $9.6 million, gross profit of $10.2 million, gross profit margin of 52% and Adjusted EBITDA1 of $8.7 million.
Reinvesting cash flow to drive value accretion: During Q2 2023, investments continued to be made in the infrastructure and development of the Buckreef Gold project, including construction of a significantly expanded tailings storage facility to accommodate a larger production profile, road realignment around the Special Mining License which will enable full life of mine access to the Main Zone, the purchase of four new gensets to replace existing rental units, as well as development drilling as part of a program which focused on infill and exploration drilling at Buckreef Main, Anfield and Eastern Porphyry.
A third mill expansion is on track: Subsequent to quarter-end, the Company used cash flow from operations to order an additional 1,000 tonne tpd ball mill for the Buckreef project as part of the short-term objective of increasing Buckreef Gold’s current average annual throughput by 75-100%. Construction of the expanded milling circuit is expected to start in fiscal 2023 and potentially benefit production in late calendar 2023.
Exploration drilling continues: In Q2 2023, Buckreef Gold drilled 13 holes representing 1,411 meters at Buckreef Gold, including exploration drilling at Eastern Porphyry and sterilization drilling at Buckreef Gold’s ROM pad. Assay results from the two programs have been received and are being analyzed with results expected in the next few weeks.
A keen eye on the bigger prize: Buckreef Gold has commenced the long-lead items for de-risking the larger mine development project. Advancements include work on geotechnical characterization to determine the ultimate pit slopes of the 2-kilometre-long open pit, the variability metallurgical study for the next 5-7 years of production, as well as the identification of potential locations for the larger processing plant, potential dry stack tailings facility, waste rock piles and other associated infrastructure.
Working safely: The Company achieved zero lost time injuries (LTI) as well as having no reportable environmental or community related incidents during the quarter.
TRX Gold’s CEO, Stephen Mullowney comments: “We are happy to deliver another solid quarter of financial results. Buckreef Gold’s newly expanded mill is operating well and generating cash flow which has allowed us to reinvest in the project to drive long-term value. Our growth plans are on track as we work on yet another expansion with the goal of increasing near term gold production, while our geological team of experts is hard at work advancing many projects aimed at developing Buckreef Gold into a much larger and significant gold producer. A little over 24 months ago we hit “reset” at the Buckreef Gold project and since then we have seen the project develop quickly with significant growth potential ahead.”

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