TRX Gold Corporation (TSX:TNX, NYSE-A:TRX) has told investors that over 2023 it expects to increase gold production, generate cash flow and invest in exploration and the larger Buckreef project in Tanzania as it hailed its first-quarter results to end-November, 2022.
The period saw the group ramp up throughput at the processing plant at its flagship asset and commercial production of the 1,000 plus tonnes per day (tpd) facility was declared effective in November.
In the quarter, the company posted quarterly net income of $5.2 million, operating cash flow of $6.6 million and adjusted underlying earnings ( earnings before interest, taxes, depreciation, and amortization) of $4.4 million.
The company's CEO Stephen Mullowney said 2023 had started off for the firm at "a great pace!"
"After having commissioned the expanded mill at the onset of Q1, we are very pleased with the way in which the equipment is functioning and with the way our processing and mining crews have been working incredibly efficiently; allowing us to maintain great zone and grade control, throughput, plant availability and recovery rates," he said in the quarterly results statement.
READ: TRX Gold extends gold mineralization of the Buckreef Main Zone to the southwest
"Through ongoing drilling, it becomes more evident with each batch of results that the Buckreef gold deposit has the potential for a much larger footprint and therefore project.
"We expect the next three quarters of 2023 to be exciting as we continue to increase gold production, generate cash flow and invest in exploration and the larger project, ultimately creating shareholder value. Growth, growth and growth, in production, cash flow and resources, respectively, is our mantra," Mullowney added.
Notably, the company highlighted that it recorded, during the quarter, its highest quarterly production, sales, gross profit, net income, operating cash flow, and adjusted EBITDA, at a low cash cost of US$732 per gold ounce, which was below its previously announced guidance of between US$750 and US$850 per ounce.
The company said it poured 5,395 ounces of gold and sold 5,754 ounces of the yellow metal, both quarterly records.
Output in gold in the first quarter was 49% higher than in the fourth quarter of fiscal 2022.
In terms of exploration, the company noted that since drilling re-started in 2021, a further 500 meters of gold mineralization has been added along strike, or around a 30% increase in deposit strike length at Buckreef Gold.
Post period end, TRX Gold also advanced towards the larger project and received positive results from a metallurgical variability sampling program on the Buckreef Gold Main Zone.
Looking ahead, the company said it expects crushing, processing and gold production were all expected to operate at full capacity during fiscal 2023 and for the fiscal year, gold output was expected to be between 20,000 and 25,000 ounces at total average cash costs of between US$750 and US$850 per ounce.
The company said it will continue to advance a project aimed at increasing the average annual throughput by between 75-% and 100% through the addition of a new ball mill.
Construction is expected to start in and potentially benefit production in late calendar H2, 2023. Detailed engineering and procurement of equipment has begun and construction is expected to start in fiscal 2023 and potentially benefit production in the second calendar half of this year.
The miner also aims to complete 9,000 meters of diamond drilling, 13,000 meters of grade control drilling and 10,000 meters of reverse circulation ‘sterilization’ drilling for fiscal 2023.
The company wants to increase gold production to generate positive cash flow, which in turn, will be used for exploratory drilling in a bid to increase the current gold resource and advance the sulphide ore project, which represents 90% of current gold resources.
Shares in the US gained nearly 8% to stand at US$0.42 each.
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Contact the writer at giles@proactiveinvestors.com