TRX Gold Corporation (TSX:TNX, NYSE-A:TRX) has reported results for the three months ended February 28, 2023, its fiscal second quarter, showing that its Buckreef Gold project 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 of $4.8 million for the company
In the year-to-date, Buckreef Gold poured and sold 11,030 and 11,258 ounces of gold, respectively, both half-year production records, resulting in a positive operating cash flow of $11.4 million. At mid-year, the company said it 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 costs of $750-$850 per ounce.
In the results statement, TRX Gold’s CEO, Stephen Mullowney commented: “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.”
The company noted that Q2 2023 represented the first full quarter of gold production from the newly expanded 1,000-plus 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 workforce and strong reliable supply chain which has enabled the company to minimize costs and deliver milestones on time and on budget, it added.
In Q2 2023, TRX Gold 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 EBITDA of $4.3 million. For the 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 EBITDA of $8.7 million.
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.
Subsequent to quarter-end, the company used cash flow from operations to order an additional 1,000 tpd ball mill for the Buckreef project as part of the short-term objective of increasing the 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.
In Q2 2023, Buckreef Gold drilled 13 holes representing 1,411 meters, 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, the company said.
The company will host a Q2 2023 webcast on Wednesday, April 19 at 1,00am EST via this link. A replay will be made available for 30 days following the call on the company’s website.
TRX Gold is rapidly advancing the Buckreef Gold Project which is anchored by a Mineral Resource, published in May 2020, which shows it currently hosts an NI 43-101 Measured and Indicated Mineral Resource of 35.88 million tonnes (MT) at 1.77 grams per ton (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.
Contact the author at jon.hopkins@proactiveinvestors.com