TRX Gold (TSX:TNX, NYSE-A:TRX) has announced solid financial results for the first quarter of 2024, highlighting positive operating cash flow, strong gross profit margins, and its strategic approach to capital management.
For the three months ended November 30, 2024, the company said it achieved positive operating cash flow of $5.1 million as it poured 4,927 ounces of gold and sold 4,895 ounces. The company reported revenue of $9.4 million and cost of sales of $5.7 million, resulting in a gross profit margin of 40% and adjusted underlying earnings (EBITDA) of $2.6 million.
Capital management remained a focal point as it reinvested $3.8 million during the quarter to advance its third consecutive mill expansion to more than 2,000 tonnes per day and advanced construction on an expanded tailings storage facility. The expansion aims to increase throughput by 75-100%, with completion expected in the second half of fiscal 2024 and is expected to benefit production in the fourth quarter.
The initial phase of the new crushing circuit arrived on site in January 2024 and is configured to produce a finely crushed ore ‘product’ suitable for the existing and future ball mills. It is expected that the new crushing circuit will help drive increased throughput and recovery percentages and will provide capacity for increased production. Concrete construction has been completed and is curing. Steel design, fabrication and construction of the new crushing circuit continues at a rapid pace, and completion is expected in the second quarter of 2024, the company added.
“Q1 2024 has been an exceptionally busy quarter at Buckreef Gold as our team continues to work hard on our next growth phase, including another expansion in processing capacity at the mill," TRX Gold CEO Stephen Mullowney commented in a statement.
"We are very pleased with the exceptional progress that has been made over the last few months in advancing construction for the plant expansion, including commencement of concrete and steel works related to the new crushing circuit."
The company said it expects to continue to build on past exploration successes through a drill program that is expected to begin in the second half of fiscal 2024. While it primarily focused on grade control drilling to support mining activity during the first quarter of fiscal 2024, exploration drilling will now focus on infill and expansion drilling at Eastern Porphyry, Buckreef West, Inferred Mineral Resources and strike extensions, both to the northeast and southwest of the Main Zone. If successful, it said this has the potential to increase tonnes to higher Mineral Resource categories.
"We continue to be impressed with the excellent and efficient work being done by our 100% Tanzanian staff, consultants and by the quality of locally sourced materials and equipment," Mullowney added.
"We look forward to completing the plant expansion later this year and utilizing the expected increase in cashflow to unlock value through a larger exploration program in the future.”
The company also highlighted its health and safety achievements over the quarter, with zero lost time injuries and no reportable environmental or community incidents.
It has maintained its 2024 production guidance at between 25,000 and 30,000 ounces at a total average cash cost of $800 to $900 per ounce.