TRX Gold Corporation posted fourth-quarter results for its fiscal year 2022 that saw its Buckreef Gold Mine in Tanzania blow past previous production guidance of 750-to-800 ounces of gold per month.
For the period that ended August 31, 2022, the Toronto-based company poured 3,619 ounces of gold to mark a new quarterly production record.
TRX Gold reported that 3,363 ounces of gold were also sold in a new quarterly sales record, resulting in a positive operating cash flow of $2.4 million.
READ: TRX Gold touts commercial production at its over 1,000-ton-per-day processing plant at Buckreef Gold Mine in Tanzania
According to the company, Buckreef clocked up $6 million in revenue during the quarter, while the cost of sales amounted to $1.9 million, with cash costs of $560 per ounce of gold.
As a result, TRX Gold said it generated a strong Q4 gross profit of $4.1 million, a gross profit margin of 69%, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.2 million.
Meanwhile, for its fiscal year that ended August 31, 2022, Buckreef Gold poured 8,874 ounces of gold and sold 8,598 ounces of gold. The company recognized revenue of $15.1 million, cost of sales of $5.7 million, and cash costs of $665 per ounce of gold. TRX generated a strong full-year gross profit of $9.4 million, a gross profit margin of 62%, and adjusted EBITDA1 of $3.5 million.
At the end of the quarter, TRX had no debt on record, cash of $8.5 million, and working capital of $5.4 million after adjusting for liabilities, which will be settled through equity.
During the year, TRX successfully closed three financing transactions including a registered direct offering with a single institutional investor for net proceeds of $6.4 million; a pre-paid gold purchase agreement with a contract price totaling $5 million with OCIM Metals & Mining SA; and a purchase agreement with Lincoln Park Capital Fund LLC enabling TRX Gold , in its sole discretion, to sell up to $10 million of its shares to Lincoln Park over a 36-month period.
Outstanding year
In a statement accompanying the numbers, TRX Gold CEO Stephen Mullowney said: “2022 has been an outstanding year for TRX Gold and Buckreef Gold. We could not be happier with the progress that we’ve made on all fronts, including building and expanding our mill, increasing gold production, increasing our expertise and skillset onsite and at the corporate office, and significantly improving the company’s balance sheet.”
“We have demonstrated what a dedicated and ambitious group can accomplish within 12 months ... In 2023, our commitment to creating stakeholder value will continue, quite simply, by way of more growth.”
Mullowney noted that in less than two years, TRX has been transformed from “a cash-burning enterprise into a sustainable, stable business” with strong local relationships.
“We are poised to provide significant upside through increases in production and continued exploration. Importantly, the option value explicit in exploration is now firmly intact,” Mullowney added.
The Toronto-based company, which is rapidly advancing its Buckreef Gold project, delivered two mill expansions onsite. During 2Q 2022, Phase 1 of the over 1,000 ton-per-day (tpd) mill was commissioned, allowing for an increase in production rates and plant throughput to 360 tpd, said the company.
In September this year, Buckreef Gold successfully commissioned the second phase of the mill expansion to 1,000+ tpd. As a result, the production of low-cost, high-margin gold ounces has steadily increased each month, said the company.
“Gold production from the 1,000+ tpd processing plant at Buckreef Gold is expected to be between 20,000-25,000 ounces at total average cash costs of $750-$850 per ounce,” said TRX Gold.
Investors can learn more about the company’s outlook for the fiscal year 2023 here.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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