TRX Gold's Record Q3 Funds $50M Mill Expansion at Buckreef

The company's ability to fund the program from cash flow depends on sustaining output and costs near current levels. Chief Financial Officer Michael Leonard described Buckreef as a "low-cost, high-margin operation." Full-year cash costs are expected in a range of $1,400 to $1,600 per ounce, he said. Annualizing the quarter's adjusted EBITDA would imply more than $80 million. TRX Gold ended the quarter with nearly $27 million in cash and more than $36 million in working capital.

The new mill is expected to be commissioned within the next 12 to 18 months. The company is updating the preliminary economic assessment released in May 2025, with the revised study expected in the fourth quarter of calendar 2026. The updated mine plan is expected to incorporate additional open-pit cutbacks, a deeper and longer pit, and a deferral of underground capital for at least a couple of years, Mullowney said. Higher gold price assumptions could make additional lower-grade resources economic, he added.

Chief Operating Officer Richard Boffey said the company completed a new geophysical program at Buckreef, generating nine or 10 strong drill targets. The first target was expected to be drilled the following week. TRX Gold has two exploration rigs on site, a third in Tanzania awaiting delivery and a fourth in China ready to ship, with an option on a fifth rig. Assays are expected to begin flowing in the fourth quarter of calendar 2026.

Discussions with the Tanzanian government are advanced as TRX Gold seeks more favorable operating terms, Mullowney said. The current joint venture with STAMICO is 55% owned by TRX Gold and 45% owned by STAMICO, with cash flow currently reinvested rather than distributed as dividends. The 55/45 split becomes relevant after capital loans are repaid and if dividends are declared, he said. Mullowney referenced other Tanzanian mining frameworks that include 80/20 or 84/16 ownership structures with a nondilutable government interest. Improved terms would reduce one of the key political risks for the project.

On the use of cash, Mullowney said reinvesting into Buckreef offers more value at this stage. The company believes it can materially increase EBITDA without raising capital, he said. A share buyback is one potential tool to address market conditions. He did not announce a plan. "We have a great growth business plan in place, and we're hopeful that the valuation will catch up to our growth profile," Mullowney said.