A Record Year Marked by Exceptional Growth
Highlights include:
- Record annual gold production (20,759 ounces), revenue (
$38.3 million ), operating cash flow ($17.3 million ), adjusted EBITDA1 ($13.7 million ), net income ($7.0 million ) and gross profit margin (47%). - Successful and safe completion of 1,000 tonnes per day (“tpd”) mill expansion for
$6.4M , on time and on budget. - Continued growth ahead through procurement of an additional 1,000 tpd mill for 2024 installation and expansion through to 2,000 tpd.
- Exploration success extending known strike length mineralization on the
Main Zone by 500 meters and successfully intersecting high-grade gold mineralization on theAnfield Zone .
TRX Gold’s CEO,
Extended Highlights for Q4 and Year Ended 2023 include:
- A year of continued growth:
TRX Gold delivered on all its objectives for fiscal 2023, demonstrating an exceptional ability to manage capital, minimize shareholder dilution and mitigate project risk. The Company reinvested$17.8 million during the year to successfully grow Buckreef Gold by expanding the processing plant from 360 tpd to 1,000+ tonnes per day, procuring an additional 1,000 tpd ball mill to increase future annual throughput, advancing construction of a significantly expanded tailings storage facility to accommodate higher production volumes, and investing in further infrastructure, capital assets and studies to support the long term growth of Buckreef Gold. - Milestone financial metrics: For the year ended
August 31, 2023 , the Company reported record annual production and financial metrics. The Company recorded revenues of$38.3 million , cost of sales of$20.1 million , gross profit of$18.2 million , gross profit margin of 47%, net income of$7.0 million , and Adjusted EBITDA2 of$13.7 million . On the production side, Buckreef Gold poured 20,759 ounces of gold, in line with full year production guidance, and sold 20,864 ounces of gold. Both are annual operating records and resulted in positive operating cash flow for the Company of$17.3 million . For the fourth quarter, the Company recognized revenue of$9.2 million , cost of sales of$5.1 million , generating gross profit of$4.1 million , gross profit margin of 44%, quarterly net income of$2.3 million and Adjusted EBITDA2 of$2.8 million . Buckreef Gold poured 4,965 ounces of gold and sold 4,796 ounces of gold, resulting in positive operating cash flow for the Company of$2.7 million . - Successful advancement of the project’s 3rd mill expansion: During the fiscal year, the Company used cash flow from operations to order an additional 1,000 tpd ball mill to advance the short-term objective of increasing Buckreef Gold’s current average annual throughput by 75-100%. In
October 2023 , the ball mill arrived on site and earthworks have since commenced. The expanded plant has a targeted completion date in the second half (“H2”) of fiscal 2024 (“F2024”) and is expected to benefit production in Q4 2024. - A major win for sulphide ore processing: During the year the Company successfully processed a bulk sample of 6,500 tonnes of sulphide ore through the existing milling facility, achieving an indicative gold recovery of 88.7%. This is a significant achievement, (approximately 90% of Buckreef Gold’s gold mineral resource is held in sulphide / 'fresh' material), thus unlocking significant economic potential for the project. This bulk sample test indicates that the Company can likely process sulphide ore through its existing processing plant, thus potentially minimizing capex for future plant expansions.
- Continued success at the drill bit: During the year, the Company drilled 11,171 meters of exploration, infill and sterilization drilling, excluding grade control drilling. Buckreef Gold announced positive near surface drilling results from the
Anfield and Eastern Porphyry Zones which are in close proximity to theBuckreef Main Zone and present an opportunity to host future mineral resources outside of theBuckreef Main Zone . Buckreef Gold also announced an extension of the Buckreef Main Zone South by an additional 200 meters, increasing the strike length of theBuckreef Main Zone deposit, or known gold mineralization, to over 2.0 kilometers.
Figure 1:
Figure 2: Buckreef Gold Mill Processing Facility Q4 2023
Fiscal 2024 Outlook – Planning for More Growth
- The Company continues to advance a third mill expansion aimed at increasing the current average annual throughput by 75-100%, with an addition to the existing carbon-in-leach plant. As demonstrated with the first plant upgrade, construction will seamlessly integrate into the existing operating plant. This includes an expansion of the crushing circuit and installation of a 1,000 tpd ball mill. The new 1,000 tpd ball mill arrived on site in early
October 2023 and earthworks have commenced for the ball mill plinth, tank line foundation and bund wall, which will support the additional leach tanks. All other significant long-lead items have been ordered, including crushing equipment, interstage screens and agitators. Buckreef Gold is targeting an expected completion date of the expanded 2,000 tpd plant, in the second half of fiscal 2024. - Annual gold production at Buckreef Gold is projected to be between 25,000 - 30,000 ounces at total average cash cost3 of
$800 -$900 per ounce. Gold production is planned to be lower in the first half of F2024 due to the ramp-up and commissioning of the 2,000 tpd processing plant during Q3/Q4 2024. Higher production and lower cash cost per ounce are expected in H2 F2024 once the ramp-up is complete and the processing plant achieves steady state operation at nameplate capacity of 2,000+ tpd. - Operating cash flow from the 2,000+ tpd processing plant will be predominantly reinvested in the Company with a focus on value enhancing activities, including: (i) exploration and drilling with a focus on potential mineral resource expansion at Buckreef Main (northeast and south), Buckreef West,
Anfield , Eastern Porphyry extension; (ii) re-evaluation of Bingwa and Tembo; (iii) additional capital programs focused on further plant expansions and production growth; and (iv) enhanced CSR/ESG programs.
Qualified Person
Mr.
Q4 2023 and Full Year 2023 Results Conference Call and Webcast Details
When:
Webcast URL: https://shorturl.at/ijQ24
Conference call numbers:
International Toll: +1-647-484-8814
A replay will be made available for 30 days following the call on the Company’s website.
About
Non-IFRS Performance Measures
The company has included certain non-IFRS measures in this news release. The following non-IFRS measures should be read in conjunction with the Company’s unaudited interim consolidated financial statements for the three and twelve months ended
Cash cost per ounce of gold sold
Cash cost per ounce of gold sold is a non-IFRS performance measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Cash cost per ounce may not be comparable to information in other gold producers’ reports and filings. Upon declaration of commercial production of the 1,000+ tpd processing plant in Q1 2023, capitalization of mine development costs ceased, and depreciation of capitalized mine development costs commenced. As the Company uses this measure to monitor the performance of our gold mining operations and its ability to generate positive cash flow, beginning in Q1 2023, total cash cost per ounce of gold sold starts with cost of sales related to gold production and removes depreciation.
Adjusted EBITDA
Adjusted EBITDA is a non-IFRS performance measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Adjusted EBITDA may not be comparable to information in other gold producers’ reports and filings. Adjusted EBITDA is presented as a supplemental measure of the Company’s performance and ability to service its obligations. Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the industry, many of which present Adjusted EBITDA when reporting their results. Issuers present Adjusted EBITDA because investors, analysts and rating agencies consider it useful in measuring the ability of those issuers to meet their obligations. Adjusted EBITDA represents net income (loss) before interest, income taxes, and depreciation and also eliminates the impact of a number of items that are not considered indicative of ongoing operating performance.
Certain items of expense are added, and certain items of income are deducted from net income that are not likely to recur or are not indicative of the Company’s underlying operating results for the reporting periods presented or for future operating performance and consist of:
- Change in fair value of derivative financial instruments;
- Accretion related to the provision for reclamation; and
- Share-based compensation expense; and
- Tax adjustments related to a prior period tax assessment (2012-2020).
The following table provides a reconciliation of net income (loss) and comprehensive income (loss) to Adjusted EBITDA per the financial statements for the three and twelve months ended
Three Months Ended | Three Months Ended | Twelve Months Ended | Twelve Months Ended | |||||
Net (loss) income and comprehensive (loss) income per financial statements | 2,309 | (2,350) | 7,045 | (2,322) | ||||
Add: | ||||||||
Depreciation | 396 | (50) | 1,259 | 122 | ||||
Interest and other non-recurring expenses | 240 | 43 | 859 | 477 | ||||
Income tax expense | 948 | 177 | 5,331 | 436 | ||||
Change in fair value of derivative financial instruments | (1,635) | 3,443 | (3,305) | 2,035 | ||||
Share-based payment expense | 562 | 988 | 2,501 | 3,113 | ||||
Adjusted EBITDA | 2,820 | 2,251 | 13,690 | 3,861 |
The Company has included “average realized price per ounce of gold sold”, “cash cost per ounce of gold sold” and “Adjusted EBITDA” as non-IFRS performance measures throughout this MD&A as
Forward-Looking and Cautionary Statements
This press release contains certain forward-looking statements as defined in the applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as “expects”, “anticipates”, “believes”, “hopes”, “intends”, “estimated”, “potential”, “possible” and similar expressions, or statements that events, conditions or results “will”, “may”, “could” or “should” occur or be achieved. Forward-looking statements relate to future events or future performance and reflect
Although
The disclosure contained in this press release of a scientific or technical nature relating to the Company’s
The information contained in this press release is as of the date of the press release and
For investor or shareholder inquiries, please contact:
Investors
Vice President, Investor Relations
+1-438-399-8665
c.lalli@TRXgold.com
www.TRXgold.com
Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/31677ddc-ecdb-40bb-ac18-446dee28f872
https://www.globenewswire.com/NewsRoom/AttachmentNg/f8f489cd-bf37-4ff5-a086-30a7482ecec0
1 Refer to “Non-IFRS Performance Measures” section.
2 Refer to “Non-IFRS Performance Measures” section.
3 Refer to “Non-IFRS Performance Measures” section.
4 See Forward-Looking and Cautionary Statements
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