- TRX Gold (TRX, Financial) releases a positive PEA for the Buckreef Gold expansion in Tanzania.
- The base case pre-tax NPV5% is US$701M, with a potential upside of US$1.2Bn at a gold price of US$3,000/oz.
- Projected to produce an average of 62,000 oz of gold annually over 17.6 years, peaking at 94,000 oz in the fifth year.
TRX Gold Corporation (TRX) has announced favourable results from a Preliminary Economic Assessment (PEA) regarding the expansion of its Buckreef Gold Project in Tanzania. The study outlines a plan to enhance the processing plant to a capacity of 3,000 tonnes per day and shift from open pit to underground mining within the next 2 to 3 years.
The PEA reveals a robust base case pre-tax Net Present Value (NPV5%) of US$701 million, with an elevated potential of US$1.2 billion at a gold price of US$3,000 per ounce. This expansion is projected to yield an average annual production of 62,000 ounces of gold over a 17.6-year period, with the first five years of underground operation averaging 80,000 ounces annually.
The development requires a total growth capital of US$89 million over four years, directed toward the underground expansion (US$55 million), process improvements (US$30 million), and tailings facility upgrades (US$3 million). The project plans to process 18.1 million tonnes of ore at an average grade of 2.14 g/t gold, with an expected recovery rate of 87%.
Operationally, the Life of Mine cash costs are estimated at US$1,024 per ounce, while the all-in sustaining costs (AISC) are projected to average US$1,206 per ounce. Notably, TRX Gold intends to finance the expansion through internally generated cash flow, negating the need for upfront capital investment.
The market responded positively to the news, given the project's significant economic upside and strategic alignment with TRX Gold's growth initiatives. With its current market cap at approximately US$87 million, the PEA underscores a significant potential uplift in value for TRX shareholders.
