Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- TRX Gold Corp (TRX, Financial) reported a significant increase in the grade profile, leading to lower cash costs and higher profitability.
- The company has successfully expanded its operations to 2,000 tons per day and is planning further expansions, demonstrating operational growth.
- The Preliminary Economic Assessment (PEA) indicates a pre-tax NPV of $1.2 billion and a post-tax NPV of $766 million at $3,000 gold, showcasing strong economic potential.
- TRX Gold Corp (TRX) is operating in a tier-one jurisdiction in Tanzania, with a special mining license allowing for unencumbered growth.
- The company has a robust plan for underground development, which is expected to be capital efficient and enhance production capabilities.
Negative Points
- The company faces challenges with the current share price, which has not reflected the operational improvements and economic potential.
- There are concerns about the timeline for expansion, as accelerating it could increase the risk profile.
- The underground development requires careful planning around existing voids from previous mining operations, which could pose operational challenges.
- TRX Gold Corp (TRX) is still in negotiations with the Tanzanian government regarding joint venture shares, which could impact future operations.
- The company needs to continue exploration efforts to fully realize the potential of its assets, which requires additional investment and time.
Q & A Highlights
Q: Is there any open pit potential at the Anfield site?
A: Yes, there is open pit potential at Anfield. The deposit comes to the surface and is quite shallow, which is favorable for open pit mining. (Steven Maloney, CEO)
Q: Is the $89 million growth CapEx timeline assuming a self-funding strategy, or is there an opportunity to accelerate the timeline with external funding?
A: Yes, the timeline assumes a self-funding strategy, but there is potential to accelerate it with external funding. However, accelerating could increase the risk profile, so it's a balance. (Steven Maloney, CEO)
Q: Is the underground mining included in the existing special mining license, or are additional permits needed?
A: The special mining license does cover underground mining. However, auxiliary permits, similar to those needed for open pit operations, may be required. (Steven Maloney, CEO)
Q: Why was a 5% NPV discount rate used in the PEA results instead of a higher rate like 10%?
A: A 5% discount rate is typically used for mining assets to maintain comparability. Adjustments for asset location and company size are made through the price and net asset value multiple rather than the discount rate. (Steven Maloney, CEO)
Q: Can you comment on the recoveries of gold from sulfide ores and any challenges faced?
A: The ore is not refractory, and the main challenge is achieving the right grind size to optimize cyanide exposure. The process involves standard techniques like grinding and flotation, and we are confident in achieving good recoveries. (Richard, COO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
