TRX Gold reports record throughput, plant expansion milestones
TSX-listed TRX Gold Corporation CEO Stephen Mullowney says the company’s results for the quarter ended May 31 demonstrate that the company’s investments in plant optimisation are delivering measurable improvements and further reinforce the strength and scalability of its Buckreef gold project, in Tanzania.
Adjusted earnings before interest, taxes, depreciation and amortisation for the quarter, which is the company’s third fiscal quarter, reached $20.7-million.
Mullowney says TRX’s accelerated plant expansion is laying the foundation for the next stage of growth, which will include both a 3500 t/d semi-autogenous grinding (SAG) mill circuit and significant upgrades to the existing 2 000 t/d plant – with a combined processing capacity well beyond the 3000 t/d plant capacity outlined in the company’s preliminary economic assessment (PEA) last year, unlocking significant value.
“As an added bonus, we have already achieved our full-year guidance as of today, having produced over 25000 oz of gold in the fiscal year-to-date.”
During the third quarter, Buckreef Gold achieved record processing plant throughput and poured 7426 oz of gold and sold 6983 oz at a record average realised price of $4703/oz.
The company says it recognised revenue of $32.9-million, gross profit of $19.5-million, gross profit margin of 59%, adjusted net income of $10.1-million, operating cash flow of $8.8-million and record adjusted Ebitda of $20.7-million during the quarter, all of which reflect increases compared with the third quarter of the prior financial year, demonstrating the company’s leverage to high gold prices during the quarter under review.
For the nine months to May 31, the company poured 21476 oz of gold and recognised revenue of $92-million, gross profit of $54.7-million, adjusted net income of $29.5-million, operating cash flow of $20.5-million and adjusted Ebitda of $54.1-million.
Moreover, during the third quarter, the company says it continued to make progress on upgrades to the 2000 t/d processing plant, including accelerated manufacturing for several key components, including installation of the pre-leach thickener, upgraded agitators and interstage screens, Aachen reactor, oxygen plant, apron feeder and belt magnet.
The company notes that plant upgrades are in various stages of completion and have already begun to boost plant reliability and performance as evidenced by an increase in plant throughput to 1690 t/d.
During the third quarter, the company reported results of ongoing metallurgical testwork as part of its current flowsheet optimisation and future expanded processing plant development.
Recovery rates between 89% and 92% were achieved from metallurgical testwork, which is above the 88% recovery rate assumed in the PEA. TRX says testwork has led the company to specify a SAG and ball mill combination of 3500 t/d.
The company notes that a letter of award for the new SAG and ball mill was initiated, final contract execution was completed early in the current quarter to end August 31, initial down payments have been made and estimated completion is expected over the next 12 to 18 months.
The existing, upgraded 2000 t/d processing plant will be available to continue operating in conjunction with the new 3500 t/d SAG and ball mill processing plant, providing a significant upgrade in processing capacity versus the 3000 t/d assumed in the PEA.
The increase in throughput from the expanded processing plant is expected to produce average yearly gold production in excess of the 62000 oz of gold originally anticipated in the PEA.
Further, the company notes that it also initiated a revision of the life-of-mine plan as a result of the expected increase in processing capacity and the increase in gold price well above the PEA reserve estimate.
Preliminary analysis indicates the potential for an expanded openpit, which could extend openpit operations, defer the start of underground mining in the Main Zone and enhance total recoverable ounces.
TRX says it is also evaluating the potential for an earlier start to underground mining of Stamford Bridge, alongside accelerating mining of the Eastern Porphyry.
This is expected to improve the overall economics of the project. Throughput rates for the updated PEA will be determined by the revised mine plan, which will feed the new 3 500 t/d processing plant and existing, upgraded 2000 t/d processing plant.
The company also continued to strengthen its working capital position during the third quarter through increased production, organically generated cash flow, improved liquidity and an increase in stockpile inventory.
