Q4 2023 TRX Gold Corp Earnings Call
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I would like to now turn the meeting over to Steve and allow me to your extra gold Chief Executive Officer, Steven Yes. Thank you Christina and before we begin the call today I'd like to recognize that their founder and chairman passed away during the quarter and.
During this year.
So all of US here had a good relationship with Mr. Sinclair and he will be greatly.
So with that with that.
This is our 2023 year end conference call, obviously will have an annual general meeting conference call.
The new year as part of the annual General meeting and I am quite excited for what we have in 2023, we added a significant amount of growth and we're really starting to see what the potential is for a brief call project. We had never planned expansion. We have another one underway, we're getting a much better sense for the geological potential.
So the property and are quite excited for that and where that could go over time, and particularly hopefully increase the resources on our property quite significantly as well as continuing to increase the production profile property as well.
2023 was a great year, we're quite excited.
For today's call and for where we're going as a company as well.
So honestly, there's cautionary note we will be talking about forward looking statements. So I would ask everyone to go to our website in our corporate presentation to read the cautionary note.
Today's speakers obviously at myself, we have answer right you can see you all here in Toronto.
Our CFO here with me as well and Christina is joining us from Montreal.
So T Rx.
You will hear this in our presentations.
Very growing company, we have experienced management team that continues to deliver a rapid growth both on the production side.
Specifically on the production side and we have a.
Exciting blue Sky potential on our property and the growth in resources over time.
So the Parkway called project just to give everybody a reminder, as the <unk> Gold project right now we have under the 2020 and resource statement of 2 million ounces in the measured indicated category at around one eight grams per tonne as a lot of you know the deposit does come to surface and it's relatively flat and it's a vertical.
<unk> also it's easily minable.
The winter around 20 meters easy metallurgy.
In Bryan crushed CIO in the oxide ore and as we'll get into in this presentation, which are very exciting during the year, even as our results around the sulfide ore, which continue now to be moved into the mine plan and process. We are fully permitted to grow as large as we can or Permian is had been.
And into 2032 and its renewable for the life of a deposit.
Processing plant and mine consistently are meeting production guidance, we have a minimal environmental footprint really recycle of water. We have good tailings management connect national power grid, and we adhere to all international standards around that around environmental standards made a good ESP program is.
Well and we have exceptional exploration potential, which hopefully will mean that this mine life goes on for a considerable period of time and with a special mining license, we can do that.
So with regards to the 2023 highlights.
There was a lot of growth and as I.
As we as a management team have told market participants is our goal now is to predominantly self fund operation and manage capital.
Your capital with minimal dilution and I think we've achieved that in 2023, we generated.
Record revenue operating cash flow and adjusted EBITDA with a great profit margin, Mike will get into statistics now in a minute and in predominantly reinvested that right back into the business to continue to grow.
So I think this is the first year that we've been able to execute on that business plan and with the expansion that is to occur in the next three to six months then that is gonna be enable us to have even more cash flow to reinvest back into the business and the business potential both out of production profile basis.
Well it is a resource expansion basis, so in 2023.
We executed on the 1000 ton per day plant that came in on time and on budget for a $6 $4 million. We are now going through another mill expansion, which will increase the throughput capacity by 75% to 100%. The production capacity will be dependent on the grade that will go through that and we'll give more guidance on that.
Future.
We're also unlocked the whole deposits, particularly the buckwheat means because everything we're talking about here right now is buffering, Maine.
We're not talking about A&P, all the eastern Gulf Marine or other exploration targets on the property.
The sulfide ore has gone through the mill, we did a bulk sample and continues to go through the mill today, while we're in the process of doing now is and this is normal operational sort of things with regards to processing plant is what's the right mix of oxides and sulfides to go through the gain the appropriate more balanced recover.
Right over time and over the life of the project that all has to do with.
Suspensions and things like that that the metallurgy is they really get into and and 2023 we've extended.
The known mineralization around our meetings all by 500 meters and we've also had discovery of the <unk> zones.
And continue to work on figuring out where to go next standard and Youll get into that mode.
In about 10 to 20 minutes.
How are you going to gogo blocking and tackling and good exploration program, particularly as this new plant comes on board and expand to hopefully expand the life of the deposit.
So with that I plan to hand over to Mike and he will go through the financial results for 2023.
Thank you, Steve and good morning, everyone. Thanks for joining us as Steven touched on that it was a record year operationally for us at at Trs.
We produced almost 21000 ounces a year that was in line with our full year guidance of 20 to 25000 ounces and that was after us having brought the thousands of eight plants online back in October of last year.
We sold all of what we produce that entering the year at an average realized price of $845 an ounce for the full year.
You can see in Q4 and oil prices exceeded $9800, an ounce and are now trading beyond $2000 now checked. This morning, we were up over 2015, so record levels.
Certainly suggests record gross going into into next year.
In terms of the financials the record production drove record financial results as well as Steven touched on we had record revenues of over $38 million cost.
Cost of sales came in at just over $20 million, which had a gross profit of over $18 million or almost 50%. So a very cost effective.
High margin operation, we had record net income of $7 million EBITDA of almost $14 million and importantly, operating cash flow over $17 million, which got reinvested back into the business. So I'll touch on that but again for investors who have been tracking the story.
This is the third year of growth since we've come on board as the year over year over year growth.
Certainly expect this growth to continue into next year as we expand to 2010.
Okay.
On the cash cost side, we recorded cash costs of $904 an ounce for the for the full year and this was above the high end of our previously guided range of 750 to $850 an ounce.
This was primarily due to higher than expected processing cost that we incurred in Q4, there's a couple of reasons for that that we called out in our MD&A.
One of which was the higher than expected maintenance costs, we ended up with <unk>.
Calories mill motor failure in one of our ball mills that required some some unexpected maintenance and that was covered coupled with an overhaul of our of our crushing circuit. So it was roughly $30 an ounce various for unplanned maintenance that we expect to normalize into next year.
And secondly.
In Q4, we experienced inconsistent.
Inconsistent unstable power.
From the Genesco power grid.
What that meant was we ended up.
Using a higher than expected Gen sets.
Power, which consumed fuel at a higher rate than what we had previously forecasted or budgeted and that led to about $18 an ounce impact on full year cash cost.
Importantly, we have since been reconnected to a a new substation that is substantially closer to Buck reef. The substations about 60 kilometers away from Buck reef, where the previous substation was over 250 kilometers away from from Barclays.
Connected to that grid in November and I'm seeing consistent grid power over the last few weeks and consequently expect cost to be lower heading into next year, we'll talk about guidance in a moment.
Lower costs year on year.
I guess the last bullet I'll touch on as Stephen mentioned at the outset, our mantra is using organically generated cash flow to reinvest back into the operation around value accretive activities, we took that $17 million to $18 million of operating cash flow that we generated put it right back into the business as we've touched on many times, we expanded the plan from 300.
60 tons, a day to 1000 tonnes a day, we're on our way towards 2000 tonnes a day, having already procured a mill we've set ourselves up for this growth by expanding our tailing storage facility to accommodate the higher production volumes and again when you look at the additional infrastructure capital assets were doing long term studies all in an effort to support long term growth of this business and doing it.
We said, we would do right.
Investing cash flow and value accretive way.
Next slide please.
Excellent well thank you Michael.
That's great.
And on our financial metrics are improving significantly and we continually expect those financial metrics to improve into this year, which will get into guidance again and these are.
I think it's fair to say projects that.
You get it going in and you're able to expand it much more quickly over time, so it's almost like pushing a snowball up the hill, it gets bigger and bigger and bigger as it goes down that hill and it gets easier to do.
Yeah. So so we're quite excited for that and one of those factors is the sulfides.
So we were in an extremely wet season last year. It was raining I think it was once in 100 years or something like that Andrew Let's first turn to rainfall windows in the spring.
And so.
When you're into that environment hard rock is easier to process than oxide rock because <unk>.
Hard rock is not as sticky does that play into it.
And sulfides oxides due so we pivoted a little bit to the sulfide see how it would work.
And it worked out just fine to 'twenty.
<unk> 2019, our 2020 metallurgical studies for 2020 preliminary metallurgical study Saturday, we should get.
Recovery rates in the mid to high Eighty's.
That's what we experienced when we put the mill feed through our mill and subsequently that will go into the long term mine planning now and into the current mine planning. So this is significant because 90% of the resources on the Buck remains on our installment and we are hitting the sulfides, who sat on top of that.
Of that in the pit there Andrew on top of the harder rock.
Tesco lessor sooner mining engineers.
Clearly.
Steve outpacing the sofa, which you can see because of the comps from brokers.
Great color.
And that particular book is actually running at five grams, a ton and so Andrew pitch.
Picture on the bottom can you take the investors through what they're really seeing in the pit because you can see the transition zone you can see the oxide zones and you can see started sulfide zones, but that's right Steven Thank you very much.
Good morning, everybody. So in the photograph on the on the bottom.
Obviously, if you look at the purchase so you'll see the top part of the very top part of the bits, you'll see the brand leader under the topsoil in regards to sort of the old code Orange colors.
That is the oxide zones about 'twenty Twitch Prime music and.
And then if you just look right at the back of a bulk of the purchase to the railroad.
It is.
The sulfate since we've started to expose the sulfides.
As part of our business, which is what you've been talking about here with a bulk sample exam.
Yep.
So onto the next slide for 2000 ton per day mill expansion.
And then I've explained to lots of investors over time, we are on a pay as you go program.
And what does a pay as you go program.
It means that as the business generates cash it.
Will be reinvested into the business to grow it so.
That essentially means that timelines can move up and timelines can move backwards, depending on hitting targets. So as Mike mentioned in Q4, we ran into power issues, which have subsequently been resolved and we also had a motor goes down which was really related to payout ratio.
From a box so we didn't hit the earn production profile, although we hit your in guidance, we were a little behind on where we were ideally hopeful to get that is delayed and the pay as you go program the mill expansion, a little bit, but not a lot and so we expect this project to come on board in the first half of.
Fiscal 2024 and.
The mill is on site the other long lead items have been ordered.
We are going to expand and this is a little bit of a switch from what I explained previously the crushing circuit will be expanded to over 2000 tonnes a day that will enable us to put in place a <unk>.
Spanned at crush.
Crushed stockpile, which will give us more consistent mill feed and I'm hopeful, we'll not be pushing the team to get over 1000 tonnes a day.
All the while we have that crushing system up and running we haven't budgeted for that but that's the goal.
And then subsequently to that the rest of the system will come online, including electrical works planes.
Planes will be poured soon.
Long lead item on the ball mill and all the other parts and things of that nature will come in thereafter, so to call capital costs on the mill expansion is around $6 million that's.
It's going to be funded through existing cash resources, obviously, you've got a big ore stockpile and gold forward sales of bank financing, which we're always in conversations around.
And we're going to build this in a 100% Tanzania light jets as we built the previous.
<unk> expansion is expected to come.
Come in and work just as well as the existing plants, we don't anticipate any problems in the ramp up of this plant because we're producing 1000 tonnes a day really doubling it ironically. This this year the mining rates don't need to increase to accommodate this and in this year's budget. So we're good on net adds.
Oh, the tailings facility as you can see down at the bottom is constructed there need to be a couple of lifts.
Forward and you can see the procurement and fabrication onsite are various other components around the.
The mill expansion and I expect as investors here will have quite a few questions on that as we get to the end of the presentation.
Now onto the excitement that's expansion, but I know everybody wants to understand.
How are we going to take this physical assets in processing capacity and we're obviously, we're going to continue to grow it after we get to 2010.
But how are we going to feed it.
Where are all the resources on the call. So we can have a long long long mine life Andrew.
Andrew.
Thank you, Steve and thank you Mike.
So as you know I was thinking like this.
Slide we're going to be here for a few minutes focusing to bear with me.
As you can see we did have.
Our program was just under 7000 pieces of drilling including infill sterilization.
I'm sure exploration the students already mentioned that we've been able to extend the mineralization to the more liquid.
We will go deeper into the south as friends South pits.
500 leases.
The northeast and southwest.
And we've also been able to get some exploration results through the jewelry now on the.
Eastern poultry.
Firms.
It was a strong monetization so parallel.
Close proximity to the bunkers from Amazon.
This is very very important opportunity for future resources, what do I say that.
<unk>.
Oh wait to sort of secure.
Continues.
Increases in throughput is appropriate.
Several pits available to us what happened.
The south goods in time, we have also begun underground.
Listen this is the first time.
Talking about the disposal will come to ground zero and geological work, we have been able to delineate some decline.
No.
Two to three.
Hybrid shoes, and some great confidence to this proposal we will go to bounce and then also chose to a much longer life of mine.
But multiple pits.
Zone, South pits and then.
Actual to move some porphyry.
Us optionality.
Time continuous mining I'm, just going to policy there Andrew for a second for and get into that so why don't you explain to the investors. When you determine how you switch from open pit to underground and the importance of strip ratio in that.
And just so that investors can understand how you make that economic decision.
It's already.
Good question, Steve missile, so very very important part.
Mine planning and.
Smart that we're currently in the middle of doing so.
So what will distribute your guests say hi, maybe six seven so it's one of my.
What kind of number.
It comes more economical to go underground.
And we.
We have to find those hybrid shoes.
Underground mining at a higher grades.
Those trends.
So finishing reasons those risks we have makes it a great economic coal mining underground environments and disturbing.
We'll be doing so it will be a cost tradeoffs, yes.
Between.
Strip ratios.
So tons of customers skip the line versus the development that we have to put in place to go mine stopes underground. So given we have a vertical deposit okay. As you go away.
Oh deeper you have to strip out and you have to get yourselves.
Angled properly so given that we were vertical and 20 meters. Why this deposit is very susceptible and good rock continuity jewelry susceptible to underground mining and it probably won't be cheaper overtime to underground.
And also the policy.
Christine we're ready for that.
This is pretty good luck and also took my own background.
But so the Rockies.
So we wont need to see is when you were talking about this morning, all kinds underground steel supports that add up to the cost because we got.
Got very competent rock baltsa mesh it.
That's right and just as a quick commentary on mining through some very very small amounts of old stopes.
From the old days in the reports.
Those stopes, who isn't that the volumes have stayed open Sam he is not.
So yeah.
Yeah, Tom picture that the other day is an important point.
How the old stocks have been there 40 years they've been.
Flood it not dried up we pumped them out and there is still very.
That's correct yep, Okay, it's been very good.
So perhaps a a quickie one of the highlights.
Of course, you're describing just to choose two of my favorites might have.
On the eastern pull people that we've seen him best results here was a 14 meters great risk that three and a half grams a ton, including three reasons at just under 11.
And to note, but that is from 27 basis points.
Very very close to surface.
In addition to the us.
We put the actual census by another.
Farmers on the half away.
62 <unk> mine.
Mrs. At 13, seven grams, a tonne, we got quite a shovel from 43 leases and some of the vessels that have been with us for a couple of years you might not fix at the end of the presentation that at Christina you've still got the picture of a guide holding a rope and that is from the Amazon site.
We drove that position and here we are just under <unk>, Some new course, you've done.
Great results.
Graham.
I still remain very very bullish on that overall trend.
And then underneath the south pits.
Get pleasantly surprised quite can be quite soon.
Monetization happens.
200 <unk> deposits.
She currently do motion sofas.
Trying to get that back into the mine plan later this year.
Excellent. Thank you Sue.
So with regards to guidance for the year.
And obviously as.
Everyone knows and hearing to Trs story, we're able to build mills and capacity.
Relative to the American extremely cheaply, Mike Hi, Guy I don't see anybody able to put out for 2000 ton per day plant. If we look at all of the cost of that including our expansion is less than 20 million Bucks.
More around $60 million to $70 million I'd be challenge people to go and see where all that has been done for it because I haven't seen anything less than 50 60 $70 million for similar type assets in other parts of the world and I think we have studies, suggesting as much. So this has been very capital efficient to your point, yes, exactly so we're going to be doing out of it.
Third mill expansion the production guidance for the year, it's going to be 25% to 30000 ounces. That's not a run rate of the 2000 tonne per day plant, that's 1000 ton per day plant operating for them.
Over the majority of the year and then the.
2000 ton per day plant coming online. So the 2000 tonne per day plant is higher than that guidance cash costs will come in at eight.
800 to $900 an ounce as of next year and again, we expect that to probably be a little bit lower when the full plant comes online as a run rate well I might just make a couple of comments on that Stephen I mean, we talked about power and be connected to grid, a substation that substantially closer to site. So expect some benefit that way.
But importantly, we expect to receive significant economies of scale from our larger plant we've been telling investors. This for quite some time.
We don't need to expand the workforce substantially to grow from 1000 to 2000 tonnes a day.
So inevitably things like your processing cost per ton and your cash cost per ounce come down because they're able to use the existing workforce to produce twice daily.
Exactly so the numbers that we're presenting here a blended numbers between <unk> and two <unk>.
I might just make one final comments you touched on our mantra our pay as you go mantra and we explained how.
To the extent there had been unexpected variances to the to the downside like mill motor breakdowns or Howard connectivity issues. It can go the other way as well it seems able to exceed some of the targets and guidance figures that we put on the slide here will move up some of that capital expenditure and try and break that said that plant online.
You have to get some when we look at the models.
It makes sense to do that.
Yes.
So.
Really makes sense to do that so again, our business plan is pretty simple produced gold pay for exploration drilling pay for additional capital programs and enhance our social license as we do that over time. That's the goal that we have in 2023, we're able to do it.
All of that in 2024, we're able to do it again and and and thereafter.
So mindful ESG.
When I see ESG, we are good corporate citizens.
I've always said this that mine has a lot of inputs and in mining.
Construction and capital cost and things of that nature dos and you can see in our operating cost plus capital would be over 50% of revenue because you got to put in capital expenditures in there too and the biggest beneficiaries of that should be local people, we're able to do that and we're 100% Tanzania.
On site and we procure as much as we can in Tanzania and are a great workers and have done a good job in building out our assets.
It helps to reduce local social risks. We also have our typical miners in this area and ramp up rate that is not abnormal for Tanzania, Our Africa, and we work with them and we reinvest into schools and into health facilities, we have.
To make <unk>, a joint venture partner and overall goal is to have a much more.
Clean smooth and efficient operation as a result of utilizing as much content as possible and adhering to the highest corporate governance. So.
As possible as well Stephen if I may it substantially reduces our supply chain risk as well, yes, yes. It does yes, and inflation risks as well as what youre seeing in the western wall, So where the guidance to neutral upcoming de.
The mill expansion is.
Underway.
We'll have a update it.
Study or at least modeling of the buttery Scold me zone. So everything we've been talking about around production is made on only.
We have metallurgical geotechnical studies underway currently that will feed into that and then we need to give the market a much better sense of where it is made Hogan golf and what our business plan is around increasing resources to have much longer life project here at Buck grief.
Okay.
With regards to share price over the last year or so our share price relative to market participants I believe has held up decently, well I'm worry and a cash position of.
Seven $6 million as of August 31, 2023 as of today, we're a little bit about that so we've been maintaining our liquidity profile in this.
This environment.
And.
We're covered by three.
Brokerages in the United States I believe some of them are on this call and will be asking questions. So all in all I would like to see a higher share price everybody all we'd like to see iron share price top market conditions, I think we're weathering the storm fairly well, but ultimately we do want to make sure that we get to a higher share price over time.
We believe that we can do that by driving the current business plan may take time, because we're on a pay as you go program it could move up or can move back a little bit.
And now I would like to hand, it back to Christina and the operator for any questions and you can see it from our side and a lot of participants would have seen this slide.
We have a lot of activity happening.
Thank you. Thank you.
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Our first question is from Heiko with H C. Wainwright. Please go ahead.
Mr. <unk> your line is open.
Yes.
Can you hear me.
Yeah Yeah.
Good morning, London, Okay, apparently where it says your microphone is open you still have to click that button.
Okay.
Sorry about that.
You in your press release, you state a quote lower cash costs are expected in the second half of next year. Once the ramp up is complete and the processing plant achieved steady state.
Can you maybe quantify the lower cash costs that you think we might see I assume there is some sort of a modeling you've done and then also just conceptually would it be fair to take the first half of the year at the higher end the 900, all or more of your range and then assume the second half will be closer to the.
The lower end of the range or is the delta even bigger in a way that the first half this over the 900 and the second half below the eight hummer.
Mike, Yes, I mean, we have obviously not guiding to that level of detail quite yet but.
Inevitably I mentioned, we expect to realize economies of scale as we move towards 2000 tonnes a day.
So certainly expect Q4 to be amongst the lowest cost quarter. Once the 2000 ton a day plant.
Yes.
Our steady state capacity.
But I think the way you are thinking about it is right now.
The front end of the year will be towards the higher higher end of the range.
And in the back end of the year towards the lower end of that uncertainty average out.
Over the course of the year.
Okay.
In your internal model the <unk>, the 2000 temporary processing pen when plant when do you think that will become cash flow positive on a monthly basis was there is there any sort of modeling that's been done.
Q4.
But monthly.
When you say monthly.
So you mean is a cash flow positive monthly basis.
Which month as more money coming out what's been going in.
I'd say the start of Q4 is the expectation that that comes online in Q3, so in our case that's probably.
Probably June.
Yes, so heiko the way this is working and is.
It's always operating cash flow positive.
Significant operating cash flow positive. It's just at the operating cash flow was being reinvested into capex to build the network and so it will once the new plant comes online obviously, we're moving we're using all operating cash flow to bring this plant on as quickly as possible.
Our predominantly most so it'll be based on the current schedule will be built and commissioned and sort of ramping up over the course of Q3, and then fully operational towards the start of Q4 at which point start generating.
Excess cash.
Yes.
Okay I'll get back in queue. Thanks for your time.
Thank you Heiko.
The next question is from Jake Zukowski with Alliance Global Partners. Please go ahead.
Hey, guys congrats on the strong year and thanks for taking my questions.
Thanks, Jake and good morning.
Good morning, I'm, just just building on heico's question, a bit and the ramp to 2000 tonnes a day or you could touch on the anticipated grade profile at the higher levels of throughput I mean is it is going to be similar to what we've seen over the last year or so any color there would be helpful.
If you want to comment on what the grade profile looks like.
So as soon as we get to 2000 tonnes a day, you'll see a little bit of a pullback from a grade.
There's two reasons for that obviously.
Fast tracking the high grades so that we can build the plant.
As a result of that we ended up with.
Medium to lower grade stockpile, which is available for us to process.
So of course, we won't be incurring the mining costs, because it's already Mike.
We expect to see some pullback on the grade.
The final quarter.
Okay. That's helpful.
And then just looking out over the medium term.
<unk>.
Now looking at additional expansions beyond the 2000 ton a day plant.
You bet.
Continue to scale gradually like you'd have been or do you think you might try and step up to call. It the 100000 ounce a year range.
Single expansion scenario.
Yes, so that's yeah.
We're prepared to do it both ways.
As long as it makes sense.
<unk> sense from a shareholder perspective so.
You know right now and I mentioned, the cost of us able to build these plants.
Has been very good.
We are aware of where the gas plants that can get us there quicker.
And so it and if it comes down to a financing question around the capital requirements for that versus the pay as you go program and you're building, you're bringing in external sources of financing such as.
<unk> Finance project finance, those sort of things would need to be procured. If you were to go a lot quicker, but but certainly I think we're going to look at that and we're going to go into most shareholder accretive fashion.
Goal is is to have that highest NAV per share that we can the highest EBITDA per share those type of metrics.
To do an evaluation for.
The expansion project and we are currently going under that.
You know looking at some of that analysis now Jake and it will be done in that fashion, but certainly that option will be fully on the table. If it makes sense for shareholders.
Okay, and then just just timing for that I mean, it sounds like Youre looking at both options now or is that something we might see news on in the first quarter or toward the middle of next year.
I would suspect that's going to be more towards the middle of next year.
Looking at that and just because.
You know, we put a particular type of.
Scenario into America.
We always adjust if it makes sense. So it can change over that particular period of time and we're getting now as we get a good feel of the asset and it's taken us a while to do that.
Now do we have a really good feel the asset we should be able to get sort of any pivots into the market a lot quicker.
Got it Okay. That's all for me. Thank you guys.
Thanks Jay.
The next question is from Mike Mayo with Roth.
Please go ahead.
Good morning can you hear me, Okay, Yes, I can hear somebody.
Mike.
Alright. Thank you I just want to congratulate you on your discipline.
Since you've come on and particularly over the last year how almost.
Now the operated cash flow equal to your investment, it's pretty pretty clear of that.
To putting all the money back into the project and really pushing it out in all directions that appears so I. Most of my questions were answered on either your presentation or the other analysts, but if I could just throw out.
Re ask in a general way that a little bit more.
Comment I would appreciate it if you don't mind.
One thing you mentioned with the gold price and cost in Tanzania.
How is the.
U S <unk> U.
U S North America perspective.
How do you look at the benefit of working in Tanzania, and operating cost basis.
Yes, I would say look we have this debate a lot between.
The market does between what is a tier one jurisdiction.
And.
In Tanzania in the case of the social infrastructures in place. So what does that mean it means that you can get qualified people that run and operate your business and that have good experience in my World class mining operations elsewhere, particularly throughout Africa and come back home. So the educational system is in place before that.
That also the skilled labors in place to.
To build tanks and claims and electrical works and all of that and so that's very important as well in building out an operation.
There's lots of contract miners remember, we haven't bought a fleet to do our mining here.
100% contract mining.
And.
Then you have the cost profile, just what labor cost in Tanzania versus elsewhere, what electricity cost, obviously fuel is a world product versus a local product and so you'd have to set your cost take on that front. So I would say in our experience we've had a very positive.
Experience in operating in Tanzania versus some of the risks that you have in as opposed to a tier one jurisdiction so cost overruns labor disputes.
A lot of.
Assets in North American picked over so you get an operational issues to our recovery rates and things of that nature. So with regards to operating in Tanzania, its been nothing but.
On a positive experience a lot of the noise that you do here from <unk> perspective is that the national government level and development. So I kind of separate what's the depressed versus the actual operating experience on the ground a little bit because we manage the Dolby.
Atmosphere quite well in.
And that's easier to manage than the operational aspects of things underground. So on the ground has been very good.
<unk> level two it's been extremely good.
Thus far it's been a good <unk>.
Experience.
The answer is it could answer.
Yeah.
It started with one very good example, Mike.
References made to the old power lines bring some.
Modern reliable.
We've approached the regional Commissioner.
The mining Commission said Hey.
It's just not working for us as opposed to like.
No short order through.
Put on some other power languages extended just crusher.
As of a few kilometers of kilometers an hour.
As of November <unk>.
Substantially.
Power reliability, yes, genesco built deadlines that buildup mind, and we didn't pay for that.
So again really to work with the government.
Great.
They want a <unk> producer.
At the end of the day.
Lots of royalties lots of jobs and economic activity around that is our goal like ours.
Second thing is as we continue to work in Tanzania.
Yeah.
System fully derisking the projects.
Well, that's a very complete answer it made me want to follow up I think that it.
I was curious what in your comment also about going underground and I'm not familiar with both Lockheed, but I think that with shutting down and.
Is that an underground mine or open pit.
And could.
Could you talk about your timing with going underground and how that's finally impact culture at least on the operating level yes.
So it's a good question Mike looking at the end of the day, we're talking with but meaningful right now so I fully expect my gut feel and im pretty confident and it is this will be underground, but <unk> made with pits and satellite pits all over to progress and so that will be ultimately.
<unk> hopefully forms obviously, there's some exploration and drilling to do that because.
Personally don't like people go and dig up the earthquake Theres no bolt and large projects do that so it does need to be drilled.
And so ultimately that is the case of buffering, Maine.
You're familiar or any of the vertical deposit it is quite wide. So youre not going to take a lot of dilution.
On mining of that it will make sense to go underground I like underground.
It reduces your footprint on surface and it's easier to manage things like security risk when youre underground versus being an open environment.
Hi.
Over time I think.
The project gets derisked more by going underground and stable.
And tailings too.
Mental actors as well backfill all happens with underground.
Well I imagine this year I should say and are you still 100% focused on mining bulk or you name it.
But by the end of the year with you coming on with the additional ball mill in the last quarter.
Youre, probably going to be really leaning heavily into making sure. There's enough mine development from either Buckley main underground with the south or these other part.
To make sure that it's bad and with more growth in mind.
I know, it's too early to say, but how do you see prioritizing the resource development outside of Barclays name.
Yes, we do rank views.
Okay.
Well I actually I think the question goes into the priority right now is expansion, taking our cash flow expansion into a robust exploration program that's correct.
Andrew has delineated.
The targets.
Sure.
We believe to be most prospective our rented properties.
Alright, you called that Bryan.
Again, you look at the <unk>.
Right.
We have.
The actual zone is only about 200 to 250 leases.
To the east of our main zone.
Very early stages with Goldman spectacular grades resulted from member.
Three mutual.
<unk> grams a tonne.
That's sitting in a much broader set of monetization as well.
Yes.
Youre asking priorities you, obviously gave us the most attractive results subtle.
Yes.
I missed the last sentence you said.
You go into the most attractive results and Thats why I put them up there Mike is is.
Simple free at Anfield.
Okay. Thank you.
Let me focus yes.
The south south extensions of the main pit.
Excellent.
That's very helpful.
Really.
The dense analysts like myself and it'll become more apparent as we move through the year.
Priority will naturally emerge.
Well that's.
Pretty much the questions I had I just wanted to say one more thing about Jim Sinclair.
To add is that his involvement in Tanzania back the Sutton.
It really was making him not just Mr Goldberg Mr. Anthony in terms of.
Bring in exploration to this part of the country.
I'm sure. He was very pleased with your activities in the last year.
And probably build great I'll stop there and thanks for taking my question and thank you. Thank you Mike all the best.
The next question is from Craig Sutherland with conceptual solutions limited. Please go ahead.
Morning can you hear me.
You can hear you just fine.
Okay very good morning, guys. A majority of the questions I had have already been answered, but first in the <unk>.
Foremost congratulations on the progress and it's really been amazing to see how much you guys are fast track. This.
In a way that we were all hoping for but I guess the question that I had was our focus is on the Buck reef, Maine, but also now looking out into the future possibilities like you said with the M field in eastern porphyry.
Are you identifying anything beyond gold and you're drilling or what youre looking for such as silver copper are there any other.
Possibilities that would increase the value of the property or not.
<unk> changed the scope and enhance the scope as we go forward.
The geological and Ross.
Yes. So currently what we're seeing is in our Dore bars, there's only a small portion of self help here.
Because you do pick that up in the in the processing and areas.
Small little amount of copper, we're not seeing anything in the assay results that would indicate that this could be a copper gold project for instance, it's just not.
Geological formation, Andrew you want to get into that just a little bit deeper. Please yes.
Greenstone system is particularly to gold.
To summarize it was a little bit.
What was it comes with it.
This is a goal to us this is integral play and in the region is almost all go in place as well.
Good.
That's it for me everything else has been answered so.
We need success to all of you and very happy with the progress.
Thank you Greg.
The next question is from Stephen Riser with a family office. Please go ahead.
Yes.
Yes.
Mr. <unk> there are you able to mute your line showing a near the donor organ.
Okay, Hi can you hear me.
Yeah again thanks.
A little bit technical.
Okay glitches, there to work through birthday, I too want to congratulate the team on a strong effort for 2023 in terms of the cleaning up the balance sheet, increasing production the exploration work and of course, the very strong steward ship.
Shareholder capital and funds that is clearly evident from the discussion.
Question I wanted to ask.
The team is really centered on market positioning and customer acquisition, a little bit of a softer issues.
In an environment, where there really is.
<unk> tightened liquidity in the boat market industry and many miners that are competing for capital.
From an asset manager standpoint, as you all will readily be aware.
There will be some natural wariness, two investing in Africa, particularly through U S asset manager or hedge fund our family office when there are.
Miners like for example, snowboarding cold for Hercules mining in Vancouver and in.
Idaho for example that have high intrinsic potential ounces.
And are in regions that might be perceived as easier to.
Work with them. So I wanted to understand what the team is doing on.
One in addition to the rhetorical discussions in the past on Africa, and that it's safe and one can drive the car.
What might be going on from a more structural standpoint to see reports or information.
<unk>, even put on the website that cast aside some of these concerns about Africa and.
Tanzania, and then secondarily and related point.
It's being done in terms of acquiring additional investors I know that 15% institutional slice in the 15% friends family and officers light slates have been fairly steady for a while but given the intrinsic value of this firm there is value and very strong programs.
To acquire additional investors and customers. So again market positioning and then structural things to overcome perceptions that may exist about Tanzania, and Africa and all through the active <unk>.
Cultivation of a really deep pocket investors.
Yes. So thank you for the question, Steve So with regards to the first risk around Tanzania, Theres been a lot of.
Progress at the government level towards foreign direct investment as.
You are fully aware of the former president and make it fully pathway just over two years.
The new President is.
All about foreign direct investment.
We've we've discussed.
Where the government is going on foreign direct investment and where it wants to go and how Tanzania is improving as an investment jurisdiction. You are seeing in the funds flows I think we've had added presentations before around divestments that Barrick is making there. We're just recently acquisition of <unk> Corp. Bye.
Silver Corp.
And we're starting to see a lot more investment in the infrastructure of Tanzania. You are correct, there's not a lot of that on our website.
And as we've spoken before we need to get that onto our website a lot of the positive articles.
Around the around Tanzania, I think in my conversations and it teams conversations with investors that starting to come through.
With regards to <unk>.
Seeing a reduced risk in the current administration in Tanzania versus the prior administration and that is starting to resonate a little bit I think you will see that come out in ratings around such as the Fraser Institute and other ratings over time.
Kind of similar to the road the analogy that I like to use is Ecuador 10 years ago.
Today kind of put out there with with other jurisdictions with regards to the acquisition.
Basically what Youre asking is new shareholders. When we go through the shareholder registry.
I do see a turnover in shareholders and new shareholders I, even see it.
And I just got out of the screen here today and look at them to participants that are here on this call versus the participants that would've been on a similar call last year.
It's much more broad.
And <unk>.
New priorities as well and we.
As you are fully aware I was in Switzerland last week I did meet quite a few shareholders that they didn't even realize where shareholders because they would show up in the <unk> versus the noble list. So.
Those communications continue we continue to have a lot of meetings and reach out to institutional investors and also large retail and family offices. So that continues.
I would say at Apple <unk>.
Ramp up significantly too as we start to formulate.
More medium to longer term business plans.
I'm hopeful that once that is more formulated we become more investable than we are currently today and that has to do with.
Youre seeing the tenants of that today with regards to talking about underground mining, but brief means don't plant expansions.
Today, if you were to try to look at what does 4000 tonnes, a day or 600 tons. A day looked like a Buck brief me you Couldnt answer that question I can answer that question much better, but I don't have all the information on that yet and that will be more into more knowns as we go forward here, which will enable.
People to put evaluation.
In the traditional mining onto the company.
Is that kind of answer your question yes.
Yes, it does and essentially we're gonna be grateful and look forward for further fact based insights on the site.
Now some of that.
Perceptions that might exist for particularly western asset managers about gains in Asia and Africa.
Yes, and look it's helpful to Steve that you have acquisitions of mining property starting to occur in Tanzania, as well that means that there are larger sources of capital that aren't afraid to make investments there.
Dr core property be envisioned capex for that is half billion.
So that's going to be a large equity check their written by somebody.
Sounds good.
Thanks, Steve.
Thank you.
The next question is from John Tumazos with John Tumazos very independent research. Please go ahead.
Thank you congratulations on the profit progress.
Thanks, John.
Sure.
Good morning.
Three ways.
Robert Boyd.
Synced.
And may simplify.
It is the 1000 ton a day ball mill installation all that is necessary.
For the expansion.
Where excess mine capacity exists.
Excess capacity exists in other parts of the process plant flotation cells et cetera.
Capacity excess or are there.
Other parts of the expansion.
Underway too.
Yes, so dangerous at a party expansion underway as well so.
The crushing circuit is being expanded first and so that equipment should arrive onshore. This month and then be go into box for each so that's jaw crushers and things of that nature.
The claims need to be built for the ball mill that should be built this month as well as electrical components that need to come in as a result of the expansion and thats going to come online in.
In the new year detained capacity does need to be expanded we have a plan for that as well that will be locally done and with regards to tailings.
Do need Tonight.
Total lots of market participants that after about two years, we do need a longer term tailings plan. We are in the process of doing that putting that together looking at a lot of dry stack options, whether it's through.
Dry stack tailings in.
Filter presses, we're also looking at <unk> and all those sort of type of processes as we speak to put that in place over time, but we can also.
Spanned our wet tailings facility, if so desired in that period of time as well so.
You rightfully.
Your question is right I think we got all the components that on mining we can maintain current mining rates day to achieve our <unk>.
But we did a lot of money last year and in our prior M&A that opened up the deposit for the medium term and that is the case.
And just as the project starts with John We don't we don't have a flotation.
At this time.
In terms of regional exploration.
Could you talk about what youre drilling programs might be in 2025, and 2026 and as the cash flow comes in.
So production or other uses of funds that may be priorities.
And Andrew <unk> the regional program.
We'll develop over time, but it certainly is not the global industry growth that's.
Maybe if I could ask us to go back maybe Stephen just to the last slide of exploration.
Yeah.
In the second.
So yet to come on the Q&A.
I can't believe it's growing the bottleneck just go to one of the arrows and in there we go.
Eric.
John is a bit easier with this.
Slide to talk about this.
Yes.
As you can see.
It remains our goal with the colors there.
Sensus is very clear.
To the immediate issue of actual as white box.
So far we understand those three zones over three kilometers anchored in the northeast with eastern corporate deposit, which is still open to the northeast and in the south.
Intermissions mining operation by some locals under the Chinese group.
There is so little drilling in that but there's so much opportunity.
We have two two.
So test outside of glass and Youll see some additional rent amoruso subtle come to east.
And then just finally another trend.
So you can see that red set of arrows and this is also that it's on the same trend.
His support and field and the main zone.
Similarly.
If I then tissue.
The extreme Westwood a lift.
Driven by the enterprise through throughput.
An additional two trends that sort of 25 26, there's no shortage of targets to drill.
On that.
Broadly in the region as you would expect and I always like to use strong re.
We obviously keep track of who's during the zoo around us.
As opportunities arise.
So there may be some productivity there are a lot of guys have approached us to.
So when I when I think through this and as I said this business plan will develop more fully over time is.
Once the processing plant is up and running is there a hub and spoke model that can be had here because there is a lot of high grade smaller type of pits and when we think about successive companies have done that <unk> is one that comes to mind.
In Nicaragua so.
That's.
It's a human capital constrained at this point in time, but certainly that we need to focus on the processing plant.
First what's on our properties second an angle.
How that all integrates into the region.
Yes.
So we haven't we're also be receiving some inbound.
Yes.
But locally.
Within Eastern Africa.
If I could ask one more.
Gold rises above 2000.
Probably all of their projects advance.
Tanzania.
The graphite industry is also active in East Africa are there shortages of skilled labor or any inputs to production.
Yes, so on that.
On the inputs have been good thus far on skilled labor, where I think.
There is some and I think this is a global thing versus just the Tanzania.
There is a lack of.
Highly skilled mining engineers.
And that's more of a global shortage than it is in Tanzania majority can we supplement our mining engineer's skill set with.
Professional services firms and individuals.
And supplement that with site, but with regard to the other disciplines around metal or just and geologists that we haven't seen a <unk>.
<unk> in that skill set or a shortage of skilled labor in Tanzania to execute I would say there is excess supply of those skills.
And in Tanzania, but the one that is shortage and Thats global as mining engineers.
I think you said also that we have.
<unk> been able to attract key people.
We also have a very modest.
Sure.
Yeah.
So we've been able to retain them very well.
We wish to retain.
Yeah, and I think.
When you're in a growing project, it's easier to attract and retain people as well so as long as we continue to grow.
And.
And pay people well then we should be okay in that regard on the HR side.
Thank you very much.
Thank you Joan C. Later this month.
I think we may have so I'd now like to hand.
Yes, sorry, I was just going to hand, it over to Stephen for a question and writing.
Alrighty.
So we don't have any tax questions bank.
Just take Q&A. If there are you just make a quick on the tech column in Mexico right.
Yes.
Yeah.
Can people, gaining because people see the questions or should we read them out no.
They cannot see them.
Okay. So Steven maybe you can read the question Yeah I'll read the question so when we.
We have from a private investor and I think just comps I get it.
I asked this question all the time and just a question from the past.
Is there a realistic possibility to get future dividends paid of physical gold.
Right now in the short to medium term I would say that that is not something that we are looking at as youre aware with the Tanzanian government does.
Put a royalty on gold it does track its gold fairly closely and we haven't joint venture partner.
And the government of 10 theatres to Mako, So I don't see a dividend in short to medium term at physical.
The second question from Nathan Mutual is based on the great exploration numbers to board presented would you agree with my personal opinion that there's a high possibility or ex coal has about five to 10 million ounces of gold underground.
Obviously, we are traded on the public markets.
That would be a personal opinion versus a fact based opinion at this point in time.
We do need to do a lot of work on the exploration potential of this property to drill that out.
To five to 10 million ounces.
Personally I am.
Dead.
That that property will come to that sort of level annual result for that the property will come to that sort of level, but it does need to be proven out through the drill bit.
Thats correct.
A personal opinion I would say again.
A very positive early results.
And there is no shortage of exploration potential on a special mining license exactly but it doesn't need to be proven out and there's a lot of drilling to be done and then again, that's the name of the game yes.
So the next question is when do you expect to bring out an updated indicated and inferred resources report how would you describe okay.
Two questions here, so with regards to.
Updated indicated and inferred resources report what we are doing is looking at what is the economic potential of the main zone and as part of that there would be an update on resources that are currently in the Buck <unk>.
I've got that correct, Andrew yes, so that is expected to come out in the first half.
Fiscal 2024.
Yes, yes baidu.
How would you describe calendar calendar, yet so not fiscal sorry calendar yes.
So next question to that is how would you describe the current relationship to Tanzania government sensor rumors some rumors of the all the aggressive tent kneen president not being sold are friendly to foreign investors and I think we did.
In Steve <unk> question, we did answer this.
The current relationship is good.
Have a good relationship with the mining minister and the old mining Minister as well Who's now device Prime Minister.
We have a good relationship to permanent Secretary may have good relationship with.
The mining commission and what our joint venture partner reality is and in countries in Africa, you put an asset in production you continue to grow and become a good taxpayer become a good employer have a good reputation you generally have a good relationship with the government.
They wanted to pediatric grow just as much as we would and that's in.
You know what I'll say aggressive.
Regimes in more not so aggressive regimes and youre right. The old President was not as friendly to foreign investors. When we started when I came onboard with the all president in power and as soon as we started to build the asset that relationship was fine.
So.
I think the.
I've often said this to people is when you go into foreign countries and I've been through a lot of them and have done business in a lot of them, particularly in my prior role of.
Managing government relationships, both on the government side and on the Investor side.
The World is opened and so what does that mean everybody has a smartphone everybody has an internet connection everybody have access to the same information.
Which wasn't the case 30 years ago.
And so in that and then a lot of the people now are very mobile and are educated in the scene educational institutions, particularly in the west.
As long as you have a fair open and transparent relationship generally you have a good relationship.
The approach that we've been we've been taken well I think you talked about foreign direct investments Stephen it's fairly well publicized but one of the key metrics that the new government put into place is growing mining as a percentage of GDP.
And they put out some targets some numbers around that so certainly India regime and.
At this point, where we're getting along well and as long as we continue to execute I don't expect that to change.
Next question is when and how our shareholders going to be rewarded.
So markets go up markets go down sometimes are good <unk>, sometimes bad.
And what's within our control is not so much on the American side, what the market value companies at it's what's in the control of US is to reach out to as many investors as possible.
<unk>.
Put forward the story to as many investors as possible, but also come up to a business plan that is investable and a business plan that could survive those ups and downs from America perception I think we've managed to do that that was one of my I was asked this a lot over the last couple of weeks is why did you go with the business.
Plane, you went with and a lot of people don't realize but a large part of my education is an economics.
There is a full realization in interest rates could never be at zero forever. They never were in the history of mankind and when interest rates go up generally valuations go down it's a pretty simple equation liquidity, usually drives up as well and the ability to access capital usually dry dock.
And so you need to have in place a business plan that will survive those ups and downs in the junior explorer I can tell you when I joined the business plan would not have survived this market today. The business plan does survived. This market is predominantly self funding operation, we wanted to slow it down and build up liquidity record.
We don't see that would be necessary at this point in time, but the business plan.
Can survive this type of market.
And over time as that business grows out its cash flow profile as EBITDA profile and as resource profile than shareholders should ideally get rewarded from that growth.
So the next question I have is.
I hope investors, who were part of this from the beginning could be made oil again I'm in good shape, but feel those who got into the visual TRA was trading at the all time lows and highs I appreciate the progress that you've made and I addressed it in almost all.
Presentations is.
And the management team came on board just over three years ago.
I believe we've moved to project forward since that point in time that business plan is much different than the original business plan of being a royalty company and predominantly in exploration call.
It has a different risk profile associated with it.
It's probably a little bit less risky today than it was before.
And markets.
When TRA was at its high Margaret its own gold are extremely bullish.
We don't have that same bullishness in the market today, and if that bullishness for to come back then hopefully we'll trade a lot higher.
And that's ultimately the goal and get out to as many investors as we can so I hope that answers that question.
Yeah.
Operator.
There are no further questions at this time, so I'll hand, it back to you think concluding remark.
Yeah. Thank you so.
And so everyone has heard from us.
A growth company.
We've grown quite well in 2023, we're hopeful that that growth continues into 2024 and stay tuned for a lot of news to come I think 2024, we'll have a lot more news in 2023, we have a lot underway. We have a plant expansion we have to <unk>.
<unk> of our business plan for <unk> main zone, and we will then start to really turn the drill bit and that will produce a lot of exploration results as I said.
I would like to be flexible the management team I would like to be flexible on what was presented today as the current business plan for 2024, but if a new one and better one emerges there will be an event.
And so we will always want to make sure that we keep shareholder value in mind and attempt to minimize dilution as much as possible.
Thank everybody on todays call for being a shareholder and sticking with us. Thank you.
This concludes the meeting you may disconnect. Thank you for participating and have a pleasant day.
Thank you.
The conference is no longer being recorded.
Okay.
[music].
Okay.