Q2 2025 TRX Gold Corp Earnings Call
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You are now rejoining the main conference.
Speaker Change: And welcome everyone to today's event, the TRX Gold Corporation Second Quarter 2025 Results Presentation.
As a reminder, all participants today are in a listen only mode and the meeting is being recorded.
Speaker Change: After today's presentation there will be an opportunity to ask questions.
Speaker Change: If you wish to ask a question, please click the Q&A icon on the left hand side of the screen. You will see the option, raise your hand to join the queue and ask your question verbally or write a question to submit your question in writing.
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Speaker Change: I would now like to turn the meeting over to Stephen Mullowney, CEO , please go ahead, sir.
Good afternoon and good morning to everyone.
Speaker Change: Welcome to our Q2 conference call for our Q2 results as well as...
Speaker Change: and a lot of people are aware of we did release the results of a PEA yesterday, we're going to certainly...
Speaker Change: to focus on that today. So the nature of this meeting today is what we're going to present, we're going to present there.
Speaker Change: All right, high level reviewer, Q2 results, but also go through what results are of that PEA study and directionally where we're going. The results of PEA study were all exciting, got a big smile on our face.
Speaker Change: with that, it's a combination of a lot of really years of work culminating into...
Speaker Change: High-level document around what this business could be looking like today and where it can go in the future. And joining me today in the room is Michael R.C.F.O. on the line from Perth, Australia, is Richard R.C.O. All, Richard, put up your hand.
Speaker Change: There you go, and we also have joining us from Daris Alom in Tanzania, our SVP cloth, raise your hand.
There we go, and so we're...
Speaker Change: All going to present here today and we look forward to your questions. I expect a lot of questions that he quite a few people on the line. And no many of you might know as many of you as well as Kaloff and Richard. So we do, we will leave extra time for a lot of questions today.
So, without further ado, let's get into it.
At first we have our-
Speaker Change: Disclaimer, the disclaimer has changed now. The PEA report has been repaired by...
the consultants.
Qualifying Persons
Speaker Change: Pulling all the information together with the assistance of TRX Gold, they are all independent, as well as our QP, Bill Bambrughal is also independent, and so the information that you see from a P.E.A. is developed by independent persons.
Thank you.
Thank you.
Speaker Change: with regards to TRX Gold in advance. This is now changing, given what the...
and what we've put it to the air.
Press release yesterday.
Speaker Change: So the Buckwheat Gold project is in Tanzania. We continue to operate at around two thousand times today on our last expansion.
Speaker Change: We are now updating the market on what the potential is to continually expand that asset as well as the refocus on loose-guy exploration potential while continuing to operate a really good asset. Well, a couple of things that you will see from...
Speaker Change: Yesterday is the Great Profiles now higher, so we now refocus the or body on economics.
Versus Sheer Alters
Speaker Change: And with that, you have a higher cutoff rate in your economic analysis, we'll get it to that in one of the slides.
and so you're, you're great [inaudible]
Speaker Change: is a lot higher in your resource statement and as we've explained to a lot of investors and a lot of participants on this call over time, great as a significant driver or cash cost.
Speaker Change: The lower degree, the higher the cash cost, the higher the degree, the lower the cash cost.
Speaker Change: And so we evaluate the business on a pretend basis and go and go and look at the deposit and every deposit is significantly different.
Speaker Change: And when we look at that, we look to accelerate economics and cash versus sheer ounces in the ground. You can lower the cutoff rate to 0.1, 0.2, but that doesn't mean that you're going to come out of there profitably.
Speaker Change: Retax net present value as well as a 766 million post tax net present value. And we didn't quote an IRR because under our business plan. Right now it's looking in that. [inaudible]
Speaker Change: Business Plan, it has the mind expanding the process of plan first and then expanding into the underground portions of the deposit and there's a lot of cash flow created from that.
Speaker Change: So, anything to add to that, Michael, from our RACS survey? No, I think it's pretty cool to you Stephen. I think what's important to know is we haven't been able to demonstrate with this study along my life, but it's just under 18 years my life.
Mike: You know, average annual production of over 60,000 ounces, speaking at over 90,000 under this current structure, lots and lots of room to optimize, we'll get into that when we talk about the study. But importantly, when you talk about cut off grade and things like that, you'll know that the life of my cash cost is still very low, it's in the lowest quartile, the cost is just over $1,000 an ounce.
Speaker Change: So again, a high-i-march operation that should generate plenty of free cash as demonstrated in the study over the lake line. Yeah, no, thank you, Mike. I did have that in my notes here that I forgot to mention on the cash cost. Now that one is really good as well. That's continually focused on the economic source.
on the next slide.
Down.
So with the...
Speaker Change: We are an emerging producer, so we're still small production. We're going to get into why we're increasingly bullish in the second half of the year versus the first half of the year. We did undergo an extensive strip campaign, Richard will explain to us that we have a couple of slides.
Um...
Speaker Change: To really demonstrate that from a visual perspective where our confidence comes from in the second half of the year versus the first half of the year, as might have mentioned we are a high-marriage in business.
Mike: We do have a significant resource that's now high-rated. We will refocus priority on drilling to expand that because that's one of the upside and continually focus on staying cash flow. With the regards to the...
McCurley Sheen, Oberum Berthud
Mike: versus the first half, versus the second half of the year, we're currently seeing, you know, data production over 50 ounces a day now, and in increasing, I thought a daily this morning was quite nice.
Mike: And that is, Richard will get into why that is the case on a slide to show us a great prop on our currently mining versus what we have been mining. So once we get that moving, the expansion and those who are available, things will come on the back end of that.
Speaker Change: Well, and Stephen, I might just comment, you know, for those that might be new to the story, after I've seen the study of the PEA results, you know, we are intense the as you've mentioned and that, you know, we comment here as a slide. We do see it as a tier wonder restriction. I think.
Speaker Change: It's important to note that part of the reason we characterise it that way is because it's a part of the world where you can get things done You've heard us say that before but you know this is as it is fully permitted we've got a special mind laser [inaudible]
Speaker Change: that allows us effectively to grow this asset on an unencumbered basis. So when you look at the study and the growth that we model in our business plan, the special lighting license that we have, which is unique to Tanzania, allows us to grow this asset and achieve a lot of targeted metrics that we've included in the study. So very, very good place to do business.
Yeah, thanks Mike.
Speaker Change: So with regard to what Mike was just saying, obviously I mentioned that we put out a robust PEA yesterday with great numbers in it.
Speaker Change: I did mention Buckbury has a significant goal resource that's higher grade now which means lower cost . . .
Speaker Change: Hi, he's the low 90s of our coverage over time as we upgrade our plant. Richard is...
Speaker Change: in the throws of that right now, and it continually deals with-
Speaker Change: The labs around, we're out of metallurgy and we understand them more and more every day.
We are fully permitted.
with the Special Mining Lations Code, the 2032.
Speaker Change: Obviously, we're environmentally responsible on the ground. I've spoken a lot of times about that.
Speaker Change: We have very high priority known gold zones from exploration through sky potential. That's not included in the PEA, that will be upside over time as to drop it. It's in the ground.
Speaker Change: And we have established infrastructure both from a physical infrastructure perspective and a social or HR infrastructure perspective as well around the assets and continually be able to give us the confidence.
Speaker Change: to continually expand this asset. We've done three expansions. Don't see another reason why we can't do another expansion to really start to unlock the value of Buck Reef. And Richard, I'm gonna pause there and anything to add to what I just said here because you're in the throes of this day to day.
Richard: Stephen, I, you know, I've been in care with what he's saying with, with been growing the capacity of the plant and the project and the people.
Over, you know, an extended period now, and the more...
Speaker Change: We have some successes in the project, the more the those good results are repeated, so it's starting to see some good consistency in repeats now. And as you've mentioned, as you've
Speaker Change: Turn a bit of the direction of the mind around, we've got through some hard work and we're now at the other side of some of that hard work and seeing some good grades coming through the project so well...
Speaker Change: Plenty of upside still, it's a very young project, it's a very young team that is learning a lot and we've got a lot of growth potential not only in answers but in efficiency and productivity to come as well.
Thanks for that, Richard.
Speaker Change: So with regards to this, we have a fast-paced transformation as Richard has mentioned at in.
Speaker Change: I know a lot of people would like to see, you know, just a little bit backward-looking [inaudible]
Speaker Change: We will over time here now give more forward milking information here. He's a lot of the 2021-2022-2023. That's a number of year, we're going to be focused solely on what's to go forward and the PEA provides basis of that.
Speaker Change: The upside in that P.E.A. is the gold price was a 1900 for resources, so gold price is higher today. The plant size, it will get into this second 3,000 times per day, you can increase that and move up so many economics.
Speaker Change: as well as increase your mining rates, move up the economics, as well as overtime moving in your exploration success into that plan. So, although it's a layout and a period of time, it will consistently change over time as we continue to refine.
Thank you.
Speaker Change: With regards to the operational growth since 2021, this is what really starts to give us the confidence.
Speaker Change: We're starting to put together timelines. You're always blue as you bring these components in. We do have similar people executing it and it has been signed off by your reputable engineering firms on flow sheet.
Speaker Change: What you will notice in Q2 results and Q1 results is look at the average head grade. So, when you have a lower head grade, you have higher cash cost.
Speaker Change: We will get into it a second. I see the slides coming up around what the head grade look like from an individual perspective in the first half and what it can look like in the second half. You do see a little bit of slow down in what I'll call
Speaker Change: processing tons, giving you're into a little bit harder rock versus what we were in the early part of the
The approving as we approve the plant and upgrade that plant.
Speaker Change: in order to get a higher throughput levels coming up. But look.
Speaker Change: The processing costs for time have come down. Our mining costs are consistent and we know how to get those lower and we're getting the better head grade as you go forward.
Speaker Change: You're right, because you're knee deep into the numbers all the time. No, I think you said it well, Stephen. I mean, the processing cost would be the key one to highlight, I mean, through the expansions, what we've begun to realize our economies of scale, particularly when we went from a thousand tons a day, a through foot to two thousand tons a day, a through foot, you know, our costs have come down from 20, you know, $22 a ton down to sort of $13, $14 a ton, which is certainly in line if not below international standards. So we're starting to see as we as we scale this plant up, economies of scale, we're starting to see as we're starting to see as we're starting to see as we scale this plant up,
Speaker Change: and expect with a full year of operations, you know, going forward that we should benefit from that larger plan.
Speaker Change: I consistently put out this slide as and this is in a different form at this time around prudent capital management to achieve profitability and move through indistinguishability.
Speaker Change: Look, a lot of mining companies raise a big amount of capital, put a drill within 20, planted in the production, and then it ramps up extremely quickly. This business model has taken a little bit more time because of the nature of it. It was reviewed.
You know.
Speaker Change: Basically, cash flow from operations as well as some supplier financing to build up the operations.
Speaker Change: to date in Q2 and half fiscal 2025. We are seeing the record gold prices come through. We will continue to see those coming through in the back half. EBDA is a little bit lower than
Speaker Change: Revenue, and just over 5 million EVDA reinvested that back into the business.
Thank you.
Thank you.
Speaker Change: I'm going to come back to this slide because it's not really in the order, I'm going to go into what gives us the level of confidence in the back cap first and then I'll reverse and come back to this slide because then that sets up for the PEA very well.
Ta-ra.
Speaker Change: Second half, I've taken a few messy pictures here. Richard will be able to explain the slide better than I can, but in what you see here is what our strippy campaign is.
and so you see March 2024, the pit is high.
It's not downing around the high-grade areas [inaudible]
Speaker Change: and you see April 2025, and what you'll notice is there's more benches. I think there's two or three more benches in that photo. You'll see the solid rocks there be starting to be exposed.
Speaker Change: and you will also see the pit being a lot wider. If you want to just give the dimensions just a quick overview of what they're really looking at here.
Rich: Well, we're looking at the main tip from the south to the north.
Speaker Change: and we're really just getting back into this part of the pit.
Speaker Change: having spent a good six right months in the north where you'll see.
Speaker Change: If you can sort of distinguish the drop-in in Verko, the same, probably, we've dropped about 30 metres in that.
Speaker Change: Northern Block, and we're about 20 to 25 metres in the in the in the southern area now we're we're quickly catching that up so from. We're moving on to the next round.
Speaker Change: What you can see on a year ago, we were mining in, uh...
and...
Speaker Change: Very easy, mind-able oxide material now are into much harder sulphide ore. We're now taking 10 meter bases as you can see there and instead of 3 to 5 meter lifts in a year ago.
It's pretty hard to distinguish, but there's a...
A large fleet of equipment now operating.
Speaker Change: at the moment, as we're exposing, you know, bigger areas of the pit, we're getting ourselves organised with the cycle of open pit mining, drilling blasting, boiling, and back to drilling again.
Speaker Change: So I'm going to put it down to this slide because you, this slide now visually.
Speaker Change: Shoes, where we were, and I'll move my cursor Richard as you explained this because we were up in this area up here in the first part of the year.
Speaker Change: Anything above the line is what we mine in the first part of the year on the orbates as a waste.
Speaker Change: And anything below the line is what we expect to do in the second half. You want to just see if the investor is a quick overview of what you're really seeing here. We like purple and pink colors in our models. That means basically it's higher grade as you can see in the legend here. [inaudible]
Speaker Change: And then at the first half we had, we don't like yellow and green, but you got to move through it.
Thank you. Bye-bye. Bye-bye.
Speaker Change: It's exactly Stephen, unfortunately, you've got to take these pits down in a relatively even fashion.
Speaker Change: and we've now done the hard work over on the right-hand side of the North of the pitch, moving that down out of the, and we've had to endure some fairly low grades while we've been mining out in the
Speaker Change: of the financial year. We've moved now to focus back over to the south and as you can see with the line is in the very far south, we've got a bit of to drop down to get that to an even back.
Speaker Change: But the good news is that he looks for the warmer colors of the reds and the purples.
The Great
Speaker Change: Sutherland Section, particularly good attractors, very good for an open pit mine. So yeah, we should be seeing and we will be seeing and we are already seeing some some higher grades coming through the middle now, and we'll yeah, we'll see those fractional gold production quarterly.
Number started to jump up now.
Speaker Change: I just want to give a quick explanation of the black areas here because these are my underground workings from the old mining areas here.
Speaker Change: 80s and 90s or 70s, 80s and 90s. There's been about 80 to 90,000 tons removed and that
Speaker Change: 20-year period and our job now is that those goals or boys were never filled. So we have to take care when we're mining around those. All of that.
Speaker Change: Production of the answers in that has been removed and out of schedules and out.
Speaker Change: and our resource models. But we now have to be careful as we go down through these areas. So we've got a very clear plan that everybody's working to that allows us to work safely around and through and down past these board areas.
Speaker Change: And it's not by accident that the void areas around the nice warmer colors as you put it in the purples.
particularly in around here.
Speaker Change: And in around here and in over here. So we will have an other slide in a few minutes on the PEA.
Woodsville Shaw, where we're going underground.
And you'll see the underground work he's coming around here.
All the way around here.
Speaker Change: and then to the north up here and then the off junction into the Stanford Bridge area which needs to continually be drilled out further. So now I said I don't want to jump back, so I'm going to jump back. So.
Speaker Change: We just even overview why we feel more confident in the second half of the year, gold prices are great, that helps, always helps, the better the gold price.
Speaker Change: The better profits going to be, but you can't let your costs get away from you, even in a good gold price environment, so we're continually focused on those operating costs.
Speaker Change: Reductions, as Mike mentioned, there is more economies of scale on this plant. There's also economies of scale in mining as well, which are starting to experience and those costs will come down.
Speaker Change: That combined with better grade profile will mean that there'll be more ounces produced as Richard just went through giving the grade profile where we're getting to in the second half of the year versus the first half of the year. So good gold prices.
Speaker Change: Focus on operating costs, good grades, means higher ounces and hopefully higher profitability.
Speaker Change: The Larger Scale Operation, as I mentioned, we've done this three times before.
Speaker Change: Richard and Team have gone through all of the, you know, engineering details that is all specs out, it's all cost of out, and now it needs to start to be executed upon and faced over time. And he had that plan.
Speaker Change: A higher recovery rate, so mover from 80s to high 80s, maybe low 90s.
That is the goal.
Speaker Change: Also on the front end of the plant, that's on the back end of the plant. We're looking at potentially a sad deed, but in the end term it may be a crushing upgrade. That's not in the PEA because we can get higher throughputs.
Speaker Change: just by crushing upgrade, and then we need to put the flotation re-grine on the back end.
Speaker Change: We're also upgrading the elusion circuit because we have more of a rudimentary elusion circuit now to a, you know, fully stated error, the elusion circuit. Now we have a couple points on recovery as well.
And so that is all well underway, the expiration success.
Speaker Change: Once we get refocused now with that higher cash flow coming in the back cap, putting the drill bit back into the ground, we fully expect that to be coming through as well and we got those high target areas in Amphial which is adjacent to the pit.
Speaker Change: Can we bring in some open pitable resources there? That'd be great.
Speaker Change: and then we have Stanford Bridge, which is the highest grade portion of what we're seeing us for at over five grams of tons.
Speaker Change: from a resource perspective, initial resource perspective, to look at the bowline as well. Richard Anything to add to what I just mentioned?
Thank you very much.
Speaker Change: The good thing is, we're not operating mine now, and we-
Speaker Change: When we're doing our cost estimates, we've got real data to go off and real.
Speaker Change: Real experience on what is available with throughput for everything else. We've done some metallurgical test work already to...
Speaker Change: to define how we can improve recovery, very confident that they'll be very successful, and we'll have some small incremental recovery rates, but then a very significant one when we expand the plan with the flotation circuit, which...
Speaker Change: which is a pretty standard technique for sole five golders around the world and certainly
Yeah.
Speaker Change: So on that basis, let's get into the PEA and what the approach was. As Richard mentioned, it's based on a lot of the data in the PEA, it's actually based on real data.
So, typically, when you go through studies, it is...
Defeat Ability Study
Speaker Change: in a pre-production property still has not actual costs, not actual data around recovery rates.
Speaker Change: Better Dad than a lot of these building studies. Good as actual real dad. And that's why we went with this sort of approach and other minors that.
Speaker Change: Are into production, go with similar approaches because you want to give the market a sense of what the overall project can hopefully based on real data and then bringing in your fur resources in a
Speaker Change: Peaceability Study, you can't bring in inferred resources in a PDA you can, and we're confident in the measure of indicated category as well. So when you look at our deposit, it's drilled more off top than it is down bottom. So the inferred resources in that mindset are later out.
Speaker Change: Versus the front end of the B.E.A. is based on better data in the measurement indicator categories, more intensely drilled.
Speaker Change: So when we look at the mine and plant expansion, we look at 3,000 tons today, so from 2,000 to 3,000 tons per day and as I mentioned that is one of the areas which we can upgrade over time to move up economics.
Speaker Change: We'll make sure that we do an expansion. It may be greater than 3,000 tons of data through Boff as we get there, but it's certainly something that we'll be open and we'll as we've done.
Speaker Change: Already, make sort of a plant that's easily upgradable by putting more tanks on or a bigger volleyball mill over time to do easy expansions.
Speaker Change: of the mine plan, as I mentioned, Buck Reece of Vertical Deposit, so...
in a set of two murder participants on the bottom.
Speaker Change: is you will have several years of open pit and then you will go underground because what is happening when you go back to the picture of the pit, you notice how it goes out wider.
Speaker Change: So the further you go down, the wider you're going in order to be safe, and that means you've got to move a lot of waste and when Mike is computing the cost of moving waste when it was golden in. He doesn't like it.
and so he wants to minimize that.
And so...
Speaker Change: When we get into it, the underground working is your cost and upfront or more underground development tons essentially that go in and get your body. But when you go to your body, you don't take weeks than the outside of it like you would in an open pit. You're just going to take your [inaudible]
Speaker Change: And so that's why it goes underground. And that's why Heiko Buckbury is fairly wide from a mineralization perspective. You're able to get good mining costs at even two and a half grants a ton underground.
Speaker Change: With the grafted process and recovery, we mentioned this several times. It will be a quotation in a rewrite. So what that reading is doing is right now the plant is capable from a thorough purpose factor of getting around 80% past 75 microns.
That gives you high seventies, low-weeds recovery.
Speaker Change: If you're trying to find her, you're as far as more goal to the Synodization process.
Speaker Change: So, if you grind that down to, say, 40 or 50 microns through floating it and re-grinding it in a high-tensity grime mill, then your recovery rates will come into the range that we're mentioning here, 88% to 92% is what we're looking at.
The PEA, as we've mentioned,
to a lot of market participants. See this.
We've expanded the plan.
Off of Casual Desperate at P.E.A.
Speaker Change: has a similar type of business approach in it, open pit, profit.
Speaker Change: He's used for underground development while a continual capsule was used for upgrade plants. So the way within the PE is they go, upgrade plant, increase cash flow to underground development. I think it might have been in a simplicity that's really what's happening after that. Yep, he's going to be getting that underground now.
Development. Now, when I was saying...
Here's a picture of why this underground development looks like.
Speaker Change: As you can see I went into the areas of the pit. [inaudible]
Speaker Change: that that encompasses. So we have the Easter Povery, which you didn't see in great profile, to the side with an open pit resource as well as underground workings.
Speaker Change: It's just a north part of the pit going down and it's just a south part of the pit going down. You'll see all the works and details. This takes a lot of time to do. Your undergrad development and talent laying and costing that out and things of that nature. Thank you very much.
Speaker Change: So, with regard to the economics of the PTA, it's on average 61,000 ounces or 62,000 ounces a year or 17.6 year mind life, as I said, increased the plant, increased mining rates, that get higher and moved up.
The annual free cash flow is around $64 million at
$3,000 naps.
Speaker Change: Capital in the first four years, as I mentioned, is phased in around $90 million over the life of mine, it's $185 million, cash costs are around $1,000, $1,200 for all of the cheating costs, I suspect that is well done in the lowest quartile.
Speaker Change: pre-tax nav of 1.2 billion and 770 million aftertax that present high all of 3,000 molecules.
Thanks for watching. Bye!
Speaker Change: It gives an overview of the breakdown of this, and now we're getting into real data here. The first two columns or the first two rows are for the plant to upgrade. Then you have your underground workings, you see it detailed by ear. We do have to have a tailings expansion for the open pit.
Speaker Change: For the Underground, we're going to have a paste backfill, so what that entails is you're basically, what you might know, your underground workings.
Speaker Change: You put it back with a little bit of cement and it's a piece back full so you have a piece back full plant and so your teammates go back underground where they came from versus having to have a big
Speaker Change: and the tailings facility. That reduces operating risk from our perspective. We have line tailings facilities that are quite safe in Tanzania, and the regulations are quite high around tailings. So we week sleep at night as a result of that, but having a peace backfill will be good.
Speaker Change: You'll see a breakdown here and I don't think anybody's really seen this breakdown before around how you build up your cash costs.
Speaker Change: and how you build up your total all-in-sustaining cash cost to $1,000 an ounce and $1,200 an ounce. If you're mining, you're processing general and min royalty costs, selling costs, quite detailed.
Speaker Change: I wonder if it's worth maybe Richard just commenting. In terms of capital, particularly the underground capital. It's far less capital intensive than folks may have seen in other underground development projects. Richard, maybe it's worth commenting just for a minute on the approach we're taking to going underground and why it's so efficient from a capital perspective. [inaudible]
Thanks.
Speaker Change: or Tunnage and OUTS profile for every sort of vertical meter we drop in the down through the underground, working as you have seen in the schematics.
Speaker Change: It allows us to access it from only two declines or other projects may need multiple declines to do that. We don't see value in putting in expensive infrastructure like a hoisting shaft or...
Speaker Change: and other conveying systems and things like that because our model is and our plan is simple. We have to get the equipment underground, the mobile equipment underground and that's the same.
Speaker Change: to get our equipment and personnel down will be the same means by which we bring all the
Speaker Change: That's really why we keep this thing at a low capital base and we develop as we need it.
Speaker Change: We will develop the mind progressively rather than having to do a significant amount of development just to start the mind and what that means we get into production walk faster as well.
Thank you. Thank you.
Speaker Change: So it's got the sensitivities, you know, the purpose of this slide and Michael spent a lot of time in this. This is in the press release. It does show a great leverage to the gold price if you keep your costs profile low.
Speaker Change: You will have leverage to gold price. And as I said, there is upside, you can play with this a little bit by lowering your cut off grades, bringing in more mining rates. But if you lower your cut off grades, as I mentioned.
Speaker Change: You have higher costs, but you have to balance that with actual sheer cash flow. So if you were to do that, do I actually create more sheer cash flow and even day off that even though it would be low-merge? And that's the equation that you look at in these mining studies and in your mind playing. [inaudible]
Speaker Change: And perhaps just to state the obvious, the upside case of $3,000 an ounce, we're currently running at about $300 an ounce above that today, so...
Um.
onward and upward from here.
Speaker Change: Yes, so with regards to the updated resource statement as a result of looking at economics, the key here is there's much different classification between 2020 resource statement.
Speaker Change: and the 2025 Resource Statement. 2020 would be on an unconstrained basis, which means you do not have to put economic pits or economic underground working around your resources.
Speaker Change: The 2025 Resource Statement and New Rules require you to put-
Speaker Change: Economic Workings in Open Pit, as well as underground workings around your resource and applying costs to ourselves.
Speaker Change: to ensure that their economic ounces. And so what we've done is we've done a bridge between 2025, Emery and the 2020.
Emery, and put it there, and part of it is…
Speaker Change: We come down to a 3-450 level in the 2020, there was resources down below that [inaudible]
Speaker Change: In any mining area, you would have what you call a hanging wall and a football outside of the main zone. Those would be off to the side and harder to get to.
and would you go underground? [inaudible]
Speaker Change: Mergers is going above ground. We're always picking, we have a higher cutoff rate versus an open paper source, so our reviewers have...
Speaker Change: A cutoff grade for the open pit, and then as a higher cutoff grade for the underground to make sure that it is.
Speaker Change: and then it is profitable. And as I mentioned before, there are artisanal workings.
and Tembo B-Won to peripheries.
Speaker Change: of the deposits we have included those this time as well. So where we get to is a much higher greater deposit and a much more profitable deposit than we had before even though the share number is lower.
Speaker Change: Well, let me see, just to reiterate, and the risk of being repetitive, just saying it again here, you know, the focus when you talk about things like cut off grade, when you talk about things like fifth design and scheduling and sequencing, when you talk about underground development, and how you expect to access that ore body, our focus was on economics and maximizing NPV and pre-cash flow. So, economics was the basis for this study, and we were very happy to see the end result. Yeah. Yeah.
Speaker Change: So as I mentioned, we will need to get back into putting more drill bits in the ground around the blue sky potential so we can make those economics even further better.
Speaker Change: On the focus, we'll be on Anfield, Anstamford Bridge as we go forward. We'll also do a field physics survey to see if we have any potential higher grade trends that we haven't identified around the property as well as we get into the second half of the calendar, Yeager.
Thank you.
Speaker Change: and Rich and in our resource statement. I think we brought in around 40,000 ounces in the current category around five grams of tons. Obviously, we need to continue to drill this out and infill that drill program. So as we infill it, get it deeper down and infill a little long trend that gives a higher level confidence to go mind this stuff in between and that will be a focus as well going forward.
Speaker Change: Where's our shoe? Tantanilla, we always got to mention Tantanilla, we got to go off on the line here today.
Speaker Change: Look, we can certainly be a good jurisdiction. I must say, over time, and everybody has been a lot of questions about government, now government's acting.
Speaker Change: We get more and more comfortable with how to manage the government, what they're going to do, what the motives are behind it, and how to work with them and be fair and open and transparent.
Over time to blatant myself.
Speaker Change: and to manage that. We get things done there. So that's one of the things we're on, the National Power Great, great, good electricity, Julie's near is up and running, the tightrope, we get our goals.
Elf,
Speaker Change: You know, there's a large mining presence in the intensity of the American Anglo, lots of employees can come from there and good employee skill sets.
Speaker Change: Lots of money has gone into the M.A. side, mine's continually expand, I believe, and I just got over my LinkedIn feed, they might have 10% target, certainly gold prices will help to get there just organically, but...
Speaker Change: But I think they may have met that and the administer is totalling that today and we're able to bring things in and get the assets moving forward to Craig's eyes.
Speaker Change: I would encourage a share price. Yeah, markets are continually being tough.
Speaker Change: We have seen a pop in the last couple of weeks.
I'm hopeful.
Speaker Change: That now that this study is into the market, people are able to more readily see a road map to value creation versus what we presented before. And now we'll help underpin the share price and bring in some new investors into the stock as we continually execute on a road map and a business map.
Thank you.
Thank you.
So I'll give you a better highlight.
Speaker Change: Again, we've done this before. We'll continue to grow. Keep an eye on them.
Speaker Change: We have that track record of doing things on time on budget. We now have an over-arching guideline. I call it a P.A. guideline. It's not the actual business plan but it's a guideline of what we can do with the current.
Current Resortes, it will change...
Speaker Change: As we get more and more information, but we at least have a road back there. We're comfortable operating in Tanzania and dealing with the various day-to-day issues there. And as you are getting the sense, we have very experienced team here and good leadership to be able to continually execute as we go along.
and I am going to stop there for questions.
Thank you. Bye.
Speaker Change: Thank you, Stephen. As a reminder to everyone, if you wish to ask a question, please click the Q&A icon on the left hand side of your screen.
Speaker Change: If you are going to ask your question verbally, you may see a prompt on screen. If you do, you should click the continue button to confirm that you are ready to have your line opened.
Speaker Change: Analysts to have dialed in over the phone into the conference call. Please press star then want on your telephone keypad to join the question.
We will now pause momentarily as participants join the queue.
Speaker Change: And today's first question comes from Mike Niehuser with Roth Capitol, please proceed.
Mr. Niehuser, really?
Speaker Change: Good, thank you. Can you hear me okay? Here's just fine
Speaker Change: Yeah, good to see Collife as well, so you can smile, Collife.
Speaker Change: and the world you are facing with high capital costs and really as you say a lot of assumptions compared to now having cash flow and real data.
Speaker Change: is really something that, you know, needs to be kind of layered over your presentation because it really, again it's a compliment to what you've accomplished.
Speaker Change: and of course, you know, higher gold rice doesn't hurt too, so lots to take in with this, the last couple press releases. Could you just do me a favor and put up the Anfield slide again? Is that something you can do?
Yeah, absolutely.
Thank you. Have a good one. Bye.
Speaker Change: And I have a question about that. Is there any open bit potential there?
Speaker Change: Yes. Yeah, absolutely. That does come to surface. And it's quite shallow. So when you go through our, our, our, our holes, our mic, I don't have it in this presentation, but it certainly is, is shallow and continues to come out.
and how soon will the PEA be out be foiled?
Speaker Change: It has been filed within 45 days, we're hopeful to get it done before that [inaudible]
Speaker Change: Okay, very good then. Really no questions, but really quite a remarkable milestone coming from where you were a couple of years ago and congratulations.
Thank you, Mike, and thank you very much for your support.
Speaker Change: And the next question today comes from Jake Sakelski with Alliance Global Partners. Please proceed.
Okay, you guys, thanks for taking my questions.
Morning, Gabe. Morning, Jake.
Speaker Change: So just looking at the 89 million growth caps right over that four-year period.
Speaker Change: Is this timeline assuming a self-sounding strategy? I guess when I'm getting it, is there an opportunity to accelerate the timeline for the expansion? If you explore external funding options?
Yes.
Speaker Change: The answer to that is, yes, there's a timeline to put that and I see Richard smiling at me when I say that but there are sequence items there too so it's a balance is what I would say you can't accelerate it but you would increase the risk profile and so there's a balance between the two to be quite honest some of it has already started. [inaudible]
Speaker Change: Okay, that's helpful. And then just on permitting, is the underground included in the existing specialized? Are there some additional permitting items that need to be done to go underground
Speaker Change: Yeah, special minding my just does cover underground, whether it's going to be, you know, what I'll call a
Speaker Change: Well, wait for the bigger study to come out in the next 45 days, but it's the same as the open pit operation, you have special mind and mind, so you go mind and we still need to get tailings perfect.
Speaker Change: Got it, got it. That's all for me, I'll hop back in and say congrats on your study.
Thank you.
Stephen Reeser: And today's next question comes from Stephen Reaser with Family Office, please proceed.
Speaker Change: Oh, hi everybody. Firstly, thanks. Can you all hear me? Okay Thank you.
Yeah.
Thank you. Okay.
Speaker Change: Good morning. Thanks and yeah, I echo the comments of many of the analysts. These are very exciting.
Speaker Change: Result, Stephen at the PEA level, and certainly very much appreciated by the investor community.
Speaker Change: I wanted to get your view on a couple of items. First, actually probably a little more tactical. You've used to 5% NPV in the results and wanted to get your viewers to why that normally, you know, personally, have modeled this hit around at 10% cost of capital.
Speaker Change: Thinking about the actual cost of the equity and normal capital asset pricing models.
Speaker Change: So we're now more in the range of 30 year key bill is the discount rate.
It's a lower risk for discounting [inaudible]
Speaker Change: And that could be okay, that was done in the time of the 23101 B as well, but just going to get your view on the use of that discount rate.
Speaker Change: Yeah, so, look, when you're doing mining variations and they've got lots of experience doing this, it's you typically use for all mining assets, say, if I percent
Discount rate. Now the analyst will tell you that.
Speaker Change: It's because Gold is kind of a special sort of commodity that you know should get that type of discount rate. Where do you adjust Steve from asset to asset is in your price to net asset value multiple?
Speaker Change: So, what would end up happening is, and we see this in the market.
Speaker Change: Assets that are in North America, trade at a higher price than that asset value, multiple than African assets.
and you would also notice that. [inaudible]
The price and that asset value for a company.
Speaker Change: for multiple assets is usually a lot higher than the price and asset value for a single asset company. So you use your 5% discount rate from a comparability perspective and then you adjust your valuation through your price and that asset value multiple.
Speaker Change: 0.25% to 10%, you can do it that way, or you can do it on a price-to-net asset value multiple
Speaker Change: Okay, that makes sense. The other element you hinted on is that the effort could be so financing. I know in your forecast for the price of gold
Speaker Change: You've used in year one I believe around 2700 just a little over it then drops down by year three to 2500.
Speaker Change: So if Gold was at those prices, which are significantly less, of course, on the price today,
Speaker Change: Would you actually be able to self-finance? Is your 89 million estimate consistent with that step down in gold prices and ability to self-finance there?
Speaker Change: So based on the financial model that was developed and it's in the press release, you'll see that we stack chart, want to have the gold prices that are base case, and want to have $3,000 per ounce case, until I tighter obviously at the base case.
Speaker Change: But still theoretical and IRRs and stuff like that are based on big case, so you have to keep a mind to that.
Speaker Change: The things case is based on what we have to report from a markets perspective and that's more regulatory.
Speaker Change: Dragon. And so, you know, you have to go with consensus pricing and analyst take time to update their consensus pricing. So that first four years is based on what we have to from a regulatory perspective report.
Speaker Change: Okay, so based on the step down in prices in the base case, is it fair to assume?
Speaker Change: that TRX could finance that those prices used in the, the step down and the prices used in the model for the price of gold, that that would be still a region of self-financing for the $89 million, or would it be different?
Speaker Change: Yeah, so the way you phrased it in a region and potential, yeah, the financial model has developed said it's potentially possible, yes, assuming that you've executed based on the plan that's been put in front of you and you have no wakeups.
Speaker Change: Craig Ford, you could also like you could play with it, you could delay it and bleed it in a little bit more over time.
Speaker Change: And so that is one thing that we always look at is how do you create higher shareholder value although we've done in this land this way Steve does far Unfortunately to share prices behind even though we haven't meant to the market almost 40 years now it's
Speaker Change: Yeah, but certainly the fundamentals, I think, is one of the analysts mentioned continue to come through and hopefully the share price will catch up and do course.
Speaker Change: I also wanted to ask, Stephen, you talked earlier in the presentation.
about the expansion to 3,000 ounces. Heiko Ihle, Heiko Ihle,
First, and then, Will. Hello.
Speaker Change: Let's call it somewhat, you know, these phases can be staggered.
but somewhat the move to expand the plan first.
then to continue the move or transition from the...
Speaker Change: surface drilling to the deeper drilling thereafter. You know, if one looks out over the next 36 months and also very encouraged to hear that some of this is already started in your commentary, you know, are there key operational milestones. [inaudible]
Speaker Change: And I don't want to say looking at quarter by quarter, but looking at on a time temporal basis.
Speaker Change: that investors should be looking for to see the things they're moving according to that overarching plan. So, just trying to get a little more detail on what might be some of the sub-miles stones to be looking for.
Speaker Change: You know, it's a real time conversation, so some of the milestones and Richard's needs deep into this is
Speaker Change: Okay, we want to get throughput even incrementally higher, because that creates more gold obviously, in order to do that, one of the things is...
Speaker Change: There are certain what are called normal meetings, cat-bex items that are going into the plant to help there and perhaps on the crushing circuit as well and the intern but the biggest things are getting that.
Speaker Change: Votation, and regrined plant up and running. There's also a way they need to have...
a thickener on the front.
So currently you want the impediments too.
Speaker Change: Higher Headgrade is we do need to mix oxide materials to the float carbon from the viscosity perspective, I'm getting really into metallurgy now.
Speaker Change: And once we put the photoshoot plant in, sorry, the thickener plant on the front end, that will help alleviate, that would put 100% high-grade salt points through the plant at that point. So those are a couple of the milestones which recurrently, and that's all in the cat-backs which recurrently...
Costing out as well as the Illusion Plant as well. So we're going to go to...
Speaker Change: What we hear from me is there's not one specific item. It's going to be several items over time to get to an end goal. So right now Richard's focus on thickener and illusion and then we'll focus on floatation and rewrite.
Speaker Change: Ultimately, we'll increase the overall capacity of the plant once those other flows or flow sheet aspects are taken care of and at that stage we'll be mining underground and feeding a combination of open titan underground seeds.
Richard: And it was fully anticipated to Steve that the not throughput should be able to go up just by putting a vocation and regrowing down. So even without this idea of front, the amount of increase you up, we haven't asked for me today yet.
Speaker Change: But that's part of some of the work that we're doing, as we continually focus on recovery rates and mental energy work that's currently ongoing, and it's always ongoing.
Okay, and you know, again, the
Speaker Change: The operation continues to show greater and greater potential as you all proceed, which is very interesting to see here. In terms of this company being acquired, I know you've spoken about this in past.
Speaker Change: Ernan's releases and other conference calls like the HEM, Stephen. This clearly is a PEA. So, you know, a major that would look at the company would probably be more cautiously optimistic here. It's not necessarily a feasibility study.
Speaker Change: In terms of ultimately someone looking to acquire TRX and how they might view the situation,
Speaker Change: In your personal viewer, they're going to be looking for more credibility and actually showing elements of the plant move up, showing additional exploration before a major would start to become interested. In other words, are there some additional triggers. There are some triggers.
Speaker Change: and I'm thinking about what ultimately boosts the stock price and a variety of ...
Speaker Change: or Andrews. Are there other triggers that probably still need to be seen before we get to that window? Yeah, so I'm going to reflect on other companies and first I address the feasibility study versus a PEA.
Speaker Change: And a lot of companies that went through that feasibility study stage have had hiccups afterwards because it's not real data [inaudible]
Speaker Change: So they don't understand recovery rates, they don't understand mining, they don't understand the nature of deposit, different zones of deposit, and operate costs are all still theoretical, even though they're pulled back.
Speaker Change: Where's our V.A. has all actual data. So I would say that-
Speaker Change: I wouldn't say our PE ain't not gonna hold up versus the feasibility study because, you know, the-
This is data that we have behind this actual.
Speaker Change: If you look at where value creation really comes off, I will go down to the company.
Speaker Change: And we have looked at other companies and why we've taken this approach, it's first.
Speaker Change: You need to put in the art of possible. Based on what you have, the PEA does that and provides basis for that and as I said, it's independent, it's not developed by us, it's developed by an independent party in P&E and all their QPs that are around it as well as our independent QPs with our support.
then I think you do need to show growth.
Speaker Change: So the drill bit is important to that and adding to what I'll call the art to possible over time through the success of the exploration drill bit. All those are required to drive value, you drive value, you drive interest.
Speaker Change: Okay, great. Well, I appreciate that you all and Stephen, you've taken time to answer the questions is clearly an impressive PEA and we really complement TRX and the management team for bringing us to this point.
Speaker Change: You know, thank you for that. And as I mentioned to a lot of people, it's, look, the focus, I know it.
Speaker Change: You can get ground down in the day-to-day quarterly results as you build it up, but there's been a lot of learnings over the period of time on this particular asset, in order to get to this point and we need to reorient people's focus too.
Speaker Change: The potential of the property and the growth potential of the buy creation potential of the property, as opposed to getting bogged down to much in smaller production quarterly results at this point in time. We need to continually grow those quarterly results. [inaudible]
Thank you. Thank you.
Speaker Change: And the next question is a reprom from Mike Niehuser with Roth's Capitol, please proceed.
Speaker Change: Yeah, probably just answered the question, but maybe a chance for Richard to chime in, another in addition to a capital cost being managed.
Speaker Change: The way you have one of the concerns that I had early on with the recoveries of gold from sulfide ores, and you know that really doesn't seem to be a problem in you know what you've experienced, you know as you say as you gain the knowledge.
Speaker Change: It's a matter of grinding, flotation, and there's really nothing especially difficult about metallurgy here. It's just about optimizing. Is that a correct view, Richard?
Richard: I think so, Mike. It's not a refractory or so. It's your fairly standard...
Sulfine, Pyrrhyne, Associated, Fine Grane, Fine Grane.
Richard: Association, and what you've got to do is get the grind down. So you can get the tie and I didn't. So, you know, we're not, um...
Richard: We're not overly concerned about solidation or anything like that, but we don't have that.
Richard: Problem to worry about that other minds do. So, no, we've seen the same sort of things that you've seen, all these elements.
Barrett Bullion, Holy Buswagi, had it the last time.
and then you'll open the thing up for greater coverage.
Speaker Change: That was a very good answer. I'm glad I asked the question. And I guess, lastly, Stephen, probably can't respond on this, but any talk about the government with regards to the joint venture share.
Speaker Change: So I look at an update on that in class on the line as well. We've been in front of the government negotiating team. Continue to be in front of the government negotiating team and deal with the ministries. They are going through an election cycle, so any time you deal with governments it's government.
Speaker Change: It's not as quick as a lot of you can make a decision.
Public, or maybe later in the year, then. Thank you.
You're welcome
Speaker Change: We have one question here for Richard too, my kind of Q&A. Yeah, Richard, in the text, Neil Biglow was text in and asked the question, do you refer to the underground mind plant using a decline ramp from surface?
Speaker Change: If so, can underground lighting be done with one production ramp from both that south and the north zones and can underground production follow right at the end of the open pit production?
Speaker Change: Thanks for the question. We have two declines planned. The strike length of your body is about 950 meters and then there's some outliers beyond that as well. So we're looking at a total strike length of around 1200 meters and that's a very difficult
Strickling to achieve to access of a single decline system.
Speaker Change: So we've looked at options of up to three or four declines and we're very comfortable with two.
Speaker Change: and from those two, we will be able to access Stanford Bridge. In terms of timing of access, we intend to...
Speaker Change: Access both declines whilst the open pit is in operation and will still have at least two years to go once we're up and developing those declines.
Speaker Change: One of the declines comes off a level within the pit, a broad area that's suitable for us to access and another one comes from the service.
Speaker Change: There is a small decline coming off the Ethan Porphyry Open Tip at the end of that project life that will come in much later in the in the mine life and there's very little point in opening that one up in the earlier.
Okay, thank you for the answer. Thank you, Richard.
But that's a hit for the questions.
Chris, are there any more questions in the queue please?
Speaker Change: No sir, no further verbal questions at this time.
Speaker Change: Well, Anna, thank you everybody for joining this morning, and I really appreciate it. Thanks for for staying up late in Perth, Australia. Thanks, Carlisle.
Speaker Change: for joining us from Dara Sutherland. And look at it, it's very exciting. It's taken a while to get here.
Speaker Change: But we're getting there and stay tuned in. Any Shareholders have any questions? Please reach up to any of us any time. And as they would say in Tanzania, thank you very much, or I'll start this channel.
Speaker Change: Have a good one. Have a good one. Have a good one.
Speaker Change: Thank you. This brings to a close today's meeting. You may now disconnect. Thank you for participating and have a pleasant day.
Heiko Ihle
No longer being recorded
and many more. Thank you. Thank you.