Q4 2025 TRX Gold Corp Earnings Call
Welcome to the TRX Gold Corporation, fourth quarter, 2025 results, presentation as a reminder, all participants are in a listen-only mode and the meeting is being recorded.
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Analysts who have dialed into the conference call. May press star then 1 on your telephone keypad to join the question queue. I would now like to turn the conference over to Mr. Stephen Maloney CEO, please. Go ahead sir.
Yeah, thank you very much and now, welcome everybody to the call this morning. Um, joining me. The today is our CFO Mike Leonard
Mike.
and,
Morning everybody.
Excellent. So today, um, we're going to go over our 2025 results. Um, 2025 was a very transformative year for the company, a couple of the key highlights, uh, from my perspective are the discovery of Stanford Bridge earlier in the year, um, having our best drill hole results ever on that part of the property. Then also the release of our preliminary economic assessment in April of this year, which laid out a blueprint for production growth and expansion at Buck Reef over the next, uh, 18 years of mine life. And, and that was great because that's just on the buck brief main Zone and doesn't take into account the other, um, potential expiration targets that we have. And then we went through a, a very big, stripping campaign.
Um, to reset the, the mine plan, and then that enable us to have record results in our fourth quarter, which have continued into the first quarter and really set us up. Well, and started to recapitalize the balance sheet and working capital, uh, in in our operations. So, a lot of really good things have happened in, uh, in 2025, we're in a really good position. We're feeling, really confident and we're looking forward to a very successful 2026, kloepfer sheet, our uh, VP Tanzania has joined us as well cough.
Right. Excellent. So he's, uh, joining us from Daryl salon. And so in today's presentation, uh, the team here will present a lot of the information. We're going to go over our financial results for 2025 as well as, um, go through our forecasts and what we plan to accomplish in 2026. I hope to get a lot of questions. I'd like to leave a lot of time for Q&A, um, as per other calls, we will answer, you know, almost all questions. I, I don't think we shy away from questions, but to give people who aren't as familiar with TRX and the buck grief goal project of just a little bit of an overview of of our company.
Um, we're based in Tanzania, we're operating the buck brief gold project under 55.45% JB. I'll get into government relations later on in the presentation, the property has over 1 and a half million ounces at 2 and a half grams a ton. Um, it is a very low cost operation. We've done 3 meal expansions in the last 3 years, we're undertaking another Mill expansion as we speak, and we're listed on the T TSX under TRX, and the New York Stock Exchange. American under the stick ticker symbol TRX as well. And we're looking forward to um continue to expand our operations to 2026 as well as our first jewelry Google land on site. I think this week, um, that's all
Owner owned um, and start the expiration program again after doing a Geo physics study, which is coming to completion.
So with that. Anything else? Uh, Mike, Richard Clough to add to just an overview before? Mike gets into the next slide and financial um results.
No, I think that was a good, good ovary. Uh, overview. And a good summary from from my side. Stephen. Thank you. Excellent. Thank you. So, Mike, I'm gonna hand it over to you, um, to go through
The key highlights of the fourth quarter.
Okay, very good. Thank you, Stephen. Good morning, everyone. Thanks for for joining us. As always, uh, Q4, uh,
Campaign that we'd uh, we'd uh, taken the market through in the early part of the year. Um, we benefited from uh, access uh,
To high-grade ore blocks, uh, in in the Q4 and consequently had had record production and sales for the quarter. Uh, we produced over 6,400 oz of Gold sold almost 7,000, oz of gold. Um, and and of course, that was a big increase, uh, quarter over quarter of a quarter again as we got through that to that strip campaign.
Um and and you know the the high grade or blocks that were accessing. After that stage 1 strip uh are continuing into q1 and and we touched on that and our last press release. We've had some record pores of over a thousand ounces into q1 of this year. So uh, that production trend has has continued and expected to continue over the course of this year. Uh, of course, we're going to record gold price environment at at at the moment we we realized uh,
Our record, uh, gold price of 3363 and in Q4, uh, but of course, they're selling gold at over 4,200. Uh, now so continue to benefit from those record gold prices. But, you know, you a couple uh, record Q4 production with record gold prices and inevitably, you end up with record Revenue. Um, records gross, profit record, debt income record operating cash flow and and and record, uh, adjusted e but uh, across the board. So really, really strong Q4 results. Uh, importantly, we we took a lot of that free cash flow that we're, we're generating now and uh, recapitalize their balance sheet as Stephen touched on earlier in the year when we were doing that stage 1 strict.
Campaign we leaned on, um, our vendors to help, uh, uh, remove. A lot of that overburden, and, and and ways to get to those higher grade or blocks. Um, and, and um, consequently working capital had had been negative in the early part of the year. We, we've since overturned that working capital is positive. Now accounts payable is back within UH, 60 odd odd days on on average, we increased our cash position uh quarter over quarter uh, by by Annette. 1.2 million dollars have about 8 million dollars on our, our balance sheet and then repaid all over our, our borrower, really in the year. So the balance sheet was was, was set up, really, really well. Uh, certainly heading into 2026. We'll talk about guidance in a moment, but in addition to recycling, the working capital position, we we continue to invest in things, like mining infrastructure and development, and, you know, Richard's better suited to talk to this but we we effectively built up a very very robust uh stockpile.
In front of Mine stock.
At, at the end of the year, we had about 15,000 Oz on that stockpile and it continues to grow or over 20,000 oz of gold on that stockpile today. Uh, what that allows us to do is is maintained things like continuous mil feed as well as um, supporting blending strategies as we head into into next year, just to again, maintain consistent steady production. So, uh, continue to invest in the business that way. And and of course, Stephen touched on the Pea uh and and some of the projects that were undertaken to enhance and expand our our our, our plant and Mill. Uh we have made down payments and things like thickeners. Um and ADR
Our Gold Room that we're we're improving and enhancing, uh, as well as things like additional oxygenation into the mill, all of which, as we've guided we expect to to benefit things like uh throughput and Recovery over the course of this year. So again, record record Q4 and and Stephen and what I might ask you to do is is flip to the next slide, and we'll just quickly touch on some of the full year highlights as well.
There we go.
So, you know, we talked about Q4 being by far our strongest year, uh, a quarter of the year after having got through this trip campaign. But but nevertheless, 2025 was was a recorded formational year, um, for the company, on, on, on the whole. Um, you know, we we produced just under 19,000 oz. So effectively in line with the
Here. But, but again, those record gold prices on a full year basis. Over $3,000 an ounce. Um, it benefited the the financials, uh, significantly. We did almost 60 million dollars of Revenue. Our gross profit was just under 25 million dollars. Uh, and again, I should touch on on gross profit quickly. Um, we did, uh, 53% gross profit in Q4. So as Stephen touched on it's a it's a low-cost high margin operation and that these gold price levels. You know, the margin and the free cash were were developing. Is is uh, is is certainly benefiting the financials uh,
Immensely, um, ibida for uh for the year was was 22 million but Q4 alone was more than half of that. So again, if you, if you take the, the production profile that you saw in Q4 and the 000 plus gold prices that you're seeing today and extrapolate that into 2026, you get a sense for what the financials might look like heading into into next year.
Um Stephen touched on things like owner managed, uh drilling. Uh we also have a an owner managed Fleet that's supporting our our contract mining Fleet. So things like Mining cost per ton are coming down as well. So you expect to see that growth profit and that gross margin continue to expand over over the course of next year.
Uh, we did press release earlier this year that uh we um are building out a larger processing facility than what we had originally envisaged with the, with the Pea. Uh the Pea contemplated to 3,000 ton a day processing plant expanded from our our current 2010 ton of Day plant. Uh, we're now in visiting uh 3,000 tons a day sulfide circuit.
Plus a thousand a day, uh, we'll call it oxide transition circuit that amongst other things will help us reprocess tailings. Um, we expect the fund that through through cash flow and are making progress on on that and and expect to update the market on our our progress over the course of this year, on that expansion. Uh, but again are making progress on some of those meal optimization initiatives like thickeners and oxygenation and ADR plants as as we go.
Finally, um, we did put out uh, uh, uh.
Production and cost outlook for 2026. We expect gold production to be between 25 and 30,000 oz of gold, uh, for for next year, at a, at a cash cost.
Of between 14 and 1600 an ounce.
Um, our our capex.
We expect to be between 15 and 20 million dollars primarily focused on things like the plant upgrades and expansions, as well as life of mine tailings facilities that were, uh, were developing concurrently um, you know, if and when we develop additional free cash flow at higher gold prices, for example, we may look to expand that.
But we'll certainly update the market as we progress over the course of the year and I'll say a final Point here around exploration, we have um, uh, plans to put the drill bit back into the ground. We did just complete a Geo physics study or in the process of completing 1 to identify additional drill targets. Um, but the focus is really going to be around the the main Zone as well as exploration Drilling and Stafford, bridge in Eastern porrey, and expect to have steady, uh, consistent. Uh, news flow on those assays as and when they come in over the course of this year. So, uh, very, very strong record transformational year for 2025. And, uh, if you look at 2026 Outlook, coupled with the higher gold prices, uh, expect results to be very strong heading into next year as well.
Steen back to you. Yeah, no, thank you. Mike for for that and, uh, I'm just going to, you know, just do a little bit of Q&A with you and Richard here. Uh, just to bring in a few other points. Richard, why don't you give the shareholders an update? Uh, where we are in the process of that expansion? I know the thickener has been put onto a boat, um, as of this week and, and how you would see that being laid out,
The rest of the remainder of the year.
Um,
sure, Stephen, thanks, hi again, everybody. Um, the the expansion, uh, processes is well underway. We've got a full team, uh, an owners team managing the the the full process from procurement through to installation and commissioning, um, uh, the first, uh, part of the, uh, expansion process and and the, the upgrade will be, as Steven mentioned, um, a thickener, uh, coming to, uh, that we can add to, um, to the Circuit before the lease circuit that enables us to, uh, improve the density, the residents time, and, uh,
Technically the grade, uh, because we'll be putting less of our oxide material through the, through the plant. Um,
So, that should have a pretty immediate effect, uh, properly starting at the end of this. Uh, second quarter. Um, we also have some, uh, additional oxygenation equipment coming in at the moment. We're feeding, uh, the plant, uh, hydrogen peroxide to improve the recovery. Uh, we're expecting a recovery gain and, uh, cost reduction by introducing some, uh, some oxidation. Uh, technology. It's a, it's a, a jetting system that, uh, is called the mark and react.
And uh, should, um, certainly helped us with our our more difficult was. Um,
The next, uh, item to come along will be an improved uh, absorb absorption, uh, dorion and Recovery plant. Uh, our current 1 is for agricultural. So as we get to much larger gold production, we'll need a much better system, and this is a a very hands-off, um,
Uh, process control system. Uh, we're very much looking forward to being able to install that uh, towards the end of this uh Financial year
Location, the fine grinding is complete and we're just reviewing the last of the data there. Uh, we're out to Tender on, uh, on those items and also, uh, by January, we'll be out of tender on a, uh, a sag Mill. So we'll put the SAG in the ball mill into uh, into a parallel system.
And that'll that'll allow us to bump up the production to somewhere between 3,000 and 3,500 tons a day, um, uh, of fresh material.
so we don't expect that until uh, FY 27, but certainly in the first half of Phi 27, we would like to, uh, have
Our full expanded plant up and running.
Excellent. Well, thank you, Richard. That's, uh, that's a good update. I'm going to switch to the to the next slide here. Now, 1 of the things, uh, that might did mention is
Um, you know, production was predominantly the same as it was in 2024 and by throughput Will did increase. So at a difference is is in the grade profile and 2024 and 2025. And as we mentioned we're now into a much better grade profile. After the stripping campaign, we went from the north back down to the South where the much better grades are and we anticipate better grades as we go forward, um, which means a lead to an increase in, uh, role production. As Richard has mentioned the oxygenation
To even using hydrogen peroxide, we have seen lately a decent increase in recovery rates in the operations. Um, coming from the low 70s into where I say. Richard now about low 80s, roughly, um, even just using hydrogen peroxide.
Uh, well, it's not just hydrogen peroxide. Yeah, we've worked on our grindability and, uh, and all reagent addition. But we've had a, a significant increase in recovery from quarter 3 when we were in the high 60s. And now we're into the low 80s. So that's been a very good, uh, few months.
So as you as you can see the, the throughput of the plant last year did increase, and it will increase again uh, increase again. This year. Um, Richard and the team have had quite a good maintenance program, put in the place which is helping our availability. Um, as Mike mentioned, wreck capitalizing, the balance sheet has meant bringing in a lot more spares and a lot more, um, that on the maintenance side. So that's to limiting our downside on the crushing and grinding circuit as well. So, all things are moving in a, in a positive direction, I'm going to ask
No, uh I'm jumping ahead of myself here. Um, this is just a summary of the uh, of both the revenues and the adjusted ebta of the company. A couple things I'd like to point out in this slide from 2025, is we have an issued equity in the market. So, now we go back 4 or 5 years ago to our original capital raises. Their now, has been a 67 million dollar investment from a 2000 race.
Um, into this asset that will continue to increase and go up as we continue to create more and more cash flow, um, from this asset and have that plan in place, I'll get into the Pei slides and in a few minutes. Um, so that's important. Also, we continue to hold the line on cash CNA and that's very important as well. So we hold that line, um, versus, um, other Miners and and we run a pretty tight, uh, management team, um, in order to hold that, uh, GNA expenditures where they are right now,
That may change in the future as we grow. But right now the we've held the line in 2025
With regards to, why are we very confident in in 2026? Like I mentioned grade profiles is a big part of it. Mining is a big part of that. I mean, 2025, Richard didn't really get into this, but there were a lot of improvements in mining, particularly around Drilling, and Blasting, um, you know, working with the contractor to make sure that they're hitting mining rates because of you,
Fall behind in mining, you're going to fall behind in your mind plan, you're going to find fall behind in the great profile that you have. Um, as Mike mentioned and Richard mentioned, the stock piles increasing. So what does that mean? That means that the grades coming from your pit are higher than what's on the stock pile.
Okay, sure. Stephen. Um, look for those people who are um not colorblind and interested in the colors. Uh, the warmer colors are the better grade. So anything with purple, um, and above is is exceptionally good grade, uh, that you don't normally find in an in an open pit mine. Um,
The blue is generally a waste material. Um, so you can see that uh in 2020.
5. We did a lot of uh, mining of blue to the, to the right hand side, which is the north. Um, and this coming year, we've still got a bit of that to go. Uh, we're going to be heading that again because there's some exceptional grades, uh, beneath that not not very well represented on this, uh, slide. But we do have a very good uniform consistent. Uh,
Area of all basically from the south all the way to about, 80 to 90%, through the strike length of the pit, uh, that should give us a nice consistent feed, uh, and we're hoping in the fourth quarter that to even, uh, get some of the probably that our best grades that we've seen um in the project coming out in the in that last quarter.
Thanks. Thanks, Richard for that.
So with regards to, I'm just going to summarize some of our investment themes from our corporate presentation. I'm going to go through these slides pretty quickly. Um, as, as been mentioned up front, and I'm going to reiterate, the company is, you know, generating strong free cash flow right now, that's being reinvested into the business. It is a scalable growth plan, um, with a significant increase in the tonnage, uh, as a result of the expansion. Remember, we've done this before, as Richard mentioned, as a full team in place, they know what they're doing. We've done this before, so we're very confident in doing it again. Which means the increase in scale, I see, Richard is just left to might have connection issues. Um, the increase in scale will reduce costs as well, from where they were in 2025. Um, there is also significant still significant Blue Sky potential. There will be a lot more focus on that in 2026 than there was in 2025. There's only so much Capital you have in 2025 we focused on the stripping and
Setting up the, the mine plan for the long term to enable significantly more expiration over time as a result of the pre-cast flow that has been generated. We could have did expiration but then we wouldn't get to the free cash flow that we're seeing today. If we did expiration last year and it would have been slower to get there as a result of the plant wouldn't have been expanded or and the pit wouldn't have been scripted. And you wouldn't have to get to the grades that create that
Cash flow.
With regards to Tanzania itself. Uh, give a little bit of an overview of Tanzania and kaf we'll get into a little bit of the, uh, the, the situation on the ground, um, in Tanzania as well. Uh, the big thing in Tanzania Beric and, uh, and angle go to Shante, continue to produce
You know, really good.
Gold production at their Assets in North, Mara bullying, Hulu. And Gaia gate is about 30 kilometers away from us. Uh, the big news in Tanzania is Perseus is putting 91 zaga into production. They're spending half billion dollars there.
Um, to put that into production or produce over 200,000 Oz. Ironically. And I like to say this, our pea has a higher Net Present Value and then that project
given the low cost at at Buck brief um it has lower production but it has such low cost that it has a significant Net Present Value relative to the other projects.
So you know we're not seeing too much from a labor perspective as of yet. Um from from the Percy is uh uh expansion. Um and our labor situation is is is really good.
uh, 1 of the things I'd like to talk about is, you know, the and and I've gotten a lot of questions around this uh, from shareholders so you're not going to
Preempt the question around a joint venture. Um as as Cheryl is are aware. We have a 5545 percenter with the state Mining Company, parasite, government entity in Tanzania.
That um, 45% interest is dilutable.
The.
Tanzanian government in I believe it's uh 2022 implemented, a a new law for 16% free carried interest in mining projects and requested that mining companies submit a timeline for um
The negotiation of the government to receive that interest.
In the buck grief mining projects other projects in Tanzania, do not have that sort of attribute. So for instance, I have here Percy is 91 Agra when they went for their mining permit.
Um, they negotiated that in under or Corp at the time.
The buck grief gold project has gone through.
Extensive what I'll say back and forth um with the government negotiating team we've dealt with stamina the government negotiating team, as well as others in Tanzania and is still a work. In progress, we expect that to pick up here in the uh in the New Year. Our goal is to switch.
The 45% dilutable to the 16% non dilutable, and be more Market with other mining projects in Tanzania, cut off anything to add, uh, to that from what I just added, and I know you're dealing with this on a daily basis on a daily basis. Yeah, no correct. I think that's, uh, that's exactly how it is. Um, uh, we we've, uh, initiated the process of, uh, negotiations with the government since 2024, so these discussions are ongoing, um, there have been somewhat, uh, delayed this, these recent months because of Elections, uh, but we've we expect that, uh, they will go back, um, fully, uh, by January from 2026. So, um, and I, I think that the, um, the
Probably the important thing is just to State uh, the uh, the new uh, framework uh arrangement with the um, proposed Financial models.
Um, which were absent in previous arrangements, and I think it's beneficial for parties to have greater transparency, um, between the investor and, and, and the government. Um, so it isn't about less, it's about, actually, um, being more transparent, uh, and having um, um, stability, um, in in these new agreements, which I think is usually important for for all of us. Um, yeah. So, basically, that's that's what it is that we look forward to. And I think that, um, the important thing also is, is the government is in, I believe the right Spirit, um, trying to promote, uh, and ensure that the investment comes into the country. So these are these sort of new agreements. The new framework has been geared up, uh, to increase investment into the country and attract investors.
Thanks for that Clough and and look that lines up with the release by the ministry of minerals. A a couple days ago with regards to you know, what they're doing with the uh US Embassy and it attempting to attract investment in the natural gas area, which is, you know, 40 billion dollars plus for for Tanzanian investment in in in the natural gas space, as well as Life Sounds um, kabang and nickel project.
And um, and there was a graphite project as well. That was a significant investment as well. So um, you know, the government is saying the right things and and looks to be moving in the right direction with regards to the capital investment and I encourage, anybody has any further questions, um, to ask those uh, towards the uh, the end of the presentation.
So I'm going to move on into the Pea, uh, right now. And as I mentioned, um, this slide will be put up on to our uh, our website, after this presentation in the corporate presentation, it it just details more detail. Coming out of the, um, out of the Pea. This is all in the Pea documents. As you can see. In year 1 it has 27,000 oz of production which is in line to the guidance that was provided um by Mike and and Richard and team of 25 to 30,000 ounces. And then it starts to ramp up thereafter. As we mentioned, in a prior release,
The company's plan is to have.
You know.
Larger than 3,000 tons a day capacity. Um, what that will ultimately get to will be determined as we get into, um, into that production profile. But certainly the older plant in the Thousand ton per day. As we mentioned, will still be there. Um, it's able to process sulfides as well but not at the same recovery rates unless you upgrade it to thickeners. And and
uh,
And and integrate in the flotation cells at the end to make sure you have enough.
Um, capacity in your high intensity, grinding them. So, but it could still in the current plant, um, process sulfides. Although I had a reduced recovery rate. Richard anything else to add to this? Um, this contemplates 3 years of open pit and the remainder Underground?
Also looking for opportunities, now, with some, uh, full, uh, geophysical surveys across the site. So if we can find additional resources, um, then we've got more opportunity. Um, and and and as you suggested, we, we'll have a, uh, a
Effectively redundant, uh, crushing, and, and Milling, Circuit of, at least a thousand ton of day that we can, we could Implement to other opportunities. So, um, yeah. It's a, it's a, it's, it's very useful.
Guideline that would like to we'd like to see us uh, improving on that uh on that profile.
Excellent. Stephen, I may just I may just add 1 comment there again, for folks new to the story. Again, if you go back 1 slide and and it'll just point to folks, to the uh, the ibida. Uh, figures that is generated. I think we've used 4 thousand dollars an ounce in the last slide. Um, but but it is a self-funding model. Again, the capex uh, that we we've envisioned. As part of the PA, would be fun to get a cash flow. And I I it's it's a bit of an eye chart here. But I think the uh the incremental Lia that you can see in what I believe is blue is is very very robust and um uh certainly funds the expansion through cash flow
Yeah, that that that's uh yeah. More more than sufficient cash flow to to expand our plans and uh and our operation
So those numbers contemplate cash costs that are here Mike um and I can tell you a year 1 guidelines we have in the in the Pea case um as well as year 2. So uh you know we we're hopeful to be able to approve on the on the cash costs that we're in this study.
so, so with regards to Richard, you mentioned
um,
Drilling and expiration be able to feed more to plant it and not everybody understands everybody understands when they see drill hole results and looking at good grades and things of that nature. But debuck property is a predominantly underexplored. Why don't you give shareholders a sense of how the team is blocking and tackling that starting with the Geo physics study, why you're doing the Geo physics study and then how it increases the probability of drill bits to go into the ground and and also
The the drill rigs that are coming to site 1's coming this week and then next 1's coming into New Year. Um, how that lowers our cost.
The drill.
Cool. Okay, fine. Um, first things first, so, our SML is quite an odd shape. Um, but it does have at least 7 mineral mineralized, uh, Trends on it and, and that's, you know, that's pretty good. Um, hunting ground for us. So, uh,
what we are doing with our geophysical program is initially to Define, uh,
Structures, uh, deep structures that, that would normally, uh, in this originated golden environment host. Uh, gold. Uh, and since we've discovered Stanford Bridge, we've obviously discovered that some of the orientations of these structures.
Where we were in we and previous owners of this project had previously been looking. So initially doing a um, a high detail surface. Um, magnetic survey, and we've completed that about 2 weeks ago. We're going through the interpretation for that, um, from that we'll get a new uh, interpretation of of the structural.
Makeup of our project. Um um that that'll be an interesting um uh review um speaking with the um geophysics geophysicist and Perth next week to have a look at that.
From that um we'll take those structures and we'll do what's called an induced polarization uh survey um with some technology that allows us to go very deep. Um,
and uh, so that IP survey will be along with structures that we identify
Um, and that will generally identify, uh, solak occurrences typically pyrite but then gold is also associated with the pyrite. So, uh, between those 2 surveys, we'll have some pretty good. Um, we, we expect to get some pretty good targets to drill. Um, so we'll be, we'll be testing along the extent of the Stanford Bridge. Um, but we'll also be looking at um, all of the other structures including anfield and some of those other uh red lines. You can see on the system on the uh on the SML there.
Quarter. Uh, We've purchased our own drill rigs, um, uh, Diamond Drill and and uh reverse circulation drills.
uh, we haven't had a lot of
Operational, success with our, um, uh, the drilling company we've used previously and we've got some very good people, so we're very comfortable, um, managing our own drilling operations. Um, if we see more success, drill drills aren't expensive and and the
our, uh, you know,
We'll do a considerably cheaper than the contractor and I expect with higher productivity as well.
So yeah, we're looking forward to a um, an era of um interesting.
Uh, expiration drilling coming up.
Yeah, so Richard, thanks for that, you know. It it wrapping that up, essentially, what we decided to do was due to Geo physics. Um, increased, the probability of targets figure out,
How many more targets are actually out in this property because Stanford Bridge, we discovered it by going through the pit. So now because it was under surface obviously
And we now want to make sure that if there's any other Stanford Bridges out there that we properly identify them, and then, Richard and team will go in and drill put in the initial, you know, drill holes into those areas to figure out if those areas have gold. So the first part is to identify the structures. The second part is to identify the structures of pirated sulfides increase the probability. The third part is to put the drill bit into the ground in those areas, along with Stanford bridge and anfield as well. So, we're quite excited for this, actually, because this is kind of the first time. This has really been done on this SML. Um, and it should uh, hopefully lead to a lot more gold resources uh, over time.
Yeah.
Where are we on comparable company analysis? I never in, in, in anybody's heard me speak, I never say we're undervalued. Um, I always say we need to get a better value.
And we need to operate towards getting that better value. We have started to move up the curve as we've and I've said this to a lot of people recycling, the balance sheet I think is 1 of the major focuses of that. Removing an overhang in the market as a result of recapitalization of the um, of the balance sheet. And that continues as I mentioned, in my note, in the last press release, I expect that to be done by the end of the second quarter, um, predominantly
Will be before that. Um, as Mike mentioned payable is now right size. So, when we did the striping campaign and the last expansions we did lean on our suppliers quite a bit, they worked with us. Um, thus working capital went upside down the finance it. Now that the the thing is, in higher production into the good gold grades working, capital to reversed, and is now into a positive situation. So, we just financed it differently. Instead of going to the market and issuing Equity is financed the what we've done. We've worked with our suppliers to help Finance it um and it's utilized cash flow from operations as well. Today, we have our liquidity designs all available to us. I think the the leases are up a little bit, given some of the equipment that we're bringing on board, but that's more long-term in nature and thus, a better matching into the long term liabilities with long-term assets.
We're not surprised by that. We, that's what we expected. And um, you know, I think as we continue to increase cash flow as well as um, have better working capital ratios potentially a new agreement with the government. I fully expect this trend, hopefully, to continue. Obviously, we do have some good gold prices. Um, gold is getting a lot more attention, all of those sort of factors, um, help as well. But fundamentally that doesn't change the way we're looking at. Continuity related to execute. We're at 2500 gold, we would be successful as well. I even, although it would be at a slower rate than eighty $4,000 gold
Um, but it certainly it. Um,
the business plan remains focused, I think.
We have more human capital, constraints to build out quicker and Logistics constraints than we do at this point in time, Capital constraints in in building out the asset.
So, with regards to um, the key investment highlights is we got a lot of strong growth sustained profitability.
We got a team here that has proven themselves. We've done this before we could do it again. Um, the Pea is is a guideline for business plan. Um we're executing a a upon that we have significant expiration potential. Gave everybody a sense of how we're blocking and tackling that or quite comfortable operating in East Africa. We know how to get things done there.
No, I think to get things done in Tanzania as well as Logistics from procuring equipment offshore and we have a very experienced leadership team to do that although it is a little bit of a skinny team. As I mentioned, the GNA is, uh, uh, you know, in line and probably lower than most other companies. So
And that with that, um, that's my closing remarks, uh, stay tuned. So I'd open the floor up the questions. And as I mentioned before, morning comfortable answering almost all questions. We are an open book.
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And the first question will come from hole with HC Wayne Wright. Please go ahead
Hi guys, thanks for taking my questions.
Hi. Hi call. How are you?
Not too bad. Looking forward to seeing some of you next week. Uh, you were talking about the, uh, drill wreck that's coming this week. Can you get a bit of collar on where you expect to focus Australia? You hinted at it a little bit earlier, how many meters you expect to see the time frame for drilling and maybe even a bit of background on the costs and changes to cost since I assumed the substantially cheaper than, you know, higher in someone that owns The Rake.
Yeah, yeah, Richard I'll hand that question over to you.
Only caught a bit of it but I don't think I caught enough. Yeah. Hi guys. Um, sorry I missed a just jumped off there for a second. Um, in terms of our drilling, um we've got a uh a reverse circulation drill that we intend to immediately start on the E support free pit for resource definition. Um, we'll be drilling that at at a, at a cost of about $25, a metre. Um, normal Contracting rates in Tanzania are about 50. Um, our Diamond Drill. Um,
Of the order of 4,000 meters a month or close to 50,000 meters a year. So there's lots to do um,
We'll also use that RC to assist us with the diamond by doing pre-color.
We'll bring the cost of the deeper deeper, expiration down as well. Uh, the diamond itself, um, should be starting in the third quarter and, uh, we're expecting, uh,
To to 2 and a half thousand meters a month. Um, at a cost of about $50, a metre. And again that's about half the cost of contractor mining.
Contracted drilling. Um, when
[Analyst]: You're at 2010 at the end.
[Analyst]: You're at 2010 at the end.
When when you say there might be a second rate, how long does it take to get something like that? Is that is that easy to do? Is there like, uh, you know, like importing it as the stuff? I have no idea. Yeah. And then Logistics Logistics is tough in Africa and especially in Tanzania. Look it's 4 to 5 months exercise to be perfectly honest. Um so yeah, we've got 1 1 drill arriving today or
it's it's morning now. So it should be arriving tomorrow Tanzania time and the next 1's on the water, probably in a couple of weeks and we'll probably be here in about. Um, let's say about 7 or 8 weeks.
So yeah I'd fair enough the 4 or 5 months yeah process to get another to get another 1 that that that's certainly available. There's no problem with availability.
Right. Uh, and then just playing big picture here for a second. I mean, obviously, 2025 was quite transformational students got like this question. Uh, you talked a bit about the Mind plan on, on this call and just in general, uh, you want to maybe just sum up the 3 catalytic company that you're most excited about for the next 12 months that are maybe underappreciated by people like me and buy the market as a whole.
Yeah, so I I'll get that from my perspective.
I think we've been decently conservative and, and it'll go over time. We've always been decently conservative. So I think, you know, there is upside potential on potentially, maybe on
On some of the financial results, gold prices, certainly heading in the right direction. So I think that is there. I I'm quite also confident on the, we will get a, hopefully, a new agreement with the government that kind of is, is more easily explained, um, and, and is more transparent and better for all parties, including the government. And that's another 1. I, I don't think there's been a lot of focus on that, um, obviously that can take time or it can speed up, its not all within our control.
The, um, and then look.
Nobody's ever gone around looking for structures around this property. And when you look at the landscape in around this property,
There's a lots of goals all over the place. You see, lots of activity on the artisul side. Um in around this area, which means there is gold.
And, you know, I think the geophysics study, as well as getting some drill bits initially into the ground, and some of these areas could be a great, great surprise here. And there's a reason why that thousand ton per day. Plant is going to stay there. Um, particularly if the surface materials, they'll go through a really good recovery rate. So, um, I think there's that potential for for that to happen. And, and obviously,
If all of that comes together, then you're going to update your study to get a higher nap. So
You can all be quite good.
yeah, I think the metal
sorry, it was just environment helps
Go ahead, go ahead.
no, I I all I was saying is the Metal pricing environment obviously helps
Oh yeah, it helps. Yeah exactly. But like I like I said look we are always going to be price takers. Um, yeah, as a gold miner and you have to have your business plan, you know, focus on your business plan.
Even considering lower potential prices um and and you want to be successful, even in that environment. So I think we're set up very, very well along all cold prices and I personally believe that they will go higher as well. Give them what's going on in the world and uh, and and potentially, you know, lowering your interest rates particularly in the United States, um, with the FED uncertainty coming in 2020 2026. So you know, I think uh gold prices will go higher over time. That's just my own personal opinion.
Sounds good. Thank you very much.
I want to like to turn the conference back over to Mr. Maloney, who would take us through questions? Submitted in writing, please go ahead. So I'm gonna just go and turn my head a little bit. So you see more on the side of my head, as I go look at this on another screen and uh, and go through the uh, the questions here. We got 5 or 6 questions so I'll I'll go through them. And the first question is,
What is the company's hedging strategy invented to finding gold prices next year? Congratulations on success. Thanks for your time.
So right now, we are uh, on hedged, um, on gold prices.
And um, I think we're going to continue to be on hedge to, uh, going into into next year. I think.
We're doing capex programs. We did do collars but no now the issue with collars is it limits the outside but it does protect you on on the downside. Mike has a pretty good pulse and to talk to Gold Traders on a daily basis and wear a gold, prices are going. But as I mentioned as well, we should be successful. Even if gold prices were to decline.
like anything that that
No, I I think you said it. Well, you know, Stephen earlier where you know the the the landscape is set up. Well, I think for gold prices to sustain if not grow from here. So the expectation is to remain unhedged but at the same time we've been very, very conservative on our budgeting. Um, so we've got lots and lots of, um, you know, sensitivity on the downside. If heaven forbid, it was to pull back. Uh, but at the same time at at these very lofty levels, um, the comment was going to make to AO was, you know, we we expect to generate a a perhaps more free cash flow than than than we'd included in our budget and and perhaps can deploy it further into things like drilling beyond what what Richard described. So lots and lots of sort of value or creative activities that we can pour that free cash flow into next year at these these prices, but in the meantime, expect to remain on hedged.
So next question is, is there any plan on TRX doing a stock buyback?
Good question. And that goes into valuation, and there will be another question here in a second on, on the credit, um, in the market that that is picked up. So, with regards to that, I can't make any promises on on BuyBacks. But it's certainly something that, um,
has started to enter into our, you know,
mindset is what I would say particularly if gold prices stay here and continue. Obviously that would mean taking cash from Tanzania into corporate and making sure that that's okay. Um, obviously we are negotiating with the government at the same time around JB agreement. So there's all kinds of things to consider when, uh, when that is being contemplated. But certainly, what I would say is, is entered the early stages of being in our mindset.
Well, they, I think Stephen, I mean, you've touched on it again, at the start of the call. Uh, we look at Capital allocation, of course, on on a regular basis, as part of our budgeting, uh, process and, uh, I think your comment was, you know, there's only so much Capital to go around and, and what, what we've kind of lined up in terms of order of priority would be the, uh, you know, the plan expansion, um, and optimization work that that Richard touched on in line with the Pea a coupled with with drilling but as and when you generate additional free cash flow where and how you deploy it uh to your point remains open and and uh um we'll look at the most value of creative activities, in terms of uh, how how to do that if and when uh, that free cash is available.
So the next 1 is an interesting question. Um you know, wonderful job navigating the last several years making TR stronger better suited to enjoy the coming Golden Era, can we count on leadership team to remain focused on bigger picture and less on being acquired?
I think they're the easiest way to answer that question is I don't think um,
There was 1, instance, in this presentation, that we said, uh, anything about being acquired or people approaching us. So, um, and I, I think, as we went through this presentation,
uh, you get a sense that we are detail-oriented people and have our eye on increasing the asset value. So that's, I think we've kind of answered it by doing the presentation.
Um, yes we are focused on um, increasing the value of the asset. We think there's a lot of value to go there yet.
Next question. What do you attribute to staying? Increasing daily trading volume, it has been 5 times to 10 times.
Um, normal is this institutional?
So we do keep an eye on, you know, 12 FS.
Um, or 13 FS Noble lists. And and, and, and registered stock. We do this a couple times a year to figure out how to share have created over, um, who are shareholders are
And things. What I can say is we have a pretty good sticky shareholder group.
Um,
would you and we're thankful for that?
And, you know, I would say, the, the stock trading from our analysis, and, and particularly, I, I do a lot of work on this.
Is more around the periphery than it is around the core of the shareholder group.
And so, I don't think there's a lot of people really influencing that share price.
and the system volumes, I suspect is attributable to the better Financial results people coming in, we do see a little bit more institutional coming in to the stock through filings and and and and what our Intel tells us
um,
I would assume there's some training going around around that. I we are starting to see a trickle in of um,
Warrants being assigned and things of that nature. So, you know, I would say
you know, all of that is leading into
You know, what's going on in in the market, it's it's very interesting. What's going on in America? It's a good question. I don't have a 100% of the answer, but I think it all adds up. Um, over time to the volume that we're seeing. And there's probably some short covering. I can tell you 1 chart, I did look at you guys can get this free, if you just Google it.
The stock price goes down when there's more failed trades.
It goes up when there's less fail trades. Just Google that.
And uh, what site did that come up on? Mike is bin role? I believe it is org and you'll see that sort of detail there. You'll also see the cost to borrow shares available. All of that sort of stuff comes in to play and is interesting. The chart was, uh, I would say the correlation. Mike, was 0.9 between sales trades and Decline and then when there's less fail trade to win up, so you can see that uh see that in those charts. And so I encourage anybody who's really a market guy to go and and and review that that's all publicly available information.
Um, and an individual asked that question, you want to get into a little bit more more than happy. Just give me a call. Send me a quick email and give me a call.
So, next question.
Yeah, we're getting more questions.
Okay, so I answered that 1. The last 1 is are there any near Pitt potential oxide Resources with higher gold price?
Um,
someone moving around the questions on me. So, here it is. And uh,
Cut off with higher gold price. Where are the other targets for oxide resources? Well, that's part of the reason for doing the, um,
The Geo physics. Um there's certain going to be some near surface material 1 is Richard mentioned anfield should have some more near surface not the afield. Sorry um east of pry um as he redefines that with the drill bit,
Uh, and there's other Pockets around the property as well and they will be once the plant is upgraded, put into the, the oxide plant or the thousand tons of there. I I I think Richard as we go around Snoop around, there's going to be, you know, more and more material there.
Peroxide. Yes, yes and and we've got a good a good team out there who who have already identified. You know, some prospective areas, I'd like to put a few drill holes in just a small. Small oxide occurrences and things like that. So yeah, certainly these gold prices as well with um getting a little uh inground inventory together.
Yep.
so, I think that's, uh, that's that and, uh,
And that's the end of the question. So,
Um, we have any other I see texts here to yes. Stephen I think, I think, yeah. Rosita had a, had a question there. Um, it's sitting in the queue. Oh yeah. Sitting in the queue here? Yeah, excellent.
Ah, this is another m&a question. Um, you've seen a pickup of m&a activity in North America. What's your thoughts on the deal landscape in in Africa? We've been approached. Um how would you ensure that in the interest of shareholders are protected?
So yes, m&a activity. Has picked up particularly in in North America and valuations for North American exploration and producers
And development plays have run.
Quicker, um, and higher than than elsewhere in the world. So I I think valuations will start to pick up.
Uh, it's usually trickle down effect from large cap. Small cap, also from North America to elsewhere. So I think they, we're starting to see that, you know, coming to our stock and, and into other stocks as well. Um, as people look at gold properties with regards to the African landscape, I do expect that to pick up as well. Um,
And certainly, that's what we are are seeing and and hearing um, I can't uh, comment on on TRX or briefly the how do we protect ourselves?
Um, we have a diversified shareholder base.
Mentioned earlier, the Cheryl abase is quite sticky. So
Um, and there's not a lot of really, what? I'll say, shares available on the market and thus if someone were to try to take a run at it, it's Gerald is going to benefit because it's going to be run up in price pretty quickly. I would think given the Dynamics of what I see.
I hope that answers the question.
Stephen I think uh, Ron's added a question to the queue as well.
Ah, political unrest in uh in in Tanzania. Um any comment
Uh impact and operation of Oak for ongoing some delay in the country. So look there, there was planned protests yesterday. Um it went through very peaceful um yesterday in to Anthony clothz cloth, is there?
Um yeah there were protests with regards to the the election that is all seen to settle down has it has an impact on our operations know. Um I think we lost 1 Day by not having an electrician, be able to get the site and um, right now it's operations as normal to security situation is very calm.
Um, and things are, are getting done. So I don't think there's going to be a lot of political
stability in Tanzania. Um, it's been
you know, the same political situation for the last couple decades. I don't expect that to change, Clough. Anything else to add to that?
Uh, know, I think that's correct. Um,
it's uh, it's been very safe. Uh, and stable. Uh, yesterday was our independence day. We expected some protests but, um, nothing happened. Anything? But
Um, everywhere in the country. So
Hopefully that's, uh, something of the past now. Yeah.
I think that's it. Well thanks. Thanks everyone for um,
The call and coming on board today. Um, if anybody has any other further questions, uh, the management team is more than happy to, um, to answer them. You reach out to us through our inbox, uh, Mike and Amy have a constant pulse on that daily. So, and and look at that and respond, and we're more than happy to set up with, uh, calls with the, where Cheryl the group. So again, thank you for your patience support. We look forward to 2026 continually to expand, continue to growth and hopefully we have a much better 2026 than even a good 2025.
Thank you. And as I was saying, uh, Tanzania, Asante Sana.
This brings to a close today's meeting, you may now disconnect, thank you for your participation and have a pleasant day.