TRX Gold (TNX) Q3 2024 earnings summary

Executive summary

• The expanded 2,000 tpd plant at Buckreef Gold is operational, achieving 1,700–1,900 tpd during commissioning, with a maximum of 1,873 tpd and expectations to reach nameplate capacity soon; throughput increased 116% over Q3 2024.

• Q3 2024 gold production was 4,628 oz, revenue $10.1M, gross profit $4.4M (43%), and operating cash flow $3.1M; year-to-date, 13,622 oz produced, $27.5M revenue, $11.3M gross profit (41%), and $9.3M operating cash flow.

• Management prioritized prudent capital management, organic growth, and reinvestment of cash flow into operations, exploration, and infrastructure, with no equity raised in over two years.

• Full-year 2024 gold production guidance was revised to ~20,000 oz (down from 25,000–30,000 oz) and cash cost guidance raised to ~$1,100/oz due to mining delays and weather impacts.

• All growth and plant expansions have been funded by internally generated cash flow, with no near-term plans for share dilution.

Financial highlights

• Q3 2024 revenue was $10.1M, gross profit $4.4M (43% margin), and operating cash flow $3.1M; year-to-date revenue was $27.5M, gross profit $11.3M (41%), and operating cash flow $9.3M.

• Adjusted EBITDA was $3.9M in Q3 2024 and $9.1M year-to-date.

• Cash balance at quarter-end was approximately $7.7M, with positive working capital of $1.7M and a debt-free balance sheet.

• Realized gold prices averaged $2,270/oz in Q3 2024 and $2,079/oz year-to-date, with recent sales at $2,460/oz.

• Processing costs per ton are expected to decrease as throughput doubles, leveraging fixed labor and overhead.

Outlook and guidance

• Plant expansion to 2,000 tpd is expected to drive higher throughput, recovery, and production in Q4 2024 and FY2025.

• FY2024 gold production guidance revised to ~20,000 oz due to delays in accessing high-grade ore and weather-related disruptions; cash cost guidance increased to ~$1,100/oz.

• Budgeting and mine planning for 2025 are underway, with updated forecasts to be provided after completion.

• Exploration drilling to resume in 2025, focusing on high-priority targets in the northeast, south, and main zone extensions.

• Weekly production run rate of 616 ounces is expected to continue during final plant commissioning and ramp-up through July and August 2024.