管理層發言
Welcome to the TRX Gold Corporation Fourth Quarter 2025 Results Presentation. The meeting is being recorded. I would now like to turn the conference over to Mr. Stephen Mullowney, CEO. Please proceed, sir.
Yes. Thank you very much, and welcome, everybody, to the call this morning. Joining me today is our CFO, Mike Leonard. Mike? And our COO is joining us from Melbourne this morning. So it's very early in his morning. Richard?
Good morning, everybody.
Excellent. Today, we're going to discuss our 2025 results, which was a transformative year for the company. Key highlights include the discovery of Stamford Bridge earlier in the year, along with our best drill hole results ever in that area. Additionally, we released our preliminary economic assessment in April, outlining a plan for production growth and expansion at Buckreef over the next 18 years. This assessment focused solely on the Buckreef Main zone and did not include other potential exploration targets. We conducted a significant stripping campaign to reset the mine plan, leading to record results in our fourth quarter, which have continued into the first quarter, putting us in a strong position to recapitalize the balance sheet and improve working capital. 2025 has been a great year with many positive developments, and we're optimistic about a successful 2026. Khalaf Rashid, our VP of Tanzania, has joined us from Dar es Salaam.
In today's presentation, the team will share extensive information, including our financial results for 2025 and our forecast for 2026. I encourage questions and will ensure we allocate time for Q&A. We are open to addressing nearly all inquiries. For those unfamiliar with TRX and the Buckreef Gold project, we are based in Tanzania and operate under a 55%, 45% joint venture. I will cover government relations later in the presentation. The property holds over 1.5 million ounces at 2.5 grams per ton, making it a low-cost operation. We have completed three mill expansions in the last three years and are currently undertaking another expansion. We are listed on the TSX as TRX and on the New York Stock Exchange American as TRX. We look forward to further expanding our operations in 2026, and our first drill rig will arrive onsite this week to resume the exploration program following our geophysics study.
No, I think that was a good overview and a good summary from my side, Stephen. Thank you.
Excellent. Thank you. So Mike, I’m going to hand it over to you to go through the key highlights of the fourth quarter.
Okay. Very good. Thank you, Stephen. Good morning, everyone. Thanks for joining us, as always. Q4 was by far our strongest quarter of the year, as Stephen mentioned. It was a record quarter for the company. This was primarily because we got through the Stage 1 stripping campaign early in the year. We benefited from access to high-grade ore blocks into Q4, consequently having record production and sales for the quarter. We produced over 6,400 ounces of gold and sold almost 7,000 ounces of gold. That was a big increase quarter-over-quarter after the strip campaign. Accessing these high-grade ore blocks is continuing into Q1, and we mentioned that in our last press release. We've had some record cores of over 1,000 ounces in Q1 of this year, so that production trend is expected to continue over the course of this year. We're in a record gold price environment. We realized a record gold price of $3,363 in Q4, and we're selling gold at over $4,200 now.
We continue to benefit from those record gold prices, and combining record Q4 production with record gold prices results in record revenue, record gross profit, record net income, record operating cash flow, and record adjusted EBITDA across the board. Very strong Q4 results. Importantly, we took a lot of that free cash flow that we're generating now and recapitalized our balance sheet, as Stephen mentioned. Earlier in the year, during the Stage 1 strip campaign, we leaned on our vendors to help remove the overburden to reach those high-grade ore blocks. Initially, our working capital was negative, but we have since turned that around; it is now positive. Accounts payable is back within 60-odd days on average. We increased our cash position quarter-over-quarter by a net $1.2 million, with about $8 million on our balance sheet, and we repaid all of our borrowings earlier in the year. So the balance sheet is set up well as we head into 2026.
We'll talk about guidance shortly. In addition to recapitalizing working capital, we continue to invest in mine infrastructure and development, with Richard being better suited to talk about that. We've effectively built up a very robust stockpile position. At the end of the year, we had about 15,000 ounces in that stockpile, and it continues to grow. That allows us to maintain continuous mill feed and supports blending strategies as we head into next year for consistent production. We continue to invest in the business in that way. As Stephen mentioned, we have projects underway to enhance and expand our plant and mill, including down payments on thickeners, an ADR gold room, and additional oxygenation into the mill, all of which we expect will enhance throughput and recovery over the course of this year. So again, record Q4. Stephen, I might ask you to flip to the next slide, and we'll touch on some of the full year highlights as well.
Here we go.
So we talked about Q4 being our strongest quarter of the year after completing the strip campaign. Nevertheless, 2025 was a record and transformational year for the company as a whole. We produced just under 19,000 ounces, which is effectively in line with what we produced last year, but those record gold prices over the full year—over $3,000 an ounce—significantly benefited the financials. We did almost $60 million in revenue. Our gross profit was just under $25 million, and we achieved 53% gross profit in Q4. It's a low-cost, high-margin operation, and at these gold price levels, the margin and the free cash we're generating benefits the financials immensely. EBITDA for the year was $22 million, and Q4 alone accounted for more than half of that. If you take the production profile from Q4 and the $4,000-plus gold prices expected in 2026, you can extrapolate that into what the financials might look like heading into next year.
We discussed cost improvements; we've seen processing costs per ton decrease year-over-year, resulting from economies of scale in our process plant. We've seen costs drop below $50 per ton processed. Stephen touched on owner-managed drilling, and we also have an owner-managed fleet that supports our contract mining fleet, lowering mining costs per ton as well. You can expect gross profit and gross margin to expand over the course of next year. Earlier, we mentioned building a larger processing facility than initially planned in the PEA. The PEA originally envisioned a 3,000 ton per day processing plant, but we're now also considering a 1,000 ton per day oxide transition circuit, which will help reprocess tailings. We plan to fund that through cash flow and will update the market on progress throughout this year. We're optimizing the plant with upgrades like thickeners and oxygenation, and we are putting together a production outlook for 2026.
We expect gold production to be between 25,000 and 30,000 ounces at a cash cost between $1,400 and $1,600 per ounce. We're forecasting CapEx of $15 million to $20 million, focused primarily on plant upgrades and life-of-mine tailings facilities. If we generate more free cash flow at higher gold prices, we may look to expand that outlook and will update the market as we progress. Regarding exploration, we plan to begin drilling and have recently completed a geophysics study to identify additional drill targets. Focus will be on the main zone, Stamford Bridge, and the Eastern Porphyry, and we expect a steady flow of assay results throughout this year. Overall, it was a record transformational year for 2025, and we expect strong results heading into 2026 due to higher gold prices.
Yes. No, thank you, Mike, for that. I'm going to do a little bit of Q&A with you and Richard here to highlight a few other points. Richard, can you give the shareholders an update on the expansion process? I know the thickener has been put up for a vote this week, and how you envision that being laid out for the remainder of the year?
Sure, Stephen. Thanks. Hi again, everybody. The expansion process is well underway. We have a team managing the full process from procurement through to installation and commissioning. The first part of the expansion and upgrade will be a thickener added to the circuit before the leach circuit. This will improve the density, residence time, and grade because we will be putting less oxide material through the plant. That should have an immediate effect starting at the end of the second quarter. We also have additional oxygenation equipment coming into the plant, using hydrogen peroxide to improve recovery. We expect an increase in recovery rates and cost reduction from the oxidation technology we're implementing. The next item to arrive will be an improved absorption, desorption, and recovery plant. Our current system is outdated. As production increases, we’ll need a better process control system, and we expect to install that towards the end of this financial year. Concurrently, we will be out to tender for flotation and the fine grinding equipment. In January, we will also tender for a SAG mill, aiming to increase production capacity significantly between 3,000 and 3,500 tons a day for fresh material around FY '27.
Excellent. Thank you, Richard. That's a good update. I'm switching to the next slide now. One thing Mike mentioned is production was primarily the same as it was in 2024, but throughput improved. The difference is in the grade profile. We are now into a much better grade profile following the stripping campaign. We have moved from the north back down to the south where the grades are significantly better. We anticipate finding better grades as we progress, leading to an increase in gold production. Richard mentioned the oxygenation is even using hydrogen peroxide, which has recently increased our recovery rates from the low 70s to about the low 80s. So as you can see, the throughput of the plant did increase last year, and it will again this year. The team has implemented a good maintenance program that aids our plant's availability. As Mike mentioned, recapitalizing the balance sheet has allowed for the purchase of more spares on the maintenance side, limiting operational disruptions.
All things continue to move in a positive direction. This is just a summary of the revenue and adjusted EBITDA of the company. I want to point out from 2025 that we haven't issued equity in the market. We return to our original capital raises; we have made a $67 million investment from a $20 million raise into this asset. That growth will continue as we generate cash flow from this asset. I’ll address the PEA slides later. Regarding our confidence in 2026, as I mentioned, the grade profile is a significant part of it. In 2025, Richard didn't delve into many improvements in mining, particularly around drilling and blasting with the contractor to ensure they meet planned mining rates. If you fall behind in mining, you will fall behind in your mine plan and grade profile. Mike and Richard noted that our stockpile is increasing. This indicates that mining more ore than our processing plant can handle, so let’s ask Richard to give a quick overview of the mine plan for 2026 at a high level, showing what has been mined and what remains to be mined.
Sure, Stephen. For those not colorblind, the warmer colors indicate the better grades. Anything with purple and above is exceptional grade that you don't typically find in an open pit mine. The blue generally represents waste material. In 2025, we mined a lot of blue, which is on the north side. This upcoming year, while we still need to mine some blue, we will be tapping into exceptional grades beneath that area. We have a consistent ore area from the south stretching about 80% to 90% through the strike length of the pit. This should provide a uniform feed, and we're hopeful that by the fourth quarter, we’ll see some of the best grades we've encountered in the project.
Now, I’ll summarize some investment themes from our corporate presentation quickly. We've been generating strong free cash flow that is being reinvested into the business. Our growth plan is scalable, with a significant tonnage increase from planned expansion. As Richard mentioned, we have a capable team who knows how to execute successfully again. This increase in scale will ultimately reduce costs compared to 2025. There is also significant blue-sky potential, which we will pursue more actively in 2026 than in 2025. There are limits to capital availability, and last year we focused on stripping and setting up the mine plan for long-term success aimed at generating more exploration opportunities with cash flow. Focusing on projects this year will yield better results for cash flow than solely pursuing exploration. About Tanzania, I'll reiterate that Barrick and AngloGold Ashanti are producing excellent gold at their operations.
The notable development in Tanzania is Perseus's Nyanzaga project going into production, which requires $0.5 billion and will yield over 200,000 ounces. Interestingly, our PEA has a higher net present value given the low cost at Buckreef. Fortunately, we aren't feeling pressure on labor due to Perseus’s expansion, and our labor situation is stable. I also want to address the joint venture with the Tanzanian government; we have a current 55%, 45% JV with the state mining company. The 45% interest is dilutable, under new laws introduced in 2022, granting a 16% free carry in mining projects. We started negotiations with the government in 2024, and while they've slowed recently due to elections, we expect discussions will resume fully by January 2026.
On a daily basis, yes. Correct. We've initiated the negotiation process with the government since 2024. These discussions have been delayed somewhat due to recent elections, but we expect them to resume fully by January 2026. It's important to have greater transparency between investors and the government. Overall, that should benefit all parties involved.
Thanks for that, Khalaf. That aligns with a recent release by the Ministry of Minerals regarding attracting investment in the natural gas and mining sectors. The government is promoting investment effectively. I encourage anyone with further questions to reach out after this presentation. Now let’s discuss the PEA in more detail, which will be uploaded to our website after this presentation. The PEA outlines expectations for year 1, with 27,000 ounces of production, in line with our guidance for 25,000 to 30,000 ounces as production ramps up. We plan for larger than 3,000 tons a day capacity, with room for further improvements as we assess production profiles. However, the older plant can still process sulfides, albeit at reduced recovery rates unless upgraded.
Not really. We are following the plan, and we're also looking for opportunities via geophysical surveys across the site. Finding additional resources would provide more opportunities, and the PEA serves as a useful guideline, but we want to improve on that profile.
Stephen, I might just add one comment here. For folks new to the story, if we go back one slide, I want to draw attention to the EBITDA figures depicted. We used $4,000 an ounce in the last slide, and the business model is self-funding. The CapEx envisaged as part of the PEA will be funded by cash flow. The incremental EBITDA shown is very robust and sufficient to support our expansion through cash flow.
Yes, I appreciate that, Mike.
Stephen, with regards to cash costs discussed in the PEA, I can tell you that our year 1 guidance is significantly lower than what is in this study.
Absolutely. We plan to refine our focus to bring about new drilling and exploration to ensure adequate ore feeds to the plant. Not everyone understands how drilling results are interpreted, but Buckreef property is predominantly underexplored. Consequently, we aim to maximize our drilling efficiency, starting with the geophysical studies to identify deep structures that may host gold. We’ll also be testing with induced polarization surveying to identify sulfidic occurrences. This will help locate the drill rigs effectively, which are expected to enhance our drilling productivity and lower costs.
Yes, we are excited for the exploration drilling coming up. Our SML is irregular, containing at least seven mineralized trends. The geophysical program will help define structures that would typically host gold in this region. From there, we will define targets to drill and test.
Exactly, Richard. Identifying structures around the property sets our expectations high for exploration success. We believe there may be more gold resources, especially since the initial discovery of Stamford Bridge was unanticipated as it was found beneath the surface. Our objective is to better identify potential targets. Now, let’s shift gears to address comparable company analysis. Historically, we’ve proactively recapped the balance sheet, reducing market overhang and fostering growth in share value. We anticipate this focus continuing to provide upward momentum in share price as we finalize the balance sheet and continue generating cash flow. Operationally in 2025, our exploration activities will benefit from this robust cash flow as we plan to execute further initiatives to increase overall value.
Yes, Stephen, Ron has added a question to the queue as well.
Thanks, Mike. In summation, we are focused on increasing asset value through strong growth, sustained profitability, and leveraging a proven team. The PEA serves as a roadmap for our business plan, and we are proceeding accordingly, exploring every opportunity. We are comfortable operating in East Africa, particularly Tanzania, as we know how to navigate equipment procurement and logistics. Our leadership team is experienced, and although our size is compact, our G&A expenses are in line with or lower than most competitors. With that, I’ll open the floor to questions. As I mentioned earlier, we are more than comfortable answering nearly all inquiries. We're an open book.
分析師問答
The first question will come from Heiko Ihle with H.C. Wainwright.
Looking forward to seeing some of you next week. You talked about the drill rig arriving this week. Can you provide some insight on where you expect to focus this drilling? You mentioned it briefly before. How many meters do you anticipate for this drilling, including the time frame and background on costs? I assume they are significantly cheaper than hiring someone else?
Yes. Richard, I'll hand that question over to you.
I only caught part of it, but I think I understood enough. In terms of our drilling, we have a reverse circulation drill that we'll start on the Eastern Porphyry pit for resource definition. We'll be drilling at about $25 a meter, while typical contracting rates in Tanzania are around $50. Our diamond drill is expected to achieve approximately 4,000 meters a month or close to 50,000 meters annually. We have plenty to work on and will use the RC to assist with diamond pre-collars, reducing deep exploration costs. The diamond drill should commence in the third quarter, with a target of 2,000 to 2,500 meters a month at around $50 per meter, meaning it’s about half the cost of contractor drilling.
When you mention there might be a second rig, how long does it usually take to acquire one? Is it challenging with importing?
Logistics in Africa, particularly in Tanzania, can be challenging. It typically takes about 4 to 5 months to procure a drill rig. We have one drill arriving tomorrow, and the second one is on the way, expected to arrive in about 7 to 8 weeks.
Looking at the big picture, 2025 was transformational. Can you summarize the three catalysts for the company that you're most excited about for the next year that may be underappreciated by the market?
From my perspective, we have taken a cautiously optimistic stance. Gold prices are on the rise, and we expect to see improved financial results. I am optimistic about finalizing a new agreement with the government, which will increase transparency and benefits for everyone involved. Additionally, the geophysics study and upcoming drilling work are new ventures for us, and there is significant potential for discovering gold resources through these efforts.
The current metal pricing environment is quite supportive.
Exactly. However, we need to stick to our business plan and prepare for market fluctuations. We anticipate being successful even at reduced gold prices. Overall, we're well-positioned for future growth.
This concludes today’s meeting. Please disconnect. Thank you for your participation, and have a pleasant day.