TRX Gold hits record Q3 output, targets $50m mill expansion
TRX Gold generated record quarterly EBITDA on surging Tanzanian production, providing enough internal cash flow to self-fund a major mill expansion without diluting shareholders.
TRX Gold produced more than 7,400 ounces of gold at its Buckreef project in Tanzania during the third quarter, driving record adjusted EBITDA of nearly $21 million. Revenue reached approximately $33 million on a realized gold price exceeding $4,700 per ounce. Gross margins came in at roughly 60 percent.
The output represents an almost 60 percent increase from the same period last year. Chief Financial Officer Michael Leonard attributed the jump to a record throughput of 1,690 tons per day and an average grade of about 1.96 grams per ton. Recovery rates improved to roughly 85 percent, up from 67 percent, following the commissioning of a thickener, oxygen plant and Acacia Reactor.
Over the trailing 12 months, the company has mined almost 28,000 ounces, generating $115 million in revenue and $66.8 million in adjusted EBITDA. Chief Executive Officer Stephen Mullowney noted the company has already hit the low end of its full-year production target of 25,000 to 30,000 ounces. "We had a great third quarter," Mullowney said, adding that TRX expects to finish the year "more than likely towards the top" of that range.
Expansion Plans
The strong cash generation is central to the company's next phase of growth. Management outlined a roughly $50 million expansion program slated for the next 12 to 18 months. The centerpiece is a new 3,500-ton-per-day mill, alongside necessary tailings storage and sustaining capital.
Crucially for investors, TRX expects to fund the majority of this capital outlay from its own cash flow. The company is simultaneously ramping up exploration to identify new drill targets. TRX is also in ongoing talks with the Tanzanian government as it seeks more favorable long-term operating terms for the Buckreef site.
The operational improvements signal that the existing 2,000-ton-per-day plant is finally performing near its intended capacity. Additional upgrades, including an ADR plant and gold room, are expected to come online in the coming quarters. If TRX can sustain these margins and fund the larger mill without raising external capital, it would mark a significant de-risking of the Buckreef asset.
