TRX Gold Corporation

as participants make their way in from the lobby. It's now my pleasure to introduce Christina Lally, Vice President, Investor Relations with TRX Gold. Christina, the floor is yours.

Thank you, Darlene. Welcome, everyone, to TRX Gold Corporation's first quarter 2024 results presentation. As a reminder, all participants are currently in listen-only mode, and the meeting is being recorded. After the presentation, there will be an opportunity to ask questions. If you wish to ask a question, please click the Q&A icon on the left-hand side of the screen. You'll see the option to raise your hand to join the queue and ask your question verbally, or please feel free to write in your question via the messaging. When you are introduced, you'll see a prompt that will appear on screen and just click continue to confirm that you are ready for your line to be opened. Analysts who have dialed into the conference call may press 1 on their telephone keypad to join with you. Of course, we welcome everyone's questions and we'll do our best to answer all. And for anyone who may like to ask a question privately, of course, you may always reach out to us directly to myself or the gentleman here. And we'd be pleased to answer your questions aside from this call. Stephen, I'll hand the conference over to you.

Thank you, Christina. You're welcome. We've had a little bit of technical difficulties this morning. So you're hearing us from actually Mike's iPhone. So you'll see me move the iPhone across the table as different people speak. And I hope everybody can hear us just fine this morning. So thank you for joining us for our first quarter. 2024 results webcast. We're at a very interesting point because right now we can, you know, both Andrew and Mike are on the line with me. You start to smell the new plant and when it's going to come online. So we're really getting through the crushing circuit. That is now I think around 60% to 65% built or so. We're having a lot of rain, so we're hopeful that it will come online between the end of January, early to mid-February, and it's all dependent on the weather. It's rained a lot more than anticipated this year in East Africa, particularly in Tanzania. So that is exciting. And then at the same time, the ball mill components and stuff like that are underway. It's starting to get installed as well. So We're really excited for that because that enables us to really put on the drill bit towards the back half of the calendar year, given that the increase in cash flow should be coming through as that plant gets online. So we're really, really excited. It's a really exciting period. So without further ado, obviously, as a public company i have to refer people to the cautionary note and reference the fact that there will be forward-looking statements in this presentation and so i would ask investors and any other people to go to our website to view the cautionary note so on the line today we have myself the chief executive officer andrew is joining us from tanzania you can see he's in an orange shirt. We like to keep them in Tanzania as much as possible. And then we have Mike here who's next to me and Christina who is next to me as well. So just starting off with some similar points that we make in all presentations, particularly for anybody who's new on this call, we are TRX Gold. We're a team of experienced leaders developing and rapidly developing a gold project in Tanzania. We have an operating plant that's been achieving high margin positive cash flow. We'll get into that in a few minutes. And we have a special mining license that has significant blue sky potential for new gold discoveries. An overview of our property. The 2020 resource statement had 2 million ounces in the measured and indicated category. The deposit comes to surface, which enables us to do all of this. It's 20 meters wide. We have straightforward metallurgy and grind crush CIL. We're fully permitted under a special mining license. Our current license goes to 2032, and it's completely renewable until the end of the life of the deposit. We have a processing plant that's been online for just over a year at 1,000 tons per day that is consistently meeting production guidance. We have a minimal environmental footprint. We recycle water. We have good tailings management connected to the national power grid. And as I mentioned before, and always brings a great smile to my face, is the exploration potential around this property. Our business plan that has been communicated is to grow production, to increase cash flow, to eventually increase exploration. So one of the things that we've been very proud of and is starting to really show in the numbers and is starting to really grow is growth. We haven't done a capital raise in, I believe, in over two years now, Mike. Correct. Yeah. So when we originally got into the business, as a lot of historic investors are aware, we had to recapitalize the business to do all the things that we're doing. So in that, when we look at, you know, the net equity cash that was raised over two years ago in around $23.5 million, and then we look at what we've invested into the property since then, both by from those raises as well as free cash flow that's been generated by the asset, the multiplier on equity now that was raised is around 1.7 times and growing. So this is starting to prove out that the business model is much different than we're going to build as we go and increase that investment to increase cash flow. And you're seeing that in both the production numbers as well as the adjusted ABBA and cash flow from operation numbers. So in fiscal year 2023, which was August, we had sales of almost $38 million, over $38 million with cash flow from operations of over $70 million and adjusted EBTA of around $14 million. So we're starting to really see it in the financial results of the company, the business plan working. We've done this while controlling G&A expense at the same time, which is great. So we've grown from, in that period of time, from around, including Buck Reef, 30, 35 employees, to now including contractors at Buck Reef to well over 500 people while keeping our GNA in check. Q1 2024 highlights, and Mike will get into this in a second, so I'm going to phrase this at a very high level. We have positive operating cash flow again in this quarter. which has been reinvested in the growth project. So I think we reinvested almost $4 million. As I mentioned earlier, we continue to have prudent capital management. We're on a third consecutive mill expansion. As of today, we have approximately $3 to $3.5 million to spend on that, which we generated from cash flow from operations of other sources. We continue to have strong gross profit margins. We expect those to rise as the new plant comes online, if gold prices stay at the same level. And we expect the new plant to come online towards the back half of the fiscal year and just prior to the end of the second quarter calendar year. And then thereafter, as that cash flow comes online, we will commence a much more in-depth drilling program, and we're starting to plan that out now. We could have, you know, used part of the capital for drilling, but it would slow down the plant expansion. And it makes much more sense, given the economies of scale, that we should achieve from the new plant to really spend our capital on that plant. So we have a much more robust exploration program at the end of that plant. So that's really why we're doing the things in the sequential order that we're doing it. And we continue to have a great safety record at Buck Reef. We've again, for the second time, achieved a million work hours LCI free. So kudos to everybody at Buck Creek for working safely. So now I'd like to hand the presentation over to Mike. As I said, I'm going to push the phone over so you won't hear too much from me on this, and Mike will go through what the financial results were. Thank you, Stephen, and good morning, everybody. Thank you for joining us for our Q1 call today. Q1 was a fairly steady state quarter relative to what you would have seen over the last three quarters. Production was just under 5,000 ounces. If you look at Q2, Q3, and Q4 of last year, that's consistent with the output we've been achieving from our 1,000 ton-a-day plant operating at or near capacity. Year-over-year, production was down slightly, as Q1 of last year was the first quarter where we were commercially operating. To get it up and running, what we had done was we prioritized a high-grade oxide or 3-gram-plus material to put through that mill to get it up and running for the first quarter. With that said, what you will have seen for T1 of this year, we put through head grade of almost 2.6 grams a ton, which is still well above the average grade of the deposit and very robust for our open pit operations. What you would have also noted operationally is recoveries were partly impacted and had an impact on year-over-year production. We realized recovery rates of, on average, about 81%, which is at the lower end of what we're seeing from our MET studies, based on our current rock composition, which is roughly 50-50 sulfide and oxide ore material that we've been putting through the mill, as well as grind size and retention times that we've been realizing through the plant. But as Stephen touched on, we're very, very excited about the expanded and enhanced crushing circuit that we expect to come online. That's really expected to improve grindability of the rock and the material, and consequently expected to improve recoveries as we head into the latter part of this year. Yeah, so Mike, I'm just going to pause you for a second there and explain that. So in any mining operation, there's a balance between your recovery rate and your two-foot rate. So... what you do is you try to maximize cash flow from operations by balancing that. So we know if our ore sits in the tanks longer or has a higher retention time, we'll get a higher recovery rate. We also know if we grind it a lot finer, we'll get a much higher recovery rate. And so that's lining up into the MET studies that we have. Right now, given the plant is a bottleneck versus the ore that we have available, we balance recovery rate and throughput rates in an attempt to maximize cash flow operations given that we're in a build-out phase. So we have a good handle on recovery rates and how to improve them. When the new crushing circuit comes online, this is one of the reasons why we decided to go with the crushing circuit first versus the milling circuit or the ball mill, is the crushing circuit is the bottleneck in the current system. And in order to free up to be able to mill more, even in the current system, we need to have the crushing circuit up and running first, which provides a much more consistent product to the mill to obtain a much more consistent grind size to increase those recovery rates through the milling process. Well said. Thanks, Stephen. On the financial side, we sold just under 4,900 ounces for the quarter, so effectively all of what we produced. And that gave rise to revenues of over $9 million. Again, you see the realized price in the screen. You know, gold prices are still at lofty and robust levels. We realized 1942 for the quarter, we've been selling well north of $2,000 an ounce this quarter. So lots of upside potential on gold price. Our growth profit was just under $4 million or 40%, as Stephen alluded to. So this continues to be a high margin operation. Just the DIVA data that we talked about as well is almost $3 million. So good proxy for cash flow. In terms of cash costs, we recorded cash costs of just over $1,000 an ounce for the quarter. That's above the full year guided range of between $800 and $900 an ounce. So this is largely in line with expectations as we talked about on our year-end call. As we touched on with our year-end results, Our year-end and Q1 cash costs have been impacted in part by higher fuel costs associated with us having to run generators to keep the mill operating at capacity due to unstable and inconsistent grid power. As we talked about on the year-end call, we've since been reconnected to a substation far closer to site in November that we expect to benefit things like processing costs as we head into the latter part of this year. We're now operating at roughly 80% grid power versus 20% generated power. So we expect that cash cost number to improve over Q2, Q3, and Q4 and get back to that full-year guidance number of between $800 and $900 an ounce. And I guess finally, Stephen touched on it, but we've effectively done what we said we were going to do is be prudent capital managers, use organically generated cash flow to invest in value-accretive activities like growth, We generated operating cash flow that was over $5 million. We put almost $4 million of it back into the operation, in part to advance the expansion that Stephen touched on, as well as grow things like our tailings storage facility to accommodate much larger growth, as well as put pieces of capital equipment in place to allow for that growth profile. We got a strong, robust balance sheet with cash of over $8 million, positive working capital, and I'm well poised to grow the asset from here. Yeah, so, Mike, I'd like to touch on what you mentioned around cash costs for a second. On the mining costs, we're very comfortable where they are, and we think we can put that down a little bit lower. But where those cash costs will start to come down is on the processing costs per ton. And the expanded plant doesn't incur any more fixed costs. or not a lot, very little extra fixed costs. So you're going to have to get a lot more fixed cost absorption through the higher throughput rates. And really, we still have a relatively small plant for the size and scale of what buckwheat can be. And in order to get those costs down, we need to continually expand to have that overhead absorption and other cost absorption in the processing plant. And that's really what's driving the higher... cash costs as opposed to the plant versus mine. No, it's a good point, Stephen. I mean, the plant will have significant economies of scale, exactly to your point. You're doubling your throughput from 1,000 tons a day to 2,000 tons a day without any additional overhead. So, you know, in principle, your processing costs of, say, $26 a ton that we reported in Q1 should roughly be halved as we get that plant expansion online. So lots of efficiencies in economies of scale. Yeah, exactly. So as we move on, the 2,000-ton Verde plant, as I said, I was smiling given the progress that we're making here. You will see some pictures here of the new crushing equipment that's arrived on site. I think you see our general manager by a cone crusher. And then you see a truck near our new jaw crusher. You'll see the expanded tailings facility. There's another lift to go on to that. And then you'll start to see the conveyors being put in place and the concrete works and things like that. You will notice the soil is pretty moist though. As I mentioned earlier, there's been lots of rain in Tanzania, a lot more than normal, but we're managing through it. And the team is continually constructing on site. They're going both on day shifts and night shifts at this point in time, constructing our new plant. So there's only so much labor capital available. And that's one of the reasons we need to do the crushing circuit first, and then we'll move on to the grinding or the ball mill circuit in order to put it all together. But we're pretty excited with what's going on. Our suppliers on the crushers has put in place a – we'll be putting in place a critical spares and critical parts warehouse in Mawanza pretty close to us in order to reduce a lot of the potential on breakdowns and things of that nature. So that looks to be turning out to be a very, very good relationship. And this is expected to drive a lot of cost savings and increased production and increased cash flow, which will hopefully end up, you know, springing the value of this project through the exploration drill bit as well as an increased production profile over time. Anything to add, Andrew?

I am just sitting here marveling at how both of you are doing an amazing technical description. And thank you very, very much. The mood here is very, very positive. I am back at site, have been here since the 2nd of January. The Progress, as I think you mentioned, is about 65% now on that crusher. The key thing there is we're going to be crushing down the sulphide rock to what I like to call popcorn size, and that will then greatly enhance what we're getting in terms of our mills, in terms of grindability. So I think that's sort of the only comment I'd like to add. The geologists are keen to see the money. but keeping them busy in terms of fine-tuning the targets and still having them get out and about and continue to explore the SML around us.

So I'm just going to move the slide forward and just continue on, Andrew, about what you should start to see the second half of the year.

Yeah, right towards the end of the year. What perhaps I could remind people of is obviously the SML itself is in the red outline. 16 square kilometers you'll see the main zone itself there with all the sort of red and pink and magenta spots that's what we're currently mining um we're currently in the process of um sourcing pumps to do water the south pit that'll be dewatered in short order we'll start mining there then in terms of the exploration The key thing for us now will be to draw that piece of ground between what we call the eastern porphyry and our southern boundary, where there's an adjacent Chinese-run operation. We have over three kilometers to go and test. But I'll just take the moment, Stephen, to just remind our listeners that we... had some great results right at the end of our last drilling campaign. In the eastern porphyry, obviously, some of the better results, 14 meters at 3.5 grams a ton. And I really do have to point out, these are very shallow, 27 meters from surface or 25-meter widths of 1.6 from 47 meters below surface. And then about 1.5 kilometers southwest of that, We had three meters running at 13 grams a ton in the anfield, and again, really shallow at 43 meters. So an awful lot of drilling. It's going to take us a number of quarters to get through that, but it's a great story. Gold deposits, it hasn't changed. a resource to the northeast, a mine to the southwest, and clear evidence with all those white dots of small-scale operational artisanal mining, which is none of that is active, that's been picked up by a geological team. So it's a good thesis. It hasn't changed. We'd like to drill it.

Excellent. Well, thank you, Andrew, for that. So as I get on to the next slide, basically what we're doing on this slide is reiterating our business plan. and reiterating production guidance around when that mill expansion should come online. The production guidance of 25,000 to 30,000 ounces. I remind you that's at the run rate. That's what we expect for the full year with the 1,000 ton and then the expanded 2,000 ton per day plant. 2,000 ton per day plant, obviously, the output is greater than that, and we'll give market guidance at the appropriate time for that. The cash costs, we're reiterating our cash cost guide to $800 to $900 an ounce. And what the increase in cash from the new plant will be used for will be additional capital programs, CSR and ESG programs. Obviously, we are operating, we'll have more employees, and an increase in the exploration and drilling focus around the property. I always say we have mindful ESG. We work with the communities. We integrate our ESG into our operating costs profile. We hire a lot of local people, a lot of local people on contractors, things like that to build our assets. We're starting to pay significant amounts of royalties and taxes as a result. And we always keep a good eye on making sure that people are happy as well as that the schools, the medical facilities, and such forth in the local communities around us are continually improving. With regards to what to expect over the next three to four months, our MET study and our geotech studies are coming to an end. Currently, we see no surprises there, so we'll be coming in with regards to we are consistently in that we'll integrate into what I'll call a mine plan update We are looking at long-term tailings solutions, fixers, and things of that nature. And we'll come out with an updated study at some point in time that will detail a little bit more on what's known today and as well as what the exploration program for tomorrow is in order to give the market and investors a much more guided business plan around how Buckle Leaf is going to roll out over With regards to how markets have performed, I don't think anybody on this call likes the current market. We are in a higher interest rate environment than we have been in the last 10 plus years or so. That is expected to continue, which means capital is much more expensive. Also, the alternatives that people have for investing are also different. So we need to get out there. We just need to get out there and tell our story. We are now a self-funded growth story, which is good. And our stock price, although we like to have it higher, we always like to have it higher, I think relative to peers, it's actually held in okay. But certainly, this is something that we are consistently on and expect to see ramp-ups in the investor relations program. And on that note, here's some new pictures. Again, we're rapidly expanding self-funded growth story. And we are excited for what the future is about to bring to Buckley, particularly as this plant expansion comes online. So, Gaylene, I'd like to hand it over to any questions.

Thank you, Stephen. 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 options. Raise your hand to join the queue and ask your question verbally. or write a question to submit your question in writing. When you're introduced, you will see a prompt on screen and you should click continue to confirm that you're ready for your line to be opened. That's those of you who were on the webinar. Analysts who have dialed in to the conference call may press the star and then one on your telephone keypad to join the question queue. Our first question is from Jake Sikalski with Alliance Global Partners. Mr. Siegelski, you should press continue.

Hey, guys. Thanks for taking my questions. Yeah, thank you, Jake. How are you? Good, good. Thanks. So just starting with recoveries, and I think Mike touched a bit on them. They're in the low 80s this quarter, and some of the work that you're doing to improve on them through network and then upgraded equipment and the like. Are those improvements something we should expect this quarter, or is that more of a second half of calendar 24 type thing?

Yeah, so I think it's more a second half. Well, actually, it should be not second quarter, but third quarter as the crushing circuit comes online to get the much more consistent product going to the ball mills. So it is a balance with solidified ore between throughput and cash flow and recoveries. And so we're not seeing anything that gives us concerns relative to the studies that have been done at Buck Creek. We do know that an increase in grind size, making the grind size, and longer retention times does increase recovery rates quite significantly. When we put out the press release in August, that had double the retention times than what we're currently seeing. experiencing to get the food put through, and that had a much higher recovery rate as a result, so there's complete balance. We're not seeing anything that's concerning at this point in time about recoveries.

That's right.

Okay.

Okay, that's helpful.

The ore actually, the ore is acting the way we thought it would, so that's about a real positive.

Yeah, it's very similar to the very initial metallurgical studies, Stephen. Yeah. just to remind our investors that these are the very final days of the old crushing circuit that was here for the test plant and uh we are now mining into the sulfides as expected and we're just weeks away quite literally from having that new crushing circuit up and running and as i mentioned earlier we'll have a very good product going into into the ball mills Just draw your attention also, Jake, just to the bottom right-hand photograph there. We've got Pascal, our senior mine engineer, standing on top of the high-grade zone that's now into the sulfites just for your visual appearance.

Okay. And do you think, you know, you might be able to get it back up to the 90s range or, you know, high 80s? Is that something that we should be expecting? Any color there would be helpful.

Yeah, I think, Jake, we'll – Yeah, I would say we'll get into the high 80s range. There's ways to get it into the mid-90s, but we'll require capital to do that, and we'll be evaluating that in trade-off studies at a further date. We've just grown so quickly. We can't commit to that at this point in time. But certainly mid to high 80s is achievable.

Makes sense. Okay. And then sort of in that vein on growth, you know, with – The completion of the most recent expansion coming to an end here, you've obviously got some options as far as how you tackle growth going forward. Can you just touch on sort of how you're viewing that in a couple of the routes that you're considering here, whether additional staged expansions or a single large expansion? And I guess what that decision ultimately hinges on.

Yeah, so as you rightfully said, what are your options or thought processes there? So that's not something that's determined at this point in time. I would fully expect it will be either going to be a larger expansion, which is another doubling, because I think we could do that. But the focus will be to step back at this point in time with that increase in cash flow and make those capital allocation decisions, what's best for the business between the expiration program as well as an expansion. Ultimately, this project needs to get to 100,000 ounces plus for well over 10 plus years or even greater than that with an expiration drill bit. And that's our ultimate goal. There's various ways to get there, and we'll evaluate them after this expansion.

Okay, very good. That's all on my end. Thanks again.

Thanks, Jake.

The next question is from Heiko Ely with HC Wainwright. Please go ahead.

Hello, everyone. Thanks for taking my questions. Hi, Heiko. What are you seeing with that 2,000-time-per-day expansion with labor? I assume it's not really any outside employees working on the expansion, right? It's really just your staff.

Yeah, so it's both. It's some of our staff and it's outside companies as well. So like electrical, for instance, you bring in an outside contractor for that and some of the welding and things like that, you'll bring some outside contractors in. So it's a combination of both our staff and outside contractors that we manage.

Can you maybe give a bit of a breakdown of that?

Andrew, what's that roughly, 50-50?

During the construction phase, yes, because we're bringing in contractors in terms of the civils. We bring in CSI Energy for the electricals, as you mentioned. But we then provide a lot of the, if you like, the nuts and bolts, the operators that are then sort of putting it together, HICO. It's about a 50-50 split.

Sorry to interrupt you, Andrew. Is it fair to say the methodology, the approach we're taking to the expansion is similar to the first one, which is it's not sort of an EPC, you know, managed project. We're managing it, you know, in-house and sort of outsourcing, you know, trades as need be.

Yeah, that's right. What we've done is we've brought Jeff Duval back as an overseer, if you like, of the capital projects. We've hired a capital projects manager at site, who's actually in one of those photographs with Gaston, Mickey Dad. So, but also, Heike, the idea behind it is if you keep that core team in the plant involved in the construction as well, and then there's specialised Contractors then fall away, but then you end up with a team, a site that can carry on with the project.

Watching smart people do the work, right?

Well, yeah, so one of the things that's really crucial is to have, as you frankly say, smart people. When it comes to heavy electrical engineering, you want to have smart people. We actually do use one of the best contractors in actually East Africa and some of the best people I've ever worked with in the name of CSI. You've got to get that right.

Yeah, fair enough. Speaking of staffing, what do you think we'll see with labor costs for the remainder of the year? I mean, anything that you can maybe share with us in regards to negotiations or just what you're seeing with turnover, that kind of stuff?

Yeah, so we don't have... Do you want to go first, Stephen?

Yeah, I think, you know, Michael, that question comes from more of a North American and European perspective of labor rate increases that we're seeing in our economies here. We're not seeing the same type of increases there as you would have seen here in North America.

Yeah, so typically the cost of inflation or inflation in Tanzania is approximately 5%. And, yeah. We're not in negotiations.

No, and you're getting – not unlike other emerging jurisdictions, you are getting some currency depreciation of the shilling, but not to the same extent as other jurisdictions. That's correct.

Well, as a European who lives in North America, I guess I just ask questions to fit the mold. Thank you all very much, and I'll get back to you.

Thank you very much, Michael.

Thank you.

The next question is from Robert Paulson with Paulson Strategy Group. Please go ahead.

Hello, everybody. Hi, Robert. I'd like to say congratulations to Stephen, Andrew, Michael, Christine, and the TRX team for transforming TRX. Been around a while and doing all the things that really need to be done to grow and be more successful. I appreciate the questions earlier about improvements, growth, expansion, all great questions, great answers. And my curiosity, probably similar to many, is with gold steady, basically holding all-time highs, 2000 plus, volatility is really strong. As far as being minimal, you know, companies profitable, cash flow positive, strong profit margins, solid team, communities looking great. You know, central banks just keep, you know, increasing their exposure and de-dollarizations under the way. You know, my question really is, is like, it's more of like, you know, a personal question. Like, what do you believe needs to happen for TRX to reflect all these great things that are going on? Like, is that an internal event, something going on for us with exploration, or an external event, or just wondering if you could elaborate a little bit.

Yeah, that's a very broad question, and I'll try to get down to a little bit more granularity, but thank you for your comments at the outset on the turnaround of the company. Obviously, as you mentioned, the company's been around a long time. I've been here just over three years, and I would say you know, the way we like to phrase it here internally, we're probably in the sixth or seventh inning of what we're trying to do here. The original part was to stabilize, recapitalize, reestablish, you know, relationships and things like that and get the company pointed into the right direction. And then thereafter, we started to expand it. So with regards to when will someone actually stand up and take notice of what we're doing, I think it's essentially your question. You know, we're on the road a lot of marketing. What I like to say is, and what I'm seeing in current markets, and I don't think you're going to disagree with this, is a lot of companies will be out there doing a lot, even more marketing than we are, but you can't out-market your financial results. So if you don't have good financial results, it doesn't matter how much marketing you're doing, your stock price declines, and a lot more than what we've experienced over the last couple of years. And so our focus has been really on turning around the operations and increasing that cash flow and then taking that cash flow and putting it into the drill bit to expand the resource profile to make this a very attractive mining project that creates cash flow and has blue sky upside. It's taking time to do that. I think as a, you know, in my former role, things happened very quickly. In a mining project, it happens slower than you would like. but you've got to keep an eye on it and keep your eye on the long-term prize. I think what's necessary here is to continually execute, continually do as we say, continually increase those financial profiles, those financial metrics, while at the same time growing your resource base. I think, you know, the slow and steady approach that I just mentioned is what you have to do. If you come along and you hit 100 grams a ton in a drill bit because you're drilling more, then great. That's always a catalyst in any mining project. But you can't bank on it. You've got to get out there and continually do what you do with the nuts and bolts of the business. And then make sure that you have that optionality in your business plan to spring it if you can hit those drill holes. Does that make sense?

Yeah, it does make sense. And thank you for... respecting the questions. You guys are doing a wonderful job. I think everybody can agree that, you know, the company now versus where it was, you know, a short time ago is a much different company, more grounded, more opportunity, you know, clean financials, like a lot of the things people are really looking for, you know, in a marketplace that's looking, you know, quite attractive. You know, and my question really is, you know, as you guys have your fingers on the pulse and, you know, see things that other people may not see, You know, it's, you know, you know, is intuition saying it's like we're just doing all the right things and, you know, it's a patient's thing? Or are there things that we should be considering doing that we're not doing?

Yeah, and look, we have these discussions every day around, okay, what's in our control, what's outside of our control? Because that's one of the things you have to take into consideration when answering the question that you just answered or just asked, Ed. You know, we believe that consistently increasing that financial profile, doing as you say, being extremely prudent with capital. There's a lot of these things you could speed up, but is that in the best interest of shareholders? So, for instance, in making the decision, we could have just went out and raised equity last year and had the plant expansion come online, you know, nine months ago or six months ago. But is that in the best interest of the long-term value of shareholders? And so you have to keep that into consideration, and we decided just to do an internally generated cash flow. Yeah, it takes a little bit more time, but the denominator now is not as great in share count. So those are the sort of things that we try to get through and make capital allocation decisions on in getting the best value for shareholders over the medium to long term.

Fair enough. If you would allow me to ask one more question, kind of in line with what we were just discussing. You know, is there something that we could see in the future or something that's kind of close that, you know, like when we talk about obstacle-wise, is there anything that we could see that's in the way right now that would hold us back from doing or being the things that we want to, you know, be doing?

You know, right now, I don't think so. You know, we built in a lot of redundancy on purpose into this business model. For instance, you know, at year end we described, you know, motors going down in August, but we had three mil, five mil, so production didn't go down and we were able to get through it without any shutdowns and things of that nature. The crushing circuit is very important, and there's going to be redundancy built into that crushing circuit as well because I go through with a team. Give me every piece of equipment that can shut down the whole thing 100% and make sure that that piece of equipment is on site. And so we go around and infill that. In the medium term, I would say we need to get a much better handle on tailings. We've got a good handle on it, but we need to build it out. We need to come up with a longer-term strategy on that. That's the only thing that I can see that can really slow us down, and we've got a handle on it right now in order to – You know, we'll have a study on the go at some point in time here soon on thickeners. It's already kicked off with us, Stephen. Yeah, that's already kicked off. Okay, yeah, filter presses to get to dry stack. So we're out ahead of the stuff that we can see. I think, you know, what you're really asking is, you know, and it's hard to predict, is what can't you see that can trip you up? That was a much harder question. That's right. Yeah, that was that. Yeah, I'm trying to figure out what we can do. Yeah, the unknowns, right? And you get them, and they happen time to time, but we take the philosophy that you build enough redundancy and you should be okay.

Yeah. Yeah, Stephen, we've often commented that it's a lot wetter. Whilst we were prepared, having the El Nino effect has really come hard, but the pumps are keeping the pit dry. It's muddy. Yeah. But we're still mining. We're not flooding yet.

Yeah, so for instance, one thing that I always look at is, okay, say something were to happen. We have a large stockpile on site. I think there's 12,000 ounces there now in stockpile. We need to get a much larger crush stockpile, which we'll work on when we get the new crushing system up and running. So I like to kind of think about, okay, how do I build all those what I'll call internal insurance policies into the company?

Yeah, good man. Thank you for answering those questions. I know they're very surfacy kind of questions. There are some who've been around a while and are fans of what you and Andrew and Michael and the rest of the team are doing. You know, we've been at it a while, and we're certainly looking forward to what seems to be coming down the road. So maybe where we started was congratulations, and maybe that would be a great place for me to end. Congratulations and thank you. Thanks, Robert. Appreciate the support.

I'd like to hand the meeting back over to Stephen Maloney, who will take us through questions submitted in writing.

So the questions submitting and writing. So we have one question here on, I think it says 2005-2006 common slide for M&A opportunities timeline. So let's talk about that on the M&A for a second. I think it's just more along the lines of what M&A opportunities are out there. So we're always consistently looking at M&A opportunities that would make sense for shareholders. And as you're getting the sense of, we don't really mind situations where you've got to get in there, roll up your sleeves, maybe a little bit messy, and create value from it. That would be similar to when I came into this opportunity as well as a team. So we all evaluate things that make sense. What I would say is we're very prudent on making sure we do not cannibalize the growth opportunities at Buck Reef. cannibalize the clean balance sheet and bring on stuff that may upset that. When we look at companies that typically are in trouble from an equity price perspective, their market cap perspective, usually they have securities that rank ahead of equity on their balance sheets that are very problematic. And that's very difficult to get out of because what ends up happening is your business becomes undercapitalized over time. And mining is a very capital intensive business. So we will prudently evaluate opportunities, but given it has to make sense for shareholders, it also has to increase growth potential. These are the buck brief because buck brief has a lot of growth potential. And so it has to have better growth potential for shareholders than buck brief does in order to make sense. And that's difficult to find. And so that's how we evaluate the M&A opportunities. Yeah, and I might just add to that briefly, Stephen. The comment was around 2025, 2026. So obviously you've heard our focus for this upcoming year is getting Buck Reef to the point where it's operating at 2,000 tons a day consistently and predictably and effectively running itself before we – They'll start venturing too deep into strategic waters elsewhere. Yeah, we have people approach us all the time, seeing what we're doing at Buck Brief, saying, can you come and help us? But then you start talking to the equity holders of that, and they're saying, oh, it's worth this, it's worth that, and we're there. Thank you, but no thank you on a lot of those opportunities. So the next question there, is there any plans, I guess, along growth, again, to acquire additional mining lands, cooperation, small cap miners in the next two or three years? I think I just answered that question. Yeah, we will evaluate that. We've also looked at, we continually evaluate growth profile about grief. Tanzania is an interesting landscape, and there are quite a few high-grade, smaller deposits around. And there are other companies out there that do have hub-and-spoke models, and I think that will be something that will be evaluated further over time. So we have in Buck Creek learned how to build roads. We have learned how to build plants very cost-effectively. So, you know, there are growth profile opportunities that will start to, as we get through this expansion, which is where our focus needs to be today, to really look at for longer-term strategies. I think, you know, there are certain people on our board that are very happy with the questions that have been asked by investors today.

Yeah, and Stephen, maybe just to give a little bit of what comes to that, as you'd expect from our geological team, we do like to know who's around us and what they're doing. Yeah. At a very high level. We don't spend a large percentage of time on it, but we obviously just keep a very high level inventory. Yeah.

So I think that's all the questions that are in the queue today.

That's right. Would you like to give any concluding remarks before we conclude?

Yeah, just one final remark. I think we said it. We're very excited for the future. We are moving through the business plan as anticipated. Looking forward to the increase in cash flow from this expanded plant. And I can tell you, Andrew and the geologist team are excited You know, no pun intended, chomping at the bit. Thank you.

Actually, yes, that's true. Thank you. Thank you, Gaylene.

This concludes the meeting. You may disconnect. Thank you for participating and have a pleasant day.