TRX Gold Corporation

And welcome everyone to today's event, the TRX Gold Corporation second quarter 2025 results presentation. As a reminder, all participants today are in a listen-only mode, and the meeting is being recorded. After today's 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 will see the option raise your hand to join the queue and ask your question verbally or write a question to submit your question in writing. When you are introduced, you may see a prompt on your screen. If you do, you should click the continue button to confirm that you are ready for your line to be opened. Analysts who have dialed into the conference call may press star then one on your telephone keypad to join the question queue. I would now like to turn the meeting over to Stephen Maloney, CEO. Please go ahead, sir.

Yeah, good afternoon and good morning to everyone. Welcome to our Q2 conference call for our Q2 results, as well as a lot of people are aware of we did release the results of a PEA yesterday. We're going to certainly focus on that today. So the nature of this meeting today is we're going to present our a high-level overview of our Q2 results, but also go through what the results are of that PEA study and directionally where we're going. The results of the PEA study, we're all excited and got a big smile on our face. With that, it's a culmination of a lot of, really, years of work culminating into – a high-level document around what this business could be looking like today and where it can go in the future. And joining me today in the room is Michael, our CFO, on the line from Perth, Australia. Here's Richard, our COO. Richard, put up your hand. There you go. And we also have joining us from Dar es Salaam in Tanzania, our SVP, Kalaf. Raise your hand. There we go. And so we're all going to present here today, and we look forward to your questions. I expect a lot of questions. I see quite a few people on the line. And I know many of you, Mike knows many of you, as well as Kalaf and Richard. So we will leave extra time for a lot of questions today. So without further ado, let's get into it. First, we have our Disclaimer, this disclaimer has changed now. The PEA report has been prepared by P&E consultants. The summary is them and their qualified persons pulling all the information together with the assistance of TRX Gold. They are all independent, as well as our RQP, Bill Van Brugel, is also independent, and so the information With regards to TRX Gold in advance, this is now changing, given what we've put into the press release yesterday. So the Buckwreath Gold project is in Tanzania. We continue to operate at around 2,000 tons a day on our last expansion. We are now updating the market on what the potential is to continually expand that asset. as well as the refocus on blue sky exploration potential while continuing to operate a really good asset. A couple of the things that you will see from yesterday is the grain profile is now higher. So we've now refocused the ore body on economics versus shear ounces. And with that, you have a higher cutoff rate. In your economic analysis, we'll get into that in one of the slides. And so your grade is a lot higher in your resource statement. And as we've explained to a lot of investors and a lot of participants on this call over time, grade is a significant driver of cash costs. The lower the grade, the higher the cash costs. The higher the grade, the lower the cash costs. And so we evaluate the business on a per ton basis and go and look at the deposit, and every deposit is significantly different. And when we look at that, we look to accelerate economics and cash versus sheer ounces in the ground. You can lower the cutoff rate to 0.1, 0.2, but that doesn't mean that you're going to come out of there profitably and expand your grade profile. So under... The PEA, when we look at this as an economics basis, at $3,000 gold, it produces around a $1.2 billion pre-tax net present value, as well as a $766 million post-tax net present value. And we didn't quote an IRR because under our business plan, right now it's looking in that business plan, It has the mine expanding the processing plant first and then expanding into the underground portions of the deposit, and that is there's a lot of cash flow created from that. So anything to add to that, Mike, from our release yesterday? No, I think it's pretty clear, Stephen. I think what's important to note is we haven't been able to demonstrate with this study along mine life. It's just under 18 years mine life. You know, average annual production of over 60,000 ounces peaking at over 90,000 under this current structure. Lots and lots of room to optimize. We'll get into that when we talk about the study. But importantly, when you talk about cutoff grade and things like that, you'll note that the life of mine cash cost is still very low. It's in the lowest quartile, the cost is just over $1,000 an ounce. So, again, a high, high margin operation. I did have that in my notes here that I forgot to mention on the cash cost. That was really good as well. That's continually the focus on the economic stuff. On the next slide, so we are an emerging producer, so we're still small production. We're going to get into why we're increasingly bullish in the second half of the year versus the first half of the year. We did undergo an extensive strip campaign, Richard Wolff, He explained to us that we have a couple of slides to really demonstrate that from a visual perspective, where that confidence comes from in the second half of the year versus the first half of the year. As Mike mentioned, we are a high margin business. We do have a significant resource that's now high grade. We will refocus priority on drilling to expand that because that's one of the upside and continually focus on sustained cash flow. With regards to the – we're currently seeing over – versus the first half versus the second half of the year, we're currently seeing, you know, daily production over 50 ounces a day now and increasing. I saw the daily this morning. It was quite nice. And that is – Richard will get into why that is the case on a slide that shows a great profile that we're currently mining versus what we have been mining. So – Once we get that moving, the expansion and those sort of other things will come on the back end of that. Well, and Stephen, I might just comment, you know, for those that might be new to the story, after having seen the study and the PEA results, you know, we are in Tanzania, as you mentioned, and, you know, we comment here on the slide. We do see it as a Tier 1 jurisdiction, and I think it's important to note that part of the reason we characterize it that way is because it's a part of the world where you can get things done. You've heard us say that before, but, you know, this asset is fully permitted. We've got a special mining license that allows us effectively to grow this asset on an unencumbered basis. So When you look at the study and the growth that we've modeled in our business plan, the special mining license that we have, which is unique to Tanzania, allows us to grow this asset and achieve a lot of the targeted metrics that we've included in the study. So very, very good place to do business. Yeah, thanks, Mike. So with regard to what Mike was just saying, obviously I mentioned that we put out a robust PEA yesterday with great numbers in it. That's a higher grade now, which means lower cost. It is a shallow deposit. It does come to the surface and continues downward. It's a vertical body. We are understanding metallurgical recoveries more and more every day and have studies to achieve high 80s to low 90s of recoveries over time as we upgrade our plant. Richard is in the throes of that right now, and it continually deals with – the labs around metallurgy, and we understand it more and more every day. We are fully permitted with the special mining license going to 2032. Obviously, we're environmentally responsible on the ground. I've spoken a lot of times about that. We have very high priority known goal zones from an exploration blue sky potential. That's not included in the PEA. That will be upside over time as the droplet gets in the ground. And we have established both from a physical infrastructure perspective and a social or HR infrastructure perspective as well around the assets to continually be able to give us the confidence to continually expand this asset. We've done three expansions. Don't see another reason why we can't do another expansion to restart and unlock the value of Buck Reef. And, Richard, I'm going to pause there. And anything to add to what I just said here? Because you're already at the throes of this day to day.

Stephen, I concur with what you say. We've been growing the capacity of the plant and the project and the people over an extended period now, and the more... we had some successes in the project, the more those good results are repeated. So we're starting to see some good consistency in repeats now. And as you've mentioned, we've turned a bit of the direction of the mine around. We've got through some hard work and we're now at the other side of some of that hard work and seeing some good grades coming through the project. So plenty of upside still. It's a very young project. It's a very young team that is learning a lot. And we've got a lot of growth potential, not only in ounces, but in efficiency and productivity to come as well.

Thanks for that, Richard. So with regards to, we've had a fast-paced transformation, as Richard has mentioned. And I know a lot of people would like to see, you know, this is a little bit backward-looking. We will, over time here now, give more forward-looking information here because a lot of the 2021, 2022, 2023, that's in the rearview mirror. We're going to be focused solely on what's to go forward, and the PEA provides the basis of that. The upside in that PEA is the gold price was at $1,900 for resources, so gold price is higher today. The plant size, we'll get into this in a second, 3,000 tons per day. You can increase that and move up some of the economics, as well as increase your mining rates, move up the economics, as well as over time moving in your exploration success into that plant. So although it's a layout and a period of time, it will consistently change over time as we continue to refine it. With regards to the operational growth since 2021, this is what really starts to give us the confidence to really focus on expanding again. We've done this three times. Richard and team have a detailed flow sheet. They have the detailed cost for that. That is in the PEA study. They have We're starting to put together timelines, which are always fluid as you bring these components in. We do have similar people executing it, and it has been signed off by reputable engineering firms on flow sheet. What you will notice in Q2 results and Q1 results is look at the average head grade. So when you have a lower head grade, you have higher cash cost. We will get into it in a second. I see the slides coming up. around what the head grate looked like from a visual perspective in the first half and what it can look like in the second half. You do see a little bit of slowdown in what I'll call processing tons, given you're into a little bit harder rock versus what we were in the early part of the mine plant. But that will be improving as we improve the plant and upgrade that plant. in order to get higher throughput levels coming up. But, look, the processing costs per ton have come down. Our mining costs are consistent, and we know how to get those lower, and we're getting the better head grade as we go forward. And I didn't add your mic because you're knees deep into the numbers all the time. No, I think you said it well, Stephen. I mean, the processing costs would be the key one to highlight. I mean, through the expansions, what we've begun to realize, our economy's a scale, particularly when we went from 1,000 tons a day of throughput to 2,000 tons a day of throughput. You know, our costs have come down from $20, you know, $22 a ton down to sort of $13, $14 a ton, which is certainly in line, if not below, international standards. So we're starting to see, as we scale this plant up, economies of scale. and expect for the full year of operations going forward that we should benefit from that larger plant. I consistently put out this slide, and this is in a different format this time, around prudent capital management to achieve profitability and move through. And this does take, look, a lot of mining companies raise a big amount of capital, put a drill within, put the plant into production, and then it ramps up extremely quickly. This business model has taken a little bit more time because of the nature of it. We've used, you know, basically cash flow from operations as well as, you know, some supplier financings to build up the operations to date. In Q2 and half fiscal 2025, we are seeing the record gold prices come through. We will continue to see those. EBTA is a little bit lower than what it will be in the second half, and that is, as Mike just mentioned, great profile. But the cost profile on a per-ton basis is still there while holding our G&A expenses throughout a period of time. So in the first half, we generated $22 million of revenue and just over $5 million of EBTA reinvested that back into the business. I'm going to come back to this slide because it's not really in the order. I'm going to go into what gives us the level of confidence in the back half first, and then I'll reverse and come back to this slide because that sets up for the PEA fairly well. So second half, I've taken a few messy pictures here. Richard will be able to explain this slide better than I can, but what you see here is what our stripping campaign is. And so you see March 2024, the pit is high. It's not down in around the high-grade areas. And you see April 2025, and what you'll notice is there's more benches. I think there's two or three more benches in that photo. You'll see the sulfide rocks there starting to be exposed. And you will also see the pit being a lot wider. Rich, you want to just give the investors just a quick overview of what they're really looking at here?

Well, we're looking at the main pit from the south to the north, and we're really just getting back into this part of the pit, having spent a good six or eight months further north where you'll see... If you can sort of distinguish the drop in vertical descent, probably we've dropped about 30 metres in that northern block, and we're down at about 20 to 25 metres in the southern area now, and we're quickly catching that up. So from what you can see on the... A year ago, we were mining in... in very easy, mineable oxide material. Now we're into much harder sulfide ore. We're now taking 10-metre benches, as you can see there, instead of 3- to 5-metre lifts a year ago. It's pretty hard to distinguish, but there's a larger fleet of equipment now operating, and our production rate is climbing up towards 20,000 tonnes a day at the moment as we're exposing bigger areas of the pit. We're getting ourselves organised with the cycle of open pit mining, drilling, blasting, balling, and back to drilling again.

So I'm going to put it down to this side because this side now visually shows where we were. And I'll move my cursor, Richard, as you explained this, because we were up in this area up here in the first part of the year. Anything above the line is what we mine in the first part of the year on the ore basis and waste. And anything below the line is what we expect to do in the second half. You want to just give the investors a quick overview of what they're really seeing here. We like purple and pink colors in our models. That means basically it's higher grade, as you can see in the legend here. And then in the first half, we had –

Exactly, Stephen. Unfortunately, you've got to take these pits down in a relatively even fashion and we've now done the hard work over on the right-hand side or the north of the pit, moving that down and we've had to endure some fairly low grades while we've been mining out in the first half of the financial year. We've moved now our focus back over to the south, and as you can see where the line is in the very far south, we've got a bit to drop down to get that to an even basis. But the good news is if you look for the warmer colours, the reds and the purples, the grades in that southern section are particularly good, attractive, very good for an open pit mine. seeing some higher grades coming through the mill now and we'll see those gold production quarterly numbers start to jump up now.

And I just want to give a quick explanation of the black areas here, because these are underground workings from the oil mining areas.

Certainly will be. Black is not a good grey. These are voids taken from the underground mining that was conducted in the 1930s. 80s and 90s, or 70s, 80s and 90s, there's been about 80,000 to 90,000 tonnes removed in that 20-year period. And our job now is that those holes or voids were never filled. So we have to take care when we're mining around those. All of the production of the ounces in that has been removed in part in our schedules and our resource models. But we now have to be careful as we go down through these areas. So we've got a very clear plan that everybody's working to that allows us to work safely around and through and down past these void areas.

Yeah, it's not by accident that the void areas are around the nice warmer colors, as you put it, in the purples. particularly in around here and in around here and then over here. So we will have another slide in a few minutes on the PEA, which will show where we're going underground. And you'll see underground workings coming around here, all in around here, and then to the north up here, and then an off junction into the Stanford Bridge area, which needs So now I said I was going to jump back, so I'm going to jump back. So we just gave you an overview of why we feel more confident in the second half of the year. Gold prices are great. That helps, always helps. The better the gold price, the better profit is going to be. Five, you can't let your costs get away from you, even in a good gold price environment. So we're continually focused on those operating costs, as Mike mentioned, there is more economies of scale in this plant. There's also economies of scale in mining as well, which we're starting to experience, and those costs will come down. That, combined with better grade profile, will mean that there will be more ounces produced, as Richard just went through, given the grade profile where we're getting to, in the second half of the year versus the first half of the year. So good gold prices, Focus on operating costs. Good grade means higher ounces and hopefully higher profitability. The larger scale operation, as I mentioned, we've done this three times before. Richard and team have gone through all of the engineering details. That is all specced out. It's all costed out. And now it needs to start to be executed upon. and phase in over time. And in that plant, we are looking at upgrades to the circuit, particularly around a flotation and regrind to get a higher recovery rate. So moving from 80s to high 80s, maybe low 90s. That is the goal. Also on the front end of the plant, that's on the back end of the plant, We're looking at potentially a 70, but in the interim, it may be a crushing upgrade. That's not in the PEA because we can get higher throughputs just by a crushing upgrade, and then we need to put the flotation regrind on the back end. We're also upgrading the elution circuit because we have more of a rudimentary elution circuit now to a, you know, fully stated error elution circuit. That will give us a couple points on recoveries as well. And so that is all well underway. The exploration success, once we get refocused now with that higher cash flow coming in the back half, putting the drill bit back into the ground, we fully expect that to be coming through as well. We've got those high target areas in Anfield, which is adjacent to the pit. If we can bring in some open pittable resources there, that would be great. And then we have Stanford Bridge, which is the highest grade part of the portion. of what we're seeing thus far at over five grams a ton from a resource perspective, initial resource perspective, to look at the gold mine as well. Richard, anything to add to what I just mentioned?

The good thing is we've got an operating mine now, and when we're doing our cost estimates, we've got real data to go off and real... real experience on what is available with throughputs and everything else. We've done some metallurgical test work already to... to define how we can improve recovery. I'm very confident that they'll be very successful. And we'll have some small incremental recovery rates, but then a very significant one when we expand the plant with the flotation circuit, which is a pretty standard technique for sulphide gold ores around the world and certainly in Africa. Yeah.

So on that basis, let's get into the PEA and what the approach was. As Richard mentioned, it's based on a lot of the data in the PEA. It's actually based on real data. So typically when you go through studies, the feasibility study in a pre-production property still has not actual costs, not actual data on recovery rates, It has more theoretical costs. Whereas even though this is a lower-level report than the feasibility study, it probably has better data than a lot of feasibility studies because it's actual real data. And that's why we went with this sort of approach. And everminers that are into production go with similar approaches because you want to give the market a sense of what the overall project can look like based on real data and then bringing in your inferred resources into A feasibility study, you can't bring in inferred resources. In a PEA, you can't. And we're confident in the measured and indicated category as well. So when you look at our deposit, it's drilled more up top than it is down bottom. So the inferred resources in that mine plan are later out versus the front end of the PEA is based on, you know, better data in the measured and indicated category. It's more intensely drilled. So when we look at the mine and plant expansion, we look at 3,000 tons a day, so from 2,000 to 3,000 tons per day. And as I mentioned, that is one of the areas which we can upgrade over time to move up economics. We'll make sure that when we do an expansion, it may be greater than 3,000 tons a day throughput as we get there, but it's certainly something that will be open and will, as we've done already, make sure that the plant is easily upgradable by putting more tanks on or a bigger ball mill over time to do easy expansions. The mine plan, as I mentioned, Bob reached a vertical deposit. So when, and I've said this to American participants a lot, is you will have several years of open pit, and then you will go underground. Because what is happening, when you go back to the picture of the pit, you notice how it goes out wider. So the further you go down, the wider you're going to go in order to be safe. And that means you've got to move a lot of waste. And when Mike is computing the cost of moving waste without gold in it, he doesn't like it. So he wants to minimize that. And so when we get into the underground workings is your cost and upfront or more underground development costs.

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Mineralization perspective, you're able to get good mining costs at even two and a half grams a ton underground. With regards to process and recovery, we mentioned this several times. It will be So what that really is doing is right now the plant is capable from a throughput perspective of getting around 80% passing 75 microns. That gives you high 70s, low age recovery rates. If you grind that finer, it was forwarded more gold to the cyanization process. So if you grind that down to, say, 40 or 50 microns through floating it and regrinding it in a high-intensity grind mill, then your recovery rates will come into the range that were mentioned here, 88% to 92% is what we're looking at. The PEA, as we've mentioned to a lot of market participants, is we've expanded the plant half of cash flow thus far to PEA, has a similar type of business approach in it. Open pit, profit is used for underground development, while continual cash flow is used for upgrade plants. So the way it would be in the PE is they'd upgrade plant, increase cash flow, do underground development. I think in simplicity, that's really what's happening in that underground development. Now, when I was saying... Here's a picture of what this underground development looks like. As you can see, I went into the areas of the pit that that encompasses. So we have the eastern periphery, which you can see in the gray profile, to the side with an open pit resource as well as underground workings. This is the north part of the pit going down, and this is the south part of the pit going down. You'll see all the works and details. This takes a lot of time to do, your underground development, tunneling and costing that out and things of that nature. So with regards to the economics of the PEA, it's on average 61,000 ounces, so 62,000 ounces a year over a 17.6-year mine life. As I said, you increase the plant, increase mining rates, that gets higher and moved up. The annual free cash flow is around $64 million at $3,000 an ounce. Growth capital in the first four years, as I mentioned, is phased in around $19 million now. Over the life of mine, it's $185 million. Cash costs are around $1,000, $1,200 for all instating costs. I suspect that is well down in the lowest quartile. Pre-tax NAV of $1.2 billion and $770 million after tax. Net present value all at $3,000 gold. This gives an overview of the breakdown of this. Now we're getting into real data here. The first two columns or first two rows are for the plant upgrade. Then you have your underground workings. You see it detailed by year. We do have to have a tailings expansion for the open pit. For the underground, we're going to have a paste backfill. So what that entails is you're basically, when you mine out your underground workings, you put it back with a little bit of cement. and it's a paced backfill, so you have a paced backfill plant, and so your tailings go back underground where they came from versus having to have a big tailings facility. That reduces operating risk from our perspective. We have line tailings facilities that are quite safe in Tanzania, and the regulations are quite high around tailings. So we sleep at night as a result of that, but having a paced backfill will be good. You'll see a breakdown here, and I don't think anybody's really seen this breakdown before, around how you build up your cash costs and how you build up your total all-in sustaining cash costs to $1,000 an ounce and $1,200 an ounce. You have your mining, your processing, general and ambient, royalty costs, selling costs, quite detailed. Stephen, I wonder if it's worth maybe Richard just commenting, maybe in terms of capital, particularly the underground capital market, It's far less capital intensive than folks, you know, may have seen in other underground development projects. Richard, maybe it's worth commenting just for a minute on the approach we're taking to going underground and why it's so efficient from a capital perspective.

I don't know that it's that capital-unintense. It's well thought out. The design so far, the all-body lends itself towards being relatively efficient. We've got good ore tonnage and ounce profile for every sort of vertical metre we drop down through the underground workings, as you would have seen in the schematics. It allows us to access it from only two declines, whereas other projects may need multiple declines to do that. We don't see value in putting in expensive infrastructure like a hoisting shaft or a other conveying systems and things like that because our model and our plan is simple. We have to get the equipment underground, the mobile equipment underground and that same portal to get our equipment and personnel down will be the same means by which we bring all the ore out. That's really why we keep this thing at a low capital base and we develop as we need it. So we will develop the mine progressively rather than having to do a significant amount of development just to start the mine. And that means we get into production a lot faster as well. Thank you.

Thank you. So with regard to sensitivities, you know, the purpose of this slide, I'm not going to spend a lot of time on this. This is in the press release. It does show a great leverage to gold price. If you keep your cost profile low, you will have leverage to gold price. And as I said, there is upside. You can play with this a little bit by lowering your cutoff grades, bringing in more mining rates. But if you lower your cutoff grades, as I mentioned, you have higher costs. But you have to balance that with actual sheer cash flow. So if you were to do that, you might actually create more sheer cash flow and give a day off that, even though it would be lower margin. And that's the equation that you look at in these mining studies and in your mine plan. Perhaps just to state the obvious, the upside case is $3,000 an ounce. We're currently running at about $300 an ounce above that today. So onward and upward from here. Yes. So... With regards to the updated resource statement as a result of looking at economics, the key here is there's much different classification between the 2020 resource statement and the 2025 resource statement. 2020 would be on an unconstrained basis, which means you do not have to put economic pits or economic underground workings around your resources. 2025 resource statement and new rules require you to put economic workings in open pit as well as underground workings around your resource and applying costs towards those to ensure that they're economic ounces. And so what we've done is we've done a bridge between the 2025 MRE and the 2020 MRE program. and put it there. And part of it is we come down to a 350 level into 2020. There was resources down below that. In any mining area, you would have what you call a hanging wall and a foot wall outside of the main zone. Those would be off to the side and harder to get to. And when you go underground, versus going above ground or open pit, you have a higher cutoff grade versus an open pit resource. So our resource has a cutoff grade for the open pit and then has a higher cutoff grade for the underground to make sure that it is profitable. And as I mentioned before, there are artisanal workings in Tambo and Bingwa on the peripheries of the deposit, so we haven't included those this time as well. So where we get to is a much higher-grade deposit and a much more profitable deposit than we had before, even though the sheer number is lower. Well, let's see. Just to reiterate, and at the risk of being repetitive, just saying it again here, you know, the focus, when you talk about things like cutoff grade, when you talk about things like pit design and scheduling and sequencing, when you talk about underground development and how you expect to access that ore body, Our focus was on economics and maximizing NPV and free cash flow. So economics was the basis for this study, and we were very happy to see the end result. So as I mentioned, we will need to get back into putting more drill bits in the ground around the blue sky potential so we can make those economics even further better. The focus will be on Anfield and Stamford Bridge as we go forward. We'll also do a geophysics survey to see if we have any potential higher-grade trends that we haven't identified around the property as well as we get into the second half of the calendar year. Stamford Bridge, in our resort statement, I think we brought in around 40,000 ounces in the inferred category, around 5 grams a ton. Obviously, we need to continue to drill this out and infill that drill program. So as we infill it, get it deeper down, and infill a little long trend, that gives a higher level of confidence to go mine this stuff in between, and that will be a focus as well going forward. With regards to Tanzania, I always got to mention Tanzania. We got to go off on the line here today. Look, we consider Tanzania to be a good jurisdiction. I must say, over time, and everybody asks me a lot of questions about government and how government is acting, we get more and more comfortable with how to manage the government, what they're going to do, what the motives are behind it, and how to work with them and be fair and open and transparent. So, you know, although it does go up and down, they do have, you know, economic and political objectives. Understanding those, understanding where they're coming from and how to work with people is certainly something that we become more and more comfortable with over time to play myself and to manage that. We get things done there. So that's one of the things. We're on the national power grid. Great. Good electricity. Julie Sneer is up and running. It's hydro. We get our goals out. And it's, you know, there's a large mining presence in it, in Tanzania, Timberic and Anglo. Lots of employees can come from there and a good employee skill set. Lots of money has gone into Tanzania on the M&A side. Mines continually expand. I believe, and I just got a look at my LinkedIn feed, they might have met that 10% target. Certainly, gold prices will help them get there just organically. But, yeah. But I think they may have met that, and the minister is telling that today. And we're able to bring things in and get the asset moving forward to great value. With regards to share price, markets are continually being tough. We have seen a pop in the last couple of weeks. I'm hopeful. that now that this study is into the market, people are able to more readily see a roadmap to value creation versus what we presented before. And that will help underpin the share price and bring in some new investors into the stock as we continually execute on a roadmap and a business plan. So key investment highlights. Again, we've done this before. We'll continue to grow, keep an eye on profit margins. We have that track record of doing things on a time-out budget. We now have an overarching guideline. I call it a PAA guideline. It's not the actual business plan, but it's a guideline of what we can do with the current resource. It will change as we get more and more information, but we at least have a roadmap there. We're comfortable operating in Tanzania and dealing with the various day-to-day issues there. And as you are getting a sense, we have a very experienced team here and good leadership to be able to continually execute as we go along. And I am going to stop there for questions.

Thank you, Steven. As a reminder to everyone, if you wish to ask a question, please click the Q&A icon on the left-hand side of your 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. If you are going to ask your question verbally, you may see a prompt on screen. If you do, you should click the continue button to confirm that you are ready to have your line opened. Analysts who have dialed in over the phone into the conference call, please press star then 1 on your telephone keypad to join the question queue. We will now pause momentarily as participants join the queue. And today's first question comes from Mike Nihuser with Roth Capital. Please proceed.

Mr. Neha. Good, thank you. Can you hear me okay?

I can hear you just fine.

Good to see Khalif as well, so you can smile, Khalif. I just want to maybe make a comment that's more of a compliment as well. It's interesting to go back to the prior technical report in 2020 and the world you were facing with high capital costs and really, as you say, A lot of assumptions compared to now having cash flow and real data is really something that, you know, needs to be kind of layered over your presentation because it really, again, it's a complement to what you've accomplished. And, of course, you know, higher gold price doesn't hurt, too. So lots to take in with this, the last couple press releases. Could you just do me a favor and put up the Anfield slide again? Is that something you can do?

Yeah, absolutely.

And I had a question about that. Is there any open pit potential there?

Yes. Yeah, absolutely. That does come to surface, and it's quite shallow. So when you go through our holes there, Mike, I don't have it in this presentation, but it certainly is shallow and continues to go down.

And how soon will the PEA be out, be filed?

It has been filed within 45 days. We're hopeful to get it done before that.

Okay, very good then. Really no questions, but really quite a remarkable milestone coming from where you were a couple years ago, and congratulations.

Yeah, thank you, Mike, and thank you for your support.

And the next question today comes from Jake Sikelski with Alliance Global Partners. Please proceed.

Jake Sikelski. Thanks for taking my question. Good morning, Jake. Good morning, Jake. So, just looking at the 89 million in growth capex spread over that four-year period, is this timeline assuming a self-funding strategy? I guess what I'm getting at, is there an opportunity to accelerate the timeline for the expansion if you explore external funding options?

Yes. The answer to that is yes, there's a timeline to put that. And I see Richard smiling at me when I say that. But there are sequence items there, too. So it's a balance is what I would say. You can accelerate it, but you would increase the risk profile. And so there's a balance between the two. To be quite honest, some of it has already started.

Okay, that's helpful. And then just on permitting, is the underground included in the existing special mining license, or are there some additional permitting items that need to be done to go underground there?

Yeah, special mining license does cover underground. Whether there's going to be, you know, what I'll call auxiliary permits, We'll wait for the bigger study to come out in the next 45 days, but it's the same as the open pit operations. You have special mining license, you go mining, but you still need to get a tailings ribbon.

Got it. Got it. That's all for me. I'll hop back and say congratulations, everybody.

Thank you.

And today's next question comes from Stephen Reaser with Family Office. Please proceed.

Oh, hi, everybody. Firstly, thanks. Can you all hear me okay? Yeah. Okay, great. Good morning. Thanks. And, yeah, I echo the comments of many of the analysts. These are very exciting results, even at the PEA level, and certainly very much appreciated by the investor community. I wanted to get your view on a couple of items. First, actually, probably a little more tactical. You've used a 5% NPV in the results and wanted to get your view as to why that normally, you know, personally I've modeled this at around a 10% cost of capital. thinking about the actual cost of the equity and normal capital asset pricing models. So we're now more in the range of the 30-year T-bill as the discount rate. It's a lower risk for discounting, and that could be okay. That was done in the time of the 23-101B as well, but just wanted to get your view on the use of that discount rate.

Yeah, so when you're doing mining valuations, and I've got lots of experience doing this, you typically use for all mining assets a 5% discount rate. Now, the analyst will tell you that it's because gold is kind of a special sort of commodity that, you know, should get that type of discount rate. Where you adjust, Steve, from asset to asset is in your price and that asset value multiple. So what would end up happening is, and we see this in the market, assets that are in North America trade at a higher price and net asset value, multiple, than African assets. And you would also notice that the price and net asset value for a company for multiple assets is usually a lot higher than than the price and net asset value for single asset companies. So you use your 5% discount rate from a comparability perspective, and then you adjust your valuation through your price and net asset value multiple.

Okay.

5% to 10%. You can do it that way, or you can do it on a price and net asset value multiple basis.

Okay, that makes sense. The other element you hinted on is that the effort could be self-financing. I know in your forecast for the price of gold, you've used in year one, I believe, around $2,700, just a little over. It then drops down by year three to $2,500. So if gold was at those prices, which are significantly less, of course, than the price today, Would you actually be able to self-finance? Is your $89 million estimate consistent with that step down in gold prices and ability to self-finance there?

So based on the financial model that was developed and it's in the press release, you'll see that we did a stat chart, one at the gold prices that are base case and one at the $3,000 per ounce case. Okay. It's a lot tighter, obviously, at the base case, but still theoretical and IRRs and stuff like that are based on base case. You have to keep in mind, too, that the base case is based on what we have to report from a market's perspective, and that's more regulatory driven. And so, you know, you have to go with consensus pricing. and analysts take time to update their consensus pricing. So that first four years is based on what we have to, from a regulatory perspective, report.

Okay, so based on the step-down in prices in the base case, is it fair to assume that TRX could finance at those prices used in the step-down and the prices used in the model for the price of gold, that that would be still a region of self-financing for the $89 million, or would it be different?

Yeah, so the way you phrase it, region and potential, yeah, the financial model has developed, says it's potentially possible, yes, assuming that you've executed based on the plan that's been put in front of you and you have no wake-ups.

Okay.

You can also, like, you can play with it, you can delay it, and bleed it in a little bit more over time. And so that is one thing that we always look at is, How do you create higher shareholder value? Although we've done this plan this way, Steve, thus far, unfortunately, the share price has declined, even though we haven't been to the market in almost four years now. Yeah.

Yeah. But certainly the fundamentals, I think, as one of the analysts mentioned, continue to come through. And hopefully the share price will catch up in due course. I also wanted to ask, Stephen, you talked earlier in the presentation about the expansion to 3,000 ounces first, and then, well, let's call it somewhat, you know, these phases can be staggered. somewhat the move to expand the plant first, then to continue the move or transition from the surface drilling to the deeper drilling thereafter. You know, as one looks out over the next 36 months, and also very encouraged to hear that some of this has already started in your commentary, you know, are there key operational milestones that And I don't want to say looking out quarter by quarter, but looking out on a time, temporal basis that investors should be looking for to see the things that are moving according to that overarching plan. So just trying to get a little more detail on what might be some of the sub-milestones to be looking for.

You're kind of a, you know, it's a real-time conversation, so some of the milestones and Richard's needs deep into this. is, okay, we want to get throughput even incrementally higher because that creates more gold, obviously. And in order to do that, one of the things is there are certain, what I call, more maintenance CapEx items that are going into the plant to help there and perhaps on the crushing circuit as well in the interim. But the biggest things are getting that flotation and regrind plant up and running. There's also a need to have a thickener in the front. So currently one of the impediments to higher head grade is we do need to mix oxide materials to the flow of carbon. From the viscosity perspective, I'm getting really into metallurgy now. And once we put the flotation plant in, sorry, the thickener plant on the front end, that will help alleviate that and put 100% high-grade sulfoids through the plant at that point. So those are a couple of the milestones in which we're currently working. And that's all in the capex, which we're currently costing out, as well as the elution plant as well. So what you're hearing from me is there's not one specific item. It's going to be several items over time to get you an end goal. So right now Richard's focused on thickener and elution, and then we'll focus on flotation and rewrite. Did I get that in the right order, Richard? Then you'll focus on safety. Yep.

Pretty much, yeah. We'll do the things that give us the biggest bang for the buck initially and then ultimately we'll increase the overall capacity of the plant once those other flow sheet aspects are taken care of and at that stage we'll be mining underground and feeding a combination of open pit and underground feed.

And it's really anticipated too, Steve, that throughput should be able to go up just by putting a flotation and regrind on. So even without, say, the front. The amount of increase yet, we haven't estimated that yet. And that's part of some of the work that we're doing as we continually, you know, focus on recovery rates and metallurgy work that's currently ongoing and is always ongoing.

Okay. And, you know, again, the operation continues to show greater and greater potential as you all proceed, which is very encouraging to hear. In terms of this company being acquired, I know you've spoken about this in past earnings releases and other conference calls like the AGM, Stephen. This clearly is a PEA, so, you know, a major that would look at the company would probably be more cautiously optimistic here. It's not necessarily a feasibility study. In terms of ultimately someone looking to acquire TRX and how they might view the situation, In your personal view, are they going to be looking for more credibility and actually showing elements of the plant move up, showing additional exploration before a major would start to become interested? In other words, are there some additional triggers? And I'm thinking about what ultimately boosts the stock price and a variety of stakeholder interest. Are there other triggers that probably still need to be seen before we get to that window?

Yeah, so I'm going to reflect on other companies. And first I'll address the feasibility study versus PEA. The feasibility study is still all theory if it's not in production. And a lot of companies that went through that feasibility study stage have had hiccups afterwards because it's not real data. So they don't understand recovery rates. They don't understand mining. They don't understand the nature of the deposit, different zones of the deposit. And the operating costs are all still theoretical, even though they're pulled back. Whereas our PEA has all actual data. So I would say that I wouldn't say our PEA is not going to hold up versus a feasibility study because, you know, the data that we have behind it is actual. If you look at where value creation really comes off of, if I look at other companies, and we have looked at other companies and why we've taken this approach, is first, you need to put in the art of possible based on what you have. The PEA does that and provides basis for that. As I said, it's independent. It's not developed by us. It's developed by an independent party in P&E and all their QPs that are around it, as well as our independent QP with our support. Then I think you do need to show growth. So the drill bit is important to that. And adding to what I'll call the arts of possible over time through the success of the exploration drill bit. All those are required to drive value. You drive value, you drive interest.

Okay, great.

Well, I appreciate that you all and, Stephen, that you've taken time to answer the questions. This is clearly an impressive PEA, and we really compliment TRX and the management team for bringing us to this point. Yeah, thank you for that.

And as I mentioned to a lot of people, look, the focus, I know that you can get ground down into day-to-day quarterly results as you build it up, but there's been a lot of learnings over the period of time on this particular asset. in order to get to this point, and we need to, you know, reorient people's focus to the potential of the property and the growth potential and the value creation potential of the property, as opposed to getting bogged down too much in smaller production quarterly results at this point in time. We need to continually grow those quarterly results.

And the next question is a reprompt from Mike Neuhausen with Ross Capital. Please proceed.

Yeah, probably just answered the question, but maybe a chance for Richard to chime in. You know, in addition to capital costs being managed the way you have, one of the concerns that I had early on was the recoveries of gold from sulfide ores. And, you know, that really doesn't seem to be a problem in, you know, what you've experienced. You know, as you say, as you gain the knowledge, it's a matter of grinding, flotation, and there's really nothing especially difficult about metallurgy here. It's just about optimizing. Is that a correct view, Richard?

I think so, Mike. It's not a refractory oar, so it's your fairly standard method. sulfide, pyrite-associated, fine-grained gold association and what you've got to do is get the grime down so you can get the cyanide in. So, you know, we're not overly concerned about sulfidation or anything like that. We don't have that problem to worry about that other mines do. So, no, we're seeing the same sort of things that you see in all these other mines around us, Gator and Barrick, Bullion, Hulu, Buswagi had it for the lot. So, yeah, get the grind size down by selectively recovering the sulfides, and then you'll open the thing up for great recoveries.

Very good answer. I'm glad I asked the question. And I guess, lastly, Stephen, probably can't respond on this, but any talk about the government with regards to the joint venture share?

No, look, an update on that, and Klaus on the line as well. Look, we've been in front of the government negotiating team, continue to be in front of the government negotiating team and deal with the ministries. They are going through an election cycle. So, look, any time you deal with governments, it's government. It's not as quick as you make a decision.

Okay, well, maybe later in the year then. Thank you.

You're welcome. I've got one question here for Richard to my kind of Q&A. Yeah, Richard, in the text, Neil Bigelow has texted in and asked the question, do you refer to the underground mine plant using a declined ramp from surface? If so, can underground mining be done with one production ramp for both that south and the north zones? And can underground production follow right at the end of the open pit production?

Thanks for the question. We have two declines planned. The strike length of the ore body is about 950 metres, and then there's some outliers beyond that as well. So we're looking at a total strike length of around 1,200 metres, and that's a very difficult strike length to access off a single decline system. So we've looked at options of up to three or four declines. We're very comfortable with two. And from those two, we will be able to access the Stamford Bridge. In terms of timing of access, we intend to... access both declines whilst the open pit is in operation. It will still have at least two years to go once we're up and developing those declines. One of the declines comes off a level within the pit, a broad area that's suitable for us to access, and another one comes from the surface. There is a small decline coming off the eastern porphyry open pit at the end of that project life. That will come in much later in the mine life, and there's very little point in opening that one up any earlier.

Okay. Thank you for the answer. Thank you, Richard. I think that's it for the questions.

Chris, are there any more questions in the queue, please? No, sir. There are no further verbal questions at this time.

Well, on that note, thank you, everybody, for joining this morning. Greatly appreciate it. Thanks, Richard, for staying up late in Perth, Australia. Thanks, Kalaf, for joining us from Dar es Salaam. And look, it's very exciting. It's taken a while to get here, but we're getting there. And stay tuned. And if any shareholders have any questions, please reach out to any of us. And as they would say in Tanzania, thank you very much, or asante sana.

Asante.

Thank you. This brings to a close today's meeting. You may now disconnect. Thank you for participating, and have a pleasant day.

The conference is no longer being recorded.