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.