TRX Gold Corporation

Welcome to the TRX Gold Corporation third quarter 2025 results presentation. As a reminder, all participants are in a 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 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. When you are introduced, you may see a prompt on screen asking you to click continue. You will be live in the call. As soon as you do, 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 Mr. Stephen Maloney, Chief Executive Officer. Please go ahead, sir. Yeah, good morning, and thank you, and welcome, shareholders, to our Q3 2025 corporate presentation and investor call. We have quite a few people on the call today, so that's really good to see. Joining me on the call today is Michael, our CFO, and also in the Tanzania boardroom, we have Kalaf Rashid and Richard Goffrey, raise your hand, guys. How's the weather down there?

It's a nice sunny, 31 degrees.

As always, nice and sunny and warm. It's warm here in Toronto today as well. I think we've got a 32 degree day. Well, without further ado, I will get into the presentation and the presentation today will be led by myself with Michael Klaus and Richard all chiming in. in the appropriate section. So let's get into it. Today what I'll do is just give a high-level overview of TRX Gold, as I always do, and then we're going to jump into where we're going in the short to medium term, as well as what our 2-3 financial results look like. A high-level summary of the PEA roadmap and how we see that view played out. as well as just finishing it off with a key of the highlights of the company. So TRX Gold, obviously we're in Tanzania. Everybody on the line realizes that. In fiscal 2024, we did over $40 million in revenue and $15 million to be bidded. We expect those numbers to be higher this year as we continue on and as the script campaign winds down and we get into the higher grade portions of the four bodies. And we'll get into the results of those operations in a second. One of the major catalysts that we put out in Q3 was our PEA. As we mentioned under our last call, that PEA has a $1.2 billion net present value at around $3,000 gold. It's around $750 million after tax on the Buck-Reese Gold Project. It has 62,000 ounces average production per year at 3,000 tons per day. of processing capacity. We are currently at 2,000 tons of capacity. Our goal will be to improve those metrics over time and hope they have a larger project than what was envisioned there, both from existing main zones as well as the other additional resources that can be found over time with the drill pit. The cash costs in that study are quite low at $1,000 an ounce, and the AISC was around $1,200 an ounce, which is comparable for the same grade profile what we currently experience. As you would have seen in Q3, the cash costs were a little bit higher as a result of the grade profile that was going through the mill. So as the grade profile normalizes, cash costs will come down. In the study, we reset resources because we focused on economics. In our last resource statement, it was focused on sheer number of resources. versus economic resources. The resources haven't gone away from the last statement. They're just not included in the economics at this point in time. In the study, there were 900,000 ounces in the M&I category at around 2.6 grams per ton. And in the occurred category, there were 725,000 ounces at 5 grams per ton. So what we did was increase the cutoff rate and the grade profile going through the mill. So pause right there. On the next slide, we do have a straightforward value-enhancing business plan. The next slide will get into more of the shorter-term business plan. In Tanzania, we have the special mining license. We have a straightforward flow sheet and metal dirt sheet, which we'll get into in a second. I'm sure there's going to be some questions on recovery rate, and he will answer those and how they're going to improve. With respect to the local infrastructure, including road and power, We have significant blue sky potential, as we mentioned and continue to mention. We do need to get back to that drill bit and start drilling out our landfill that stands for big zones. We have good human capital availability in country and we're constantly operating that quality. We've gotten three successful expansions to 2,000 tons a day. We'll do another expansion. in between 3,000 and 4,000 times a day. The PEA computes 3,000 times a day. We'll do that over time. We're in planning stages of that now. That will be done over time. The business plan around the PEA is quite straightforward. Expand the plant, take the cash flow, develop the underground mine, and be willing to take on exploration. We've had a successful wrap-up of our operations. We are a high-merge and low-cost operating profile. Costs have come down. Mike will get into that in a sec, particularly on a first-time basis. Obviously, trade impacts short-term costs. We still see significant opportunities to continually reduce costs, both mining and co-setting. And the PEA sets a roadmap for that. You have a very experienced management team on this. site as well as in corporate that has done this all before and we're very excited for, you know, the significant value potential and value increase potential over time. So I'm going to pause there. Mike, anything to add? Anything to add, Richard, in that class? No, I think that was well said, Stephen. Nothing further from you. Okay. Thank you. So with regards to, you know, why we are where we are today, as Q3 indicates, revenues are growing significantly. Part of that is the gold price. Ounces will start to grow now as well as we get into a higher-grade profile. And we're self-funding this growth, and we continue to self-fund the growth. The PEA has had a straightforward business plan or a roadmap that we can move along to create value in the Buck Creek main zone. I went through some of the statistics earlier. That plan is very scalable. We've done that before, as I mentioned, and we'll continually move along that roadmap. And I really like always the blue sky potential. So the way that the roadmap can improve is both increasing the tank capacity as well as finding more higher grade ounces in Mount Stamford Bridge, Anfield and elsewhere on our property. And so we're quite comfortable with that. We do need to get back to the drill bit and that will be in our budget plans for fiscal 2026. So with that, I'm going to hand it over now to get into the nitty gritty details. I went through the PEA high level. Michael decided to get into the financial profile and the rest of these slides here, Mike, and I'll hand it over to you for the next two or three slides, please. Yeah, no problem, Stephen. Good morning, everybody. Thanks for joining us. And you touched on the PEA, which is really our focus over the next 12, 18 months is focusing on our expansion to really unlock that billion-dollar valuation that we put out into the market on that study. But in the meantime, as we talked a little bit about over the last couple of quarters, we have embarked upon a stage one tripping campaign over the first half of the year to really remove a lot of the overburdened waste that would provide access to high-calorie ore blocks as we got deeper into the pit. And Richard, his team, is managing that very closely. And the good news is we're substantially through the lion's share of that strip, and it's begun to access some of those higher-grade bonds. And consequently, what we're seeing is an increase in both production and sales. And coupled with the leverage that we have at the gold price, we're seeing increased financial metrics both quarter-on-quarter and year-on-year. I'll talk about some of the details here in a minute, but why don't we flip to the next slide so we can just touch on some of the specifics.

So here's a snapshot on the next slide of a financial overview of the results.

And again, as mentioned, it was a strong quarter for the company's financial results. We did see increases in both quarter-on-quarter relative to T2 and year-on-year. in really almost all financial categories, from revenue to gross profits, to net income, operating cash flow, and adjusted EBITDA. We produced just under 4,700 ounces in this quarter, which is substantially more than what we did in Q2. And we continue to benefit from these record gold prices that we're seeing yet again. We realized over $3,100 an ounce. I sold gold this morning at over $3,300. So we'll continue to sort of Take advantage of these lofty gold price levels. And again, those numbers grow revenues of $12.5 million, gross profit of almost $4.5 million, or 35% in the quarter, and just even of $4 million. Again, all improved relative to the prior period, demonstrating our leverage to gold price. Stephen touched on it a little bit earlier, but gross profit continues to benefit from an improving cost per ton profile. And this is really based on a lot of work we did in the early part of the year setting the foundation for some of these benefits that we're seeing. You know, illustratively, processing costs per ton were below $15 and substantially improved, as you can see, compared to the prior year period. And a big part of the reason for that is the economies of scale that we're realizing from the expanded plant. When we grew from 1,000 ton a day last year to 2,000, we had to explain to folks that this was a scalable plant. And again, you're seeing the benefits in that cost per ton set of metrics. And similarly, mining cost per ton has come well down, both relative to last quarter and last year, significantly improved. And it takes part due to the fact that we're now using our own fleets that we had procured in the early part of the year to help support our contract mining fleet. And illustratively, and again, Richard can maybe talk a little bit about this later in the presentation, but we used our piece to move about 300,000 tons of material or waste during the quarter. We did that about $1.80 a ton, $1.80 to $1.90 a ton, which is well below international contract rates. It's certainly a very, very cost-effective way for us to mine both ore and waste, as well as provide support for projects like our TFF expansion. Richard, do you want to just provide a couple of sound bites on how our fleet's operating and why we're seeing that there, please?

I think we may have a comms issue in sending the answer. That's okay. Okay.

Why don't we just continue, and if we get a chance to hear from you later, Richard, we'll have you chime in then. In the meantime, what David liked to add, which folks might have seen in our press release in MD&A, is that during the quarter we had entered into negotiations with the Bank of Tanzania to sell a minimum of 20% of our local gold production to Central Bank, and that was in line with the newly enacted mining law in Tanzania that's applicable to all mining companies in country. And as a part of that agreement, the company would benefit from a reduced royalty rate of about 4% on revenue for domestic sales compared to a 7.3 royalty rate for exported sales. And the way it works is the company's paid in Tanzania shillings at market rates, which we can then use to go and fund the operating costs that we incur in local currency. And part of the reason I bring it up here in the context of the Q3 results is that while the discussions were ongoing over the course of Q3, we were required to set aside a portion of our production in inventory. We set aside almost 650 ounces during Q3 for future sale to the Bank of Tanzania. And therefore, what you would have seen in our results is a bit of a gap between ounces produced and sold. And, you know, the good news is that we ended up signing that agreement with the Bank of Tanzania in early June. And we were able to sell this inventory to the BOT, the Bank of Tanzania, which is really benefiting now what we're seeing in Q4 around things like revenue and cash flow and PIVA done and working capital for the last quarter of the year. And really, this is useful for the mention of us as a company for a number of reasons, one of which is that we incur a lot of local cost and local currency that we can use to show and for. We've had a bit from the royalty rate, but this disagreement helps drive things like local content and local benedication, which has been a key area of focus for the government to, amongst other things, help improve their foreign exchange reserves. So, a good initiative all around. Actually, I'm going to be talking to you for a second. One of the things you will notice is we have financed this company through short-term liquidity lines with Stanbeck, with Normat Facility, as well as working with our suppliers around payable. So that is all short-term liquidity lines that are funding a long-term asset. And so what that has done in our financial stages is shown a profile. We're comfortable with the way we finance this thing, but it At quarter end, you would still see negative working capital. And one of the things that, you know, is front and center in our press release as well as in our operations going forward in the real short term is right-sizing that working capital ratio and making sure that it gets above one. It's above one today, and it's continuing to improve. So we think it's one of the things that holds us back in the market from a financial metrics perspective, vis-a-vis the comps, and I'll get into that in a second. But that's certainly a very, now that we're finally through the campaign and into the higher grades, is right-sizing working capital is a short-term goal of ours. Yeah, no, you said it well, Stephen. I mean, that's really the last two points. You're seeing the benefit from it in Q4. Production's increased, you know, we're up to about 75 ounces a day, which is substantially up from both Q2 and Q3. And in six, you know, four weeks, we've been able to recapitalize that. working capital deficit that we've incurred through that script campaign. And as you mentioned, we've reduced things like accounts payable by almost $6 million. We've paid our short-term borrowings. We've got full access to our liquidity lines. And, you know, the focus over the rest of Q4 is to strengthen that liquidity and set us up for execution of the PEA you touched on earlier. Yeah, and we have no loss of liabilities besides a couple of leases. on long-term equipment. I believe our trucks are paid for now as well, right? So that lease on trucks come out as well as, so we're just up with the excavator long-term leases. Yeah. Why don't we turn to the next slide, if we can, please, where we've talked about this, I think, over the last few quarters, but for folks new to the story, let's even touch on earlier. We have expanded three times in three years successfully. We are operating at 2,000 tons a day at full capacity. We did just under 1,500 tons a day of throughput in Q3 after some scheduled maintenance and downtime. But, you know, with that larger plant that cuts around the economy to scale, you're seeing it come through the processing cost for tons. But that throughput there is really what's driving the increasing production. It is a bit of a lower-grade profile based on where we are in the pit and the strip we've seen to date, but really starting to see the benefits now in Q4, now that we're getting up those higher-grade ore blocks and doing about 75,000 ounces a day that we expect to continue through the end of the year. Yeah, so one of the things is, is Richard now available?

I know you're in the same room.

Hey, Steven? Okay, we hear you just fine. So one of the things Mike touched on is three mill expansions in the three years, and I know I'm going to get ahead of questions. One of the questions that is bound to come is how we're going to deal with the plant expansion going forward vis-a-vis the PEA and what I'll call what we're currently thinking 555 around the initial plant upgrade that you're going to be making in the next set. four to six months as well as how we envision building a tank. You want to just give the insurers just a quick high-level summary of that?

Sure, absolutely. So our plant has been upgraded multiple times and it's now at a target of 2,000 tonnes per day. There are many opportunities to the plants as it is at the moment and when we see some of the results we'll notice that there is room for improvement. So in the next three or four months we're focusing on just optimising the current 2,000 tonne per day plants and adding enhancements that are part of a longer term expansion by modifying the flow sheet in incremental ways. flow sheet modification is the addition of a pre-leach thickener that is planned for the expanded plant and getting that in early. That will enable us for a lot better control of our leaching process. It will allow us to feed higher grade through the mill as well and we believe will improve our overall recovery through that process. The next aspect that we're trying to do in this next five or six months is put a new absorption desorption recovery class or ADR class into the process. That will have the ability to make considerable enhancements to our carbon management process Our current process is quite manual, we get a lot of breakage, a lot of fines and a lot of gold loss through that damage to carbon and this new plant will enable us to minimise, eradicate a lot of that and probably give us another 3 or 4% improvement in recovery in that way. Other improvements are through optimising our mills. We've just embarked on a program of optimising the power draw. We've noticed we're not drawing enough power through our mills and we can improve throughput us the opportunity to put more charge into the mills and therefore get a finer grind and more throughput. So some small easy additions to the plant and then some larger items that are part of still a 2,000 tonne per day operation that will improve recovery substantially from where they are now. up to a much higher level. Then the expansion work requires another flow sheet change which involves a flotation circuit and fine grinding of the sulphide concentrate we get from that flotation plant and secondly a far more simplified comminution or crushing and grinding circuit that is all rated to 3,000 or more tons per day. So that's the various steps that we'll be taking over the next 6, 12, and 18 months to get that achieved.

Perfect, Richard. Thank you for that. And I think that's a good overview and gives you guys some comfort that it's being well handled. We do need to focus on, you know, efficiency. So some of the things that will happen as a result of what Richard just described is Higher head grade, as you guys hear, means lower cash costs per ton, lower processing costs per ounce, sorry. And also, it enables us to, the power drought will probably enable us to push more tons through the plant, which means lower costs per ton, lower costs per ounce. Those are some of the sort of metrics that are going to improve as we improve the plant here in the next five to six months. Thank you, Richard. Mike, back to you. Okay, why don't we test in the next slide briefly. This slide just kind of reinforces the approach that Sean earlier to how we're running and operating this business. We continue to use organically generated operating cash flow to fund growth. We did reinvest another $5 million of cash flow into the business this quarter. And today, you can see on the far right box that we put in that over $50 million following an early capital raise in 2021, coupled with almost $40 million of operating cash flow that's been reinvested in this business. So the goal would be to continue to use cash flow to help fund some of the enhancements and growth that Richard just touched on. What we can't see is it is driving increases in things like revenue and EBITDA, and we continue to do it very, very cost-effectively. We've got a very, very lean management team and continue to keep a keen focus on things like G&A to make sure our overhead costs are in check. But our approach is being very, very prudent with capital to drive higher profitability. Yeah, Mike, I was just going to add on G&A there for a second because I do get quite a few questions on the non-controlling interest numbers. in the financial statements based on the JEP. As everyone's aware, we have a joint venture with Semenko, 55-45. And one of the things is G&A costs, particularly corporate costs, come down below buck rates. And so that's one of the reasons why we are very sensitive to make sure we maintain G&A and are very prudent on G&A costs in order to, in the future, hopefully drive higher net profit.

that the market will look at and that people will do screen from. Okay, next slide.

And we don't have Richard, so obviously we have a comms issue in Tanzania. So I forgot to describe in the last presentation, and a lot of people liked it, so it was fairly easy to understand. A couple things in this slide that are relevant. One is We like purple. We particularly like deep purple in this slide. And here he is back. And so, batteries get better grades as we get deeper. And so, what this slide is showing here now is where the mining has occurred up until May 31st and where mining is going to occur the rest of the year. So, Rich, if this provides us with a – gives the investors a quick sense of where you're going to mine the rest of the year, how that's going to improve the grade profile going to the mill. And also, one of the things that we did mention in our press release is the significant increase in the ROM hat, both from a ton perspective, ounce perspective, and grade perspective, and how that will change over time.

Sure. Thanks, Stephen. Okay. Well, if we just follow the colors, the warmer colors represent the higher grades. and in the beginning of FY25 we focused on the right hand side of that page to much lower grades. Over the last two quarters as we signalled in these meetings, we pushed the strategy to get back to the central and southern part of the main PIP and we've succeeded in doing that last quarter. and we've now accessed these high grades. So we've got not only higher grades but plentiful ore that we are now accessing by, you know, we've received the benefits of that strip. So the other benefit of that is we've got a much lower trip ratio now going forward for a little while and that enables us to We really grow our stockpiles ahead of the processing plants to the point now where I would suggest we've got about two months supply already now of high grade and seed grade ore that's ready to go for processing and that will continue. We'll be in a very healthy position now. until we finish stage one of the pit which is another six or seven months away. So we've built ourselves into a good strong position with good seed for the plant and we've also now started the second stage of stripping. We've built up a nice healthy stockpile to see us through a gap of mine ore that will hit us in about seven or eight months.

Excellent. Thank you, Richard. Getting on to the next slide, just a brief overview of PEA. The grain profile is improving. There's healthy stockpiles. We're moving through the pit in a very good sequence, which is part of the PEA. And so in that PEA, that sequence continues for three to four years of open pit mining in various states. I think there's three stages, Richard, for the open pit.

Two stages in this pit now, we've reduced it from a three stage pit to a two stage pit and the third stage is really underground.

So we're moving through that sequence and why that's important is because that sequence and the way that it's engineered goes through the plant expansion, goes through the mining of the higher grade ore blocks in the open pit part. great cash flow for the underground expansion and the underground workings in about three to four years' time. So I won't go through the metrics again of the PEA. They're on the slide here. They're quite obvious. Obviously, it was quite healthy. The key in talking to investors over the last couple months since we released this study is one of the things in mind is everybody asks, what's your upfront gap at? How much do you need to fund in order to execute your business plan? And our comment has always been, we got a little cute in the IRR. We probably should have stepped back a little bit because we could ask that question. So what's your IRR? We say, well, given that the way the study was put together and it was so predominantly self-funding, you don't have an initial capex up front, so you don't have an IRR. It's infinite, to a certain degree. But everybody asks, so what are you going to spend over the next three to four years? And the reality is that spend is around $90 million. The first two years of society is predominantly the trans expansions that Richard just went through with you on how that would operate. And then the third and fourth year are predominantly the development of underground development to feed the past for the remainder of the mine life. And this is all within the Buckley's main zone, so it does not include ANCLC. where I mentioned before, best drill hole results are, as well as, don't worry, Stanford Brink, as well as Ampio, which also has really good drill hole results. So this is a CapEx profile that's split down between the plant expansion first, and then to the underground working thereafter. And so everybody asks, so how theoretically, when you're operating this business, how much do you need to raise? Because everybody's asking us, okay, when are you going to raise money to do this? And the answer that we have is right now, we're self-funding. As Mike mentioned, we've invested a lot of money into self-funding. Right now, it's contemplated to continue to be self-funding. And if you look at the projected operating cash flow as well as projected EBTA and the multiples on the CapEx in the first four years, it says that we should be able to do this predominantly being self-funded going forward. So, I just wanted to make sure that people understand that and the way that the study was made up. Mike, anything to add to that? Because we have a lot of questions around this.

You're on mute. No, not off yet.

Some issues in Canada as well. Apologies. No, I think that was well said, and again, I think that clarifies a lot of the questions we've been getting from folks over the last few weeks since we published the PEA. Thanks for that. So with regards to, we put in the comparable company analysis, and one of the things that I mentioned earlier of focusing on is if you don't get people moved up on this curve, they've executed both on ounces, expansions, And importantly, they have what I'll call normalized working capital ratios. And so the short, the medium-term focus for us is to make sure that we're not discounted because of our working capital ratios. And so we will be continually working on hanging down some of our payables and capitalizing the business appropriately to make sure that our working capital ratios are aligned with market costs that have performed. And also, when I look at the, you know, others who've moved up on this curve as well, making sure we have the capital discipline in executing our expansion plan as well as continually growing that business is also extremely important to move up on this curve. So focus. Although we're behind today, hopefully we can start to catch up when we recapitalize through the, through, you know, increases in production and,

cost management, as well as our expansionary plans.

With regard to the capital structure, we did not issue any capital raises in the last quarter or the last couple of years. The stock is still operating. As I mentioned, I think a large part of that is you've got a billion-dollar study in America. America wants to see you get there. To get there, they want to make sure that you have the proper capital to get there. And when we recapitalize the next couple of quarters, I think we should see, hopefully start to see some movement on the share price. We also, you know, have picked up our marketing campaigns, have the PEAs out through various parties and ourselves. And we are having a lot more, particularly institutional meetings, I would say, Mike, over the last two to three months than we normally have. We started to see some institutions come into the stock on 12X. So that's been encouraging as well. All those smalls up first. This does take a little bit of time to execute, but certainly team focus first. So I'm going to reiterate the key investment highlights before we get into the Q&A. We're seeing strong growth and sustained profitability and other ways to cut costs and keep those costs down. We do have a proven operational track record. We have a robust business plan and the PEA in front of everyone. We are in a good mining jurisdiction. We get along quite well with Pantheon, as I mentioned on earlier calls. We are in front of the government negotiating team and others with regards to the attempts to revise the venture agreement. That should happen politics. There's an election in October, so we'll see if we can do anything before then. but more than likely into the new year next year. We have the technical experience both on the ground and in corporate to execute our business plan. So I'm going to pause there and turn it over to the moderator for Q&A.

Thank you, Stephen.

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. When you are introduced, you will see a prompt on screen asking you to click continue. You will be live in the call as soon as you do so. Analysts who have dialed into the conference call, please press star then one on your telephone keypad to join the question queue. We'll pause for a moment as participants join the queue. And our first question will come from Jake Sikelski with Alliance Global Partners.

Please go ahead. Hey, Steve and Michael on the team. Thanks for taking my questions.

All right, Jake. So just starting with throughput during the quarter, we saw 25% oxide, 70% sulfide mix. Any visibility on how you expect it to trend in the coming quarters? Yeah, so I'm going to answer that, and I'm going to ask Richard to finish my answer. When he said there will be a pre-leach thickener, that is to get to 100% sulfide in order to have a better head grade. So currently what's happening is the oxides are lower grade, but they're needed in order to float carbon appropriately in order to get goal recovery. So this is one of the items that is high on Richard's list. Richard, you're much more technical than I am. You want to just continue to answer that question.

I think you answered it okay, but in terms of timing, we're looking to get the thickener installed by the end of this calendar year. So we're looking that we'll probably not feed off sites much at all or at such a high percentage going from calendar year 2026 onwards. And, yeah, that will probably raise our head grade by about 0.3 of a gram, 0.4 of a gram.

And so also, Jake, really, when you look at the way this is being executed, we have predominantly an outside plant right now that is being upgraded to its own life. And that's part of the picture, and that's part of the quotation and rebrand circuit changes that Richard has been explaining. Okay, that's helpful. And then building on that a bit, just on recovery, you touched on the finer grind work that's ongoing. Any additional color on what that timeline looks like? I mean, are those benefits we might see in the next few quarters, or is that a program that might take a bit longer?

Go ahead, Randy. I'll jump in on this one. We're working on two aspects of grindability. So our current process requires us to get a PAD of about 75 microns and we've achieved that but not in a stable fashion. So the more we work on that, we'll see slightly better recovery. The flotation part with the associated fine-grind heap or isomill will be roughly 12 to 15 months away. But the intent for me is to try and get this in and running by financial year 2027. And then we'll see a big jump in recovery associated with that.

Yeah, for Richard, I think that the timelines you take models and stuff sort of out is for recovery rates into the low 80s, those are kind of where we're going to do what we're doing into the current plant upgrades with the seconders and the 80 airplane. That's the goal there. And then the high 80s, low 90s installed by that twist, the application and regrind circuits, as well as the upfront projects.

So we'll see recovery improvements, stepwise recovery improvements in about by the end of the calendar year and hopefully some other minor improvements, just operational optimisations ahead of that as well.

Okay, so targeting the low 80s in the next couple quarters, and then another step to higher these low 90s over the next 18 months, that's not fair. Yeah, and that's modeled out in the PEA as well, that way. You know, what I'll add to that as well, Richard, I think, you know, as we get more and more experience with Buc-ee, there are different geometric zones that have, you know, different recovery rates in them. So the lower grade zones that we were in at the beginning of the year have lower recovery, lower grades and lower recoveries than the current zone that we're currently in. If you want to just give a quick overview, a snapshot of that, Richard, because that's important. Yeah, sure.

So, yeah, look, we're doing a lot of metallurgical test work Part of that is on the current ore that we have at the moment and part of that is the ore that's going to be for underground and we're looking at things from a geometallurgical perspective, from a flotation perspective, from a grindability perspective. So all that work's ongoing. We've already found out some very interesting attributes of the ore body and we've kind We know that we've got to take slightly different approaches to the processing of those two. But yeah, we have to mind it all. It's all economic. We just have to optimise our plants to act accordingly.

Yeah, and I was just going to say, I mean, Richard, maybe you could briefly comment, but we've got the results of the geometallurgic study that have sort of given us a roadmap to follow to deal with some of these more complex geometallurgic zones, coupled with a combination study that, you know, has given us a roadmap for the improved flow sheet, right?

That's right. And, you know, as I said, there are small optimizations we can do additional to the flotation circuit. Just running some pure oxygen and some over the tank of the CIL tank will probably give us another small kick in these sorts of things. It's more effective on one geometallurgical domain than the other. There's a lot of fine tuning that we need to do. It's a young class and we're finding our way through it to get the best results.

Thanks for that. Okay, that's all for me. I'll hop back in here. Thank you. The next question will come from Mike Niehauser with Roth Capital Partners. Please go ahead. Hi, good morning. Stephen, can you hear me okay? Yeah, I can hear you just fine, Mike. How are you doing this morning? Good, thanks. Yeah, I'm heartened by Richard's comments about optimizing the plant really good in several ways, and it seems like it's perfectly timed with the transition from oxide toward the sulfurides. You know, my question is, it sounds like you're pretty much wheeled up with the pushback of this pit to proceed down the path of the PEA by, you know, continuing production, generating cash flow, and, you know, completing the steps of, you know... being able to do flotation circuits and get underground. So really, it seems like you're just going to feather right into that. Am I saying that correctly? Correct. Simple answer. That's good. I don't want a lot of showtime here. The other question is, there's a lot of surface material around the project that's oxidized. How do you see, is that going to be, take a backseat to the salt sides and underground, or is there a way to avail yourself of that with the existing plan that could, you know, take advantage of, you know, take advantage of, you know, the market and such? Yeah, so you saw Richard's smile on that when you asked that question. Look, we're constantly assessing off heads around the properties. And the part of that is increasing the exploration spend, which I did mention, that we will need to put into the fiscal 2026 budget. And anytime you have more oxides, there's a trade-off between here and the way that we looked at this is if we have below one gram a ton oxide and you have two and a half gram a ton sulfides, well, once these tank optimizations are done, you're going to put the two and a half gram a ton sulfides here, right? So There's a trade-off between the two, but certainly you can get some really good high-grade oxides, you're going to put them through, because they're helpful. And they'll go through any plant. They'll go through the expanded plants as well, as long as there's not too much clay in it. The problem with oxide material on pot trees, sometimes there's clay in it. Did I get that right, Richard?

Well, yes and no. I think Mike's asking us if we've got plans to maybe... punch another 10 or 20,000 ounces outside just having a little plant for oxide and whilst we don't, the potential is definitely there and we've even got old tailings that can be economically reproached at $3,000 an ounce. So we've got lots of opportunities. We're focusing very much on the PEA aspect but there are other business improvement opportunities all over this project.

Well, those are both actually very good answers, and I appreciate them both. One suggestion is that with us being in the fourth quarter and the time it takes to publish year-end results, I think the investors would be quite hungry to see ongoing operating results on a one-off basis, so I encourage you to do that. I think this is the time to you know, break the pattern a little bit and, you know, take a victory lap if you can. So that's all I've got. Thank you very much. You must be sorry for our board members, Mike. No, no, I'm just saying the obvious. Thank you. Thank you. The next question will come from Hypo Elaine with A.T.

Wainwright. Please go ahead. Hey, good morning. Thanks for taking my question. I assume you can hear me okay?

I can hear you fine. I also got your note as well, Heiko, on your questions.

Excellent. Hey, in your PEA, so I guess you have fair warning of what I'm about to ask you. In your PEA, you're calling for annual production of $62,000 amounts of gold per year. Obviously, the current gold price environment is ridiculously strong. and we may actually see some more increases given all the inflation that's going on. Let's assume for a second money was not really much of a concern. What would be the main bottlenecks? Will this figure even more over the next couple of years?

So I'll let Richard answer that question more technical in a second, but I'll give you a sense of the way that we look at this. We'll be very engaged in putting together this study. is the bottleneck right now is tank capacity in the study is the major bottleneck of 3,000 tons per day, which can go larger. But then when you do that, you have to go and do all your underground workings and engineer all those things. You have so many ramps and these sort of things that go into that. And it takes a lot of time to do that sort of work. And so when we look at the study, we said the same thing you said. 18-year mine life, too long. 62,000 ounces can be higher. Most studies that you see are in the range of 8 to 12 years of mine life. How do we get there? And then when we spoke to the engineers around that, it would have taken a couple more months in order to engineer that appropriately. And we said, these numbers are great anyway, so let's get this into the market to show investors how good just the buck-three-to-eight zone can be. So Richard, you can get a little bit more technical in and around how and why it takes so long to do underground work.

Oh, I don't need to go into that sort of detail. I mean, the bottleneck is like any good plant, it's the mill. Our crushing circuit would need a significant upgrade as well just to increase throughput. The new flow sheet calls for a sag mill and what I would plan to do is make sure that our sag mill has extra capacity to realise a higher throughput than 3,000 tonne a day. So don't make that the bottleneck or at least maximise that to its maximum capacity and overperform. When we get to underground getting 3,000 tonne a day out of essentially two declines is not impossible. Getting out of three declines however is quite easily achievable and that's scalable. So we are looking at the potential for us to put an extra decline down. Our studies are based on 50 tonne trucks. You could look at 60 tonne trucks for example. We did a haulage and hoisting trade-off study and you could throw a blanket over them so even a small shaft would be considered as a viable option and then you can really start talking about 4,000 tonne a day. So plenty of upvotes potential there, but optimisation studies could be required, and as Stephen said, we wanted to get out to the market with a, I guess, a vanilla-flavoured technical approach to it, and I think it's a good base case.

Yes. Fair enough.

And then just a follow-up, and maybe I'm just not grasping something here, but I mean, your deal with the bank depends on the app. you're going from a 7.3% loyalty to a 4% loyalty. So that changes 3.3% of what you're getting. It's about $100 now. It's real meaningful. It also says that you're selling it to VOT at the market rate. So if you could scale this, and it sure sounds like you could, because the 20% seems to be your worst minimum, why wouldn't you just go to the maximum of 100%? Is there credit risk? What's the downside from this agreement to you? I'm just, I guess I'm not.

Great question. Great question. So we just got into this agreement. I don't know if I might get into the nuances of it, because there's another question in the queue around this. Look, when we engage on this, we have certain factors. And the way the agreement is set up is essentially we're selling assay dore to the bankruptcy from the gold room and get paid instantaneously, although we get paid in market exchange rates of shillings. And we have a, you know, our cost basis is predominantly shown in that. So, yeah, no, it is a really good transaction. We worked quite extensively with the Tanzania government to get it to this point. The Tanzanian Bank of Tanzania, not unlike a lot of central banks in the world, wants to grow their gold reserves. And this is a good way for them to do it. We sold 20%. Barrick sold 20%. Gator sold 20%. Chancel sold 20%. I would say right now the biggest bottleneck is the refining capacity in-country. So, Mike, do you want to get into that a little bit? Yeah, no, you said it well. You're right, Heiko, for sure. I mean, it is a minimum. So, we've got an opportunity to sell as much over and above that as we deem appropriate. We are paying shillings, though, to Stephen's point. We do have things like overhead costs and others that are U.S. dollar denominated. So, there is a bit of U.S. dollar demand. exposure that we would continue to be paid and require that. But there is an opportunity to shift more gold to the local refiner and sell to the Bank of Pensy and take advantage of that royalty. Because they're only now kind of getting up and running as far as what they can refine, there is a capacity constraint, a HICO that Stephen mentioned. They are trying to figure out how to refine our gold, Barrick's gold, Tango's gold, Chance's gold. and do it efficiently and effectively. And, you know, right now I've asked that we perhaps be a little bit patient with them in terms of what we ship them. And as they get more efficient in their process, we could certainly look at increasing what we send them and what we sell to them and take advantage of that reduced royalty rate. Yeah. So, Mike, I'm just going to poke in before I answer another question because it leads into the text question. Can you please explain the foreign exchange rate between the 10 Z shilling and the U.S. dollar for gold as it pertains here to the premium of the DOT? So I want to explain to you how you manage that during the 10 Z. Yeah, no, it's a good question. So as I think you touched on, and a good question on the FX as well, both the gold price that they quote as well as the foreign exchange rate that they quote on each transaction are daily international published rates. So the FX is published on a daily basis. It's that of a $2,600 to $1 for every $1 U.S. dollar, $2,600 shilling. And again, what we validate, both the gold price and FX rates that the Mining Commission quotes with each shipment are, again, internationally published rates in London and abroad. So all market rates, and again, published on a daily basis on the Mining Commission website at folks can track. And, again, Stephen mentioned that the goal, in part, by some of this local identification is to help prop up those foreign currency exchange reserves. You know, the currency has depreciated, candidly, in the last number of years. So, you know, this is an opportunity for them to bolster the currency. And it's encouraged from a vote. I want to say $2,750 to one to about $2,600 to one currently, which I think is in part due to the approach we're taking here with the global gold deal.

All right, Heiko, any other questions? No, that was it on my end.

Thank you so much, and have a great day. Thanks, Heiko. So I'll get into another question. Operator, is anybody else in the queue? No, sir. You're free to take the floor. Okay, excellent. So the last question is, It's an interesting one. Gentlemen, all fair and good, but how do investors make a return? We are in the early stages of a gold bull market, and I'm seeing a number of small juniors that are not even in production that have a good price appreciation at TRX stock. It's not appreciated to the same degree. So I'll get into what I think is necessary and what the team thinks is necessary. And I did get into this in part in the presentation. I think you have a billion-dollar study and a good roadmap. That's great, but you need to get there. As you're hearing on this call, we are getting there. We are making steps to start to realize that. But I think the market's going to need to see us continue down that path as well as become properly capitalized. As I mentioned in the comp charts, more better capitalized companies, have had better returns. And I've seen that, and we see that in the analysis that we do. So what I would do is I would ask the gentleman that asked that question, look at those juniors that have appreciated and look at their working capital ratios as well as their cash balances. And I believe what you will see is ones with higher cash balances have appreciated more than ones with lower cash balances. Ones that don't have debt have appreciated more than ones that have significant debt. So I think there's still a working capital element to this market. The second part to that question is the joint venture agreement. I think the market still has some uncertainty. We have a 55, 45% joint venture agreement, which isn't as favorable as other jurisdictions or other people, even in countries. And I think we need to work through that with Tanzanians and help them understand that what's good for us is also good for them and move that forward. So I think those are the two major things that have impacted, you know, share price appreciation. Also, I have a third one. When we did come in, and I've explained this a lot of times to people, it was very undercapitalized even when I came in. and it only had $2 million of cash. In order to do what we've done, we had to do early capital raises. There weren't a lot of sources of capital at that point in time. We do have a warrant book that's still there that starts to expire in the new year. I think as we move through that warrant book and those warrant expiries, we should start to see some share price appreciation. So anybody who understands trading understands what I'm talking about.

I'm more than happy to take more questions around that.

Hopefully that answers the question. And in the fullness of the question, it's certainly something on our mind. Operators? Yes, sir. We do not have any other audio questions. So you're free to take the floor for closing remarks or if you have additional text questions. So thanks to everyone for joining the call today. Great. We appreciate it. Thank you for the The questions, I hope you get a good sense that we are moving forward. This does take a little bit of time, but we do have the proper team to move this asset forward. We've proven that in the past. We are proving that in the future. The short to medium-term focus is going to be on, as I mentioned several times, normalizing the working capital, continually the plant expansion, continue the mining and then into underground, the PEA route, get back to the drill bit in the new year, put that into our budget, to expand resources, as well as continue negotiating and having good conversations around the joint venture agreement with the government. Quite straightforward now. No longer as complicated as it used to be two years ago. So it's a straightforward roadmap to value creation. Thank you. This brings a close to today's meeting. We may now disconnect. Thank you for your participation and have a pleasant day.