TRX Gold (NYSEAMERICAN:TRX) reported record financial and operating results for its fiscal second quarter of 2026, driven by higher production and a record realized gold price, while management outlined plans to expand processing capacity and update the project’s mine plan and economic study at its Buckreef Gold Project in Tanzania.
Record quarter: production, pricing, and profitability
Chief Financial Officer Michael Leonard said the company delivered “a record quarter” with increases “in virtually all financial and operational metrics versus last quarter as well as the prior year comparative period.” He reported gold production of just under 7,500 ounces, which he said marked a quarterly production record. Leonard also cited a record average realized gold price of $4,655 per ounce.
CEO Stephen Mullowney described the quarter as “a great quarter,” and pointed to the company’s improving trailing twelve-month performance, including 25,000 ounces produced over the last 12 months and approximately $95 million in revenue with $50 million of adjusted EBITDA, as he framed the company’s financial position heading into a planned plant expansion.
Liquidity and funding plans: cash, working capital, and CapEx
Leonard said the company strengthened its working capital position during the quarter through higher production, record operating cash flow, improved liquidity, and investment in stockpiles. He highlighted the scale of ore on hand, noting that the ROM pad alone contains “over 20,000 ounces of gold on the stockpile,” which he valued at “over $100 million” at current gold prices. Leonard said this helps support “steady, consistent” mill feed for the existing 2,000-ton-per-day mill.
As of Q2, Leonard reported cash of more than $26 million, accounts payable “current within 34 days-45 days,” and a working capital ratio of 2.4x, or $32 million positive. He added the company has access to credit lines of more than $12 million.
On guidance, Leonard said TRX Gold remains on track for full-year production of 25,000 to 30,000 ounces and cash costs of $1,400 to $1,600 per ounce. He reported year-to-date cash costs of $1,507 per ounce and said costs are expected to improve in the second half due to a greater share of the owner-managed fleet and benefits from plant upgrades. Leonard listed upgrades underway at the existing plant, including:
- addition of a thickener,
- an Aachen reactor (now running),
- an ADR plant (in progress), and
- additional oxygenation intended to reduce reagent and consumable costs.
Leonard said full-year capital expenditures are expected toward the upper end of the $15 million to $20 million guidance range, reflecting the process plant upgrades and construction of a life-of-mine tailings storage facility. He added that “subject to gold prices and cash flow in the second half of the year,” the company may expedite spending related to the larger plant expansion to begin procurement earlier.
Expansion and updated study: larger throughput and mine plan changes
Management emphasized growth in cash flow and net asset value as core valuation drivers. Mullowney said the company intends to update its 2025 PEA, which was based on a $1,900 gold price assumption. He said the update will be prepared at approximately $3,000 gold, which he expects will reduce cutoff grades and “more than likely” increase total resources, though potentially at lower average grades.
Mullowney also discussed a larger processing expansion than previously contemplated. He said the company’s new plan is for “around a 3,500 ton per day SAG ball mill combination,” operating alongside the existing approximately 2,000-ton-per-day plant. He said throughput levels will ultimately depend on the updated mine plan, which is in process, and that the revised PEA will provide updated production and capital cost expectations.
Chief Operating Officer Richard Boffey provided timing detail on long-lead equipment. He said bids for the SAG and ball mills from seven suppliers indicate lead times ranging from 28 weeks to 50 weeks, and he expects something in the 30-40 week range. Boffey added that after delivery, construction could take “probably 12-13 week” before commissioning.
In response to a question about timing, Mullowney said the goal is to have the expanded plant completed by the end of June next year, clarifying he meant “calendar” Q2 rather than the company’s fiscal year. Boffey said he expects the “fully expanded plant fully operational” around “the end of Q2, start of Q3 2027.”
Boffey also described early changes emerging from mine planning work. He said the open pit design has been adjusted to go “between 100 and 130 meters” deeper than the PEA design, which he said would defer underground mining of the main zone. In Q&A, he characterized it as “definitely a deferral of the Main Zone underground,” adding it would push it “by at least five years,” though it would not prevent underground activity elsewhere.
Exploration and drilling: targets, geophysics, and additional rigs
TRX Gold also detailed a stepped-up exploration approach aimed at expanding and upgrading the resource base. Mullowney said the company completed a geophysics survey and expects it to generate targets this month, adding the company identified “10 very good targets” referenced in its MD&A.
Mullowney described the work as an 810-line-kilometer magnetic survey, followed by a 40-line-kilometer gradient array resistivity and induced polarization (IP) survey. He said many targets overlap with areas where the company has made recent discoveries, including Stamford Bridge and Anfield.
Boffey said the gradient array portion has been completed and the team is now conducting dipole-dipole surveys. He said the company has one diamond drill and one RC drill on site, expects a second diamond drill in May, and is targeting a second RC rig around June or July. Leonard said exploration spending is expected to remain in a $3 million to $5 million range, and noted the company commissioned its first drill rig on the property during Q2 with the goal of upgrading the Eastern Porphyry resource and using IP data to prioritize drilling in the second half.
On timing of results, Mullowney said investors could expect drill updates later in the back half of the calendar year, and Boffey suggested results may be more likely in the fourth calendar quarter.
Shareholder questions: dividends, buybacks, gold prices, and the government split
Management addressed shareholder questions about capital returns and the company’s joint venture framework. Asked about dividends, Mullowney said the company will not pay dividends this year due to significant capital plans, adding that management is focused on “growing EBITDA, Net Asset Value and resources.”
On the possibility of share buybacks, Mullowney said it is something the company will consider and has discussed with advisors, calling it “certainly something that’s on our potential radar screen.”
Management also discussed sensitivity to lower gold prices. Mullowney emphasized maintaining low costs, while Leonard said the company’s cash costs are tracking around $1,500 per ounce and that “at $4,200 an ounce gold, we’re still running at 60% margin.” Boffey added that mine planning iterations have used assumptions up to nearly $4,000 gold and settled on a profile around $3,000 to $3,300 for pit design modeling, which he said positions the company to “withstand any drops in the gold price from a long-term planning perspective.”
Regarding the company’s arrangement with the Tanzanian government, Mullowney said the current split is 55/45, with TRX holding 55%. He said TRX receives its capital loan back first and noted that future capital contributions would be subject to equity capital calls, requiring STAMICO to contribute proportionally or face dilution. On timing for negotiations, Mullowney said discussions continue but remain “fluid,” adding that politics are involved and the timeline is “always uncertain.”
Other questions touched on jurisdictional risk and logistics. Mullowney said he feels “very safe” operating in Tanzania and said the company has not seen civil unrest since the election. On oil availability, he said the company has not seen impacts in Tanzania, and noted the site has stockpiles that could allow mining to pause temporarily if needed. He also said the national power grid is online, while Boffey said grid availability fluctuates between 88% and 95%.
In closing remarks, Mullowney reiterated that TRX Gold’s focus is “growth in the underlying valuation metrics,” adding he expects “increase in revenue, EBITDA, and resources over time” as the company executes its plans at Buckreef.
About TRX Gold (NYSEAMERICAN:TRX)
TRX Gold Corporation engages in the exploration, development, and production of mineral property interests in the United Republic of Tanzania. The company primarily explores for gold deposits. It holds interests in the Buckreef gold project that comprises a single Special Mining License covering an area of 16.04 square kilometers and 12 Prospecting Licenses covering 98.19 square kilometers located in north-central Tanzania. The company was formerly known as Tanzanian Gold Corporation and changed its name to TRX Gold Corporation in May 2022.
