TRX Gold Corp Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Richard Niehuser - ROTH Capital Partners - Analyst : Can you hear me okay?

Question: Richard Niehuser - ROTH Capital Partners - Analyst : Yes. Good to see Khalaf as well. So you can smile, Khalaf. I just want to maybe make a comment that's more of a complement 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 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, higher gold price doesn't hurt too. So lots to take in with this, the last couple of press releases. Could you just give me a flavor and put up the Anfield slide again? Is that something you can do?

Question: Richard Niehuser - ROTH Capital Partners - Analyst : And I had a question about that. Is there any open pit potential there?

Question: Richard Niehuser - ROTH Capital Partners - Analyst : And how soon will the PEA be out be filed?

Question: Richard Niehuser - ROTH Capital Partners - Analyst : Okay. Very good then. Really no questions, but really quite a remarkable milestone coming from where you were a couple of years ago, and congratulations.

Question: Jake Sekelsky - Alliance Global Partners - Analyst : 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?

Question: Jake Sekelsky - Alliance Global Partners - Analyst : 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?

Question: Stephen Reiser - Family Office - Analyst : Can you all hear me okay?

Question: Stephen Reiser - Family Office - Analyst : Yes, 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 I wanted to get your view as to why that. Normally, 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 30-year T-bill is 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.

Question: Stephen Reiser - Family Office - Analyst : 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, and 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

Question: Stephen Reiser - Family Office - Analyst : 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?

Question: Stephen Reiser - Family Office - Analyst : 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 -- these phases can be staggered, but somewhat the move to expand the plant first, then to continue the move or transition from the surface drilling to the deeper drilling thereafter. 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, are there key operational milestones, 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 that things 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.

Question: Stephen Reiser - Family Office - Analyst : Okay. And 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 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?

Question: Stephen Reiser - Family Office - Analyst : Okay. Great. Well, I appreciate that you all and Stephen, that you've taken time to answer the questions. It's clearly an impressive PEA, and we really compliment TRX and the management team for bringing us to this point. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 23, 2025 / 1:00PM, TRX.A - Q2 2025 TRX Gold Corp Earnings Call

Question: Richard Niehuser - ROTH Capital Partners - Analyst : Yes. Probably just answered the question, but maybe a chance for Richard to chime in. In addition to the 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 that really doesn't seem to be a problem in what you've experienced. As you say, as you gained 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?

Question: Richard Niehuser - ROTH Capital Partners - Analyst : 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?