TRX Gold Corporation (AMEX:TRX) Q1 2026 Earnings Call Transcript

TRX Gold Corporation (AMEX:TRX) Q1 2026 Earnings Call Transcript January 19, 2026

Operator: Thank you for waiting, and welcome to the TRX Gold Corporation First Quarter 2026 Results Presentation. [Operator Instructions] The meeting is being recorded. [Operator Instructions] At this time, I would like to turn the meeting over to Stephen Mullowney, CEO. Please go ahead, sir.

Stephen Mullowney: Yes. Thank you, and thanks, everybody, for joining this morning. I believe it’s Martin Luther King Day in the United States. And thus, you have a holiday. I think we got a little bit mixed up in that, but that’s — it’s good to see a number of participants here today as well as we had really good participation on Friday on our virtual NDR with Renmark as well. So it’s an exciting time here at TRX. We’re going to go over our Q1 2026 results, which were really good. The results continue to improve the company’s financial profile, working capital continues to improve. And Richard and team on site, Richard is joining us from Buckreef today, have been progressing very well on the expansion plans. As I mentioned and as the team has mentioned before, really, our business plan is quite straightforward.

We have a robust asset in Tanzania, 1.5 million ounces, 2.5 grams a tonne. The business plan is to expand the plant in the next 18 to 24 months, increase production, which then helps fund the underground. And then we have an 18-year mine life between an open pit operation and an underground mine operation, all on the Buckreef main zone that’s funded [Technical Difficulty]. Thereafter — we have someone [Technical Difficulty] probably — there we go. Thank you, operator. And then also, we have some very prospective areas of the property, particularly Stamford Bridge, Anfield. Richard will also get into what we’re finding on the geophysics side, and we’re quite excited for the exploration side as well. And Khalaf will give a brief summary of our government relations side.

So I’m going to try not to speak as much today. I have a very strong team. I have Mike Leonard, our CFO, here today. Mike, there we go. Richard, as I mentioned, is joining us from site, our COO. Raise your hand, Richard. I think everybody can tell who Richard is. He’s got the orange shirt on. And then Khalaf is joining us from Dar es Salaam this morning. Good morning, Khalaf. So without further ado. So TRX at a glance, I gave a high-level overview. We operate the Buckreef Gold project in Tanzania. We are in production, producing between 25,000 ounces and 30,000 ounces in fiscal 2026. That cash flow will enable our expansion of the plant, which will then be online with PEA for an 18-year mine life and the last 15 years are underground roughly.

Richard will get into that today. We may be a little bit early on some of those items, but we won’t overpromise as well. And we have 1.5 million ounces in the resource category M&I, about 2.5 grams a tonne. So I really want to focus on what we did in the first quarter and financial-wise. And I’m going to hand it over to Mike to go through Slide #5 with regards to what Q1 looked like, and he will be supplemented by Richard on some of the operational aspects. Go ahead, guys.

Q&A Session

Michael Leonard: Terrific. Thank you, Stephen, and good morning, everybody. Thank you for joining us, particularly those in the U.S. on a holiday. As you would have seen, we did release our Q1 2026 results late last week on Thursday, we press released the numbers, and they were record results across the board. Yet again, starting right at the top on production. It was a record quarterly production quarter for us. We produced just under 6,600 ounces. That was a significant increase over the prior comparative period as well as even our Q4 results. We had indicated that over the first half of 2025, we undertook a Stage 1 strip campaign. And the idea was to remove overburden to access higher-grade ore blocks towards the back end of last year.

What you would have seen is that we put through about 1.9 grams a tonne through the mill at higher throughput levels compared to the prior year. So higher throughput, higher grade and higher recovery, in fact, we recovered around 60 — excuse me, 75% recovery for Q1 meant record production for the quarter. And in terms of guidance, we’d indicated full year production guidance of between 25,000 ounces and 30,000 ounces. Q1 was expected to be amongst the lowest quarters of the year. We do continue to access higher-grade ore blocks and remain on track for that production guidance of again, between 25,000 ounces and 30,000 ounces at a cash cost of between $1,400 and $1,600 an ounce. And in Q1, we came in at around $1,500 an ounce, right in the middle of that.

You couple that record production with the record gold price environment that we’re seeing. In Q1, we realized $3,860 an ounce, which was a record at that time. And of course, a few weeks later, here we are at over $4,600 an ounce. So gold continues to be very, very strong. We continue to demonstrate leverage to that gold price. And you couple a record gold price with record production and inevitably, you’ve got record quarterly revenue in our case of over $25 million for Q1 as well as things like adjusted EBITDA of over $13 million. So we’re demonstrating strong, strong cash flow, strong margins. And what we’ve been able to do, we’ve talked about this for a couple of quarters now, is basically take that free cash that we’re generating, and we’ve overturned what was a negative working capital ratio early last year as we were in the middle of that strip campaign and have effectively recapitalized our balance sheet.

So even relative to our year-ended August 31, where we had a working capital ratio of about 1.3x, we’re up to 1.7x or about $15 million positive working capital at Q1, and that continues to improve. And amongst other things, we’ve been able to show an increase in our cash position to over $9 million, which is an increase relative to Q4, but we also continue to invest in the business. So we have significantly grown our ROM pad stockpile, which Richard can talk a little bit about in his remarks. But we’ve got over 22,000 ounces sat on that ROM pad stockpile, which is about 1.2, 1.3 gram a tonne roughly on average currently and a split between oxide and sulfide rock, which allows us basically to optimize what goes through the mill and also serves as a very, very good insurance policy for us to make sure that, that mill feed is consistent and strong.

And material coming out of the pit is sort of prioritized relative to what’s on the stockpile to make sure the highest-grade material is going through the mill. I guess the last maybe comment I’ll make on the quarter. We do continue to invest in what Stephen talked about, the plant upgrade followed by the expansion, which once complete, will pay for effectively the underground development. During Q1, we used a lot of that free cash to put down payments on things like thickeners and elution plants and gold rooms and increased oxygenation, all of which is meant to help improve things like throughput and recovery, which will lead to higher production over time. So a very, very strong quarter, record across the board and certainly expect that to continue into Q2 and beyond.

Next slide, please. So this is effectively a summary of some of the key stats, I think we’ve already talked about. We’ve talked about the revenue. We’ve talked about EBITDA. Gross profit is an important one to touch on. We have been able to demonstrate it’s a high-margin, low-cost operation with, again, leverage to gold price. Gross profits are over 50% right now. So we’re generating lots and lots and lots of free cash and sitting in that — what we would characterize as the lowest quartile of the cash cost curve at roughly $1,500 an ounce. And again, the model is to use that free cash flow to execute against in the PEA to both upgrade our existing mill and expand it and then use that cash flow to fund the underground development that Stephen touched on.

We’ve also been able to invest in things like exploration. The first stage of our exploration program was effectively this geophysics study, which I think we’ll talk a little bit about later, but continue to advance in that regard and hope to be able to put some assay and drill results out later this year as that continues to develop as well as finalizing metallurgical test work that, again, I think Richard will touch on when he gets to it, but effectively demonstrates that we can achieve high, high recoveries with some of the mill enhancements that we’re making, which will help drive future production. And the last bit, I think I’ve touched on, but we do continue to expect our production to be between 25,000 ounces and 30,000 ounces at between $1,400 and $1,600 an ounce.

Capital, we had guided at between $15 million and $20 million. We continue at this stage to expect to spend at that level. But of course, at these gold price levels, if we generate additional free cash, we may move some of those capital expenditures around the plant expansion forward into the back end of this year, but we’ll certainly update the market as and when we make that determination. And finally, we’re spending on exploration. We expect to spend between $3 million and $5 million. We have procured a couple of drill rigs in RC and a diamond drill rig, which we’ll talk about, which we expect will help our drill program over the course of this year. So that was it, I think, as far as results in terms of what I wanted to touch on, Stephen, back to you, please.

Stephen Mullowney: Yes. No, thank you, Mike. And we’re going to switch into what I’ll call operational growth here. And I’m going to hand it over to Richard to give a brief overview, Richard, of where we are in our expansion plans and what investors can expect in the next 12 to 24 months around our expansion and where we’re going to get through to on throughput. Obviously, we’re online with what was in the PEA, and our goal is to exceed what was in that PEA given that we do plan to have a higher throughput than what was in the PEA. But where exactly are we on all our items? I know a lot of exciting things around Aachen reactors, ADR plants, looking at confirming and finalizing metallurgy and then getting into the SAGD (sic) [ SAG ] ball mill as well as flotation cells and thickeners, all kinds of things going on. So a lot on your plate. You are on mute, Richard. Here you go.

Richard Boffey: Hopefully, — how is that? You can hear me clearly?

Stephen Mullowney: We can hear you just fine. The reception is good [indiscernible] today. Possibly any thunderstorm.

Richard Boffey: No, we’re in the middle of one right now, which is why I asked. Anyway, in terms of the work we’re doing at the moment, we are still heavily focused on upgrades to our 2,000 tonne per day plant. So right now, we’re in the midst of doing a major upgrade and improvement to our crushing circuit. We’ve got more work lined up straight after that to move on to our mills and the power draw for the mills as well as the CIL circuits. We’re installing a super oxidation system that will hopefully give us another couple of percent recovery. We’ve also made some major improvements this last quarter in the recovery areas, which Mike alluded to, and that’s going well and is progressing again through this quarter. In terms of work towards the expansion, we have more or less finalized all of our metallurgical test work.

We’ve done a full modeling in spec of the SAG circuit. And for those people who may have read the PEA, we had planned to combine our existing 600-kilowatt ball mill with a SAG mill. And our modeling shows we’re probably better to just invest in a larger SAG mill and make it a simpler circuit. So we’re going out on price inquiry at the moment and full tender very shortly. And indications are that the lead time on that equipment is probably of the order of 7 to 9 months. The float plant and fine grind aspects of the expansion and the change in the process flow sheet have gone well. The met testwork was really focused on that, generally getting some excellent results in the lab and pilot plant with recoveries and mass pull, both better than expected.

And our fine grind looks like we’re going to optimize at about 20 microns instead of 15 microns, which again is a big improvement in energy expenditure and capital expenditure. So those aspects are going well. On the water at the moment, we’ve got oxygen plants coming to site. So we’ve got ADR plant orders just finalized and under construction. So they’ll be in towards the end of this financial — they’ll be in by the end of the financial year. I won’t say we’ll see much benefit from some of those aspects until financial year 2027. So generally, things are working pretty well. And as I discussed, this change to a straight SAG circuit for our new expanded plant allows us to effectively fully utilize the existing plant we’ve got, which is why we’re confident that we can probably improve on PEA metrics in terms of throughput and ultimate gold production.

Coupled with that, we’re doing a re-optimization of our pits with this higher gold environment, and we’re pretty confident we’re going to see some added reserves in our known reserves coming out with a reduced cutoff grade. So all in all, things are looking pretty positive for us.

Stephen Mullowney: Yes. Thank you, Richard, for that. A lot of information intake there, and it gives investors a sense of the direction and some of the news that will come out as we finalize plans. As Richard indicated, we may not utilize 1,000 tonne per day ball mill now in the SAGD (sic) [ SAG ] circuit. So per the prior press release, we said we wouldn’t utilize the 3 smaller ball mills. So that means the existing circuit will remain intact as well as the new SAGD (sic) [ SAG ] circuit. So that’s essentially higher throughput than we announced before, but we got to finalize that. The — also with regards to operating cost, recovery rates are up. And the reason why they’re — one of the reasons why they’re up is oxygenation and we’ve been using hydrogen peroxide currently and Aachen reactor will come in.

And Richard, I assume we’re going to get the oxygen rates even up higher than what we currently have with hydrogen peroxide. So that should, as you mentioned, lower cost as well as increased recovery rates going forward as well as the upgrades to the crushing circuit, I believe the apron feeders we put in today, which is critical for that. So that enables us to continue to operate our 2,000 tonne per day plant efficiently, both before and after the expansion. So I think that things are extremely positive, and we should see higher throughput rates this year than we’ve seen as well as the grade profile is going to increase. We’ll get into that in a second than it was last year, given where we are in the pit. And as Richard mentioned, in any study and in any resource profile, you pick a gold price to figure out your optimal pit design and underground mining plan design.

In our PEA, I believe we utilized $1,900 an ounce, Richard, is what it was in order to do that work. And so that then drives a cutoff grade. So Richard and team now are going to relook at that given we’re at $4,600 an ounce now. So we’ll choose a higher price there. And really, the goal is what you’ll start to see is as you do that mine plan, you’ll have a bottleneck in your plant and your stockpile will continually increase as you take the lower grade material and just put it on the stockpile for the end of mine life. And typically, that’s what you’ll see from a mine planning perspective. But certainly, the reserves and resources will go up as a result of that. So all in all, very, very positive aspects are going on, on the throughput side of things.

So with regards to that, when you’re looking at numbers coming through in financial numbers, we haven’t utilized a $4,000 gold price in our budgets. We use a lower gold price than that. So given we are confident on our throughputs, on our recovery rates and on our gold production metrics, obviously, that should flow through to the financial metrics, and we are very hopeful that we’ll be higher than we were certainly for fiscal 2025. If you look at our run rate right now, it’s certainly higher, significantly higher than what was achieved in fiscal 2025, and we’re doing fairly well. The first quarter had an increase in EBITDA of around $10 million versus first quarter of last year from a net basis. So all in all, doing very well. And obviously, working capital continues to increase.

Our judgment is companies that have performed extremely well, have a working capital ratio anywhere between 1.75 and above 2. That certainly we’ll get there fairly soon and are well capitalized to execute our plans. Anything to add to that point, Mike?

Michael Leonard: No, I think that was well said, Stephen. We’re well on our way, as mentioned, at $15 million positive for Q1 with an improving profile will fit deeply into that working capital metric that you just described.

Stephen Mullowney: Yes, exactly. So our mine planning, a lot of people have come back to me on this particular slide and like it because the saying a picture says a thousand words, it certainly does on this particular slide and explains why we had to go through the stripping campaign last year and now we’re into the pinks and the reds, the nice colors. We still got some blue colors to go through, but you can’t avoid blue colors. You got to strip in order to open up the nice colors. And Richard, do you want to give just a quick overview of our mine plan for this year, what can we expect from a mining perspective as grade profile comes through. And obviously, the thickener is a big thing because we no longer will have to mix oxides in our plant, and that will increase the head grade, which increases production as well. So just give us a quick overview of what people are seeing here. Obviously, Buckreef gets nicer colors as we get deeper.

Richard Boffey: Sure. Look, Generally, our focus towards the second half of financial year ’25 was in that southern area to the left on that slide, where there were better grades, and that was in response to some delays to get there. This year, we’ve got a far more steady descent of the project of the main pit, and we’ll be taking a pretty — probably about a 30-meter overall vertical lift right across the site — right across the pit. And that allows us a fairly even grade profile, especially for the first 3 quarters. And then we actually hit some very sweet stuff in the fourth quarter, which we’ll see a bit of a boost in grade through the mine. The reason I’m stressing an even profile of about 2.1 grams, 2.2 grams is that…

Stephen Mullowney: Richard, we’re losing you a little bit. Yeah, mute again. Oh, we lost you. [indiscernible] So we lost you at the reason why I’m stressing an even profile of 2.1 grams.

Richard Boffey: Fine. So it’s helping the plant enormously having a nice steady grade profile. As Stephen mentioned, in about 2.5 months, 3 months, certainly by sometime in April, we’ll have our pre-leach thickener installed, and that will enable us to probably see about a 5% lift in the mill head grade. So we’ll start to see some improvements in production related to that as well. The other thing we’re doing in the third quarter of this year is we’re starting a new pit, the strip for the new pit, which is called Eastern Porphyry. And by the end of our financial year, we’ll have faced off to have all faces in the ore blocks available to us. So we’ll be, I guess, derisking our production profile in that respect as well.

Stephen Mullowney: That’s great. So we’ve gone through on the production side of things, what solidifies the pay for things. And I’m going to jump around our presentation a little bit here. And let’s just go straight into what our exploration programs are envisioned to be. I do know we do have one drill rig, RC rig on site, and that’s currently doing, I believe, Richard, some condemnation drilling for some of the expansion plans. But we do plan to do some exploration holes with that fairly soon and describe our diamond drill rig is — should be on the water pretty soon and be at site, and we’ll probably use some subcontract drilling as well in 2026. Obviously, everything we’ve described on the production side is in the Buckreef main zone. We’ve had a good geophysics study being completed, and we’ll come to the market with that shortly. But give an overview of what our plans are around exploration.

Richard Boffey: Sure. So as you mentioned, Stephen, we’ve got — we’ve completed our first geophysical study, and it’s basically highlighting interesting structures, and it’s done in quite a high level of detail that hasn’t been done before on this project area. So that’s highlighted some really interesting targets for us. And we are — we will hit some of those immediately with our drills. And others, we’re planning to do what’s called an induced polarization or electrode resistivity survey on those other ones to see if we can try and identify some deeper pyritic anomalies and therefore, we’ll put drills on those as well. So across the course of the year, we’re planning to probably drill of the order of about 40,000 meters of drilling in total, maybe even 50,000 to 60,000 if we get a good run at it.

Stephen Mullowney: Yes. And so obviously, Stamford Bridge will be in there. Anfield will be in there. And as other people just heard, there’s other areas that are looking extremely good from the geophysics survey that’s being done on the site, which are not Anfield or Stamford Bridge. Is that correct?

Richard Boffey: Yes, that’s absolutely correct. We’ve got some other very interesting little structural features that we’ve identified that we want to follow up on.

Stephen Mullowney: Correct. Excellent. So in summary, we are online our PEA. As people understand, the production profile gets quite good under the PEA. We’re hopeful to exceed that. And given current gold prices, profitability looks pretty good as well. The next thing, part of our whole business plan, obviously, we’ve been open with this. We are in negotiations with the government. Obviously, that’s a little bit slower than everybody would like, but that is the nature of dealing internationally. Things have to go through their political process. So Khalaf, why don’t you just give a high-level overview of where we are in that? Come off mute.

Khalaf Rashid: Yes. Thank you, Stephen, and good morning to everybody. Good evening, Richard, at the site in Tanzania with me. Yes, okay. So I mean, we all know that Tanzania has been through a difficult period. We’re coming out of that difficult period, election period. So it does feel like things are normalizing. Business is getting back to how it should be. Obviously, there’s some aftermath that the politicians are dealing with trying to reconcile differences and so forth. They’ve had — Tanzania has been hit a little bit with international development funding. For us, it’s probably a positive thing because it prioritizes mining, right? So there’s a focus trying to get projects to — new projects off the ground, existing projects ourselves to scale up as soon as possible.

So obviously, that government gets more income. We’ve — as we’ve mentioned in the previous meetings we’ve had; we’ve been busy negotiating with the government. There is — as we all know, state participation regulations, the amendment was introduced in 2022, right, essentially framework agreements and participation of the state. We have an existing joint venture agreement since 2011. So what we’re looking forward to is getting to a point where we can agree with the government better agreements, all parties, right, much more transparent, easier to operate in Tanzania, and I guess, avoiding dispute and reducing risks for investment in the country. So we’re looking forward to that. Negotiations are ongoing. As Stephen says, albeit a bit slow.

But in Tanzania, apparently, we’re going fast. But anyway, so we do expect that I think 2026 is going to be the year that I hope things will accelerate. At least the groundwork has been done, right? The groundwork and initial discussions have been done. So we should move quite quickly. I think the last month; we’ve already met twice. We met in December, late December. We met last week again with our partners. So we’re moving. And the expectation, like I said, possibly by the end of this year, we should have new agreements and better and more investable agreements. So — yes, basically, in summary, that’s what it is, Stephen. Do you like me to add anything else to that?

Stephen Mullowney: No, no. I think, look, it’s progressing. And obviously, pace and politics are different in other parts of the world versus what we would be used to in the United States and Canada. But that is part of operating internationally. I have a lot of experience around this, and it has to go through its political departments and get to the right spot where decisions could be made. And I think we’re at that spot, and we will hopefully be able to progress it with a little bit more pace than we’ve had before. Our agreements are a little different than what you see in other companies there. Other companies are looking to put properties in production, so they go straight to the framework agreement. We are dealing with an existing joint venture to switch to framework agreement terms.

And in that, obviously, we’re looking to basically put the agreements into better agreements than what we currently have for both sides, both for us and for the government, and that has been well communicated. So I think we’ll come out the other side for us and for the government in a much better win-win situation.

Khalaf Rashid: Yes. No, absolutely. Perhaps I should add also that we are engaging with our embassies here locally. And they’re weighing in and they’re obviously quite involved as well in this process, working with the government to try and get all these things over the line as soon as possible. So…

Stephen Mullowney: Yes. And that’s both the American and Canadian…

Khalaf Rashid: Canadian, yes.

Stephen Mullowney: Yes, both American and the Canadian embassies. And when I was in Tanzania in December, I visited with both of them. And it — both are pro-investment; pro-stability is what I would say. All right. So with regards to us, I’m going to open up the floor now in the second and last part as I’m going to go through valuation. Obviously, we are starting to move up our chart somewhat as we continue to produce good financial results, recapitalize the business internally and the market gets a sense of where we’re going with our business plan and expansion plan. So I fully expect, hopefully, as we continue to execute and execute successfully, we continue to move up that chart. We have looked at a lot of metrics of what the market is looking for and have orientated our business plan towards that — towards those metrics.

I do think we have a huge chunk of warrants coming off on February 11, $0.80 warrants and then a year later, it’s the $0.44 warrants. I think we will get into a spot where the overhang of those warrants and capital structure on the equity side becomes a lot cleaner. I think that will be a positive for the stock as well. So all in all, things are going fairly well. TRX is in a good position. We are generating good cash flow, particularly at $4,600 gold, reinvesting that cash flow into the business. We did our last capital raise over 4 years ago and raised net $20 million, and we’re probably going to get to a mining property that could produce 80,000 ounces to 100,000 ounces plus of that $20 million, which is I don’t think it has been done anywhere.

And right now, the gross investment into the asset has been around $70 million off of that $20 million. So that ratio is well over 3x now and continues to grow. We’re looking confident. you’re hearing the confidence in our voice. I think there’s a lot of upside in the exploration side as well. And there’s even upside in revising our mine plan. So we’re a self-funding growth operation, both on the production side, cash flow side and resource side. So looking — yes, we’re fairly confident. So I’ll hand it back to the moderator for questions.

Operator: [Operator Instructions] And today’s first voice question comes from Heiko Ihle with H.C. Wainwright.

Heiko Ihle: The larger processing facility, can you walk me through potential bottlenecks during like when it actually ramps up? And also the impacts on the labor force, how many extra staff do you think you’ll need? I assume once this is up and running, it’s a limited number. And then maybe if I could just throw in one more, the guess for the — your best expectations for what you’ll pay for labor this year.

Stephen Mullowney: I’ll hand that back over to Richard. I assume the — I’ll answer the last part of the question. I assume that you’re looking at labor as inflationary pressures. That your real question?

Heiko Ihle: Correct. Well, also I mean, it’s presumably going to be more people. But yes, that’s the idea.

Stephen Mullowney: Yes. So I think Richard will answer that question more around what we expect processing cost per ton to be versus labor rates. We haven’t seen a lot of inflationary pressure on labor rates in Tanzania. But certainly, versus what you’ve seen elsewhere, there is some, but it’s not to the same extent. So Richard, do you want to answer the first part of the question? I think you’re on mute again. There we go. We’re having some difficulty hearing you, Richard, today. You’re on mute.

Richard Boffey: How about now? Did you hear now?

Stephen Mullowney: Yes.

Richard Boffey: Fantastic. Okay. Very quickly on labor. Labor is not particularly increasing significantly. It’s more exchange rate affected than anything else at the moment. We’ve had a pretty stable sort of 36 months here. As we upskill our people, obviously, we remunerate them a bit better, but that will result in slightly reduced workforces. The expansion will increase total workforce but reduce unit costs and overall labor increments relative to what we’re seeing at the moment. The underground aspect of the project is not that labor-intensive compared to what we’re seeing in the open pit at the moment. We’re looking to have quite an efficient contractor-run underground mine, probably only employing a maximum of 300 operators and maybe another 50 staff. So it’s not going to be a huge increment, not like some of the other African mines where you’re seeing thousands of people employed. I don’t see labor being a big driver of [indiscernible].

Stephen Mullowney: Okay. Thank you, Richard. Does that answer your question, Heiko?

Heiko Ihle: Yes. Thank you. Thank you, Richard and team. And then also figure 8 on Page 7 of the press release, I mean, if you just sort of look at it like from a 20,000-foot view, there’s a lot of high-grade material center, right? Given — and it seems to be getting even better as you go deeper. Just conceptually, when should we expect that to get mined? And is it going to be blended in a way that, that impact will be muted? Or will there be, call it, a quarter or 2 with substantially above mine fine grades?

Stephen Mullowney: Yes. So Richard answered that question earlier in the presentation that head grade will go up as we get into — put in place the thickener. So the thickener enables us not to have to mix lower-grade oxides with the higher-grade sulfide material. And as the pit goes down deeper and we get into the underground portions, you’ll see the head grade change in our PEA, and there are peaks in there, obviously, as a result of the increase in head grade.

Operator: [Operator Instructions] As we wait for any other verbal questions to come through, I can turn it over to you, Steve, there are some text questions that came through.

Stephen Mullowney: Yes. So there’s some text questions, so I’ll get into those. The first one is, could you explain what brought the plant utilization rate from 88% to 90% in hopes that I have a related question, are there any plans to place a lower strip ratio from 5.8. Thanks for taking my 2 questions. Great results this quarter. So on the first one, the utilization has gone up a little bit. Look, there’s been a large focus on preventative maintenance and also bringing in a lot more spares on a working capital perspective. Both of those have had a positive impact on plant utilization. Richard, anything else to add to that?

Richard Boffey: Look, only that we’re getting this process plant a little bit better organized. We’ve brought some expatriate expertise for consulting and management to improve our reliability-based maintenance planning.

Stephen Mullowney: And then with regards to the strip ratio, the strip ratio is really determined by the mine plan. And the mine plan has the figures in it I just mentioned. One is gold price, one is recovery rates, one is mining operating cost. And what then the mine model is doing is you want to maximize net present value and cash flow. And so with regards to the strip ratio is down, strip ratio will go up and down depending on how much ore blocks you’re getting versus strip blocks in that or waste in your mine plan. So given that we’re now getting — when you see stockpiles increasing, that means your strip ratio is generally going to be lower. When you’re drawing on your stockpile, generally your strip rate is higher. So what we generally look at as miners is a life of mine strip ratio.

So life of mine strip ratio is going to be higher than 5x because that’s the nature of the deposit, particularly at $4,600 gold, you’d want to in order to maximize cash flow to have a higher strip ratio in this deposit than that. When you have what I’ll call a crossover point, and that’s when you go underground because it’s more costly to strip than it is to have underground development. And so the strip ratio is consistently changing. With regards to the second question, the TSF3 is listed as taking 1 quarter to build later in fiscal 2026. What are the risks of completing this on schedule given? So Richard, take people through TSF3. Obviously, you and I were discussing this earlier on this morning. We are doing a lift to TSF2 and then doing TSF3.

And TSF3 then removes almost all tailings risk because it will be predominantly for the life of the mine. So just take people through the process on this.

Richard Boffey: Sure. So we’re — we’re in the full swing of design and assessment of our major TSF3, our life of mine facility that’s based upon holding all of the PEA material that we’re planning to mine. We’re — in terms of risk, we’ve made the decision to put in a third and final lift on our current TSF2.2. That will buy us another quarter or 1.5 quarters. And that really gives us till probably the first or possibly the second quarter of FY ’27, which should give us plenty of time to build this full facility. So we’re basically committing to the expenditure of a full life of mine tailings project in one construction effort. And basically, we’re doing that for the economy of scale in the area of basically everything that we dig out, we put into walls, and it’s a very even match. So we’re not importing a lot of material. And that will probably take us about 5 months to complete construction, and we’ve probably got another month of permitting and final design to go.

Stephen Mullowney: Excellent. Thank you. So it’s well in hand is the answer to the question. The next one is, Stephen, can you provide a view on 2026 initiatives to further promote TRX and its stock? We’d like to see more high and ultra-high-net-worth investors understanding the value and investing in the company, particularly given the strong operational performance. Please advise. So with regards to marketing, we do have a couple of marketing firms that have been hired on our behalf, out in the market, approaching a lot of what I’ll call retail brokers, high-net-worth individuals as well as institutional investors. And that has brought in a lot of meetings. Also with regards to the performance of the company, that has gotten the eyes of a lot of investment banks who have also brought forward a lot of institutional investors.

The challenge, I would say that we predominantly have is most people in the mining industry are used to getting discounts through private placements. And we’re not offering that. We’re offering if you want exposure to our stock and our growth story, you can purchase in the market. And so a lot of the institutional investors have the option of going in — there’s a lot of capital raises happening, going into other stocks on the capital raise or purchasing ours in the market without a discount. And we’re going to hold the line on that because we want to hold the line on and believe that not increasing the share count by our choice is more beneficial over the medium to long term. So you may not see the shareholder base change as quickly as you would like as a result of that philosophy, but we’re going to hold the line on that.

With regards to marketing as well, we do quite a bit of marketing in what I’ll call small to mid-cap conferences now in the United States, as well as a couple of mining conferences. So in the small to mid-cap conferences, dovetailing that with the 2 marketing firms that we have — actually, we have 3 marketing firms on board. We do find a lot of shareholders that fit what you’re describing around high-net-worth individuals. And that’s been a successful avenue for us to find new shareholders. So those are the initiatives. It is certainly a top-of-mind initiative. Anything to add to what I just described, Mike?

Michael Leonard: No, I think you said it well, Stephen. I mean as you mentioned, we are heading into conference season here and I have 3 conferences in the next 4 weeks, and our calendars are already full with a fairly large slate of high-net-worth and institutional investors that have — to help answer the question, take an interest in the results that we’re starting to generate. So there is active interest in the market. And over the next few weeks, expect to get in front of some prospective shareholders. So stay tuned.

Stephen Mullowney: Stay tuned, yes. I think that’s it for the questions, operator.

Operator: Yes, that is correct. There are no further voice questions at this time.

Stephen Mullowney: Thank you. Well, thanks, everyone, for joining the Q2 — sorry, Q1 conference call. Results are good. They continue to grow. We are on side our business plans for expansion, utilizing free cash flow. Exploration results will come further on later in the year. As Richard mentioned, we’re looking to do well over around 40,000 meters of drill holes. We have also more prospective targets than just Anfield and Stamford Bridge to go after. And we’re all excited for what the future lies at Buckreef in Tanzania. Thank you. Asante sana.

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

Stephen Mullowney: Yes. Thanks, Richard, and Khalaf for joining from Tanzania.