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TICKERS: TNX; TRX

Co. Completes Production Capacity Expansion at Buckreef Gold Project
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TRX Gold Corp. (TNX:TSX; TRX:NYSE.American) announced record revenues and the completion of its third successful expansion at the Buckreef Gold Project, according to a Roth MKM research note.

Roth MKM analyst Mike Niehuser, in a research report published on July 19, 2024, provided an update on TRX Gold Corp. (TNX:TSX; TRX:NYSE.American) following the company's announcement of record revenues and the completion of its third successful expansion at the Buckreef Gold Project.

The analyst maintained a Buy rating and a 12-month price target of US$1.00 on the stock.

TRX Gold reported record revenues due to higher gold prices, which enabled the company to complete its expansion project to increase gold production.

"This allowed it to complete its third successful expansion to increase gold production in a de-risked, self-funded, and phased approach," Niehuser noted. 

The analyst highlighted the completion of the capacity expansion, stating, "The 1,000 tpd ball mill and crusher upgrades were scheduled for completion in 4Q24 at a cost of ~US$6.0 million. Capacity has been expanded to 2,000 tpd." Niehuser emphasized the importance of the new crushing circuit, which has increased the project's potential total crushing capacity to 3,600-to-4,800 tpd.

Regarding production outlook, Niehuser commented, "As of July 15, 2024, the processing plant achieved average mill throughput of 1,750 tpd, and a maximum of 1,873 tpd, 116% over 3Q24 levels. Currently, it is producing 616 oz per week, which is 60% of 3Q24 production levels."

The analyst praised TRX Gold's staged development approach, stating, "The current approach bypassed a large capital project thought essential to achieve economic gold recoveries from sulfide ore. By processing oxidized gold mineralized material on a modest scale, TRX funded expansion and improvements in crushing and grinding to achieve satisfactory gold recoveries from transitional and sulfide ore."

TRX Gold's strategic focus on phased, self-funded expansion has allowed the company to avoid significant shareholder dilution and debt, potentially derisking both the company and the project while accelerating and enhancing cash flow.

Roth MKM's valuation methodology for TRX Gold is based on a multiple of operating cash flow. "Based on annual gold production of 41,500 ounces and a US$2,000 gold price, a multiple of 15x operating cash flow results in a target price of ~US$1.04 per share," Niehuser explained.

With a Buy rating and a price target of US$1.00, representing a potential return of approximately 144% from the price at the time of the report of US$0.41, Roth MKM sees significant upside potential for TRX Gold.

The analyst concludes, "With the installation of the new ball mill, we anticipate increased throughput resulting in low cost of production. This should result in increased cashflow through the end of fiscal 2024, which should then stabilize in fiscal 2025."


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Important Disclosures:

  1. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Disclosures for Roth MKM, TRX Gold Corp., July 19, 2024

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures: ROTH makes a market in shares of TRX Gold Corporation and as such, buys and sells from customers on a principal basis. Shares of TRX Gold Corporation may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business
relationships with the covered companies mentioned in this report in the next three months. The material, information and
facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from
sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used
as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are
subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual
results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high
degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the
express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC. 





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