Gold Recovery Innovations Drive Positive Growth Outlook

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TRX Gold Corp. (TNX:TSX;  TRX:NYSE.American) recently completed a metallurgical variability study at its Buckreef Gold Project. This completion has showcased strong improvements in gold recovery rates, particularly from sulfide ore, which comprises the majority of the project's gold resources. The study demonstrates the company's progress in optimizing ore processing through finer grinding and advanced milling techniques, aiming to boost recovery rates sustainably. With these findings, TRX Gold plans to enhance the Buckreef Project's processing plant, furthering its commitment to low-cost, efficient operations and future growth potential in its high-priority gold zones.

Highlights from the news release:

• Higher Gold Recovery with Finer Grind Sizes: Incremental tests showed improved recovery rates as grind sizes were reduced, with gold recovery increasing from 81.2% to 92.5% as grind size moved from 80% passing 53 micrometers to 80% passing five micrometers.
• Operationally Consistent Results: Recovery rates for the 15 composites tested ranged from 79.9% to 87% in a gravity-flotation-leaching process at a grind size of 80% passing 75 micrometres. The Buckreef Project's operations have shown a stable tailings grade, underscoring the benefits of finer grinding for enhanced recovery.
• Enhanced Recovery in Current Operations: Given the fine dissemination of gold within pyrite, grinding to finer than 25 micrometres is expected to further boost recovery. Planned upgrades to the Buckreef plant will add rougher flotation and regrinding capabilities to achieve targeted recoveries above 90% with minimal energy consumption.
• Expansion Opportunities with Minimal Cost: The positive grade recovery results align with TRX Gold's self-financed expansion strategy, confirming project economics and potential for future optimizations and plant enhancements.
• Positive Outlook for Resource Development: Results support the potential for additional resources in Buckreef's high-priority zones, such as Anfield and Eastern Porphyry, where similar mineralization characteristics suggest scope for future resource expansion.

Gold Momentum Boosts Gold Exploration Potential

According to The Speculative Investor on October 7, the anticipated economic policies of both major U.S. political candidates could further pressure the U.S. dollar. As a result, a weakened dollar over the next 12 months could bolster gold prices, benefiting companies like TRX Gold in the sector. "It's almost as if both sides of the U.S. political aisle have a weaker dollar and a higher gold price as unofficial goals," The Speculative Investor reported.

Also on October 7, Bloomberg highlighted Costco's booming sales of gold bars amid the metal's strong performance this year, driven by its role as a safe haven asset. Rising inflation and economic uncertainty have made gold especially appealing, resulting in "record highs" and broadening consumer appeal. Gold has outperformed many other investments, appreciating almost 30% this year alone. According to MKS PAMP's Nicky Shiels, "There's a whole new cohort of retail buyers," which Bloomberg noted as "positive in the medium to long term," suggesting steady demand for physical gold assets.

TRX's Catalysts

The Buckreef Project's growing metallurgical insights provide key strategic benefits for TRX Gold. The study's findings support the company's direction in refining its milling operations, focusing on finer grinding initiatives that could consistently yield recovery rates over 90%.

According to TRX Gold's recent investor presentation, future mine planning aims to leverage low-cost, self-financed expansions, ensuring profitability and minimizing environmental impact through efficient energy use and localized resource management.

Additional exploration efforts targeting high-potential zones like Anfield and Eastern Porphyry further position the Buckreef Project for resource growth and long-term operational stability.

Experts Talk TRX Gold

In an October 2 report, Jake Sekelsky from Alliance Global Partners emphasized that TRX Gold's successful metallurgical tests on Buckreef's sulfide material represented a "significant de-risking event" due to the high percentage of sulfide ore in Buckreef's resource base. Sekelsky stated that these test results "open the door for higher throughput rates" and may drive expanded recovery capabilities, suggesting the potential for recovery rates exceeding 90%. He maintained a Buy rating for TRX with a 12-month target of US$1.75, based on a NAV analysis using a 10% discount rate.

Roth MKM analyst Mike Niehuser also affirmed a "Buy" rating for TRX, setting a 12-month target price of US$1.00 per share based on projected cash flows and operating metrics.

Sekelsky further noted TRX's commitment to funding growth through existing cash flow, reflecting a disciplined approach to expansion. He observed that this method could support TRX's goal of scaling Buckreef's output to over 100,000 ounces annually, whether through "additional staged expansions" or a larger-scale project that could elevate TRX to an intermediate producer.

Mike Niehuser from Roth MKM, on October 9, highlighted the company's ability to double production capacity at its Buckreef mine in Tanzania "without shareholder dilution," attributing this to effective cash flow management and efficient expansion strategies. He stated, "TRX has successfully expanded its operations on time and on budget," positioning the company for stable and increasing cash flow. Niehuser also affirmed a "Buy" rating for TRX, setting a 12-month target price of US$1.00 per share based on projected cash flows and operating metrics.

Additionally, Niehuser pointed to TRX Gold's commitment to further growth while minimizing dilution, observing that recent metallurgical studies supported management's business plan. With expected gold recoveries nearing 90%, TRX is positioned to process its substantial sulfide ore reserve more effectively. He further commented that sustained operational enhancements "should lead to increased cash flow," which, coupled with TRX's strategic location in Tanzania, enhances its long-term prospects.

Ownership and Share Structure

According to Refinitiv, 2.52% of TRX Gold is held by management and insiders. Of that, James Sinclair owns the most at 1.38%.

Institutions hold 1.25%. The rest is retail.

TRX Gold has 271.9 million free float shares and a market cap of US$108.78 million. The 52 week range of TRX is US$0.31–$0.49.