TRX Gold's Plan to Double Buckreef Output — Funded From Its Own Cash Flow

TRX Gold is no longer a story about getting a mine running — it is a story about doubling what that mine can do. Speaking in an Investor TV interview, CEO Stephen Mullowney laid out a plan to take the Buckreef Gold Project in Tanzania from roughly 30,000 ounces of gold a year to more than 80,000, funded without returning to shareholders for capital. The video's description notes the company has posted four consecutive quarters of record production.

The backdrop is a record fiscal 2026: almost 30,000 ounces produced, record revenue and record EBITDA (earnings before interest, taxes, depreciation and amortization). Mullowney puts the current run rate near $80 million — the fiscal third quarter's $20 million annualized — on a balance sheet he describes as debt-free with about $30 million in cash, aside from equipment leases.

## What changed: optimization, not just the gold price

Asked whether the record year simply tracked higher gold prices, Mullowney said no. Recovery rates — the share of gold in the ore that actually becomes saleable metal — climbed from the mid-70s to the mid-80s percent, the mine plan was optimized, and third-quarter throughput reached 1,833 tonnes per day, up 25% from a year earlier, on a plant rated at 2,000 tonnes per day.

The flip side: he expects fiscal 2027 production to be only slightly higher, because the existing plant "can only take so much." The step change has to come from the expansion.

## A 5,500-tonne target, paid for from cash flow

TRX is building a parallel 3,500-tonne-per-day circuit alongside the existing plant, taking theoretical capacity to 5,500 tonnes per day. The mine plan will set actual throughput, which Mullowney expects to land above the 3,000 tonnes per day in the current study — but he cautioned investors not to model the full 5,500. Tailings storage facilities are under construction, ball mills are ordered, and the recovery plant is underway. The work is budgeted at about $50 million over the next year, with the expanded plant due online in fiscal 2028 — roughly the end of calendar 2027.

Funding is the differentiator. Management plans to pay for the whole expansion from operating cash flow, with no equity raise. The company raised about $20 million at the outset and has reinvested roughly $90 million of free cash flow since. When an audience member noted the presentation showed $59 million still to spend against $27 million of cash, Mullowney's answer was that the mine's future cash generation, not the market, covers the gap.

## The baseline study — and why management calls it conservative

The May 2025 PEA (Preliminary Economic Assessment — an early-stage economic study of a deposit) modeled 3,000 tonnes per day: roughly 60,000 ounces of average annual production over an 18-year mine life, cash costs around $1,000 per ounce, all-in sustaining costs (AISC — what it really costs to produce an ounce, including sustaining capital) near $1,200, and a pre-tax net asset value around $1.9 billion at $4,000 gold — $1.2 billion after tax.

That study assumed $1,900 gold. With prices above $4,000, Mullowney argues the gap is what makes self-funded growth possible, and he expects EBITDA above $200 million within three to four years. The company stress-tests lower prices, he said: if gold pulls back, capital spending can slow rather than the plan break.

## Catalysts to watch

- **Updated PEA** — expected around the end of 2026 or early 2027, with a larger open pit that defers underground development, higher throughput, and probably more resources. - **Drill results** — initial assays within a couple of months, with four to five rigs active over the next six months. A first geophysics survey identified 10 prospective targets, including Stamford Bridge, where host Munir Barazi cited a 37-metre intercept grading 6.86 grams per tonne — the best in Buckreef's history. Mullowney's take: higher-grade ounces are the cheapest ounces. - **Resource growth** — the main zone remains open at depth, with drilling results down to 750 metres, though under current reporting rules only mined ounces are being counted.

## Tanzania: the overhang without a date

Buckreef operates as a 55/45 joint venture with Tanzania's state mining company, STAMICO, and the government's 45% stake is currently dilutable. Tanzania's 2022 mining legislation gives the state a 16% free-carried interest, and talks are underway toward a framework agreement — similar to deals other miners signed — that would produce a 50/50 economic split through taxes and royalties. Mullowney called the process slow and political, with no timeline. He separates on-the-ground operating risk, which he rates as strong, from national-level politics.

## The market doesn't believe it — yet

Mullowney's own diagnosis of the depressed share price: this is a "show me" market that doubts a small producer can expand without dilution. Inclusion in GDXJ — an index tracking junior gold miners — and four other indexes this year is starting to draw institutional buyers. The stock trades more than 2 million shares a day in New York and is covered by four analysts. His conclusion: "You have to execute your way out to close the gap."

One caveat belongs in any reading of this video: it was disseminated on behalf of TRX Gold, and producer Global One Media discloses it may be compensated by the featured company. The projections above are the CEO's, made in a promotional context, and they rest on single-asset execution in a jurisdiction that still carries real political risk.