TRX Gold Corporation (TRX) Q4 2025 Earnings Report, Transcript and Summary

Welcome to the TRX Gold Corporation Fourth Quarter 2025 Results Presentation. [Operator Instructions] and the meeting is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Stephen Mullowney, CEO. Please go ahead, sir.

Yes. Thank you very much, and welcome, everybody, to the call this morning. Joining me today is our CFO, Mike Leonard, Mike? And our COO is joining us from Melbourne this morning. So it's very early in his morning. Richard?

Good morning, everybody.

Excellent. So today, we're going to go over our 2025 results. 2025 was a very transformative year for the company. A couple of the key highlights from my perspective are the discovery of Stamford Bridge earlier in the year, having our best drill hole results ever on that part of the property. Then also the release of our preliminary economic assessment in April of this year, which laid out a blueprint for production growth and expansion at Buckreef over the next 18 years of mine life. And that was great because that's just on the Buckreef Main zone and doesn't take into account the other potential exploration targets that we have. And then we went through a very big stripping campaign to reset the mine plan, and then that enabled us to have record results in our fourth quarter, which have continued into the first quarter and really set us up well and started to recapitalize the balance sheet and working capital in our operations. So a lot of really good things have happened in 2025. We're in a really good position. We're feeling really confident, and we're looking forward to a very successful 2026. Khalaf Rashid, our VP, Tanzania, has joined us as well. Khalaf -- excellent. So he's joining us from Dar es Salaam. And so in today's presentation, the team here will present a lot of the information. We're going to go over our financial results for 2025 as well as go through our forecast and what we plan to accomplish in 2026. I hope to get a lot of questions. I'd like to leave a lot of time for Q&A. As per other calls, we will answer almost all questions. I don't think we shy away from questions. But to give people who aren't as familiar with TRX and the Buckreef Gold project, just a little bit of an overview of our company. We're based in Tanzania. We're operating the Buckreef Gold project under a 55%, 45% JV. I'll get into government relations later on in the presentation. The property has over 1.5 million ounces at 2.5 grams a ton. It is a very low-cost operation. We've done three mill expansions in the last 3 years. We're undertaking another mill expansion as we speak. We're listed on the TSX under TRX and the New York Stock Exchange American under the ticker symbol TRX as well. And we're looking forward to continue to expand our operations to 2026 as well as -- our first drill rig will land on site, I think, this week that's owner-owned and start the exploration program again after doing our geophysics study, which is coming to completion. So with that, anything else, Mike, Richard, Khalaf to add to just an overview before Mike gets into the next slide and financial results.

No, I think that was a good overview and a good summary from my side, Stephen. Thank you.

Excellent. Thank you. So Mike, I'm going to hand it over to you to go through the key highlights of the fourth quarter.

Okay. Very good. Thank you, Stephen. Good morning, everyone. Thanks for joining us, as always. Q4 was by far our strongest quarter of the year, as Stephen mentioned, it was a record quarter for the company. And that was primarily as we got through the Stage 1 stripping campaign that we've taken the market through in the early part of the year, we benefited from access to high-grade ore blocks into Q4 and consequently had record production and sales for the quarter. We produced over 6,400 ounces of gold, sold almost 7,000 ounces of gold. And of course, that was a big increase quarter-over-quarter-over-quarter, again, as we got through that strip campaign. And the high-grade ore blocks that we're accessing after that Stage 1 strip are continuing into Q1, and we touched on that in our last press release. We've had some record cores of over 1,000 ounces in Q1 of this year. So -- that production trend has continued and expected to continue over the course of this year. Of course, we're in a record gold price environment at the moment. We realized a record gold price of $3,363 in Q4. But of course, we're selling gold at over $4,200 now. So we continue to benefit from those record gold prices. But you couple record Q4 production with record gold prices and inevitably, you end up with record revenue, record gross profit, record net income, record operating cash flow and record adjusted EBITDA across the board. So really, really strong Q4 results. Importantly, we took a lot of that free cash flow that we're generating now and recapitalized our balance sheet, as Stephen touched on. Earlier in the year, when we were doing that Stage 1 strip campaign, we leaned on our vendors to help remove a lot of that overburden and waste to get to those high-grade ore blocks. And consequently, working capital had been negative in the early part of the year. We've since overturned that. Working capital is positive now. Accounts payable was back within 60-odd days on average. We increased our cash position quarter-over-quarter by a net $1.2 million, about $8 million on our balance sheet and then repaid all of our borrowings early in the year. So the balance sheet was set up really, really well, certainly heading into 2026. We'll talk about guidance in a moment. But in addition to recapitalizing the working capital position, we continue to invest in things like mine infrastructure and development. And Richard is better suited to talk to this, but we've effectively built up a very, very robust stockpile position, run-of-mine stockpile position. At the end of the year, we had about 15,000 ounces on that stockpile and it continues to grow over 20,000 ounces of gold on that stockpile today. And what that allows us to do is maintain things like continuous mill feed as well as supporting blending strategies as we head into next year, just to, again, maintain consistent steady production. So continue to invest in the business that way. And of course, Stephen touched on the PEA and some of the projects that we're undertaking to enhance and expand our plant and mill. We have made down payments of things like thickeners, an ADR gold room that we're improving and enhancing as well as things like additional oxygenation into the mill, all of which, as we've guided, we expect to benefit things like throughput and recovery over the course of this year. So again, record Q4. And Stephen, what I might ask you to do is flip to the next slide, and we'll just quickly touch on some of the full year highlights as well.

Here we go.

So we talked about Q4 being by far our strongest year -- quarter of the year after having got through the strip campaign. But nevertheless, 2025 was a record and transformational year for the company on the whole. We produced just under 19,000 ounces, so effectively in line with what we produced last year. But again, those record gold prices on a full year basis over $3,000 an ounce benefited the financials significantly. We did almost $60 million of revenue. Our gross profit was just under $25 million. And again, I should touch on gross profit quickly. We did 53% gross profit in Q4. So as Stephen touched on, it's a low-cost, high-margin operation. And at these gold price levels, the margin and the free cash we're developing is certainly benefiting the financials immensely. EBITDA for the year was $22 million, but Q4 alone was more than half of that. So again, if you take the production profile that you saw in Q4 and the $4,000-plus gold prices that you're seeing today and extrapolate that into 2026, you get a sense for what the financials might look like heading into next year. We talked about cost improvements a little bit. We've seen things like processing cost per ton come down year-over-year, economies of scale from our process plant having got a full year at 2,000 ton a day. We're below $50 a ton in the processing plant. Stephen touched on things like owner-managed drilling. We also have an owner-managed fleet that's supporting our contract mining fleet. So things like mining cost per ton are coming down as well. So you expect to see that gross profit and that gross margin continue to expand over the course of next year. We did press release earlier this year that we are building out a larger processing facility than what we had originally envisaged with the PEA. The PEA contemplated a 3,000 ton a day processing plant expanded from our current 2,000 ton a day plant. We're now envisaging a 3,000 ton a day sulfide circuit plus 1,000 ton a day, we call it oxide transition circuit that amongst other things, will help us reprocess tailings. We expect to fund that through cash flow and are making progress on that and expect to update the market on our progress over the course of this year on that expansion. But again, we are making progress on some of those mill optimization initiatives like thickeners and oxygenation and ADR plants as we go. Finally, we did put out a production and cost outlook for 2026. We expect gold production to be between 25,000 and 30,000 ounces of gold for next year at a cash cost of between $1,400 and $1,600 an ounce. Our CapEx, we expect to be between $15 million and $20 million, primarily focused on things like the plant upgrades and expansions as well as life of mine tailings facilities that we're developing concurrently. If and when we develop additional free cash flow at higher gold prices, for example, we may look to expand that, but we'll certainly update the market as we progress over the course of the year. And I'll say a final point here around exploration. We have planned to put the drill bit back into the ground. We did just complete a geophysics study or in the process of completing one to identify additional drill targets. But the focus is really going to be around the main zone as well as exploration drilling in Stamford Bridge and Eastern Porphyry and expect to have steady, consistent news flow on those assays as and when they come in over the course of this year. So very, very strong record transformational year for 2025. And if you look at 2026 outlook, coupled with the higher gold prices, expect results to be very strong heading into next year as well. Stephen, back to you.

Yes. No, thank you, Mike, for that. And I'm just going to -- just do a little bit of Q&A with you and Richard here, just to bring out a few other points. Richard, why don't you give the shareholders an update on where we are in the process of that expansion? I know the thickener has been put on to a vote as of this week and how you would see that being laid out the rest of the remainder of the year.

Sure, Stephen. Thanks. Hi again, everybody. The expansion process is well underway. We've got a full team and owner's team managing the full process from procurement through to installation and commissioning. The first part of the expansion process and the upgrade will be, as Stephen mentioned, a thickener coming to -- that we can add to the circuit before the leach circuit. That enables us to improve the density, the residence time and technically the grade because we'll be putting less of our oxide material through the plant. So that should have a pretty immediate effect probably starting at the end of this second quarter. We also have some additional oxygenation equipment coming in at the moment, we're feeding the plant hydrogen peroxide to improve the recovery. We're expecting a recovery gain and cost reduction by introducing some oxidation technology. It's a jetting system that is called an Aachen reactor and should certainly help us with our more difficult sulfidic ores. The next item to come along will be an improved absorption, desorption and recovery plant. Our current one is bit agricultural. So as we get to much larger gold production, we'll need a much better system. And this is a very hands-off process control system. We're very much looking forward to being able to install that towards the end of this financial year. At the same time, our met test work on the flotation and the fine grinding is complete, and we're just reviewing the last of the data there. We're out to tender on those items. And also by January, we'll be out to tender on a SAG mill. So we'll put the SAG and the ball mill into a parallel system, and that will allow us to bump up the production to somewhere between 3,000 and 3,500 tons a day of fresh material. So we don't expect that until FY '27, but certainly in the first half of FY '27, we would like to have our full expanded plant up and running.

Excellent. Thank you, Richard. That's a good update. I'm going to switch to the next slide here now. One of the things that Mike did mention is production was predominantly the same as it was in 2024, but throughput did increase. So the difference is in the grade profile in 2024 and 2025. And as we mentioned, we're now into a much better grade profile after the stripping campaign, we went from the north back down to the south where the much better grades are. And we anticipate better grades as we go forward, which means a lead to an increase in gold production. As Richard has mentioned, the oxygenation, even using hydrogen peroxide, we have seen lately a decent increase in recovery rates in the operations, coming from the low 70s into where I say, Richard, now about low 80s roughly, even just using hydrogen peroxide?

Well, it's not just hydrogen peroxide. Yes, we've certainly worked on grindability and all reagent addition, but we've had a significant increase in recovery from quarter 3 when we're in the high 60s and now we're into the low 80s. So it's been a very good few months.

So as you can see, the throughput of the plant last year did increase, and it will increase again this year. Richard and the team have had quite a good maintenance program put into place, which is helping our availability. As Mike mentioned, recapitalizing the balance sheet has meant bringing in a lot more spares and a lot more that on the maintenance side. So that's limiting our downside on the crushing and grinding circuit as well. So all things are moving in a positive direction. I'm going to ask -- I'm jumping ahead of myself here. This is just a summary of both the revenues and the adjusted EBITDA of the company. A couple of things I'd like to point out in this slide from 2025 is we haven't issued equity in the market. So now we go back 4 or 5 years ago to our original capital raises, there now has been a $67 million investment from a $20 million raise into this asset. That will continue to increase and go up as we continue to create more and more cash flow from this asset and have that plan in place. I'll get into the PEIA slides in a few minutes. So that's important. Also, we continue to hold the line on cash G&A. And that's very important as well. So we hold that line versus other miners, and we run a pretty tight management team in order to hold that G&A expenditures where they are right now. That may change in the future as we grow. But right now, we've held the line in 2025. With regards to why are we very confident in 2026. Like I mentioned, grade profile is a big part of it. Mining is a big part of that. In 2025, Richard didn't really get into this, but there were a lot of improvements in mining, particularly around drilling and blasting, working with the contractor to make sure that they're hitting mining rates. Because if you fall behind in mining, you're going to fall behind in your mine plant, you're going to fall behind in the grade profile that you have. As Mike mentioned and Richard mentioned, the stockpile is increasing. So what does that mean? That means that the grades coming from your pit are higher than what's on the stockpile. So you're not drawing from your stockpile and you're mining more ore than your processing plant has capacity to mine. So Richard, why don't you just give the shareholders a quick overview of the mine plan for 2026 at a very high level. They can see what has been mined above the line and what is to be mined below the line. And I like those very pinkish blocks that are there -- deep purples that we're going to be mining in 2026.

Sure, Stephen. Look, for those people who are not color blind and interested in the colors, the warmer colors are the better grade. So anything with purple and above is exceptionally good grade that you don't normally find in an open pit mine. The blue is generally a waste material. So you can see that in 2025, we did a lot of mining of blue to the right-hand side, which is the north. And this coming year, we've still got a bit of that to go. We're going to be hitting that again because there's some exceptional grades beneath that, not very well represented on this slide. But we do have a very good uniform, consistent area of ore basically from the south all the way to about 80% to 90% through the strike length of the pit. That should give us a nice consistent feed, and we're hoping in the fourth quarter to even get some of the -- probably our best grades that we've seen in the project coming out in that last quarter.

So with regards to -- I'm just going to summarize some of our investment themes from our corporate presentation. I'm going to go through these slides pretty quickly. As it has been mentioned upfront, and I'm going to reiterate, the company is generating strong free cash flow right now that's being reinvested into the business. It is a scalable growth plan with a significant increase in the tonnage as a result of the expansion. Remember, we've done this before. As Richard mentioned, there's a full team in place. They know what they're doing. We've done this before. So we're very confident in doing it again, which means the increase in scale -- I see Richard has just left and he might have connection issues. The increase in scale will reduce costs as well from where they were in 2025. There is also significant -- still significant blue sky potential. There will be a lot more focus on that in 2026 than there was in 2025. There's only so much capital you have. In 2025, we focused on the stripping and setting up the mine plan for the long term to enable significantly more exploration over time as a result of the free cash flow that has been generating. We could have did exploration, but then we wouldn't get to the free cash flow that we're seeing today if we did exploration last year and it would have been slower to get there as a result of the plant wouldn't have been expanded or/and the pit wouldn't have been stripped and you wouldn't get to the grades that create that cash flow. With regards to Tanzania itself, I give a little bit of an overview of Tanzania and Khalaf will get into a little bit of the situation on the ground in Tanzania as well. The big thing in Tanzania, Barrick and AngloGold Ashanti continue to produce really good gold production at their assets in North Mara, Bulyanhulu and Geita. Geita is about 30 kilometers away from us. The big news in Tanzania is Perseus is putting Nyanzaga into production. They're spending $0.5 billion there. To put that in production, it will produce over 200,000 ounces. Ironically, and I'd like to say this, our PEA has a higher net present value than that project, given the low cost at Buckreef. It has lower production, but it has such low cost that it has a significant net present value relative to other projects. So we're not seeing too much from a labor perspective as of yet from the Perseus expansion, and our labor situation is really good. One of the things I'd like to talk about is the -- and I've gotten a lot of questions around this from shareholders. So I'm going to preempt the question around the joint venture. As shareholders are aware, we have a 55%, 45% joint venture with the state mining company, [indiscernible] government entity in Tanzania. That 45% interest is dilutable. The Tanzanian government in -- I believe it's 2022 implemented a new law for 16% free carried interest in mining projects and requested that mining companies submit a time line for negotiation of the government to receive that interest. We are in a unique situation given that we already have a government interest in the Buckreef mining projects. Other projects in Tanzania do not have that sort of attribute. So for instance, I have here Perseus, Nyanzaga, when they went for their mining permit, they negotiated that in under OreCorp at the time. The Buckreef Gold project has gone through extensive, what I'll say, back and forth with the government negotiating team. We've dealt with STAMICO, the government negotiating team as well as others in Tanzania and it's still a work in progress. We expect that to pick up here in the new year. Our goal is to switch the 45% dilutable to the 16% nondilutable and be more market with other mining projects in Tanzania. Khalaf, anything to add to that from what I just added? I know you're dealing with this on a daily basis.

On a daily basis, yes. Correct. I think that's exactly how it is. We've initiated the process of negotiations with the government since 2024. So these discussions are ongoing. They have been somewhat delayed these recent months because of elections, but we expect that they will go back fully by January 2026. So -- and I think that probably the important thing is just to state the new framework arrangement with the proposed financial models, which were absent in previous arrangements. And I think it's beneficial for all parties to have greater transparency between the investor and the government. So it isn't about less, it's about actually being more transparent and having stability in these new agreements, which I think is hugely important for all of us. Yes. So basically, that's what it is. And we look forward to. And I think the important thing also is that government is in, I believe, the right spirit, trying to promote and ensure that the investment comes into the country. So these sort of new agreements, a new framework has been geared up to increase investment into the country and attract investors.

Thanks for that, Khalaf. And look, that lines up with a release by the Ministry of Minerals a couple of days ago with regards to what they're doing with the U.S. Embassy and attempting to attract investment in the natural gas area, which is $40 billion plus for Tanzanian investment in the natural gas space as well as Lifezone's Kabanga Nickel project. And there was a graphite project as well that was a significant investment as well. So the government is saying the right things and looks to be moving in the right direction, with regards to the capital investment. And I encourage anybody has any further questions to ask those towards the end of the presentation. So I'm going to move on into the PEA right now. And as I mentioned, this slide will be put up on to our website after this presentation in the corporate presentation. It just details more detail coming out of the PEA. This is all in the PEA documents. As you can see in year 1, it has 27,000 ounces of production, which is in line to the guidance that was provided by Mike and Richard and team of 25,000 to 30,000 ounces. And then it starts to ramp up thereafter. As we mentioned in the prior release, the company's plan is to have larger than 3,000 tons a day capacity. What that will ultimately get to will be determined as we get into that production profile. But certainly, the older plant and the 1,000 ton per day, as we mentioned, will still be there. It's able to process sulfides as well, but not at the same recovery rates unless you upgrade it to thickeners and integrate in the flotation cells at the end to make sure you have enough capacity in your high-intensity grinding mill. So -- but it can still at the current plant process sulfides, although at a reduced recovery rate. Richard, anything else to add to this? This contemplates 3 years of open pit and the remainder underground.

Not really. I mean we're following the plan. It's a good plan. We're also looking for opportunities now with some full geophysical surveys across the site. So if we can find additional resources, then we've got more opportunity. And as you suggested, we'll have a effectively redundant crushing and milling circuit of at least 1,000 ton a day that we could implement to other opportunities. So yes, it's very useful guideline, but we'd like to see us improving on that profile.

Stephen, I might just add one comment there. Again, for folks new to the story, again, if you go back one slide, and I'll just point folks to the EBITDA figures that is generated. I think we've used $4,000 an ounce in the last slide. But it is a self-funding model. Again, the CapEx that we've envisaged as part of the PEA will be funded by cash flow. And it's a bit of an eye chart here, but I think the incremental EBITDA that you can see in what I believe is blue is very, very robust and funds the expansion through cash flow.

Yes, I like this $285 million, Mike.

Yes, that's more than sufficient cash flow to expand our plant and our operation.

So those numbers contemplate cash costs that are here, Mike. And I can tell you, our year 1 guidance is a lot lower than we have in the PEA case as well as year 2. So we're hopeful that we'll be able to improve on the cash costs that were in this study. So with regards to -- Richard, you mentioned drilling and exploration to be able to feed more to plant. Not everybody understands -- everybody understands when they see drill hole results and looking at good grades and things of that nature. But the Buckreef property is predominantly underexplored. Why don't you give shareholders a sense of how the team is blocking and tackling that, starting with the geophysics study, why you're doing the geophysics study and then how it increases the probability of drill bits to go underground. And also the drill rigs that are coming to site, one is coming this week and then the next one is coming in the new year, how that lowers our cost to drill?

Cost. Okay, fine. First things first. So our SML is quite an odd shape, but it does have at least 7 mineralized trends on it. And that's a pretty good hunting ground for us. So what we are doing with our geophysical program is initially to define structures -- deep structures that would normally in this origenic gold environment host gold. And since we've discovered Stamford Bridge, we've obviously discovered that some of the orientations of these structures aren't what where we were -- we and previous owners of this project have previously been looking. So we're initially doing a high detail surface magnetic survey, and we've completed that about 2 weeks ago. We're going through the interpretation for that. From that, we'll get a new interpretation of the structural makeup of our project. And that will be an interesting review, speaking with the geophysics in Perth next week to have a look at that. From that, we'll take those structures, and we'll do what's called an induced polarization survey with some technology that allows us to go very deep. And so that IP survey will be along the structures that we identify, and that will generally identify sulfidic occurrences typically pyrite, but then gold is also associated with the pyrite. So between those two surveys, we'll have some pretty good -- we expect to get some pretty good targets to drill. So we'll be testing along the extent of the Stamford Bridge, but we'll also be looking at all of the other structures, including Anfield and some of those other red lines you can see on the system on the SML there. So when we have completed that in probably by the end of the second quarter, we've purchased our own drill rigs, diamond drill and reverse circulation drills. We haven't had a lot of operational success with our -- the drilling company we've used previously, and we've got some very good people. So we're very comfortable managing our own drilling operations. If we see more success, drill rigs aren't expensive and our -- we'll do it considerably cheaper than the contractor, and I expect with higher productivity as well. So yes, we're looking forward to an era of interesting exploration drilling coming up.

Yes. So Richard, thanks for that. In wrapping that up, essentially, what we decided to do was do the geophysics, increase the probability of targets, figure out how many more targets are actually on this property because Stamford Bridge, we discovered it by going through the pit. So now because it was under surface, obviously. And we now want to make sure that if there's any other Stamford Bridges out there that we appropriately identify them and then Richard and team will go and drill -- put in initial drill holes into those areas to figure out if those areas have gold. So the first part is to identify the structures. The second part is to identify the structures with pyrite and sulfides to increase the probability. The third part is to put the drill bit into the ground in those areas, along with Stamford Bridge and Anfield as well. So we're quite excited for this actually because this is kind of the first time this has really been done on this SML. And it should hopefully lead to a lot more gold resources over time. Where are we on comparable company analysis? I never -- and anybody has heard me speak, I never say we're undervalued. I always say we need to get a better value. And we need to operate towards getting that better value. We have started to move up the curve as we've -- and I've said this to a lot of people, recapitalizing the balance sheet, I think, is one of the major focuses of that, removing an overhang in the market as a result of recapitalization of the balance sheet, and that continues. As I mentioned in my note in the last press release, I expect that to be done by the end of the second quarter. Predominantly it will be before that. As Mike mentioned, payables now rightsized. So when we did the stripping campaign and the last expansions, we did lean on our suppliers quite a bit. They worked with us. Thus, working capital went upside down to finance it. Now that the thing is in higher production into the good gold grades, working capital is reversed and is now into a positive situation. So we just financed it differently. Instead of going to the market and issuing equity to finance what we've done, we've worked with our suppliers to help finance it and its utilize cash flow from operations as well. Today, we have our liquidity lines all available to us. I think the leases are up a little bit given some of the equipment that we're bringing on board, but that's more long term in nature and thus a better matching into long-term liabilities with long-term assets. With regards to stock price performance, I think, as I mentioned, when we announced to the market our Q4 results and the reversing of the working capital deficit, the stock really started to take off. We're not surprised by that. That's what we expected. And I think as we continue to increase cash flow as well as have better working capital ratios, potentially a new agreement with the government, I fully expect this trend hopefully to continue. Obviously, we do have some good gold prices. Gold is getting a lot more attention. All of those sort of factors help as well. But fundamentally, that doesn't change the way we're looking at continually to execute. We're at $2,500 gold, we would be successful as well, although it would be at a slower rate than that $4,000 gold. But certainly, the business plan remains focused. I think we have more human capital constraints to build out quicker and logistics constraints than we do at this point in time, capital constraints in building out the asset. So with regards to the key investment highlights is we've got a lot of strong growth, sustained profitability. We got a team here that's proven themselves. We've done this before. We can do it again. The PEA is a guideline for a business plan. We're executing upon that. We have significant exploration potential, gave everybody a sense of how we're blocking and tackling that. We're quite comfortable operating in East Africa. We know how to get things done there, know what things to get things done in Tanzania as well as logistics from procuring equipment offshore. And we have a very experienced leadership team to do that. Although it is a little bit of a skinny team, as I mentioned, the G&A is in line and probably lower than most other companies. So with that, that's my closing remarks. Stay tuned. So I'd open the floor up to questions. And as I mentioned before, more than comfortable answering almost all questions. We are an open book.

[Operator Instructions] And the first question will come from Heiko Ihle with H.C. Wainwright.

Looking forward to seeing some of you next week. You were talking about the drill rig that's coming this week. Can you give a bit of color on where you expect to focus this drilling? You hinted at it a little bit earlier. How many meters do you expect to see the time frame for drilling and maybe even a bit of background on costs and changes to costs since I assume they're substantially cheaper than hiring someone that owns the rig.

Yes. Richard, I'll hand that question over to you.

I only caught a bit of it, but I think I caught quiet enough -- sorry, I was just jumped off there for a second. In terms of our drilling, we've got a reverse circulation drill that we intend to immediately start on the Eastern Porphyry pit for resource definition. We'll be drilling that at a cost of about $25 a meter. Normal contracting rates in Tanzania are about $50. Our diamond drill of -- what do we expect to get out of that? I think it was one of the questions of the order of 4,000 meters a month or close to 50,000 meters a year. So there's lots to do. We'll also use that RC to assist us with the diamond by doing pre-collars, which will bring the cost of the deeper exploration down as well. The diamond itself should be starting in the third quarter. And we're expecting -- well, we've got a lot of drilling to do. We've got a 35,000-meter drill program to upgrade the first 500 meters of the underground mine -- design mine to indicated, and then we'll have the results of the exploration program. So it could well be that we get a second rig to assist in all of that. But we'll be looking to drill about 2,000 to 2,500 meters a month at a cost of about $50 a meter. And again, that's about half the cost of contractor mining -- contractor drilling.

When you say there might be a second rig, how long does it take to get something like that? Is that easy to do? Is there like importing it, is this tough? I have no idea.

Yes. Logistics is tough in Africa and especially in Tanzania. Look, it's a 4- to 5-month exercise to be perfectly honest. So yes, we've got one drill arriving today or it's morning now, so it should be arriving tomorrow, Tanzania time and the next one is on the water probably in a couple of weeks, and we'll probably be here in about, let's say, about 7 or 8 weeks. So yes, 4 or 5 months process to get another one. That's certainly available. There's no problem with availability.

Right. And then just playing big picture here for a second. I mean, obviously, 2025 was quite transformational. It seems like this question. You talked a bit about the mine plan on this call. And just in general, do you want to maybe just sum up the three catalysts for the company that you're most excited about for the next 12 months that are maybe underappreciated by people like me and by the market as a whole?

Yes. So I'll get that from my perspective. Look, I think we've been decently conservative. And look, over time, we've always been decently conservative. So I think there is upside potential on potentially maybe on some of the financial results. Gold price is certainly heading in the right direction. So I think that is there. I'm quite also confident on the -- we will get, hopefully, a new agreement with the government that kind of is more easily explained and is more transparent and better for all parties, including the government. That's another one. I don't think there's been a lot of focus on that. Obviously, that can take time or can speed up. It's not all within our control. The -- and then look, nobody has ever gone around looking for structures around this property. And when you look at the landscape in around this property, -- there's lots of gold all over the place. You see lots of activity on the artisanal side in and around this area, which means there is gold. And I think the geophysics study as well as getting some drill bits initially into the ground in some of these areas could be a great, great surprise here. And there's a reason why that 1,000 ton per day plant is going to stay there, particularly if there's surface materials, they'll go through a really good recovery rate. So I think there's a potential for that to happen. And obviously, if all of that comes together, then you're going to update your study to get a higher NAV. So it can all be quite good.

The metal pricing environment helps -- all I would say is the metal pricing environment obviously helps.

Yes, it helps. Yes, exactly. But like I said, look, we are always going to be price takers as a gold miner. And you have to have your business plan, focus on your business plan, even considering lower potential prices, and you want to be successful even in that environment. So I think we're set up very, very well along all gold prices. And I personally believe that they will go higher as well given what's going on in the world and potentially lowering of interest rates, particularly in the United States with the Fed uncertainty coming in 2026. So I think gold prices will go higher over time. That's just my own personal opinion.

I would now like to turn the conference back over to Mr. Mullowney, who will take us through questions submitted in writing. Please go ahead.

So I'm going to just go and turn my head a little bit, so you see more on the side of my head as I go at this on another screen and go through the questions here. We got 5 or 6 questions. So I'll go through them. And the first question is, what is the company's hedging strategy in the event of declining gold prices next year? Congratulations on success. Thanks for your time. So right now, we are unhedged on gold prices. And I think we're going to continue to be unhedged going into next year. I think -- there is ways to hedge if we decided to hedge. We get offered them every day. And in the past, when we're doing CapEx programs, we did do collars. But now the issue with collars is it limits the upside, but it does protect you on the downside. Mike has a pretty good pulse and to talk to gold traders on a daily basis of where gold prices are going. But as I mentioned as well, we should be successful even if gold prices were to decline. Mike, anything to add to that?

No, I think you said it well, Stephen, earlier, where the landscape is set up well, I think, for gold prices to sustain, if not grow from here. So the expectation is to remain unhedged. But at the same time, we've been very, very conservative on our budgeting. So we've got lots of sensitivity on the downside if heaven forbid it was to pull back. But at the same time, at these very lofty levels, -- the comment I was going to make to Heiko was we expect to generate perhaps more free cash flow than we included in our budget and perhaps can deploy it further into things like drilling beyond what Richard described. So lots and lots of sort of value-accretive activities that we can pour that free cash flow into next year at these prices. But in the meantime, expect to remain unhedged.

The next question is, is there any plan on TRX doing a stock buyback? Good question, and that goes into valuation, and there will be another question here in a second on liquidity in the market that has picked up. So with regards to that, I can't make any promises on buybacks, but it's certainly something that has started to enter into our mindset is what I would say, particularly if gold prices stay here and continue. Obviously, that would mean taking cash from Tanzania into corporate and making sure that, that's okay. Obviously, we are negotiating with the government at the same time around the JV agreement. So there's all kinds of things to consider when that is being contemplated. But certainly, what I would say is it -- has entered the early stages of being in our mindset.

Well, I think, Stephen, I mean, you touched on it again at the start of the call. We look at capital allocation, of course, on a regular basis as part of our budgeting process. And I think your comment was there's only so much capital to go around. And what we've kind of lined up in terms of order of priority would be the plant expansion and optimization work that Richard touched on in line with the PEA, coupled with drilling. But as and when you generate additional free cash flow where and how you deploy it, to your point, remains open, and we'll look at the most value-accretive activities in terms of how to do that if and when that free cash is available.

So the next one is an interesting question. Wonderful job navigating the last several years making TRX stronger, better suited to enjoy the coming golden era. Can we count on leadership team to remain focused on bigger picture and less on being acquired? I think the easiest way to answer that question is I don't think there was one instance in this presentation that we said anything about being acquired or people approaching us. So -- and I think as we went through this presentation, you get a sense that we are detail-oriented people and have our eye on increasing the asset value. So that's -- I think we've kind of answered it by doing the presentation. Yes, we are focused on increasing the value of the asset. We think there's a lot of value to go there yet. Next question. What do you attribute to sustained increase in daily trading volume? It has been 5x to 10x normal. Is this institutional? So we do keep an eye on 12x or 13x NOBO list and registered stock. We do this a couple of times a year to figure out how shares have traded over, who our shareholders are and things What I can say is we have a pretty good, sticky shareholder group, and we're thankful for that. And I would say the stock trading from our analysis and particularly I do a lot of work on this, is more around the periphery than it is around the core of the shareholder group. And so I don't think there's a lot of people really influencing that share price. The sustained volumes, I suspect, is attributable to the better financial results of people coming in. We do see a little bit more institutional coming into the stock through filings and what our intel tells us. I would also say that there's probably some trading going on around. We have 16 million warrants at $0.80 coming due in February -- early February. I would assume there's some trading going around, around that. We are starting to see a trickle in of warrants being assigned and things of that nature. So I would say all of that is leading into what's going on in the market. It's very interesting what's going on in the market. It's a good question. I don't have 100% of the answer, but I think it all adds up over time to the volume that we're seeing. There's probably some shortcoming. I can tell you, one chart I did look at, you guys can get this free, if you just Google it. The stock price goes down when there's more failed trades. It goes up when there's less failed trades. Just Google that. And what site did that come up on, Mike? Is it FINRA, I believe it is, dot org, and you'll see that detail there. You'll also see the cost to borrow shares available. All of that sort of stuff comes into play. And it's interesting, the chart was -- I would say the correlation, Mike, was 0.9 between failed trades and decline. And then when there's less failed trades, it went up. So you can see that in those charts. And so I encourage anybody who's really a market guy to go and review that. That's all publicly available information. And an individual asked that question, you want to get into a little bit more? More than happy, just give me a call. Send me a quick e-mail and give me a call. So next question. we are getting more questions. Okay. So I'd answered that. The last one is, are there any near pit potential oxide resources with higher gold price? Someone moving around the questions on me. So here it is. In-pit cut off with higher gold price, where are the other targets for oxide resources? Well, that's part of the reason for doing the geophysics. There's certainly going to be some near surface material. One is Richard mentioned, Anfield should have some more near surface -- not the Anfield sorry, East of Porphyry as he redefines that with the drill bit. And there's other pockets around the property as well. And there will be -- once the plant is upgraded, put into the oxide plant or 1,000 tons there. Look, I think, Richard, as we go around, snoop around, there's going to be more and more material there for oxides?

Yes. And we've got a good team out there who have already identified some prospective areas I'd like to put a few drill holes in just a small oxide occurrences and things like that. So yes, certainly, these gold prices as well with getting a little in-ground inventory together.

Yes. So I think that's that. And that's the end of the question. So do we have any other -- I see text here to.

Yes, Stephen, I think Rosita had a question there, that's sitting in the queue.

Sitting in the queue here. Yes, excellent. This is another M&A question. You've seen a pickup of M&A activity in North America. What's your thoughts on the deal landscape in Africa? We've been approached? How would you assure that the interest of shareholders are protected? So yes, M&A activity has picked up, particularly in North America and valuations for North American exploration and producers and development plays have run quicker and higher than elsewhere in the world. So I think valuations will start to pick up. It usually trickle on effect from large cap to small cap also from North America to elsewhere. So I think we're starting to see that come into our stock and into other stocks as well as people look at gold properties. With regards to the African landscape, I do expect that to pick up as well. And certainly, that's what we are seeing and hearing. I can't comment on TRX or Buckreef, obviously. The -- how do we protect ourselves? We have a diversified shareholder base. And I'm in decent contact with that shareholder base. I don't think this is the price level that they would entertain. It would be difficult for someone to acquire a position in the company or a toehold given that diversified shareholder base. As I mentioned earlier, the shareholder base is quite sticky. So -- and there's not a lot of really what I'll say, shares available on the market. And thus, if someone were to try to take a run at it, shareholders are going to benefit because it's going to be run up in price pretty quickly, I would think, given the dynamics of what I see. I hope that answers your question.

Stephen, I think Ron has added a question to the queue as well.

Political unrest in Tanzania. Any comment impact on operation for ongoing stability of the country? So look, there was planned protests yesterday. It went through very peaceful yesterday in Tanzania [indiscernible] there. Yes, there were protests with regards to the election that has all seemed to settle down. Has it had an impact on our operations? No. I think we lost 1 day by not having an electrician being able to get the site. And right now, it's operations as normal. The security situation is very calm and things are getting done. So I don't think there's going to be a lot of political unstability in Tanzania. It's been the same political situation for the last couple of decades. I don't expect that to change. Khalaf, anything else to add to that?

No, I think that's correct. It's been very safe and stable. Yesterday was our Independence Day, we expected some protest, but nothing happened -- everywhere in the country. So hopefully, that's something of the past now. Yes.

I think that's it. Well, thanks, everyone, for the call and coming on board today. If anybody has any other further questions, the management team is more than happy to answer them. You reach out to us through our IR inbox. Mike and Amy have a constant pulse on that daily. So look at that and respond, and we're more than happy to set up calls with our shareholder group. So again, thank you for your patience and support. We look forward to 2026, continuing to expand, continue to grow. And hopefully, we have a much better 2026 than even a good 2025. Thank you. And as I was say in Tanzania [Foreign Language]

This brings to a close today's meeting. You may now disconnect. Thank you for your participation, and have a pleasant day.