TRX Gold is set to boost up production at its Buckreef Gold project in Tanzania with capacity nearly three times higher to 1,000 tons per day.
The Corporation said the boost will be from a mill circuit just commissioned. The project was planned less than 12 months ago at a capital cost of US$4 million. The mill has been expanded from its original 360 tpd capacity to the 1,000+ tonne per day (tpd) capacity. First ore has been introduced to the expanded processing plant and the team is ramping up throughput over the next month to reach nameplate capacity by the end of October, TRX said in a statement.
When fully operational, the project is expected to produce an average of 15,000 to 20,000 ounces of gold annually over the life of the oxide mine plan. Around 10% of its total mineral resource consists of oxide mineral resources. TRX told shareholders that it plans to use current gold production to fund “value-accretive activities,” such as mineral resource development, exploration and future processing plant expansions. TRX CEO Stephen Mullowney said it was “another great milestone” for East African operation. “We are very proud of the dedication and hard work accomplished by our Tanzanian colleagues,”
“Over the last 18 months we have taken the Buckreef Gold project from a negative cash flow test plant, to a high margin, cash flow positive operation that continues to have near-term expansion opportunities,” Mullowney said in a statement.
Pre-paid gold purchase agreement
The news comes just after TRX announced it had entered into a pre-paid gold purchase agreement with a contract price totaling US$5 million with OCIM Metals & Mining SA. The total contract price can be made available to Buckreef Gold in tranches with a $2.5 million upfront tranche and further tranches to be drawn over the next 18 months at Buckreef Gold’s option.
Proceeds from non-dilutive financing will enable Buckreef Gold to opportunistically make purchases to boost productivity and improve mining and processing operating costs over time. Additionally, it provides the flexibility to expedite exploration and sulphide development programs Buckreef, TRX said. The financing enables TRX to opportunistically move up high return quick payback purchases and further reduce operating costs.
“The company continues to be prudent in financing operations by balancing capital requirements, funding amounts and managing overall enterprise liquidity,” the CEO added. “The financing amount is easily supported by Buckreef Gold’s forecast production profile which is anchored by a robust stockpile and strong mining rates,” Mullowney said.
