TRX Gold

EXECUTIVE INSIGHT LEADING THE PROFESSIONAL CHARGE

SUMMER 2022

TRX GOLD Golden Prospects FOLLOWING SEVERAL MILESTONES ACHIEVED IN 2021, TRX GOLD CORPORATION, FORMERLY TANZANIAN GOLD, IS FASTTRACKING DEVELOPMENT ON ITS KEY ASSET, THE BUCKREEF GOLD PROJECT IN TANZANIA.

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Golden Prospects Following several milestones achieved in 2021, TRX Gold Corporation, formerly Tanzanian Gold, is fasttracking development on its key asset, the Buckreef gold project in Tanzania.

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he Buckreef gold mine, part of the Buckreef gold project, located in north-central Tanzania immediately to the south of Lake Victoria, is fully licensed for development, mining and the extraction of gold by TRX Gold Corporation along with its joint venture partner, the Tanzania State Mining Corporation (STAMICO). The company is continuing with an exploration drilling programme with the goal of expanding existing mineral resources, discovering new resources and converting mineral resources into mineral reserves.

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State Mining Corporation

STAMICO

Proudly celebrating 50 years of business best practice, serving the Tanzanian mining sector since 1972

Products Industrial Coal Coal Briquettes Chemicals Explosives Aggregates

Services Mining Engineering Geological Works Environmental Consultancy Geotechnical Engineering Services Mineral Processing Consultancies

www.stamico.co.tz Being a key strategic joint venture partner with TRX Gold Corporation, we have been crucial in providing a number of key services which has allowed the successful development of the Buckreef project to date so far.

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Stamico Led by Dr. Venance Mwasse, State Mining Corporation (STAMICO) is proudly celebrating its 50th operational anniversary in 2022. Established in 1972, STAMICO has been a pioneer in the rapid development of the Tanzanian Mining sector now for fifty years. Helping develop numerous mining assets across the country, and creating thousands of jobs for Tanzanians since 1972, without the establishment of the organization, it would have been tough to ensure that the minerals and resources within the country are benefitting the citizens of the country, public services and the development of the countries mining supply chain, again creating businesses, employment, and further economic benefits to the countries annual GDP. Providing numerous products from Industrial Coal, Coal Briquettes, Chemicals, Explosives, and aggregates, STAMICO is there to assist multiple organisations across the country with their day-to-day operational needs. Not only just providing products, STAMICO also provides several services ranging from, Mining Engineering, Geological Works, Environmental Consultancy, Geotechnical Engineering Services, and Mineral Processing Consultancies.

Being a Joint Venture partner to TRX Gold Corporation, STAMICO has played an integral role in the development of the Buckreef gold project, not only offering expert professional services to TRX Gold Corp but ensuring that the Mining operation provides the maximum returns in terms of resources available. With further exploration in the Northeast zone of the Buckreef Gold Main Zone, the requirement of an additional drill rig will further the support STAMICO is providing to the operations.

In April, TRX Gold announced its results for the Company’s second quarter of 2022 – a significant milestone, as it was the first quarter in the company’s history in which it recorded revenues; a significant gross profit margin; low cash costs of $796 per ounce of gold; and positive operating cash flow.

The results demonstrate not only the immense opportunity for the Buckreef Gold Project to generate significant revenues and cash flow, but also set the stage for the company’s sustainable business plan, in which cash flow from operations funds value-creating activities, including exploration, ESG/ CSR and local community initiatives and sulphide project development.

Stephen Mullowney, the company’s Chief Executive Officer, says: “The Q2 results demonstrate our ability to drive significant, profitable sustainable growth at Buckreef Gold. The processing plant is currently being expanded and will triple in size to 1,000+ tpd in the coming months.

“Overall exploration activities will accelerate across the entire Buckreef gold project over the next year.

We have also started advancing the technical work for the much larger sulphide development project with the goal of exceeding all the metrics as outlined in the 2018 Pre-Feasibility Study, particularly annual production, and we are in the process of resetting the long-term vision, aiming at a much larger project than

was originally envisaged.”

Under new leadership The recent results are all the more impressive in that Stephen Mullowney, who joined the company as CEO only 16 months ago, inherited a loss-making business. Coming from the fast-paced environment of PriceWaterhouseCoopers (PwC), with extensive experience in both business turnarounds and the mining environment, he had a very clear idea of what had to be done, and done fast.

“In my role since then, I’ve switched out the entire management team, and evaluated talent throughout the whole organisation in order for it to move forward very rapidly,” he says.

“We have put in place a lot of mine planning, built a 360 tonne per day plant, now expanding that plant to 1,000+ tonnes per day and have begun an extensive exploration programme. All that during the global pandemic, by utilising a lot of local suppliers, and, primarily, by putting in place a new ethos for the company and a high performing culture under the new management.”

The hard work accomplished last year has resulted in yet another milestone – in March 2022, the company was granted an extension to the renewal date for the Special Mining License (SML), certifying that the renewal period for Buckreef Gold has now been extended by an additional 5 years, from 2027 to 2032.

The company anticipates the life of mine will extend significantly beyond 2032, and therefore the SML 5

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CSI Energy Group 2022 kicked off a new era for CSI Energy Group. A renewed ambition and a desire to excel on a variety of fronts, simultaneously. From a single electrical company in 1978, CSI Energy Group has grown into a diversified African group of companies working, investing, and promoting gender equity in the energy sector across the continent.

Sharing on the company’s future plans, Dominique Augsburger, Chief Operations Officer comments; “We have diversified into an African centric network of companies providing sustainable solutions to the energy sector, investing in 3 strategic business clusters, across Africa. Our investments build upon our existing strengths and market footprint while anticipating the growth industries of the future. We continue to explore new avenues for growth while investing strategically and sustainably in Africa.”

CSI Energy Group’s mission is to enable success and improve lives, and over the past 25 years, lives of over 50 million people across Africa have been enhanced.

From remote rural locations to suburban streets, from the heart of our cities to the most challenging and isolated terrains, CSI Energy Group is committed to creating a brighter future for the communities they work in and the clients they serve.

With an African footprint in more than 12 countries, Jon Gunnar, CSI Energy Group Tanzania Managing Director shares; “For the past decades, we have been working side-by-side with the power, oil and gas, and mining industry to successfully deliver projects across sub-Saharan Africa. We value local content capacity and actively invest in its development. Our Integrated Management Systems are internationally certified to ISO9001, 18001 and 450001 and our business model delivers the highest standards of international safety.

We leverage on our African footprint, local market knowledge, and resilience to collaborate, innovate and positively impact the communities we serve.”

The relationship with TRX Gold Corporation is a long-lasting one and CSI Energy Group is providing EPC services and technical support in building their production capacity in the Buckreef Goldmine in Tanzania. Q1 2022 reflected an important transition for Buckreef Gold, moving from a test plant to commissioning of Phase 1 of the 1,000+ tpd processing plant. In-house construction was completed by the Buckreef Gold and TRX Gold teams in conjunction with CSI Energy Group and other key stakeholders. As part of our future plans, CSI Energy Group is looking at a sustainable power solution that will provide uninterrupted power to the mine.

will be renewed prior to the renewal date, in accordance with the requirements under the Tanzanian Mining Act. Local force Mr Mullowney explained that Tanzania has 7

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significant gold production and thus a well-developed social infrastructure with plentiful local talent. “100% of our employees on site are Tanzanian. When building out the asset, we attempt to buy local first and then go elsewhere.

“We tend to source with local companies in helping them to develop their businesses, and then move nationally, or if required, elsewhere in Africa or China. This has undoubtedly helped us during the pandemic as well – making the supply chain close to the operation significantly mitigates the impacts of Covid-19 and its related restrictions.”

In a more general context, he points out that while profitability is a key factor for a mining operation, environmental and social responsibility are as just as important. “The mining industry has changed profoundly over the last decade and CSR and ESG are now an integral part of any operation. They are taken very seriously in our company. We started our CSR programmes prior to actually entering into production when I joined.”

TRX’s initiatives have covered support to local education as well as a focus on improving living conditions. “The biggest beneficiary of mining assets should be the employees themselves, who, by spending their wages in local communities, increase the standard of living in those local communities. That is a very important goal for us.”

He points out that since he joined, Buckreef has doubled the size of its workforce to 200, which is expected to grow to 400 within the next few years in line with the project’s development.

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FEMA Builders Established in 2002, FEMA Builders is a civil and building company and have recently expanded further to create a Mining Division. FEMA Mining has earned a reputation of being a reliable operational partner to mining organizations across the Tanzanian marketplace, with a vision to be a competitive mining contractor as FEMA are experts in meeting the specific needs of your project.

Located strategically within the Lake Zone mining area, we can also extend our service to operations across the East African Region. We can optimize our world-class level services to clients in mining businesses and provide energy with operational excellence and reliable service to support national prosperity. FEMA has a comprehensive fleet of equipment for open-pit mining and surface work and our team includes experienced and highly skilled workers and supervisors. Our areas of focus are open-pit mining, overburden removal, equipment hire, and drill & blast operations.

In 2019 FEMA earned the load and haul contract with TRX Gold Corporation at Buckreef. We have assisted them with several key capital expansion projects e.g., plant expansion, tailing storage facility, and overburden removal as well as with their day-to-day operations for open-pit mining.

We would like to congratulate Steven and his team for leading the project into a prosperous future. We would also like to thank him for his continued support, and we wish TRX Gold Team every success in the future.

Our Managing Director, Hassan Ally, is at hand to answer your questions about how FEMA Mining can be a key partner to your operations.

Exceeding expectations The pace continues as planned. As stated in Q2 2022, Buckreef Gold has to date drilled 17 holes representing over 5,500 meters in the north-east extension of Buckreef Main Zone. This programme envisions an additional 5 drill holes of over 1,200 meters.

The larger 1,000+ tpd oxide processing plant is expected to be completed in calendar Q3 2022 and is forecast to produce 15,000 – 20,000 oz of gold per year. In addition, Buckreef Gold has finalised the planning for a 10,000 meter infill and expansion drill programme which is expected to start in Q3 2022.

The company also plans to begin exploration drilling 10

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at the newly discovered Anfield Zone later this year.

“We have achieved quite a lot in a short space of time and later this year we are set to define a new over-arching strategy for the business, aiming to make this project much bigger than originally envisaged. The key is that unlike most exploration companies, we are going to fund the progress from operations – we don’t need to go to the market to

raise money for studies,” Mr Mullowney points out.

“I’m very pleased with the progress that the team has made and all the hard work they have put in since I joined the company. We have built solid foundations to really accelerate the business, and we can start to get down to what this business should really look like over the medium to long term, not only meeting but exceeding expectations.”

CONSTRUCTION AND MINING OPERATIONS Site Clearance / Topsoil stripping / Overburden removal / Drill & Blast / Load & Haul / Crusher feed This covers new pits and cutbacks to existing pits Tailings Storage Facility construction, Initial Dam Construction projects. Mine site development works, Access Roads / Site Clearance / Topsoil Strip / Bulk Earthworks for plant sites / Mine Site Roads / Haul Roads

Nyamanoro - Mwanza • P.O. Box 10217 Mwanza, Tanzania Mob: +255 755 407 000 • info@femamining.co.tz • TIN: 151-687-641

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