TRX Gold Corporation (TRX) Earnings Call Transcript & Summary

Hello and good morning, ladies and gentlemen. Welcome to today's presentation. My name is Julia Perron, virtual event moderator here at Renmark Financial Communications. On behalf of our team, we'd like to thank everyone for joining us today for TRX Gold Corporation's Third Quarter 2026 results. TRX Gold is trading on the Toronto Stock Exchange under the ticker symbol TRX and on the NYC American under the ticker symbol TRX. Presenting today is Stephen Maloney, Chief Executive Officer; Michael Leonard, Chief Financial Officer; Khalaf Rashid, Senior Vice President, Tanzania; and Richard Boffey, Chief Operating Officer. The presentation will last approximately 20 to 25 minutes and will be followed by a formal Q&A session for which you get participated in using the chat box on the top right-hand corner of your screen. With that being said, I will now hand it over to Stephen.

Thank you, and welcome, everybody, to today's Q3 corporate presentation of results. Richard is not underlying yet. I was just talking to them on top of the TSF and he's making his way back to the office, so he should join us in about 5 to 10 minutes time. He's at Buck reef today. Also, as Julie mentioned, Michael and Khalaf here with me -- we're coming back in Toronto today. I was being in Tennessee and Texas last week. I should have stayed there given that came home to 38, 40 degrees. And now we have yellow skies and apparently the big camp fires up north of banked us with salt anyways, it was pleasant to be down in the United States last week. So without further ado, Julia, can you -- here's Richard. Richard is joining us now from Bore. How are you doing today, Richard?

Yes. Good afternoon, everybody. Apologies to being late. Just got back from a little bit of an inspection.

Yes, exactly. I tell me you were talking to me on top of the TSF. So if we can go to Slide #4. Excellent. So no, no, you're skipping all the way down. Yes, there we go. Obviously, we're going to have prior slide is forward-looking statements. There will be some forward-looking statements today in this presentation. So with regards to Buck brief gold, we had a great third quarter. We actually had a good start to the year, 9 months to the year. Our goal here at TRX Gold is to rapidly develop the brief Gold project into a world-class mining operation. It is today a world-class mining operation and is expanding quite rapidly. We'll get through the details of that in a few minutes with the mill expansion, TSF expansions and other enhancements that are going on at UpREIT as well as the exploration program. But a little summary on the year-to-date, we've done almost 28,000 ounces for an LTM period that's starting Q4 of last year to the end of Q3 this year with $115 million of revenue. and a healthy $66.8 million of adjusted EBITDA. This is what gives us confidence in funding our expansion projects -- in that time period, we've made significant capital investments as the press release this morning. We've made almost, I believe, $47 million, $48 million of investments over the last 12 months. both in working capital, which we can normalize now. That investment will no longer go forward in around $17 million to $18 million, and the rest on CapEx to focus now going forward is on CapEx and exploration. The Buck Reef project is anchored by 1.5 million ounces at around 2.5 grams a tonne. We're on line with the PEA that was released last year with first year production of around 27,000 ounces. As I mentioned in the press release, we've already achieved our guidance of 25,000 to 30,000 ounces. as of today and expecting to be within that range as we get through Q4, more unlikely towards the top of that range. With regards to the CapEx program that was in the PEA. The first part of that PEA was mill expansion that the mill has been ordered, Rich will get into that in a few minutes. And that capital project is well underway and planning is done, and it's now starting to be executed. I will remind people, I know I'm going to get a lot of questions around stock price. We're going to address that later in valuation and things of that nature. The pretax NPV on the study that was released in May of last year was $1.9 billion at $4,000 gold. That study is now being updated with the new capacity as well as the new mine plan. The mine plan will drive the throughput rates. We expect to have excess capacity and then it's going to be up to us to figure out how we're going to fill it. But it's certainly going to be well above 3,000 tonnes per day that were in the prior PEA study. What does that mean? That modernize the mean higher NAV -- it also with the increase in gold price should drive higher resources, but that work is yet to be finalized. And what we finalized in the next couple of months, we expect that PEA to be released in Q4 of calendar 2026. So can we go to the next slide, Julie? So as I said, our focus is growing the underlying valuation metrics. So valuation works by having certain multiples, multiples go up and down depending on markets. Multiples are compressed on an EBITDA basis with the gold price decline in this last couple of months, we expect those to get to normalize over time. And what the market does is say, okay, you have a little bit of a decrease in gold price. So EBITDA will be coming down in minor. So we have to adjust the forward multiples. that's typical of what happens in a market adjustment. Our EBITDA will continue to grow. It will grow as a result of an increase in production over time, we're very comfortable at today's gold price of $4,000 an ounce. As I mentioned, the expansion is underway. So to renew 3,500 tonne per day SAG and ball mill that will operate with the existing optimized and upgraded plant operating alongside of it. We expect emerging or cost reductions, particularly on the processing side of things, you get into that in a minute. with this improved scale as well as the enhancements that have been made. For instance, we put in place an oxygen plant that reduces chemicals such as hydrogen pyoxide to get oxygenation up. So we're going to continue to be a low-cost operation going forward. Our margins are quite healthy. With regards to NAV, we've just discussed that with regard to updating the PEA to give a good sense of what the Buck reef be. and it will be revised and that will be put into the market in Q4 2026. And also, we'll get into an exploration program. The geophysics study is done. We now are going to start to just drill out some targets there as well as go back to prior targets such as Stanford Bridge and Anfield to hopefully grow the resource base. There are some significant good targets around this property. And at drill bits, will start to really start to ramp up soon. and assays will start to flow into the market shortly thereafter. So we have a proven track record of doing these expansions. This is our fourth expansion. We are a self-funded model with a very improved balance sheet, $27 million of cash, significant EBITDA, significant working capital buildup and undrawn credit lines. We can go out and get further credit lines or credit facilities, we want to the offer to us every day. We just don't see the need to do that today. It's very easy to get a credit facility in the $50 million to $100 million range at Buck Reef at this point in time. But right now, we don't see a need to put that onto the balance sheet. We are located in Tanzania, where we get -- we're able to get things done. There's a lot of geology in the area. We're also looking at other properties in the area as well as we have discussions with government. We have, right now, a large high-quality resource base. Next slide, please. So now I'm going to hand it over to Mike and Richard also poke in on some of the things around processing costs and some of the other items around operations. So Mike and Richard, over to you guys. And Mike, please take the lead.

Well, thanks, Steven, and good morning, everyone. Thanks for joining us here today. Richard, it looks like you may have some connectivity issues, so I'll do my best to talk to the process and cost improvements that you touched on earlier, Stephen. But Q3, I mean, you mentioned at the outset, it was a very, very strong quarter for us, both operationally and financially. The plant, as you will have seen, achieved record quarterly throughput of 1690 tonnes per day of throughput. And that was not only an increase from last year's prior year comparative, but also last quarter. We also achieved a grade of about 1.6 gram a tonne for the quarter. But importantly, recovery continues to improve. And year-over-year, you would have seen recovery increase from 67% last year to almost 85% this year as we make some of those metallurgical improvements that Stephen touched on as well as upgrades to our 2,000 tonne a day plant. We commissioned things like a thickener, an oxygen plant and a Okan reactor this quarter. We're bringing online additional improvements like an ADR plant and gold room in the coming quarters. So we expect both recovery and throughput to continue to improve. But those benefits that we saw this quarter through the mill drove gold production of over 7,400 ounces this quarter, and that's up almost 60% relative to the prior year comparative period. You couple that with the Q3 realized gold price of over $4,700 an ounce, which was up 50% from the prior year. and we recorded revenue of almost $33 million, which obviously is a significant year-over-year improvement on the back of both higher production and higher gold prices. So the company continues to demonstrate leverage to that high gold price environment. And illustratively, Buck Reef continues to show that it's a low-cost, high-margin operation. Steven touched on it early, but at an average cash cost on a full year basis of between $1,400 and $1,600 we've been able to produce gross profit margins of almost $20 million for the quarter or running at about 60% gross margin ratio. Now with that all said, there is an opportunity for margin to continue to improve as we go. You will see mining costs at just over $3 a ton. That started to normalize this quarter from about $4 a ton last quarter following the signing of a new contract mining arrangement. And on the processing cost per ton side, we are up over $25 a ton, as Stephen mentioned, using things like hydrogen peroxide and other consumables and reagents to maximize recovery and consequently produce more gold. But as these plant improvements and enhancements continue to come online at a nameplate normalized capacity, we expect that cost per tonne to come down and consequently, margin to improve and expand. With that all said, I mentioned that we show leverage to gold price. We did record a record GAAP net income number of $8.4 million for the quarter and very importantly, a record adjusted EBITDA number of almost $21 million, that's a record for the company. And if you annualize that, I know Stephen touched on the last 12 months of being about $66 million. But if you annualize this quarter's EBITDA, you end up at over 80%, which puts us in a really, really good position to fund and execute our growth plan and our capital plan. And you couple that with our working capital position. We reported working capital of 2.2x or over $36 million. We've got a cash position of about $27 million. Stephen touched on the undrawn credit lines. So again, really well positioned to fund our capital plan. And just sort of looking forward, we did report a record buildup in in-circuit inventory in the CIL tanks this quarter as we worked on metallurgical improvements and enhancements. We've got almost 1,600 ounces in those tanks at the end of Q3, coupled with a raw pad stockpile of over 19,000 ounces, the expectation in Q4 is to draw down on some of that inventory to help supplement and benefit production into Q4. And looking at our full year guidance numbers, we reported full year guidance of between 25,000 and 30,000 ounces. We've already achieved the low end of our guidance range as of today. So we achieved our full year guidance numbers. But over the next 6 weeks, we expect to continue to produce at these levels, drawdown on inventory and what we hope is to have a record production quarter for Q4. And finally, I'll just touch on the cash cost. We continue to be right in the middle of that $1,400 to $1,600 an ounce cash cost range, which again is in part what's driving that significant gross margin that we're seeing this quarter. So all in all, a record quarter, both financially and operationally, and the cash flow and EBITDA that we're generating positions that's very, very well to fund our capital plan and growth plan going forward. Stephen, back to you.

Excellent. Thank you. So with regards to the next side, Julia or Mike. So with regards to rapid EBITDA growth. As I mentioned, the project gets being expanded again. So obviously, with higher throughput, you're going to get higher results and higher EBITDA going forward. This is our fourth expansion with regards to the CapEx plans that we have around this over the next 12 to 18 months, we have roughly a $50 million budget. which includes $30 million for the new mill that encodes the actual mill and all the other workings. The TSF will be around $10 million. That will be a plan for predominantly the life of the mine, which is great because we were currently doing it in pods. And we have stated sustaining capital of around $10 million. Of that $50 million, about I would think around $6 million to $8 million has already been spent and the rest of it will be paid for over the next 12 to 18 months out of cash flow. If we do have bulges in that CapEx, which we don't anticipate too many, we have those undrawn credit lines to smooth out any of those bulges. So we're quite comfortable with that, and we're quite comfortable that we're going to get to a much higher EBITDA number as a result of executing that plan. It's a very reasonable plan, and it's well planned out, and it is starting really rapidly. Mike, anything to add to that? I know it is not on the line.

No, I think you summarized it pretty well. I mean, again, hopefully, folks get a sense for annualized EBITDA run rate of $80-plus million against the capital profile that you just mentioned, again, positions us very, very well to fund it over the next 12 to 18 months over -- using cash flow from operations.

And thus, the forward EBITDA is going to be very significant as per the PEA that we released in May 2025, in the next couple of years and say, 24 to 36 months, you're looking at well over $200 million of potential EBITDA. So a significant, significant increase in profitability. Next slide, please. So with regards to the PEA, I'll just go over some of those numbers. Like I said, the PEA is being updated, so we expect these numbers to be better. Take a look at the cash cost with scale, cash cost comes down. Mike is referencing around $1,400 cash costs in the study were at around $1,000, it's going to be expanded even larger net now. So I would expect cash cost to be rent same as well as all-in sustaining costs and the preproduction -- sorry, the pretax NPV where hopefully, our goal is to get these significantly higher as well with annual production, hopefully, ranging in the range of anywhere 80,000 100,000 ounces over time. Next slide, please. So as I mentioned, look, we are on track with our PEA, particularly in the capital build around the expanded plant. If you look at year 1 here, you had 27,000 ounces of production. We're already into that range. Year 2 has around 38,000. So we're well on track with regards to profile our PEA. PEA was always contemplated. do to plant first, expand that, expand your mining operations at the same time, particularly open pit. It was originally envisioned here 3 years. We expect that to go on longer and then go into your underground development. all self-funded. That's why we didn't release an IRR because it's infinite. You want to put an IRR on a $1, then it would be exponential. So it's a very good plan here that's been put in place by Richard and the team and are well through the execution on that. And can we go to the next slide. With regards to increasing the resource base, Tanzania has a lot of resources. We are in 1 of the better resources in the New York of the Victoria like the Tory Greenstone Belt and a lot of other major assets in the Arco get into it in a second with how we discuss these sort of things with government. But one of the things is there are a lot of resources that may or may not become available over time in Tanzania, we wouldn't mind taking a look at. Next slide, please. Richard, I'm going to turn this over to you with regards to exploration, and we're planning -- there was never a geophysics study done at Buck Reef but now that there is one, you now have a much better sense of where to go.

Thanks, Stephen, and hi, everybody. Well, the word geophysics studies done in the past by IAMGOLD and Anglo over the past 20 or 30 years. But for 1 reason or another, a lot of the data is the raw data was missing. And a lot of the test work was done was looking very shallow deposits. And as we found in Main zone and Stanford Bridge, these things are a lot deeper. So we came to the conclusion that starting again with pretty much the standard geophysical approach to most of these arcane gold systems would give us some new targets and probably confirm some of our existing targets. And that's exactly what's happened with -- over the last 3 quarters, we've done a detailed magnetic survey, followed up by an electroreti followed up again with overlaps on the highs and anomalies from those 2 on a dipole to dipole survey. And from that, we've now given ourselves about 9 or 10 strong targets that we're -- we've developed drill programs for and the first of those targets will be drilled in next week, basically, where should be hopefully moving the drill on there about Monday. So yes, we're pretty excited to see all of that, and we've got to do a lot of strategizing now with the resources we have. We have 2 exploration drill rigs on site at the moment. the third has been delayed at our core, but it's in country, and we're expecting it any week now, and that will immediately go to work on Stamford Bridge. And then a fourth drill rig is sitting in China at the port, really to come over to us. And we've got an option now on fifth. So yes, we're pretty excited about getting into these new targets and getting into some of the stuff that was never really drilled properly at Ann field and a few other areas as well. So there's a lot going on with exploration in the coming months, and we expect that we'll start getting some assays back on some of these 9 anomalies from the geophysics starting in August, and we'll probably have our first round of drilling done, I would suggest in September with results out in October.

There's a lot of drilling to happen coming up with 4 to 5 drill rigs on site potentially turning, which is great. And prior to that will be -- with regard to ongoing operations prior to that is on the exploration program. So with regard to Stanford Bridge, I won't go over this again. As Richard mentioned, it will be subject of the new dude that's in country will get started on this area again, expecting to see very robust program over time in around Buck Reef and Stamford Bridge has delivered the best assay results thus far. With regards to stakeholder engagement and communication, so this one, we're bring it over to Khalaf and I'll add a few bits and pieces as well. Go ahead, Khalaf.

Yes. Thank you, Stephen. Good morning to everybody in North America. And good afternoon, events in Tanzania. Just a short brief discussion update on what I would say is 3 focus areas for us, really designed to reduce our risks, improve operational efficiency and just basically avoid business disruption and increase our opportunity -- opportunities in the future. So when it comes down to the 3 main areas we've been focused on community development which is essentially all the projects that we're doing in and around our sort of mine site with the immediate comics around us towards that labor us. So we've done quite a lot of work we have been doing for a number of years in health and education, supporting schools and some of the health centers. Obviously, we do look at the local procurement by the immediate community and what can be supplied and what services can be provided immediately, which supports the development in our area, and we work very closely with the local government authority in Gatan maintained very good relationships with them. government engagement, as you can imagine, is hugely important in our part of the world, relationships have important we existed in, I would say, overly regulated environment. So maintaining and keeping good relations with government gets the mine operating better. So we've maintained a very strong relationship with our central government authorities. I personally attend a lot of the meetings with the team here. various meetings on -- especially on regulatory matters so that we can provide our input and advocate for change where we find that there are things which are difficult for us to work with. And obviously, I think, Stephen, you might want to say a little bit more about the current negotiations ongoing with the government of Tanzania. I think we've mentioned this a few times that we are quite, I believe, advanced. And the prospect and the outcome that we want is basically better terms and more investable terms for TRX Gold. I'm sure you mentioned that. And the last bit that I would like to just mention is the -- we've enhanced our communication basically just to raise the image of TRX Gold as an investor in Tanzania communicating different media channels about all the various benefits that come as a consequence of our investment, particularly in creating jobs obviously, paying taxes, the procurement that has been generated from all the good work that we have done on the mine side. and we've communicated this across all different media, targeting all different levels of government and public, right? Some directs are obviously using various channels, social media and traditional media. So we are, I would say, very visible. We've been very consistent with our messaging. So we -- I believe in a very good position, and we have looked at in Tanzania as a fourth leader industry, I would say, 1 of the more high-profile operators in Tanzania. Yes, basically, that's my --

Yes, Buck Reef is anybody who would have seen is particularly on our latest video that Richard and I did with Isaac, it's becoming a substantial operation. It has around 1,000 employees and contractors in around site, particularly with the build at this point in time, and it's profitable. as everyone can see. And when profitability, there's royalties, taxes and a lot of jobs. And so that leads well into government relations as well as we're very keen on local content as well. We have a lot of good suppliers that we utilized in country and work well with them and they're very supportive of the development that is happening at Buck Reef. So we have an overall good relationship, and that is leading into what I'll say is negotiations around joint venture and going forward are further along. I still can't give it it's fitted a time line on those sort of things. given it is in the political realm and the quality takes a little longer as an African saying that we have the watch, but they have the time. And so it's an ongoing process, but we're more confident in a successful outcome. That's a win-win-win situation. Next slide, please. And with regards to valuation, I will answer this more substantially in the Q&A portion. Obviously, valuations across the sector have come off, not only our valuation stock price decline, but it's come across the entire sector. This gives us an idea of we've fallen down versus where we were before, given I believe our decline has been further than others. with regards to that. But as I said, we're constantly onto these valuation metrics are growing them, particularly EV, the EBITDA, PNAV, and resources. Those are all part of the business plan to plant expansion -- is EBITDA, the PNAV is new studies and better mine plans and the resources is on exploration. So all 3 of these buckets is being looked after in the business plan. And eventually, some of them will recognize them. Eventually, some of them will, but you got to be patient. And eventually, you will get there. Next slide please; with regards to capital structure. The capital structure is now key. And there's no warrants outstanding. There's $27 million of capital or cash on the balance sheet. very little debt. There's a few leases outstanding. That's about it and undrawn liquidity line. So we're in an extremely good position with the cash flow that we have as well as liquidity lines of cash to execute our business plan. around CapEx to get this plant expanded. And once this plant gets expanded, Richard will be all smile. He likes building it, but it will be all smiles with all the cash flow that comes out of it as well, particularly with the higher mining. Next slide, please. So the key investment highlights, we're growing, and we're going to continue to grow. We're very confident in the growth. We're going to grow EBITDA, we're going to grow in NAV, we're going to grow resources. That's the business plan. quite simple, grow, grow, grow. We internally generate cash flow. We have approved an operational track record, robust exploration potential, can operate in the jurisdiction that we are in and we have the leadership team to do it and are very confident. And if you look at the last 4 quarters, they're really good quarters, and we expect that to continue going forward. So now I will hand it over to Q&A.

Excellent. Thank you all for the presentation. As mentioned, we will start the Q&A. Your first question for today is -- please clarify or elaborate on the Tamica partnership on Buck Reef and how that will impact production attributable to TRX?

So with regards to the joint venture agreement was set up. is the current joint venture agreement. It's 55%, 45% equity ownership. So what does that mean? That means that the cash flow is generated Buck Reef can be reinvested to grow that business and grow the value of that business. In the board structure, TRX can determine whether there's any dividends or not. Right now, the choice is to put the capital that's being generated by the business back into the business to grow the business. And the rationale for that is to increase the value of the overall business. So when I get on to the valuation metrics, if we achieve EBITDA numbers like are in that PEA in 3 to 4 years' time, you'll get the EBITDA multiple on that. So if -- at $4,000 gold is projected to be $250 million of EBITDA, you're going to get your valuation multiple on that. That's a good $50 million investment -- for that increase in the EBITDA. The same with the price -- the net asset value and revising the mine plans and putting money into exploration to increase resources. That all increases the value of the overall business, which is a benefit to TRX shareholders, but it's also a benefit to government stakeholders. In fact, there's more jobs relative to taxes and cash flow, the government as a result of that much larger operation. So with regards to 55-45, that comes into play after our capital loans are repaid. And if we did a dividend at a Buck Reef.

Excellent. Thank you for your answer, Stephen. Moving on to your next question. What is the status of the 55-45 deal?

The status is, as I mentioned and I mentioned the presentation, we are in discussions with government. I had discussions last week actually in the United States versus elsewhere. And so we are well advanced in what we desire. Now it's for the government to go back and talk to their stakeholders in what can be done. And so those discussions are moving towards that stage is what I would say. Obviously, I've been quite clear that we would prefer to be into the framework agreement like Barrick, Perseus and others have which has ranged from 84% to 16% nondilutable -- 16% nondilutable on the government side. From agreements are 80-20 with 20% nondilutable on the government side. in those agreements and in their live is a 50-50 economic split, which then acts as a stabilization mechanism. Khalaf, anything to add to that?

No, I think you summarized it well. And I would say that they understand -- I mean they understand the concept, and I think that there are appreciate -- they're starting to appreciate, right, the importance of them working with us so that we get obviously much better valuation for all of us, including the south.

Excellent. Thank you both. Moving on to your next question. When will we start seeing drill results? And what are the drilling plans for next year?

Richard provided a good summary of that in the presentation. To grow rings are arriving on site. Like you said, we'll have 4 to 5 drill rigs in the next couple of months. One in China, in other words in the country, just 3 upside right now. should start to see drilling programs going to ramp up now and we will start to see assays in the fourth quarter calendar 2020.

Excellent. Thank you, Stephen. Moving on to your next question. It's a bit of a long one, so bear with me, if you were commenting management has noted strong Q3 operational momentum with record throughput of 1,833 tonnes per day and recovery of 84.6%, alongside accelerated expansion to a new 3,500 tonnes per day SAG/ball mill circuit and plant upgrades targeted for Q4 2026 completion. You are also actively revising the LOM plan and expect an updated PEA in Q4 2026. Can you share preliminary findings from the LOM review, including any contemplating changes to the mining sequence such as additional open pit cutbacks at the main zone, potential deferral or acceleration of underground development at Stanforn Bridge or faster mining at Eastern porphyry and how these factors combined with higher processing capacity and the current gold price environment are expected to affect recoverable ounces, average annual production rates, mine life and overall project economics versus the May 2025 PEA.

Look, I love that question. I'll tell you why I love that question. That tells me that's a shareholder, very in tuned with everything. which is great and has read the details that we pro. So -- and I've answered a lot of those sort of things in the presentation itself, but I'll provide a summary. So recovery rates have gotten to around 85%. That's correct. And we expect them to go higher as a result of the new mill into more of a study ranges of 88% to 90%, maybe even a little bit higher than that. We expect costs to get those recovery rates come down as well as we stop using as many -- as much reagents as we have. We put in place a new AVR plant, our crushing costs will come down as well given it would be a sedan all mill followed by ball mills. So that is -- that's good. We are also going to have theoretically, 3,500 tonnes per day say, all mill combination as well as the existing 2,000 tonne per day plant, which gives us a theoretical capacity rate of around 5, 500 tonnes per day potential. but you got to feed it, right? So -- and the good news is that there are going to be centered circuits or multiple pails in the existing circuit. So there's a lot of flexibility feeding. And so the mine plan review right now that's being done is to figure out what is a good number to feed it, an achievable number to feed. There will be excess capacity. We won't get to 5,500 tonnes tomorrow when it's turned on because it takes time to ramp up mining and a pit is only sold large and unease so much room to move around. So right now, yes, there will be additional cutbacks to the pit in theory. It will go deeper, it will go longer, thus the underground and the related CapEx will be deferred a couple -- at least a couple of years. That's what we're looking at, at this point in time, and we made those statements before. we wouldn't be doing this. We didn't think it led to increased profitability. On the last study was done a $1,900 gold. So obviously, it's going to be done at a higher gold price. So we do expect some more resources to come in that weren't in the last study because now they become economic in the study. But in order for them to come economic, they're lower grade resources and they're then in the current study. But they're still be profitable profitable resources. So I think that answers all the questions. So yes, there will be more recoverable ounces obviously, if you bring in more resources that are now economic as a result of your gold price competition in there given we do expect gold prices to continue to increase over time and the recent 1 -- recent gold price pullback reverse at some point in time. I think that answers all the questions. Mike, did I get all of those answered in one.

And what I think it hit all the highlights and certainly look forward to getting that updated study into the market in the coming months for folks to see what improvements and enhancements in value that we hope to add.

Yes. And I think the last part of that is, can you go underground while expanding your open pit. And the answer is yes, there is optionality to do that, particularly if we deem it to be beneficial to the mine plan of Stanford Bridge, et cetera. And also, given that we're going to have excess capacity, we find any resources as a result of the new drill program, they can be added in pretty quickly as well.

Excellent. Thank you both for --

If anybody knows me on it. I like optionality.

Excellent. Thank you. Moving on to your next question. Regarding supplies of diesel for running the plant/equipment and softer oxide for leaching purposes, both products being affected by the straight of Harmos. How are the procurement of these necessary supplies being affected by the Iran War? What are the cost implications going forward? Do you see a problem with having enough diesel to continue processing and running mining equipment, trucks, digging machines, et cetera, without significant disruptions to production over the next 6 to 12 months? What effect do you expect on future cost profits? Do you have any hedging in place for diesel supplies? Do you have the ability to source supplies from the United States? And if so, what increased cost for shipping?

So Richard and the team has recently read on the contract. So look, what we expected to see, just like America expected to see a squeeze on potential oil and fuel suppliers. But we aren't seeing that. So when Richard and the team sat down with the fuel supplier to renegotiate the contract. Tanzania has ample supply. Actually, I believe they are at full capacity of refined diesel stock. So we were surprised to hear that. Tanzania diesel is refined, it predominantly comes in from the Middle East and India into the country. and there's ample supply there now. And I think the market also sees that and that's reflected in the global oil price, that the fight Ranade appears to be ample supplies and that's currently what we're experiencing in Tanzania. So we haven't seen any squeeze on supply at this point in time. Richard, anything to add to that? I can't hear you right now.

It appears we have an audio issue for Richard.

Just give me a thumbs of predominantly got it right. Here you go. Here we go. Yes.