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Exhibit 99.1
TRX Gold CorporationTRX GOLD Corporation
Interim Condensed Consolidated
Financial Statements
(Unaudited)
For the three months ended
November 30, 2024 and 2023
TRX Gold Corporation
Interim Condensed Consolidated Statements of Financial Position
(Unaudited)
(Expressed in Thousands of US Dollars)
| | | | | | | | | | | |
| | | Note | | November 30, 2024 | | | August 31, 2024 | |
| Assets | | | | | | | | | | |
| Current assets | | | | | | | | | | |
| Cash | | | | $ | 6,787 | | | $ | 8,331 | |
| Amounts receivable | | 4 | | | 2,307 | | | | 1,958 | |
| Prepayments and other assets | | 5 | | | 1,215 | | | | 1,246 | |
| Inventories | | 6 | | | 6,534 | | | | 6,249 | |
| Total current assets | | | | | 16,843 | | | | 17,784 | |
| Other long-term assets | | 4 | | | 3,373 | | | | 3,259 | |
| Mineral property, plant and equipment | | 7 | | | 82,416 | | | | 77,817 | |
| Total assets | | | | $ | 102,632 | | | $ | 98,860 | |
| Liabilities | | | | | | | | | | |
| Current liabilities | | | | | | | | | | |
| Amounts payable and accrued liabilities | | | | $ | 15,876 | | | $ | 15,545 | |
| Income tax payable | | 8 | | | 840 | | | | 1,411 | |
| Current portion of deferred revenue | | 9 | | | 1,322 | | | | 1,653 | |
| Current portion of lease liabilities | | 10 | | | 903 | | | | 401 | |
| Derivative financial instrument liabilities | | 11 | | | 1,454 | | | | 2,273 | |
| Total current liabilities | | | | | 20,395 | | | | 21,283 | |
| Lease liabilities | | 10 | | | 1,951 | | | | 942 | |
| Deferred income tax liability | | 8 | | | 10,796 | | | | 9,505 | |
| Provision for reclamation | | | | | 1,127 | | | | 1,091 | |
| Total liabilities | | | | | 34,269 | | | | 32,821 | |
| Equity | | | | | | | | | | |
| Share capital | | | | | 166,313 | | | | 165,945 | |
| Share-based payments reserve | | 13 | | | 8,970 | | | | 9,151 | |
| Warrants reserve | | 14 | | | 1,700 | | | | 1,700 | |
| Accumulated deficit | | | | | (120,912 | ) | | | (121,893 | ) |
| Equity attributable to shareholders | | | | | 56,071 | | | | 54,903 | |
| Non-controlling interest | | 15 | | | 12,292 | | | | 11,136 | |
| Total equity | | | | | 68,363 | | | | 66,039 | |
| Total equity and liabilities | | | | $ | 102,632 | | | $ | 98,860 | |
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
TRX Gold Corporation
Interim Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
(Unaudited)
(Expressed in Thousands of US Dollars, except per share amounts)
| | | | | | | | | | | | | |
| | | | | | Three months ended November 30, | |
| | | Note | | | 2024 | | | 2023 | |
| | | | | | | | | | |
| Revenue | | | 19 | | | $ | 12,528 | | | $ | 9,404 | |
| | | | | | | | | | | | | |
| Cost of sales | | | | | | | | | | | | |
| Production costs | | | | | | | (5,846 | ) | | | (4,508 | ) |
| Royalty | | | | | | | (942 | ) | | | (695 | ) |
| Depreciation | | | | | | | (906 | ) | | | (484 | ) |
| Total cost of sales | | | | | | | (7,694 | ) | | | (5,687 | ) |
| Gross profit | | | | | | | 4,834 | | | | 3,717 | |
| General and administrative expenses | | | 17 | | | | (1,425 | ) | | | (2,211 | ) |
| Change in fair value of derivative financial instruments | | | 11 | | | | 819 | | | | 199 | |
| Foreign exchange losses | | | | | | | (77 | ) | | | (80 | ) |
| Interest and other expenses | | | | | | | (321 | ) | | | (473 | ) |
| Income before tax | | | | | | | 3,830 | | | | 1,152 | |
| Income tax expense | | | 8 | | | | (1,693 | ) | | | (1,191 | ) |
| Net income (loss) and comprehensive income (loss) | | | | | | $ | 2,137 | | | $ | (39 | ) |
| | | | | | | | | | | | | |
| Net income (loss) and comprehensive income (loss) attributable to: | | | | | | | | | | | | |
| Shareholders | | | | | | $ | 981 | | | $ | (966 | ) |
| Non-controlling interest | | | | | | | 1,156 | | | | 927 | |
| Net income (loss) and comprehensive income (loss) | | | | | | $ | 2,137 | | | $ | (39 | ) |
| | | | | | | | | | | | | |
| Basic and diluted earnings (loss) per share | | | 12 | | | $ | 0.00 | | | $ | (0.00 | ) |
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
TRX Gold Corporation
Interim Condensed Consolidated Statements of Changes in Equity
(Unaudited)
(Expressed in Thousands of US Dollars, except share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Share Capital | | | | Reserves | | | | | | | | | | | | | | | | | |
| | | | Number of
Shares | | | | Amount | | | | Share-based
payments | | | | Warrants | | | | Accumulated
deficit | | | | Shareholders'
equity | | | | Non-
controlling
interests | | | | Total
equity | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at August 31, 2023 | | | 277,625,317 | | | $ | 164,816 | | | $ | 8,807 | | | $ | 1,700 | | | $ | (121,423 | ) | | $ | 53,900 | | | $ | 7,156 | | | $ | 61,056 | |
| Shares issued for share-based payments (Note 13) | | | 1,465,417 | | | | 642 | | | | (632 | ) | | | - | | | | - | | | | 10 | | | | - | | | | 10 | |
| Share-based compensation expense (Note 13) | | | - | | | | - | | | | 865 | | | | - | | | | - | | | | 865 | | | | - | | | | 865 | |
| Witholding tax impact on share-based payments | | | - | | | | - | | | | (357 | ) | | | - | | | | - | | | | (357 | ) | | | - | | | | (357 | ) |
| Net (loss) income for the period | | | - | | | | - | | | | - | | | | - | | | | (966 | ) | | | (966 | ) | | | 927 | | | | (39 | ) |
| Balance at November 30, 2023 | | | 279,090,734 | | | $ | 165,458 | | | $ | 8,683 | | | $ | 1,700 | | | $ | (122,389 | ) | | $ | 53,452 | | | $ | 8,083 | | | $ | 61,535 | |
| Shares issued for share-based payments | | | 1,100,002 | | | | 487 | | | | (489 | ) | | | - | | | | - | | | | (2 | ) | | | - | | | | (2 | ) |
| Share-baseds compensation expense | | | - | | | | - | | | | 1,153 | | | | - | | | | - | | | | 1,153 | | | | - | | | | 1,153 | |
| Witholding tax impact on share-based payments | | | - | | | | - | | | | (196 | ) | | | - | | | | - | | | | (196 | ) | | | - | | | | (196 | ) |
| Net income for the period | | | - | | | | - | | | | - | | | | - | | | | 496 | | | | 496 | | | | 3,053 | | | | 3,549 | |
| Balance at August 31, 2024 | | | 280,190,736 | | | $ | 165,945 | | | $ | 9,151 | | | $ | 1,700 | | | $ | (121,893 | ) | | $ | 54,903 | | | $ | 11,136 | | | $ | 66,039 | |
| Shares issued for share-based payments (Note 13) | | | 519,215 | | | | 368 | | | | (370 | ) | | | - | | | | - | | | | (2 | ) | | | - | | | | (2 | ) |
| Share-based compensation expense (Note 13) | | | - | | | | - | | | | 189 | | | | - | | | | - | | | | 189 | | | | - | | | | 189 | |
| Net income for the period | | | - | | | | - | | | | - | | | | - | | | | 981 | | | | 981 | | | | 1,156 | | | | 2,137 | |
| Balance at November 30, 2024 | | | 280,709,951 | | | $ | 166,313 | | | $ | 8,970 | | | $ | 1,700 | | | $ | (120,912 | ) | | $ | 56,071 | | | $ | 12,292 | | | $ | 68,363 | |
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
TRX Gold Corporation
Interim Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Expressed in Thousands of US Dollars)
| | | | | | | | | | | |
| | | | | Three months ended
November 30, | |
| | | Note | | 2024 | | | 2023 | |
| | | | | | | | | |
| Operating | | | | | | | | | | |
| Net income (loss) | | | | $ | 2,137 | | | $ | (39 | ) |
| Adjustments for items not involving cash: | | | | | | | | | | |
| Non-cash items | | 21 | | | 1,547 | | | | 2,955 | |
| Changes in non-cash working capital: | | | | | | | | | | |
| (Increase) decrease in amounts receivable | | | | | (209 | ) | | | 1,032 | |
| Increase in inventories | | | | | (446 | ) | | | (343 | ) |
| Decrease in prepaid and other assets | | | | | 31 | | | | 79 | |
| (Decrease) increase in amounts payable and accrued liabilities | | | | | (87 | ) | | | 1,863 | |
| Decrease in income tax payable | | | | | (592 | ) | | | (408 | ) |
| Cash provided by operating activities | | | | $ | 2,381 | | | $ | 5,139 | |
| | | | | | | | | | | |
| Investing | | | | | | | | | | |
| Exploration and evaluation assets and expenditures | | | | $ | (431 | ) | | $ | (91 | ) |
| Purchase of mineral property, plant and equipment | | | | | (3,155 | ) | | | (3,683 | ) |
| Increase in other long-term assets | | | | | (114 | ) | | | (286 | ) |
| Cash used in investing activities | | | | $ | (3,700 | ) | | $ | (4,060 | ) |
| | | | | | | | | | | |
| Financing | | | | | | | | | | |
| Withholding taxes on settlement of share-based payments | | | | $ | (2 | ) | | $ | (357 | ) |
| Lease payments | | 10 | | | (223 | ) | | | (24 | ) |
| Cash used in financing activities | | | | $ | (225 | ) | | $ | (381 | ) |
| | | | | | | | | | | |
| Net (decrease) increase in cash | | | | $ | (1,544 | ) | | $ | 698 | |
| Cash at beginning of the period | | | | | 8,331 | | | | 7,629 | |
| Cash at end of the period | | | | $ | 6,787 | | | $ | 8,327 | |
| | | | | | | | | | | |
| Taxes paid in cash | | | | $ | 994 | | | $ | 700 | |
| Interest paid on leases | | | | | 70 | | | | 1 | |
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
TRX Gold Corporation (“TRX Gold” or the “Company”) was incorporated in the Province of Alberta on July 5, 1990 under the Business Corporations Act (Alberta). The Company’s principal business activity is the exploration, development and production of mineral property interests in the United Republic of Tanzania (“Tanzania”).
The Company’s registered office is 400 3rd Avenue SW, Suite 3700, Calgary, Alberta, T2P 4H2, Canada and the Company’s principal place of business is 277 Lakeshore Road E, Suite 403, Oakville, Ontario, L6J 6J3, Canada.
The Company’s common shares are listed on the Toronto Stock Exchange in Canada (TSX: TRX) and NYSE American in the United States of America (NYSE American: TRX).
The Company is primarily focused on development and mining operations, exploring, and evaluating its mineral properties. The business of exploring and mining for minerals involves a high degree of risk. The underlying value of the mineral properties is dependent upon the existence and economic recovery of mineral resources and reserves, the ability to raise long-term financing to complete the development of the properties, government policies and regulations, and upon future profitable production or, alternatively, upon the Company’s ability to dispose of its interest on an advantageous basis; all of which are uncertain.
| a) | Statement of compliance |
The Company’s interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”). The interim condensed consolidated financial statements do not include all disclosures required by International Financial Reporting Standards (“IFRS”) for annual financial statements and should be read in conjunction with the Company’s consolidated financial statements for the year ended August 31, 2024.
These interim condensed consolidated financial statements were approved by the Board of Directors of the Company on January 9, 2025.
| b) | Basis of presentation and measurement |
These interim condensed consolidated financial statements have been prepared on a going concern basis under the historical cost basis, except for certain financial assets and liabilities which are measured at fair value as disclosed in Note 18. All amounts in these interim condensed consolidated financial statements are presented in United States dollars with all amounts rounded to the nearest thousand, except for share and per share data, or as otherwise noted. Reference herein of $ or USD is to United States dollars and C$ or CAD is to Canadian dollars.
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
| 3. | Material accounting policies, judgements and estimates |
The accounting policies, judgements and estimates applied in these interim condensed consolidated financial statements are consistent with those set out in Notes 3 and 4 of the Company’s annual consolidated financial statements for the year ended August 31, 2024.
| Schedule of amounts receivables | | | | | | | | |
| | | November 30, 2024 | | | August 31, 2024 | |
| Sales tax receivable(1) | | $ | 5,599 | | | $ | 5,144 | |
| Other | | | 81 | | | | 73 | |
| Other receivable | | | 5,680 | | | | 5,217 | |
| Less: Long-term portion | | | (3,373 | ) | | | (3,259 | ) |
| Total amounts receivable | | $ | 2,307 | | | $ | 1,958 | |
| (1) | Sales tax receivables consist of harmonized services tax and value added tax (“VAT”) due from Canadian and Tanzanian tax authorities, respectively. Tanzanian tax regulations allow for VAT receivable to be refunded or set-off against other taxes due to the Tanzania Revenue Authority ("TRA"). The Company has historically experienced delays in receiving payment or confirmation of offset against other taxes. The Company is in communication with the TRA and there is an expectation for either cash payments or offsetting of VAT receivable against other taxes in the future. VAT which the Company does not expect to recover within the next 12 months has been classified as long-term assets. |
The Company held no collateral for any receivables. During the three months ended November 30, 2024, the Company recovered $0.9 million (2023 - $0nil) of VAT refunds from the TRA.
| 5. | Prepayments and other assets |
| Schedule of prepayments and other assets | | | | | | | | |
| | | November 30, 2024 | | | August 31, 2024 | |
| Prepaid expenses | | $ | 508 | | | $ | 539 | |
| Deferred financing costs(1) | | | 707 | | | | 707 | |
| Total prepayments and other assets | | $ | 1,215 | | | $ | 1,246 | |
| (1) | Consists of $0.5 million in commitment fees paid with respect to a share purchase agreement whereby the Company, at its sole discretion, has the right to sell up to $10 million of its common shares over a 36-month period and $0.2 million in deferred financing costs related to an At-the-Market Offering Agreement entered on May 12, 2023. |
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
| Schedule of inventory | | | | | | | | |
| | | November 30, 2024 | | | August 31, 2024 | |
| Ore stockpile | | $ | 4,491 | | | $ | 4,533 | |
| Gold in circuit | | | 836 | | | | 837 | |
| Gold doré | | | 37 | | | | 55 | |
| Total precious metals inventories | | | 5,364 | | | | 5,425 | |
| Supplies | | | 1,170 | | | | 824 | |
| Total inventories | | $ | 6,534 | | | $ | 6,249 | |
| 7. | Mineral property, plant and equipment |
| (1) | Represents exploration and evaluation expenditures related to the Anfield and Stamford Bridge deposits on the Buckreef property. |
| (2) | Includes automotive and computer equipment and software. |
| (3) | Includes leasehold improvements |
Income tax expense is recognized based on management’s estimate of the weighted average annual income tax rate expected for the full financial year. The maximum amount of tax losses that a business can utilize in Tanzania is 60% (2023 - 70%) of its taxable profit for the current year. The remaining 40% (2023 - 30%) of taxable profit is subject to a statutory tax rate of 30%. As a result, Buckreef’s current income tax is calculated at an effective tax rate of 12% (2023 - 9%) until Buckreef’s tax loss carryforwards are fully utilized. Tax losses in Tanzania can only be utilized by the entity to which the tax losses relate to.
The carrying value of Buckreef’s Mineral Property, Plant and Equipment is higher than their tax written down values due to historical mining incentives in Tanzania and accelerated depreciation for tax purposes. The taxable temporary difference between the carrying value of Mineral Property, Plant and Equipment and its tax basis in excess of available tax loss carryforwards resulted in a deferred tax liability.
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
For the three months ended November 30, 2024, the Company recorded income tax expense of $1.7 million, comprised of current income tax expense of $0.4 million and deferred income tax expense of $1.3 million (2023 - $1.2 million income tax expense comprised of current income tax expense of $0.3 million and deferred income tax expense of $0.9 million).
On August 11, 2022, the Company entered into a $5 million prepaid Gold Doré Purchase Agreement (“Agreement”) with OCIM Metals and Mining S.A. The Agreement requires funds to be made available to the Company in two tranches. On July 11, 2023, the Company drew $1.0 million from the second tranche of the Agreement in exchange for delivering 46.4 ounces of gold per month, commencing October 2023, for a total of 603 ounces of gold over 13 months. During November 2023, the Company fully settled $2.5 million drawn on the first tranche of the Agreement. On September 26, 2023, the Company drew an additional $0.5 million from the second tranche of the Agreement in exchange for delivering 23.5 ounces of gold per month, commencing December 2023, for a total of 305.4 ounces of gold over 13 months. On November 29, 2023, the Company drew an additional $1.0 million from the second tranche of the Agreement in exchange for delivering 44.1 ounces of gold per month, commencing February 2024, for a total of 573.2 ounces of gold over 13 months. On May 6, 2024, the Company amended the terms of the Agreement to allow for additional prepayments and drew $1.0 million in exchange for delivering 40.85 ounces of gold per month, commencing June 2024, for a total of 490.2 ounces of gold over 12 months. On October 30, 2024, the Company drew an additional $0.5 million in exchange for delivering 17 ounces of gold per month, commencing November 2024, for a total of 204 ounces of gold over 12 months.
| Schedule of deferred revenue liability | | | | |
| | | Amount | |
| As at August 31, 2024 | | $ | 1,653 | |
| Drawdown | | | 500 | |
| Accretion of deferred revenue (Note 21) | | | 84 | |
| Revenue recognized | | | (915 | ) |
| As at November 30, 2024 | | $ | 1,322 | |
Lease liabilities are measured at the discounted value of future lease payments using the lease-specific incremental borrowing rate. Lease payments are apportioned between interest expense and the reduction of the liability. Interest expense is based on the lease-specific incremental borrowing rate at the commencement date of the lease. The incremental borrowing rate differs between each category of asset, location of asset and the duration of the lease. The Company’s lease liabilities primarily comprise of leases for 13 pieces of mobile equipment for use in Buckreef’s mining operations.
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
The carrying amounts of lease liabilities and movements during the period were:
| Schedule of carrying amounts of lease liabilities | | | | |
| | | Amount | |
| As at August 31, 2024 | | $ | 1,343 | |
| Additions | | | 1,665 | |
| Accretion of lease liabilities (Note 21) | | | 70 | |
| Lease payments | | | (223 | ) |
| Foreign exchange | | | (1 | ) |
| As at November 30, 2024 | | $ | 2,854 | |
| Schedule of lease liabilities | | | | | | | | |
| | | November 30, 2024 | | | August 31, 2024 | |
| Current portion of lease liabilities | | $ | 903 | | | $ | 401 | |
| Lease liabilities | | | 1,951 | | | | 942 | |
| Balance at end of period | | $ | 2,854 | | | $ | 1,343 | |
The following amounts are recognized in the statement of income and comprehensive income:
| Schedule of statement of income and comprehensive income | | | | | | | | |
| | | For the three months ended Nov 30, | |
| | | 2024 | | | 2023 | |
| Depreciation expense for right-of-use assets | | $ | 162 | | | $ | 11 | |
| Accretion of lease liabilities | | | 70 | | | | 1 | |
| Total amount | | $ | 232 | | | $ | 12 | |
As at November 30, 2024, the Company was committed to a lease for one additional piece of equipment which had not yet commenced with payments totaling $0.7 million.
As at November 30, 2024, the Company had the following lease commitments:
| Schedule of lease commitments | | | | |
| | | Amount | |
| Not later than one month | | $ | 124 | |
| Later than one month and not later than three months | | | 201 | |
| Later than three months and not later than one year | | | 920 | |
| Later than one year and not later than five years | | | 2,177 | |
| Total undiscounted lease commitments | | $ | 3,422 | |
As at November 30, 2024, the carrying value of right-of-use assets amounted to $3.9 million (August 31, 2024 - $1.7 million). Mobile equipment under lease contracts are depreciated over their useful life as the purchase price at the end of the lease term is immaterial.
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
| 11. | Derivative financial instrument liabilities |
| Schedule of derivative financial instrument liabilities | | | | | | | | |
| | | November 30, 2024 | | | August 31, 2024 | |
| Derivative warrant liabilities | | $ | 1,454 | | | $ | 2,273 | |
| Total derivative financial instrument liabilities | | $ | 1,454 | | | $ | 2,273 | |
| a) | Derivative warrant liabilities |
| Schedule of derivative warrant liabilities | | | | |
| | | Amount | |
| As at August 31, 2024 | | $ | 2,273 | |
| Change in fair value | | | (819 | ) |
| As at November 30, 2024 | | $ | 1,454 | |
Derivative warrant liabilities of $1.5 million will only be settled by issuing equity of the Company. For the three months ended November 30, 2024, fair value changes amounted to a gain of $0.8 million (2023 - gain of $0.2 million).
Fair values of derivative warrant liabilities were calculated using the Black-Scholes Option Pricing Model with the following assumptions:
| Schedule of assumptions fair value of derivative warrant liabilities | | | | |
| | | November 30, 2024 | | August 31, 2024 |
| Share price | | $0.36 | | $0.39 |
| Risk-free interest rate | | 4.08% - 4.22% | | 3.82% - 4.13% |
| Dividend yield | | 0% | | 0% |
| Expected volatility | | 43% - 45% | | 47% - 49% |
| Remaining term (in years) | | 1.2 – 2.2 | | 1.5 – 2.4 |
The fair value is classified as level 3 as expected volatilities is determined using adjusted historical volatilities and were therefore not an observable input.
Sensitivity analysis
If expected volatility, the significant unobservable input, had been higher or lower by 10% and all other variables were held constant, net income and net assets for the three months ended November 30, 2024 would increase or decrease by:
| Schedule of net loss and net assets | | | | | | | | |
| | | | November 30, 2024 | |
| 10% change in expected volatilities | | | Increase | | | | Decrease | |
| (Loss) income | | $ | (493 | ) | | $ | 443 | |
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
| 12. | Earnings (loss) per share |
| Schedule of earnings (loss) per share | | | | | | | | |
| | | Three months ended November 30, | |
| | | 2024 | | | 2023 | |
| Net income (loss) attributable to shareholders | | $ | 981 | | | $ | (966 | ) |
| Weighted average number of common shares for basic EPS(1) | | | 291,668,469 | | | | 285,283,429 | |
| Effect of dilutive stock options, warrants, RSUs and share awards | | | 1,826,542 | | | | - | |
| Weighted average number of common shares for diluted EPS(1) | | | 293,495,011 | | | | 285,283,429 | |
| (1) | | The weighted average number of common shares for basic and diluted EPS include 11.0 million gross number of vested, but unissued, common shares relating to common share awards. |
For the three months ended November 30, 2024, the weighted average number of common shares for diluted EPS excluded 10.5 million stock options and 36.2 million warrants that were anti-dilutive for the period (2023 - 15.4 million stock options, 2.8 million RSUs, 4.6 million common share awards and 39.0 million warrants).
| 13. | Share-based payments reserve |
Share-based compensation expense for the three months ended November 30, 2024 totaled $0.2 million (2023 - $0.9 million).
As at November 30, 2024, the Company had 6,942,109 (August 31, 2024 - 5,997,632) share awards available for issuance under the Omnibus Equity Incentive Plan.
Canadian Dollars denominated stock options
| Schedule of continuity of outstanding stock options | | | | | | | | |
| | | Number of stock options | | | Weighted average exercise price per share | |
| Balance – August 31, 2024 | | | 4,986,000 | | | | CAD $0.41 | |
| Options exercised(1) | | | (562,000 | ) | | | CAD $0.42 | |
| Balance – November 30, 2024 | | | 4,424,000 | | | | CAD $0.41 | |
| (1) | | The weighted average share price at the time of the option exercise was C$0.53. |
Options to purchase common shares carry exercise prices and terms to maturity as follows:
| Schedule of options to purchase common shares carry exercise prices and terms to maturity | | | | | | | | | | | | | | |
| | | | | | | | Remaining | |
| | | Number of options | | | Expiry | | contractual | |
| Exercise price | | Outstanding | | | Exercisable | | | Date | | life (years) | |
| C$0.40 | | | 2,259,000 | | | | 2,259,000 | | | October 11, 2026 | | | 1.9 | |
| C$0.43 | | | 2,065,000 | | | | 2,065,000 | | | September 29, 2026 | | | 1.8 | |
| C$0.35 | | | 100,000 | | | | 100,000 | | | January 2, 2027 | | | 2.1 | |
| C$0.41(1) | | | 4,424,000 | | | | 4,424,000 | | | | | | 1.9(1) | |
| (1) | | Total represents weighted average. |
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
US Dollars denominated stock options
| Schedule of outstanding stock options | | | | | | | | |
| | | Number of stock options | | | Weighted average exercise price per share | |
| Balance – November 30, 2024 and August 31, 2024 | | | 10,450,000 | | | | $0.49 | |
Options to purchase common shares carry exercise prices and terms to maturity as follows:
| Schedule of options to purchase common shares exercise prices | | | | | | | | | | | | | | |
| | | | | | | | Remaining | |
| | | Number of options | | | Expiry | | contractual | |
| Exercise price | | Outstanding | | | Exercisable | | | Date | | life (years) | |
| USD $0.50 | | | 7,375,000 | | | | 4,425,000 | | | August 17, 2027 | | | 2.7 | |
| USD $0.45 | | | 3,075,000 | | | | 1,230,000 | | | August 28, 2028 | | | 3.7 | |
| USD $0.49(1) | | | 10,450,000 | | | | 5,655,000 | | | | | | 3.0(1) | |
| (1) | Total represents weighted average. |
For the three months ended November 30, 2024, share-based compensation expense related to stock options totaled $0.1 million (2023 - $0.2 million).
| b) | Restricted Share Units: |
The following table sets out activity with respect to outstanding RSUs:
| Schedule of restricted stock outstanding | | | | |
| | | Number of RSUs | |
| Balance – November 30, 2024 and August 31, 2024 | | | 1,498,385 | |
For the three months ended November 30, 2024, share-based payment expenses related to RSUs totaled $0.1 million (2023 - $0.5 million).
| Schedule of warrants reserve | | | | | | | | | | | | |
| | | Number of warrants | | | Weighted average exercise price per share | | | Weighted average remaining contractual life (years) | |
| Balance – August 31, 2024 | | | 36,190,769 | | | | $0.62 | | | | 1.9 | |
| Balance – November 30, 2024 | | | 36,190,769 | | | | $0.62 | | | | 1.7 | |
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
As at November 30, 2024, the following warrants were outstanding:
| Schedule of warrants outstanding | | | | | | | | | | |
| | | Number of
Warrants | | | Exercise price | | | Expiry date |
| Private placement financing warrants - February 11, 2021 | | | 16,461,539 | | | | $0.80 | | | February 11, 2026 |
| Private placement financing broker warrants - February 11, 2021 | | | 1,152,307 | | | | $0.80 | | | February 11, 2026 |
| Private placement financing warrants - January 26, 2022 | | | 17,948,718 | | | | $0.44 | | | January 26, 2027 |
| Private placement financing placement agent warrants - January 26, 2022 | | | 628,205 | | | | $0.44 | | | January 26, 2027 |
| Balance – November 30, 2024 | | | 36,190,769 | | | | $0.62(1) | | | |
| (1) | | Total represents weighted average. |
| 15. | Non-controlling interest |
Summarized financial information for Buckreef is disclosed below:
| Schedule of summarized financial information | | | | | | | | |
| | | Three months ended November 30, | |
| Income Statement | | 2024 | | | 2023 | |
| Revenue | | $ | 12,528 | | | $ | 9,404 | |
| Depreciation | | | 906 | | | | 484 | |
| Accretion expense | | | 188 | | | | 140 | |
| Income tax expense | | | 1,693 | | | | 1,191 | |
| Comprehensive income for the period | | | 2,568 | | | | 2,061 | |
| | | | | | | | | |
| Statement of Financial Position | | November 30, 2024 | | | August 31, 2024 | |
| Current assets | | $ | 10,746 | | | $ | 11,297 | |
| Non-current assets | | | 83,681 | | | | 78,952 | |
| Current liabilities | | | (17,057 | ) | | | (16,973 | ) |
| Non-current liabilities | | | (13,863 | ) | | | (11,528 | ) |
| Advances from parent, net | | | (29,371 | ) | | | (30,210 | ) |
| | | | | | | | | |
| | | Three months ended November 30, | |
| Statement of Cash Flows | | 2024 | | | 2023 | |
| Cash provided by operating activities | | $ | 3,572 | | | $ | 6,110 | |
| Cash used in investing activities | | | (3,675 | ) | | | (4,057 | ) |
| Cash used in financing activities | | | (1,090 | ) | | | (1,089 | ) |
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
| 16. | Related party transactions |
Related parties include the Board of Directors and officers, extended relatives and enterprises that are controlled by these individuals as well as certain consultants performing similar functions.
Remuneration of Directors and key management personnel of the Company was as follows:
| Schedule of related parties compensation | | | | | | | | |
| | | Three months ended
November 30, | |
| Directors and key management personnel | | 2024 | | | 2023 | |
| Remuneration | | $ | 366 | | | $ | 436 | |
| Share-based compensation expense | | | 93 | | | | 693 | |
| Total directors and key management personnel | | $ | 459 | | | $ | 1,129 | |
During the three months ended November 30, 2024, $0.1 million for stock options granted to key management personnel was expensed (2023 - $0.2 million) and $0nil for RSUs granted to directors and key management personnel was expensed (2023 - $0.3 million).
During the three months ended November 30, 2024, 0$nil related to common share awards granted to key management personnel was expensed (2023 - $0.2 million). As of November 30, 2024, 11.0 million of vested common share awards have yet to be issued.
| 17. | General and administrative expenses |
| Schedule of general and administrative expense | | | | | | | | |
| | | Three months ended
November 30, | |
| | | 2024 | | | 2023 | |
| Directors’ fees (Note 16) | | $ | 64 | | | $ | 60 | |
| Insurance | | | 61 | | | | 85 | |
| Office and general | | | 60 | | | | 67 | |
| Shareholder information | | | 151 | | | | 158 | |
| Professional fees | | | 169 | | | | 189 | |
| Salaries and benefits (Note 16) | | | 477 | | | | 558 | |
| Consulting | | | 215 | | | | 177 | |
| Share-based compensation expense (Notes 13 and 16) | | | 156 | | | | 810 | |
| Travel and accommodation | | | 52 | | | | 78 | |
| Depreciation | | | 15 | | | | 13 | |
| Other | | | 5 | | | | 16 | |
| Total general and administrative expenses | | $ | 1,425 | | | $ | 2,211 | |
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
Fair value of financial instruments
The following table sets out the classification of the Company’s financial instruments as at November 30, 2024 and August 31, 2024:
| Schedule of financial instruments | | | | | | | | |
| | | November 30, 2024 | | | August 31, 2024 | |
| Financial Assets | | | | | | | | |
| Measured at amortized cost | | | | | | | | |
| Amounts receivable | | $ | 2,307 | | | $ | 1,958 | |
| Measured at fair value through profit or loss | | | | | | | | |
| Cash | | | 6,787 | | | | 8,331 | |
| | | | | | | | | |
| Financial Liabilities | | | | | | | | |
| Measured at amortized cost | | | | | | | | |
| Amounts payables and accrued liabilities | | | 15,876 | | | | 15,545 | |
| Measured at fair value through profit or loss | | | | | | | | |
| Derivative financial instrument liabilities | | | 1,454 | | | | 2,273 | |
Cash, derivative warrant liabilities are classified as measured at fair value through profit and loss. Amounts receivable and amounts payable are classified as measured at amortized cost. The carrying value of the Company’s amounts receivable and amounts payable approximate their fair value due to the relatively short-term nature of these instruments.
Fair value estimates are made at a specific point in time based on relevant market information and information about financial instruments. These estimates are subject to and involve uncertainties and matters of significant judgment, and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
The Company classifies its financial instruments carried at fair value according to a three-level hierarchy that reflects the significance of the inputs used in making the fair value measurements. The three levels of fair value hierarchy, giving the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs, are as follows:
| · | Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; |
| · | Level 2 – Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly; and |
| · | Level 3 – Inputs for assets or liabilities that are not based on observable market data. |
As at November 30, 2024 and August 31, 2024, cash was classified as Level 1 and derivative financial instruments (Note 11) were classified as Level 3 under the fair value hierarchy.
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
Operating segments
The Company’s Chief Operating Decision Maker, its Chief Executive Officer, reviews the operating results, assesses the performance and makes capital allocation decisions of the Company viewed as a single operating segment engaged in mineral exploration and development in Tanzania. All amounts disclosed in the interim condensed consolidated financial statements represent this single reporting segment. The Company’s corporate division only earns interest revenue that is considered incidental to the activities of the Company and does not meet the definition of an operating segment as defined in IFRS 8, Operating Segments.
Geographic segments
The Company is in the business of mineral exploration and production in Tanzania. Information regarding the Company’s geographic locations are as follows:
| Schedule of revenue | | | | | | | | |
| | | Three months ended
November 30, | |
| Revenue | | 2024 | | | 2023 | |
| Tanzania | | $ | 12,528 | | | $ | 9,404 | |
| Total revenue | | $ | 12,528 | | | $ | 9,404 | |
During the three months ended November 30, 2024, the Company generated 93% (2023 – 90%) of its revenue from one (2023 – one) customer totalling $11.6 million (2023 – $8.5 million).
| Schedule of non-current assets | | | | | | | | |
| Non-current assets | | November 30, 2024 | | | August 31, 2024 | |
| Canada | | $ | 30 | | | $ | 36 | |
| Tanzania | | | 85,759 | | | | 81,040 | |
| Total non-current assets | | $ | 85,789 | | | $ | 81,076 | |
| 20. | Commitments and contingencies |
Commitments:
In order to maintain its existing mining and exploration licenses, the Company is required to pay annual license fees. As at November 30, 2024 and August 31, 2024, these licenses remained in good standing and the Company is up to date on its license payments.
Contingencies:
The Company is involved in litigation and disputes arising in the normal course of operations. Management is of the opinion that the outcome of any potential litigation will not have a material adverse impact on the Company’s financial position or results of operations. Accordingly, no provisions for the settlement of outstanding litigation and potential claims have been accrued as at November 30, 2024 and August 31, 2024.
TRX Gold Corporation
Notes to the Interim Condensed Consolidated Financial Statements
For the three months ended November 30, 2024 and 2023
(Unaudited)
(Expressed in Thousands of US dollars, except for share and per share amounts)
| Schedule of non-cash items | | | | | | | | |
| | | Three months ended
November 30, | |
| | | 2024 | | | 2023 | |
| Depreciation | | $ | 921 | | | $ | 497 | |
| Change in fair value of derivative financial instruments (Note 11) | | | (819 | ) | | | (199 | ) |
| Share-based compensation expense (Note 13) | | | 189 | | | | 875 | |
| Accretion of provision for reclamation | | | 36 | | | | 27 | |
| Deferred income tax expense (Note 8) | | | 1,291 | | | | 899 | |
| Accretion of lease liabilities (Note 10) | | | 70 | | | | 1 | |
| Deferred revenue (Note 9) | | | (415 | ) | | | 578 | |
| Accretion of deferred revenue (Note 9) | | | 84 | | | | 112 | |
| Foreign exchange losses | | | 190 | | | | 165 | |
| Total non-cash items | | $ | 1,547 | | | $ | 2,955 | |
For the three months ended November 30, 2024, an increase in amounts payable and accrued liabilities related to purchase of mineral property, plant and equipment was $0.1 million (2023 – decrease of $0.6 million).
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