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TRX Gold Reports Purchase Deal with OCIM Metals and Mining SA

TRX Gold Corporation has reported that Buckreef Gold Corporation Limited, one of its operating subsidiaries, has signed a pre-paid gold purchase deal with OCIM Metals & Mining SA with a contractual price of US$5 million.

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With an initial tranche of $2.5 million and additional tranches to be drawn over the following 18 months at Buckreef Gold’s discretion, the complete contract amount may be made available to Buckreef Gold in installments.

This non-dilutive financing’s Tranche 1 is comprised of a 6-month time limit, followed by a 12-month repayment period with quarterly deliveries of a pre-determined amount of gold. Giving a reduction to the current gold spot prices on the day the money is sent to Buckreef Gold will yield the actual quantity.

The funds from this financing will allow Buckreef Gold to proactively make acquisitions that will increase productivity, such as buying mining equipment to replace more expensive rental equipment, which will eventually lower operational costs for mining and processing.

Furthermore, it gives Buckreef Gold the freedom to advance its exploration and sulfide development projects.

The building of the additional 1,000+ tpd processing plant is still progressing on schedule, with a projected completion date in calendar Q3 2022 and a $4 million capital expenditure that is still within budget. In due time, the Company intends to offer an update on the extended processing plant.

As operations continue to ramp up at Buckreef Gold, non-dilutive alternative sources of financing continue to emerge for the enterprise. This financing enables the Company to opportunistically move up high return quick payback purchases, enabling the Company to further reduce operating costs.

Stephen Mullowney, CEO, TRX Gold

The Company continues to be prudent in financing operations by balancing capital requirements, funding amounts, and managing overall enterprise liquidity. The financing amount is easily supported by Buckreef Gold’s forecast production profile which is anchored by a robust stockpile and strong mining rates,” said Mullowney.

We would like to thank OCIM for their support throughout the financing process and an efficient, straightforward due diligence process,” Mullowney noted.

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