TRX Gold's Record Quarter Falls on Deaf Ears as Management Battles Market Skeptics
Record EBITDA and expansion on track, but shares lag as management alleges 'fake selling' and eyes a buyback.
TRX · Earnings Call · 2026-07-16
A Record Quarter Meets a Falling Share Price
TRX Gold delivered what CEO Stephen Mullowney called "a great third quarter" — and the numbers back him up. Revenue came in at almost $33 million, adjusted EBITDA hit a record $21 million, and net income reached $8.4 million, all powered by higher gold prices and a 60% year-over-year jump in gold production to 7,400 ounces. “We also achieved a grade of 1.96 g/t for the quarter, but importantly, recovery continues to improve.” — Michael Leonard, Chief Financial Officer or Finance Executive · 2026-07-16 Recovery rose to 85% from 67% a year ago, and throughput set a record of 1,690 tpd. The company has already hit the low end of its full-year guidance of 25-30k ounces, with six weeks left in the fiscal year. Yet the stock has been drifting lower, frustrating management and shareholders alike. Mullowney acknowledged the disconnect openly: “I am getting the sense that a lot of our trading is not based on fundamental value.” — Stephen Mullowney, Chief Executive Officer or President · 2026-07-16 He pointed to record options open interest, heavy short interest, and the behavior of market makers as potential culprits. stock price action has not reflected the EBITDA number or the company's Mining operation performance, which management attributes to a sector-wide de-rating and a still-opaque U.S. trading environment.Growth Plan on Track: Mill, Exploration, and the PEA
Operationally, the company is executing on a multi-pronged growth strategy. The mill expansion to 3,500 tpd is underway, with a new SAG/ball mill ordered and the existing 2,000 tpd plant operating alongside. excess capacity is expected as the mine plan is upgraded; the company is also assessing additional open-pit cutbacks and deferring underground development at the main zone by at least two years. Mullowney explained in Q&A: “There will be additional cutbacks to the pit. In theory, it will go deeper. It will go longer.” — Stephen Mullowney, Chief Executive Officer or President · 2026-07-16 This is a direct evolution from the prior plan, as Richard Boffey had earlier stated: “it's definitely a deferral of the main zone underground ... it will defer it by at least 2 or 3 years and main zone by at least 5 years.” — Richard Boffey, Unknown - likely a senior technical or operational role · 2026-04-15 Exploration is ramping up aggressively. A detailed geophysics survey has generated nine or ten strong targets, and drilling is set to start imminently. The company will have four to five drill rigs on site within months, with assays expected in Q4. drill rig activity has been a recurring theme across recent quarters, but the current program is the broadest yet. Management is also updating the May 2025 PEA, with a new study expected in Q4 2026, incorporating higher gold prices and the expanded processing capacity. The company's world class resource base and low-cost profile underpin its confidence in self-funding the ~$50 million capital plan.The Valuation Puzzle: Management's Unconventional Explanation
Perhaps the most striking commentary came in response to repeated questions about the stock's decline. Mullowney outlined a theory that market makers and short-sellers are profiting from downside pressure, and he floated the idea of a buyback as a potential countermeasure.He also noted that the company has cleaned up its capital structure, with no warrants outstanding and $27 million in cash. potential buyback remains on the table, though management prefers to reinvest in growth. The JV negotiation with the Tanzanian government also continues, with the company seeking better terms than the current 55/45 split. As Mullowney put it, "We have the watch, but they have the time." Overall, TRX Gold is delivering on the operational metrics it controls — production, costs, and growth — while the market remains skeptical on valuation. The record results and aggressive expansion plan provide a strong fundamental narrative, but the stock's persistent decline suggests investors are waiting for either a clearer catalyst (the updated PEA, exploration results) or a structural change in market structure. The story is compelling, but the market is not yet buying it.We are getting the sense that a lot of our trading is not based on fundamental value. It is based on others who make money from the stock existing.