![]() This is a very ambitious leap from less than 1,000~ ounces per annum currently. To put this plant's size in perspective, Kirkland Lake Gold ( KL) is currently milling 66,000~ tonnes per day at its Detour Lake plant, so a 110-tonne per day operation is a very small scale-operation.Īs mentioned earlier, the company has announced that it is a gold producer and insists that it is targeting 150,000 to 175,000 ounces of gold production per annum with its sulfide mine Final Feasibility Study. Between the June 17th declaration of commercial production and October 30th, the company managed to produce 428~ ounces of gold or a monthly haul of barely 100 ounces. So, what is the investment thesis for Tanzanian Gold Corporation?Īs of November, the company noted that it was operating a 5-tonne per day (110-tonnes per day) test plant, and commercial production had been reached as of June 17th, 2020. At the same time, I would consider an investment in Barrick because less than 15% of total gold production is exposed to the country. Generally, I prefer to avoid the lowest-ranked jurisdictions globally, so the company is un-investable on this basis alone. While investors will accept the jurisdictional risk when exposure to Tanzania is part of a broader portfolio of assets in much safer jurisdictions, a bet on Tanzanian Gold Corporation is a bet on solely Tanzanian operations, given that this is the company's only operation currently. It's currently ranked in the bottom-10 jurisdictions out of over 80 globally, partially stemming from previous issues with companies like Acacia Mining. The project is situated south of AngloGold Ashanti's Geita Mine and just west of Barrick's ( GOLD ) Bulyanhulu Mine, but the jurisdiction is not favorable. Let's take a closer look below:įor those unfamiliar, Tanzanian Gold Corporation is a gold explorer with a $150~ million market cap in Tanzania, with the company's Buckreef Gold Project home to just over 2.04 million ounces of gold ( GLD ). In fact, many explorers do bulk samples that are almost twice this size while testing their project economics, but they do not rush out to give themselves the regal title of 'gold producer.' Unfortunately, many gold investors continue to be lured into this story due to recent claims of the company potentially becoming a 150,000-ounce plus producer, but I don't see any clear path to an operation of this size, especially considering the upfront capex it would require. Tanzanian Gold Corporation recently announced that it was a gold producer, which is an ambitious statement to make after producing less than 1,000 ounces of gold in FY2020. Four years later, we still don't have any semblance of a real operation here, with a 110 tonne-per-day test plant resembling something we might see on the hit show 'Gold Rush' or 'Aussie Gold Hunters' on Netflix ( NFLX). Given the history of excessive share dilution and the fact that the company is located in one of the worst mining jurisdictions globally, I continue to see the stock as an Avoid.įor years investors in Tanzanian Gold Corporation have been assured that cash-flow was around the corner as the company readied to begin production. ![]() While the company has ambitious plans to become a mid-tier producer, I don't see any easy path to accomplish this, with upfront capex projections of over $70 million based on a much smaller operation. However, names like Tanzanian Gold Corporation ( NYSE: TRX) have continued to languish with low single-digit returns in 2020 due to owning average projects in Tier-3 mining jurisdictions. What is the outlook for TRX? Use POWR Ratings for clearer insight into price direction.Last year was an exciting one for many gold explorers and developers, with quite a few names like Skeena Resources ( SKREF) and GoGold Resources ( GLGDF) enjoying triple-digit returns. Stocks similar to TRX GOLD CORP in the Precious Metals industry regarding analyst recommendations and price targets are PLG, EXK, and TGB. To contextualize these metrics, consider that out of Basic Materials stocks, TRX GOLD CORP's upside potential (average analyst target price relative to current price) is greater than 524.51% of them.To contextualize these metrics, consider that out of Precious Metals stocks, TRX GOLD CORP's variance in analysts' estimates is lower than 33.57% of them.In the context of all US stocks, TRX GOLD CORP's number of analysts covering the stock is higher than 13.16% of them.To contextualize these metrics, consider that out of all US stocks, TRX GOLD CORP's average analyst price target is greater than 0.87% of them.The points below can provide you with additional insight regarding what the price target and recommendations metrics in the table above mean for investors. Over the past 25 months, TRX's average broker recommendation rating improved by 0.
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