TRX Gold Corporation Q4 2025 Results: Sustained Growth in Volatile Conditions

TRX Gold delivered a strong finish to 2025, with preliminary Q4 results showing record production of 6,404 ounces poured and sales of 6,977 ounces, a 37% quarter-over-quarter surge. This output was supported by an average gold price of $3,350 per ounce in Q4, generating $23.5 million in revenue and achieving a healthy 54% gross profit margin. Yearly, the company poured 18,935 ounces and sold 19,213 ounces, reflecting sustained operational momentum and resulting in $57.6 million in annual revenue.

The company bolstered its financial position during the quarter, reporting $7.8 million in cash and strengthening working capital to a current ratio of 1.3. Notably, TRX repaid $3 million of debt, enhancing its liquidity buffer against potential market volatility. This improved financial flexibility supports its ambitious growth plans, including a larger-than-anticipated processing facility expansion aligned with its PEA for future capacity increases beyond 3,000 tonnes per day.

While the Q4 surge demonstrates operational efficiency and strong sales execution, investors should note the preliminary nature of these results, which remain subject to adjustment in the audited reports expected later this month. The company's focus on exploration, highlighted by high-grade discoveries like the Stamford Bridge Zone, underpins long-term growth potential but requires significant capital investment, as evidenced by the planned facility upgrades and exploration spend. The current financial position provides a solid foundation to navigate these investments while maintaining debt reduction as a priority.

Growth Drivers and Upside Momentum

TRX Gold's immediate upside hinges on two tangible catalysts: its expanded run-of-mine stockpile and new plant upgrades. The company grew its ROM inventory to 15,162 ounces, while thickener and flotation circuit installations aim to boost throughput efficiency. These moves align with its prefeasibility study targeting 3,000+ tonnes/day capacity, creating a clear path to volume growth.

Cost discipline further supports margins. Automation and digital optimization have cut operational expenses by 12% versus 2024, positioning TRX competitively against the global industry range of $900–$1,400 per ounce. Even with energy and regulatory pressures, this cost reduction offsets challenges from declining ore grades-a structural headwind across mining.

Gold's macro backdrop adds revenue upside. J.P. Morgan forecasts $3,675/oz average prices in Q4 2025, driven by central banks buying 710 tonnes quarterly. If this demand persists, TRX's output growth could translate into outsized profit growth. However, margins remain vulnerable: producers operating above $1,400/oz face squeeze if prices stall below $3,600/oz, especially as lower-cost competitors intensify pressure.

Execution risk looms. Plant upgrades must deliver promised efficiency gains, and declining ore grades could accelerate cost inflation despite tech gains. While ROM stockpiles provide near-term flexibility, long-term resilience depends on sustaining cost leadership amid a crowded global supply base.

Risk Factors and

Industry Challenges

Geopolitical tensions and persistent inflation remain key headwinds, threatening gold's safe-haven appeal. While central banks, especially in emerging markets, continued aggressive buying in Q3 2025, fueling record demand, this hasn't fully insulated the market from broader economic volatility. J.P. Morgan's optimistic forecast of gold averaging $3,675/oz by Q4 2025 and rising toward $4,000/oz mid-2026 hinges significantly on this central bank demand remaining robust amid global dollar diversification. However, the path isn't guaranteed; prolonged policy uncertainty or shifts in U.S. fiscal or monetary stance could undermine the very safe-haven flows supporting this thesis.

Rising operational costs present another significant challenge. Global gold mining costs are projected to range between $900 and $1,400 per ounce in 2025. This pressure stems partly from declining ore grades and increased energy expenses, but stricter environmental, social, and governance (ESG) regulations and the imperative to adopt renewable energy are driving substantial capital expenditures. While technology like automation and AI can slash operational costs by up to 12% compared to 2024, integrating these solutions requires significant upfront investment, straining margins for many producers against the cost curve. The threat from low-cost producers operating below $900 per ounce looms large, intensifying margin pressure on higher-cost operations and potentially forcing consolidation or forcing difficult production decisions if gold prices stall.

Furthermore, the significant $21 billion in U.S. gold-backed ETF inflows during H1 2025 underscores strong investment demand and acts as a powerful support. Yet, this inflow surge could reverse if U.S. policy shifts reduce global safe-haven demand or if the U.S. dollar strengthens markedly. Such a reversal would represent a substantial risk to price stability and investor sentiment, highlighting the market's sensitivity to macroeconomic policy direction.

Future Catalysts

TRX Gold's near-term growth hinges on operational optimization and strategic stockpile use. Preliminary Q4 results show the company utilized 15,162 ounces of ROM (Run-of-Mine) stockpile gold while initiating critical plant upgrades, including a thickener and flotation circuit. This foundation supports management's target for 15-20% production growth in 2026 as existing stockpiles are processed and new capacity comes online as reported in Q4 results. However, utilization of these ROM stockpiles remains below 40%, creating a near-term constraint on ramping output faster than planned.

Balance sheet strength offers resilience against market volatility. The company finished 2025 with $7.8 million in cash and repaid $3 million of debt, improving its working capital position. This liquidity buffer is designed to weather corrections, potentially shielding the stock during periods when gold prices dip below $3,200 per ounce.

Gold's wider trajectory presents a significant valuation catalyst. J.P. Morgan projects the metal's price will climb toward $4,000 per ounce by mid-2026. If this target holds, it could generate 30-40% upside for TRX Gold's valuation, especially considering the company's projected increase in production volume and the strong economics of its PEA, which forecasts 62,000 ounces per year at a $4,000 gold price. Near-term, the company's fiscal 2026 guidance calls for Q1 production of approximately 6,550 ounces, building on recent strong results.