6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of January 2023

Commission File No. 001-32500

TRX GOLD Corporation

(Translation of registrant’s name into English)

277 Lakeshore Road East, Suite 403

Oakville, Ontario Canada L6J 6J3

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under the cover Form 20-F or Form 40-F.

Form 20-F ☐ Form 40-F ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Explanatory Note

TRX Gold Corp. (the “Company”) is furnishing this Form 6-K to provide its financial information for the three months ended November 30, 2022, and to incorporate such financial information into the Company’s registration statements referenced below.

Exhibits 99.1 and 99.2 attached hereto are hereby incorporated by reference into the Company’s Registration Statements on Form F-3 (Registration Statement File numbers 333-248210; 333-250146; and 333-255526) and on Form S-8 (Registration Statement File number 333-234078) to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed.

Exhibits

The following exhibits are filed as part of this Form 6-K.

Exhibit No.	Document
99.1	Unaudited financial statements for the three months ended November 30, 2022
99.2	Management’s Discussion & Analysis for the three months ended November 30, 2022
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 6-K report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TRX Gold Corporation
	(Registrant)
	By:	/s/ Stephen Mullowney
		Stephen Mullowney, Chief Executive Officer
Date: January 13, 2023

EX-99.1

Exhibit 99.1

TRX Gold Corporation

Interim Condensed Consolidated

Financial Statements

(Unaudited)

For the three months ended

November 30, 2022 and 2021

TRX Gold Corporation

Interim Condensed Consolidated Statements of Financial Position

(Unaudited)

(Expressed in Thousands of US Dollars)

	Note	November 30, 2022			August 31, 2022 (Note 2)
Assets
Current Assets
Cash		$	8,930		$	8,476
Amounts receivable	5		1,624			2,540
Prepayments and other assets	6		1,220			1,206
Inventories	7		3,831			3,630
Total current assets			15,605			15,852
Other long-term assets	5		4,976			4,359
Mineral property, plant and equipment	8		54,757			51,634
Total assets		$	75,338		$	71,845
Liabilities
Current Liabilities
Amounts payable and accrued liabilities		$	7,103		$	7,920
Withholding tax payable			181			181
Income tax payable			789			436
Current portion of deferred revenue	9		2,627			1,864
Current portion of lease liabilities			64			-
Derivative warrant liabilities	10		3,484			6,849
Total current liabilities			14,248			17,250
Lease liabilities			77			-
Deferred revenue	9		-			621
Deferred income tax liability			1,129			-
Provision for reclamation			2,850			2,815
Total liabilities			18,304			20,686
Equity
Share capital			164,173			163,946
Share-based payments reserve	12		7,313			6,825
Warrants reserve	13		1,700			1,700
Accumulated deficit			(120,161	)		(123,673	)
Equity attributable to shareholders			53,025			48,798
Non-controlling interests	14		4,009			2,361
Total equity			57,034			51,159
Total equity and liabilities		$	75,338		$	71,845

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

2

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	2022			2021 (Note 2)
Revenue	19	$	9,718		$	-
Cost of sales
Production costs			(3,518	)		-
Royalty			(697	)		-
Depreciation			(193	)		-
Total cost of sales			(4,408	)		-
Gross profit			5,310			-
General and administrative expenses	16		(1,837	)		(2,345	)
Gain on derivative warrant liabilities	10		3,365			208
Foreign exchange (losses) gains			(7	)		18
Interest and other expenses			(185	)		(39	)
Income (loss) before tax			6,646			(2,158	)
Income tax expense	17		(1,486	)		-
Net income (loss) and comprehensive income (loss)		$	5,160		$	(2,158	)
Net income (loss) and comprehensive income (loss) attributable to:
Shareholders		$	3,512		$	(2,022	)
Non-controlling interests			1,648			(136	)
Net income (loss) and comprehensive income (loss)		$	5,160		$	(2,158	)
Earnings (loss) per share attributable to shareholders
Basic and diluted earnings (loss) per share	11	$	0.01		$	(0.01	)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

3

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			Owner's equity			Non- controlling interests			Total equity
Balance at August 31, 2021		254,870,556	$	158,129	$	5,680		$	1,606	$	(117,457	)	$	47,958		$	(1,533	)	$	46,425
Shares issued for settlement of debts		165,889		98		-			-		-			98			-			98
Share-based compensation expense (Note 12)		-		-		980			-		-			980			-			980
Net loss for the period		-		-		-			-		(2,022	)		(2,022	)		(136	)		(2,158	)
Balance at November 30, 2021		255,036,445	$	158,227	$	6,660		$	1,606	$	(119,479	)	$	47,014		$	(1,669	)		45,345
Shares issued for financing		909,901		373		-			-		-			373			-			373
Shares issued for cash, net of share issuance costs		17,948,718		3,867		-			-		-			3,867			-			3,867
Stock options exercised		450,000		258		(111	)		-		-			147			-			147
Shares issued for share-based payments		1,801,120		1,221		(1,221	)		-		-			-			-			-
Witholding tax impact on restricted share units		-		-		(636	)		-		-			(636	)		-			(636	)
Warrants issued		-		-		-			94		-			94			-			94
Share-based compensation expense		-		-		2,133			-		-			2,133			-			2,133
Net loss for the period		-		-		-			-		(4,194	)		(4,194	)		4,030			(164	)
Balance at August 31, 2022		276,146,184	$	163,946	$	6,825		$	1,700	$	(123,673	)	$	48,798		$	2,361		$	51,159
Shares issued for share-based payments		442,500		227		(227	)		-		-			-			-			-
Share-based compensation expense (Note 12)		-		-		809			-		-			809			-			809
Witholding tax impact on restricted share units		-		-		(94	)		-		-			(94	)		-			(94	)
Net income for the period		-		-		-			-		3,512			3,512			1,648			5,160
Balance at November 30, 2022		276,588,684	$	164,173	$	7,313		$	1,700	$	(120,161	)	$	53,025		$	4,009		$	57,034

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

4

TRX Gold Corporation

Interim Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Expressed in Thousands of US Dollars)

		Three months ended November 30,
	Note	2022			2021
Operating
Net income (loss)		$	5,160		$	(2,158	)
Adjustments for items not involving cash:
Non-cash items	21		(1,016	)		887
Changes in non-cash working capital:
Decrease (increase) in amounts receivable			915			(42	)
Increase in inventories			(125	)		(338	)
(Increase) decrease in prepaid and other assets			(14	)		182
Increase (decrease) in amounts payable and accrued liabilities			1,371			(1,486	)
Increase in income tax payable			357			-
Cash provided by (used in) operating activities		$	6,648		$	(2,955	)
Investing
Exploration and evaluation assets and expenditures		$	-		$	(2,192	)
Proceeds from gold sales			-			535
Purchase of mineral property, plant and equipment			(5,419	)		(906	)
Increase in other long-term assets			(617	)		-
Cash used in investing activities		$	(6,036	)	$	(2,563	)
Financing
Withholding taxes on settlement of restricted share units		$	(94	)	$	-
Lease payments			(64	)		-
Cash used in financing activities		$	(158	)	$	-
Net increase (decrease) in cash		$	454		$	(5,518	)
Cash at beginning of the period			8,476			13,447
Cash at end of the period		$	8,930		$	7,929

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

5

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

1. Nature of operations

TRX Gold Corporation (“TRX Gold”, “Group” 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”). On November 1, 2022, the Company declared commercial production on the 1,000+ tonnes per day process plant at its Buckreef Gold Project (“Buckreef”) in Tanzania.

The Company’s registered office is 400 3^rd 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: TNX) 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.

2. Basis of preparation

a) Statement of compliance

The Company’s interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board. 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 consolidated financial statements for the year ended August 31, 2022.

These interim condensed consolidated financial statements were approved by the Board of Directors of the Company on January 12, 2023.

b) Comparative figures

Certain comparative amounts have been restated to conform to the current period’s presentation.

The reclassification in presentation resulted in the following impact on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three months ended November 30, 2021:

		Reported at November 30, 2021			Reclassification			Restated at November 30, 2021
General and administration expenses	$	(2,345	)	$	-		$	(2,345	)
Financial instrument related costs and other		174			(174	)		-
Gain on derivative warrant liabilities		-			208			208
Foreign exchange gains		18			-			18
Interest and other expenses		(5	)		(34	)		(39	)
Net loss and comprehensive loss	$	(2,158	)	$	-		$	(2,158	)

The reclassification in presentation resulted in the following impact on the Consolidated Statements Financial Position as at August 31, 2022:

		Reported at August 31,2022		Reclassification			Restated at August 31, 2022
Amounts receivable	$	40	$	2,500		$	2,540
Other receivables		2,500		(2,500	)		-

c) 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 U.S. 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 US dollars and C$ or CAD is to Canadian dollars.

6

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

3. Significant accounting policies

The accounting policies applied in these interim condensed consolidated financial statements are consistent with those applied in the preparation of the Company’s annual consolidated financial statements for the year ended August 31, 2022.

4. Significant accounting judgments, estimates and assumptions

The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the carrying amount of assets and liabilities and the reported amount of revenues and expenses. The following discusses the most significant accounting policy judgments and accounting estimates that the Company has made in the preparation of these interim condensed consolidated financial statements.

a) Production Start Date

Management assesses the stage of each mine development project to determine when a mine moves into the production stage. The criteria used to assess the start date of a mine are determined based on the unique nature of each mine development project. The Company considers various relevant criteria to assess when the mine is substantially complete, ready for its intended use and moves into the production phase. Some of the criteria include, but are not limited to, the following:

· A significant level of capital expenditures compared to construction cost estimates are complete,

· Ability to produce gold in saleable form within specifications has been achieved,

· Reasonable period for testing has been completed, and

· Reasonable level of ongoing production based on mill throughput, recovery rates and mill availability.

On November 1, 2022, the Company declared commercial production for the 1,000+ tonnes per day (“tpd”) processing plant at Buckreef after successful construction, commissioning and ramp-up of processing to a steady state throughput of 1,000+ tpd. The processing plant was running consistently at or above nameplate capacity since October 2022 with gold recoveries exceeding 90%. All major construction activities were completed and Buckreef demonstrated its ability to sustain ongoing production levels.

b) Units-of-Production

Management estimates recoverable proven and probable mineral reserves in determining the depreciation and amortization of certain mineral property, plant and equipment that is expected to be used for the duration of the mine life. This results in a depreciation charge proportional to the recovery of the anticipated ounces of gold. The life of the asset is assessed annually and considers its physical life limitations and present assessment of economically recoverable reserves of the mine property at which the asset is located. The calculations require the use of estimates and assumptions, including the amount of recoverable proven and probable mineral reserves. The Company’s units of production calculations are based on recovered ounces of gold poured.

7

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

5. Amounts receivable

	November 30, 2022			August 31, 2022
Receivable from precious metal sales	$	1,515		$	-
Sales tax receivable(1)		5,044			4,359
Prepaid gold purchase receivable (Note 9)		-			2,500
Other		41			40
		6,600			6,899
Less: Long-term portion		(4,976	)		(4,359	)
Total amounts receivable	$	1,624		$	2,540

(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 taxes due to the Tanzania Revenue Authority (“TRA”). VAT which still need to be verified by the TRA have been classified as long-term assets as the Company does not expect to recover these amounts within the next 12 months.

As at November 30, 2022 and August 31, 2022, no impairment has been recorded against these receivables and the Company held no collateral for any receivables.

6. Prepayments and other assets

	November 30, 2022		August 31, 2022
Prepaid expenses	$	713	$	699
Commitment fees(1)		507		507
Total prepayments and other assets	$	1,220	$	1,206

(1) Consists of 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 shares over a 36-month period.

7. Inventories

	November 30, 2022		August 31, 2022
Ore stockpile	$	1,745	$	2,643
Gold in circuit		1,255		210
Gold doré		-		253
Total precious metals inventories		3,000		3,106
Supplies		831		524
Total inventories	$	3,831	$	3,630

8

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

8. Mineral property, plant and equipment

	Construction in progress			Mineral properties		Processing plant and related infrastructure		Machinery and equipment		Other		Total
Cost
As at August 31, 2022	$	45,239		$	-	$	7,076	$	1,396	$	143	$	53,854
Additions		-			822		2,378		21		211		3,432
Transfers(1)		(45,239	)		45,239		-		-		-		-
As at November 30, 2022	$	-		$	46,061	$	9,454	$	1,417	$	354	$	57,286
Accumulated depreciation
As at August 31, 2022	$	-		$	-	$	1,566	$	619	$	35	$	2,220
Depreciation		-			112		95		31		71		309
As at November 30, 2022	$	-		$	112	$	1,661	$	650	$	106	$	2,529
Net book value
As at August 31, 2022	$	45,239		$	-	$	5,510	$	777	$	108	$	51,634
As at November 30, 2022	$	-		$	45,949	$	7,793	$	767	$	248	$	54,757

(1) On November 1, 2022, Buckreef achieved commercial production at which point development expenditures were subject to depreciation.

9. Deferred revenue

On August 11, 2022, the Company entered into a $5 million prepaid Gold Doré Purchase Agreement (“Agreement”) with OCIM Metals and Mining S.A. (“OCIM”). The Agreement requires funds to be made available to the Company in two tranches. The Company drew down the first tranche of $2.5 million in exchange for delivering 434 ounces of gold per quarter, commencing February 2023, for a total of 1,735 ounces of gold over four quarters.

The Agreement has been accounted for as a contract in accordance with IFRS 15, Revenue from Contracts with Customers. As the total amount paid up-front by OCIM for the future deliveries of gold differs from the stand-alone selling price of the gold, the Company concluded the Agreement contains a significant financing component (“SFC”). Gold deliveries due in connection with the up-front payment are recorded in revenue based on the gold spot price originally established at the time of each advance, being the estimated stand-alone selling price of gold deliveries as determined at inception (after separating the SFC). The outstanding deferred revenue liability will accrue interest reflecting the cost of financing.

	Amount
As at August 31, 2022	$	2,485
Accretion of deferred revenue		127
Transaction costs expensed		15
As at November 30, 2022	$	2,627

9

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

10. Derivative warrant liabilities

	Amount
As at August 31, 2022	$	6,849
Change in fair value		(3,365	)
As at November 30, 2022	$	3,484

Derivative warrant liabilities of $3.5 million will only be settled by issuing equity of the Company.

Fair values of derivative warrant liabilities were calculated using the Black-Scholes option pricing model with the following assumptions:

	November 30, 2022		August 31, 2022
Share price	$	0.34	$	0.48
Risk-free interest rate		3.91% - 4.66%		3.32% - 3.44%
Dividend yield		0%		0%
Expected volatility		55% - 57%		55% - 60%
Remaining term (in years)		0.7 – 4.2		0.9 – 4.4

The fair value is classified as level 3 as the expected volatility 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, 2022 would increase or decrease by:

	November 30, 2022
10% change in expected volatility		Increase			Decrease
(Loss) income	$	(467	)	$	468

11. Earnings (loss) per share

	Three months ended November 30,
	2022		2021
Net income (loss) attributable to shareholders	$	3,512	$	(2,022	)
Weighted average number of common shares for purposes of basic EPS		276,477,860		254,983,579
Effect of dilutive stock options and warrants		1,221,178		-
Weighted average number of common shares for purposes of diluted EPS		277,699,038		254,983,579

The determination of weighted average number of common shares for the purpose of diluted EPS excluded 7.4 million share options and 42.0 million warrants that were anti-dilutive for the period (2021: 7.4 million share options and 23.4 million share warrants).

12. Share-based payments reserve

Share-based compensation expense for the three months ended November 30, 2022 totaled $0.8 million (November 30, 2021: $1.0 million).

As at November 30, 2022, the Company had 2,910,925 (August 31, 2022 - 2,106,675) share awards available for issuance under the Omnibus Equity Incentive Plan.

10

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

a) Stock options

Canadian Dollars denominated stock options

	Number of stock options		Weighted average exercise price per share
Balance – November 30, 2022 and August 31, 2022		5,336,000	CAD $0.41

Options to purchase common shares carry exercise prices and terms to maturity as follows:

						Remaining
	Number of options				Expiry	contractual
Exercise price	Outstanding		Exercisable		Date	life (years)
C$0.40		2,454,000		2,454,000	October 11, 2026		3.9
C$0.43		2,782,000		2,782,000	September 29, 2026		3.8
C$0.35		100,000		100,000	January 2, 2027		4.1
C$0.41(1)		5,336,000		5,336,000			3.9	(1)

⁽¹⁾  Total represents weighted average.

US Dollars denominated stock options

	Number of stock options		Weighted average exercise price per share
Balance – November 30, 2022 and August 31, 2022		7,375,000		$0.50

Options to purchase common shares carry exercise prices and terms to maturity as follows:

						Remaining
Exercise price	Number of options				Expiry	contractual
Outstanding $	Outstanding		Exercisable		Date	life (years)
USD $0.50		7,375,000		1,475,000	August 17, 2027		4.7

Share-based payment expenses related to stock options amounted to $0.1 million for the three-month period ended November 30, 2022 (November 30, 2021 - nil).

b) Restricted Share Units (“RSUs”):

The following table sets out activity with respect to outstanding RSUs:

	Number of RSUs
Balance – August 31, 2022		1,855,276
Vested		(600,000	)
Forfeited		(160,000	)
Balance – November 30, 2022		1,095,276

Share-based payment expenses related to RSUs amounted to $0.2 million for the three-month period ended November 30, 2022 (November 30, 2021 - nil).

11

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

13. Warrants reserve

	Number of warrants		Weighted average exercise price per share
Balance – November 30, 2022 and August 31, 2022		41,970,074		0.72

As at November 30, 2022, the following warrants were outstanding:

	Number of Warrants		Exercise price		Expiry date
Convertible debenture warrants - July 27, 2020		3,002,037	$	1.21	July 27, 2023
Private placement financing warrants - December 23, 2020		2,777,268	$	1.50	December 23, 2023
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, 2022		41,970,074

The outstanding warrants have a weighted average exercise price of $0.72 and weighted average remaining contractual life of 3.3 years.

14. Non-controlling interest

Summarized financial information for Buckreef is disclosed below:

	Three months ended November 30,
Income Statement	2022		2021
Revenue	$	9,718	$	-
Comprehensive earnings (loss) for the period		3,662		(301	)

Statement of Financial Position	November 30, 2022			August 31, 2022
Current assets	$	8,283		$	7,253
Non-current assets		57,430			53,789
Current liabilities		(8,448	)		(8,602	)
Non-current liabilities		(3,995	)		(2,815	)
Advances from parent, net		(37,709	)		(37,725	)

12

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

15. 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:

	Three months ended November 30,
Directors and key management personnel	2022		2021
Remuneration (1)	$	459	$	399
Share-based compensation expense		714		980
Total directors and key management personnel	$	1,173	$	1,379

 ⁽¹⁾ Remuneration includes salaries and benefits for certain key management personnel and director fees. Certain members of the board of directors have employment or service contracts with the Company. Directors are entitled to director fees and share based payments for their services and officers are entitled to cash remuneration and share based payments for their employment services.

As at November 30, 2022, included in amounts payable is $0.2 million of board fees (August 31, 2022 - $0.2 million) due to related parties with no specific terms of repayment.

During the three-month period ended November 30, 2022, $0.1 million for the stock options granted to key management personnel was expensed (November 30, 2021 - nil) and $0.2 million for RSUs granted to directors was expensed (November 30, 2021 - nil).

During the year ended August 31, 2021, the Company granted common shares upon hiring key management personnel in the aggregate of:

a) 1.56 million common shares having a fair market value of $1.1 million on the respective start dates of the key Management (December 1, 2020 to May 18, 2021).

b) Common shares on the first, second and third anniversary dates of the greater of up to 2.02 million, 3.55 million and 2.82 million common shares; or common shares having a fair market value of to $1.4 million, $2.5 million and $2.0 million provided that 80% of such issuance shall be guaranteed and 20% shall be subject to certain financial milestones to be determined by the Board of Directors respectively.

The common shares had a value of $7.0 million at grant date that is amortized over the service period.

During the three-month period ended November 30, 2022, $0.8 million related to common shares granted to key management personnel was expensed (November 30, 2021 - $1.0 million).

13

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

16. General and administrative expenses

	Three months ended November 30,
	2022		2021
Directors’ fees (Note 15)	$	107	$	73
Insurance		99		122
Office and general		19		108
Shareholder information		128		113
Professional fees		101		152
Salaries and benefits(1)  (Note 15)		484		628
Consulting		51		45
Share-based compensation expense(1)  (Note 15)		753		980
Travel and accommodation		47		43
Depreciation(1)		40		81
Other		8		-
Total general and administrative expenses	$	1,837	$	2,345

 ⁽¹⁾ As a result of adoption to amendments to IAS 16, Property, Plant and Equipment, during the year ended August 31, 2022, certain costs incurred related to Buckreef’s operating costs, post adoption, were recorded in cost of sales.

17. Income tax

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 70% of its taxable profit for the current year. The remaining 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 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.

For the three months ended November 30, 2022, the Company recorded income tax expense of $1.5 million, comprised of current income tax expense of $0.4 million and deferred income tax expense of $1.1 million (November 30, 2021 - nil).

18. Financial instruments

Fair value of financial instruments

Cash and 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 cash, amounts receivable, 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, 2022 and August 31, 2022, cash was classified as Level 1 and derivative warrant liabilities (Note 10) were classified as Level 3 under the fair value hierarchy.

14

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

19. Segmented information

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:

	Three months ended November 30,
Revenue	2022		2021
Tanzania	$	9,718	$	-
Total revenue	$	9,718	$	-

Non-current assets	November 30, 2022		August 31, 2022
Canada	$	65	$	-
Tanzania		59,668		55,993
Total non-current assets	$	59,733	$	55,993

20. Commitments and contingencies

Commitments:

In order to maintain its existing mining and exploration licenses, the Company is required to pay annual license fees totalling $24. As at November 30, 2022 and August 31, 2022, 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, 2022 and August 31, 2022.

15

TRX Gold Corporation

Notes to the Interim Condensed Consolidated Financial Statements

For the three months ended November 30, 2022 and 2021

(Unaudited)

(Expressed in Thousands of US dollars, except for share and per share amounts)

21. Non-cash items

	Three months ended November 30,
	2022			2021
Depreciation	$	233		$	81
Gains on derivative warrant liabilities (Note 10)		(3,365	)		(208	)
Share-based compensation expense (Note 12)		809			980
Accretion of provision for reclamation		35			34
Deferred income tax expense (Note 17)		1,129			-
Accretion of lease liabilities		5			-
Accretion of deferred revenue (Note 9)		127			-
Foreign exchange gains		(4	)		-
Other expenses		15			-
Total non-cash items	$	(1,016	)	$	887

16

EX-99.2

Exhibit 99.2

 

TRX GOLD CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three-month period ended November 30, 2022

Management’s Discussion and Analysis November 30, 2022  

The following Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of operations for TRX Gold Corporation (“TRX Gold” or the “Company”) should be read in conjunction with the Company’s unaudited interim consolidated financial statements for the three months ended November 30, 2022, as well as the Company’s audited consolidated financial statements included in the Company's Annual Report on Form 40-F and Annual Information Form for the year ended August 31, 2022. The financial statements and related notes of TRX Gold have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Additional information, including our press releases, has been filed electronically on SEDAR and is available online under the Company’s profile at www.sedar.com and on our website at www.TRXGold.com.

This MD&A reports our activities through January 12, 2023 unless otherwise indicated. References to the 1^st quarter of 2023 or Q1 2023, and references to the 1^st quarter of 2022 or Q1 2022 mean the three months ended November 30, 2022 and 2021, respectively. Unless otherwise noted, all references to currency in this MD&A refer to US dollars. Unless clearly otherwise referenced to a specific table, numbers referenced refer to numbered Endnotes on page 33.

Mr. Andrew Mark Cheatle, P.Geo., MBA, ARSM, is the Company’s in-house Qualified Person under National Instrument 43-101 “Standards of Disclosure for Mineral Projects” (“NI 43-101”) and has reviewed and approved the scientific and technical information in this MD&A. Mr. Cheatle is the Chief Operating Officer and a Director of TRX Gold and a Director of the Company’s subsidiaries, including Buckreef Gold Company Limited (“Buckreef Gold”) and TRX Gold Tanzania Limited (“TRX Gold Tanzania”). Therefore, he is not considered to be independent under NI 43-101. Mr. Cheatle has over 30 years of relevant industry experience, a Master of Business Administration (MBA) from Capella University, USA (2005), and an Honours Degree in Geology from the Royal School of Mines, Imperial College, London, UK (1985). He is a registered professional geoscientist with Professional Geoscientists of Ontario, Canada (Reg. No. 0166).

Disclosure and Cautionary Statement Regarding Forward Looking Information

This MD&A contains certain forward-looking statements and forward-looking information, including without limitation statements about TRX Gold’s future business, operations and production capabilities. All statements, other than statements of historical fact, included herein are forward-looking statements and forward-looking information that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Although TRX Gold believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance. The actual achievements of TRX Gold or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors. These risks, uncertainties and factors include general business, legal, economic, competitive, political, regulatory and social uncertainties; actual results of exploration activities and economic evaluations; fluctuations in currency exchange rates; changes in costs; future prices of gold and other minerals; mining method, production profile and mine plan; delays in exploration, development and construction activities; changes in government legislation and regulation; the ability to obtain financing on acceptable terms and in a timely manner or at all; contests over title to properties; employee relations and shortages of skilled personnel and contractors; and the speculative nature of, and the risks involved in, the exploration, development and mining business.

1 

Management’s Discussion and Analysis November 30, 2022  

Certain information presented in this MD&A may constitute “forward-looking statements” and “forward looking information” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and under securities legislation applicable in Canada, respectively. Such forward-looking statements and information are based on numerous assumptions, and involve known and unknown risks, uncertainties, and other factors, including risks inherent in mineral exploration and development, which may cause the actual results, performance, or achievements of the Company to be materially different from any projected future results, performance, or achievements expressed or implied by such forward-looking statements and information. Investors are referred to our description of the risk factors affecting the Company, as contained in our U.S. Securities and Exchange Commission (“SEC”) filings, including our Annual Report on Form 40-F and Report of Foreign Private Issuer on Form 6-K, and our Annual Information Form also posted on SEDAR, for more information concerning these risks, uncertainties, and other factors.

TRX Gold Corporation

TRX Gold is rapidly advancing the Buckreef Gold Project. Anchored by a Mineral Resource published in May 2020, the project currently hosts an NI 43-101 Measured and Indicated Mineral Resource of 35.88 million tonnes (“MT”) at 1.77 grams per tonne (“g/t”) gold containing 2,036,280 ounces (“oz”) of gold and an Inferred Mineral Resource of 17.8 MT at 1.11g/t gold for 635,540 oz of gold. The leadership team is focused on creating both near-term and long-term shareholder value by increasing gold production to generate positive cash flow. The positive cash flow will be utilized for exploratory drilling with the goal of increasing the current gold Resource base and advancing the Sulphide Ore Project which represents 90% of current gold Resources. TRX Gold’s actions are led by the highest environmental, social and corporate governance (“ESG”) standards, evidenced by the relationships and programs that the Company has developed during its nearly two decades of presence in Geita Region, Tanzania. Please refer to the Company’s Updated Mineral Resources Estimate for Buckreef Gold Project, dated May 15, 2020 and filed under the Company’s profile on SEDAR and with the SEC on June 23, 2020 (the “Technical Report”), for more information.

2 

Management’s Discussion and Analysis November 30, 2022  

First Quarter 2023 Highlights

Q1 2023 was a significant quarter for the Company as Buckreef Gold declared commercial production on the expanded 1,000+ tpd processing plant and began operating the expanded plant at full design capacity beginning in November 2022. During Q1 2023 the Company recorded its highest quarterly: (i) production, (ii) sales, (iii) gross profit, (iv) net income, (iv) operating cash flow, and (v) Adjusted EBITDA, at a low cash cost¹ of $732 per ounce of gold. During the quarter, the Company continued to use cash flow from operations to fund reinvestment in Buckreef Gold. The Company continued to advance its drilling campaign, including infill drilling, step-out drilling and grade control drilling and announced positive assay results from the metallurgical variability program on the Main Zone and step-out drilling program to the southwest. These positive results continue to demonstrate the immense opportunity at Buckreef Gold and reflect successful execution of the Company’s sustainable business plan where cash flow from operations funds value creating activities - including exploration and growth.

Key highlights for Q1 2023 include:

· The Company achieved zero lost time injuries (“LTI”) and had no confirmed COVID-19 cases at site;

· The Company achieved a significant safety milestone of 1.0 million operating hours with no LTI.

· In September 2022, Buckreef Gold announced successful commissioning of the expanded 1,000+ tpd processing plant, which was completed on time and on budget (capital cost of $4.0 million). The plant ramped up throughput and reached nameplate capacity of 1,000+ tpd at the end of October 2022. Commercial production of the 1,000+ processing plant was declared effective November 2022.

· Poured 5,395 ounces of gold in Q1 2023, a new quarterly production record at Buckreef Gold. Sold 5,754 ounces of gold in Q1 2023, a new quarterly sales record resulting in positive operating cash flow for the Company of $6.6 million.

· Recognized revenue of $9.7 million in Q1 2023, cost of sales of $4.4 million, and cash costs¹ of $732 per ounce of gold, generating gross profit of $5.3 million, gross profit margin of 55% and Adjusted EBITDA¹ of $4.4 million.

· The Company completed over 4,665 meters of diamond drilling at Buckreef Gold including infill drilling, step-out drilling and grade control drilling.

· Subsequent to quarter end, the Company announced positive assay results from its 19-hole metallurgical variability sampling program on the Buckreef Gold Main Zone and assay results from the southwest Main Zone drilling.

3 

Management’s Discussion and Analysis November 30, 2022  

2023 Outlook

· Fiscal 2023 (“F2023”) production and cost guidance ranges are unchanged from when they were originally estimated and released in November 2022.

· The Company continues to expect gold production from the 1,000+ tpd processing plant for F2023 to be between 20,000 - 25,000 ounces at total average cash costs¹ of $750 - $850 per ounce.

· Mining, crushing, processing and gold production are all expected to operate at full capacity during F2023 following initial ramp-up and commissioning of the 1,000+ tpd processing plant during Q1. Higher production is expected in the second half (H2) of the year as the processing plant achieved steady state operation at nameplate capacity of 1,000+ tpd at the end of October 2022.

· Operating cash flow from the 1,000+ tpd processing plant will be reinvested in Buckreef Gold with a focus on value enhancing activities, including: (i) exploration and drilling with a focus on potential resource expansion at Buckreef Main (northeast and south), Buckreef West, Anfield, Eastern Porphyry extension, Bingwa and Tembo; (ii) additional capital programs focused on further plant expansions and production growth; and (iii) enhanced corporate social responsibility/ESG programs.

· The Company continues to advance a project the Company initiated aimed at increasing the average annual throughput by 75-100% through the addition of a new ball mill. Detailed engineering and procurement of equipment has commenced. Construction is expected to start in F2023 and potentially benefit production in late calendar H2 2023. Any incremental production as a result of this expansion has not been considered in the F2023 guidance above.

· The Company continues to expect exploration spending in F2023 to include diamond drill and reverse circulation drilling services provided by the State Mining Company of Tanzania (“STAMICO”) for a program which includes; brownfields drilling at Buckreef Main Zone (NE and SW), Buckreef West, Eastern Porphyry, and greenfield drilling at Anfield. Sterilization drilling will commence at site expansion facilities, including tailings storage and waste rock facilities.

· The Sulphide Development Project, in which the ‘sulphide ore’ encompasses approximately 90% of the Buckreef Main Zone’s Measured and Indicated Mineral Resources, is a key mid-to-long term value driver. Unlocking this value is an important business objective for the Company. The Sulphide Development Project will evaluate the options for a high return large scale project. It is the goal of the Company to exceed the metrics outlined in the 2018 Technical Report, including annual production, strip ratios and key financial metrics. The Company continues to work with our principal consultants on advancing the Sulphide Development Project, including advanced metallurgical testing across the deposit and geotechnical studies for a deeper pit. The Company has started assessing a significantly larger sulphide ore processing facility.

4 

Management’s Discussion and Analysis November 30, 2022  

First Quarter 2023 Operational and Financial Details

Mining and Processing

· Buckreef Gold reported zero LTI and had no confirmed COVID-19 related cases at site during the three months ended November 30, 2022. For the three months ended November 30, 2022, including contractors, Buckreef Gold recorded a safety incident frequency rate of 0 (per million hours). The Company’s two main contractors, FEMA Mining and STAMICO Drilling, also recorded a safety incident frequency rate of 0 (per million hours). Also, in Q1 2023, the Company achieved a significant safety milestone of 1.0 million operating hours with no LTI.

· In September 2022, Buckreef Gold announced that the 1,000+ tpd oxide mill circuit was commissioned and was ramping up production from its initial 360 tpd capacity. The expanded processing plant construction was completed in line with the scheduled completion date of calendar Q3 2022 at a capital cost of $4 million, also within guidance. First ore was introduced to the expanded processing plant in September 2022 and site ramped up throughput, rapidly reaching nameplate capacity of 1,000+ tpd at the end of October 2022. Commercial production of the 1,000+ processing plant was declared in November 2022.

· During Q1 2023, Buckreef Gold poured 5,395 ounces of gold and sold 5,754 ounces of gold, both quarterly records for the Company. The 49% increase in gold production in Q1 2023 compared to Q4 2022 is mainly attributable to an increase in ore tonnes milled following commissioning of the expanded 1,000+ tpd processing plant in Q1 2023.

· The 1,000+ tpd processing plant achieved the following in Q1 2023: (i) average throughput of 847 tpd; (ii) plant availability of 95%; and (iii) average recovery rate of 91%.

· Total ore mined of 68 thousand tonnes (“kt”) in Q1 2023 was consistent with Q4 2022. Total waste mined of 438 kt were 147 kt above Q4 2022 contributing to a strip ratio of 6.5 (waste:ore tonnes) and a total of 506 kt of material mined. During Q1 2023 the Company expedited waste stripping to access a greater extent of ore, including higher grade blocks.

· As at November 30 2022, the run-of-mine (“ROM”) pad contained 103,140 tonnes at an average grade of 1.21 g/t with an estimated 4,006 ounces of gold. A further stockpile of crushed mill feed of 5,309 tonnes at 2.45 g/t containing an estimated 418 ounces of gold has been accumulated between the crusher and mill. During Q1 2023, the Company processed stockpiled and mined material to commission the expanded 1,000+ tpd processing plant (which includes 7 new large carbon-in-leach (“CIL”) tanks) and consequently reported an increase of gold in circuit, reflecting a buildup of metal inventory in the CIL tanks during plant commissioning. The net result being a substantial increase of gold in circuit from 230 ounces at August 31, 2022 to 1,751 ounces at November 30, 2022. The stockpile balance provides support for the Company to meet its production guidance in the upcoming quarters.

· Tailings storage facilities (“TSF”) (TSF 2, pond 1 and pond 2) have significantly advanced and are on track to provide an additional two years of storage. Concurrently, the Company has identified two local sites for a long-term tailings storage solution. Engineering design will commence in Q2 2023.

5 

Management’s Discussion and Analysis November 30, 2022  

Exploration

· In Q1 2023, the Company drilled 21 holes representing 4,665 meters at Buckreef Gold including infill drilling at Buckreef Main and exploration drilling at Anfield and Eastern Porphyry. Assay results from the latter two programs are pending.

· The Company has also drilled to the southwest (“SW”) of the Main Zone, beyond and under the historical South Pit (24 drill holes representing 4,255 meters). Assay results from both wide spaced drill programs are encouraging with wide zones of mineralization encountered in some holes that are comparable to present mining areas. Importantly, the deposit now remains open on strike to the southwest, northeast and at depth, and since drilling recommenced in 2021, an additional 500 meters of gold mineralization (along strike and representing approximately 30% increase in deposit strike length) have been identified. The identification of the additional 500 meters of strike length to the deposit provides future opportunity for the Company to potentially add additional mineral resources to inventory.

· The Company received significant assay results for the metallurgical testing program, the results of which demonstrate: (i) continuity of mineralization down dip and along strike of the deposit; and (ii) excellent width and grade of mineralization. As part of the upcoming metallurgical variability study, using core from this program, the Company will assess the amenability of the sulphide material to be processed through the existing processing plant, using its relatively simple flowsheet. In turn, this may have positive implications for potential plant expansions.

Sulphide Development Project

· Buckreef Gold has commenced the long-lead items for de-risking the Sulphide Development Project, including: (i) geotechnical characterization to determine the ultimate pit slopes of the 2 kilometre long open pit. This work commenced in Q2 2022 with consultants SGS Canada Inc (“SGSC”) and Terrane Geoscience Inc; and (ii) the variability metallurgical study for the first 5-7 years of potential production of the Sulphide Development Project. To date a total of 19 metallurgical holes (2,367 meters) have been completed along the entire strike of the Buckreef Main deposit. These holes have now been prepared for shipment for metallurgical testing at the successful bidding laboratory.

· The Company, in conjunction with Ausenco, has identified potential locations for the sulphide ore processing plant, dry stack tailings facility, waste rock piles and other associated infrastructure. All locations are subject to successful ‘condemnation drilling’, which will commence in fiscal Q2 2022.

· The exploration drilling program will also focus on infill and expansion drilling at Eastern Porphyry, Buckreef West, inferred mineral resources and strike extensions, both to the northeast and southwest of the Main Zone - which if successful, has the potential to increase tonnes to the indicated mineral resource category.

Environmental, Social and Corporate Governance

· The Company is committed to working to high ESG standards and is implementing several community programs, while continuing to develop a broader framework and policies. There were no reportable environmental or community related incidents during the quarter ended November 30, 2022. Buckreef Gold continued to develop its ESG program during the quarter, successfully partnering with the Geita District and District Commissioners on school, water and health projects.

· Buckreef Gold worked with the Geita District Council and local wards to collaboratively identify key programs that focus on short to long term educational needs, which in turn is aligned with Buckreef Gold’s local hiring practices and includes Science, Technology, Engineering and Mathematics (STEM) and gender goals.

6 

Management’s Discussion and Analysis November 30, 2022  

· A Memorandum of Understanding was signed in Q2 2022 between Buckreef and Geita District Council to provide support around education in the wards of Lwamgasa, Kaseme, Busanda and Bugulula, being the host wards for the mine site. A total of 420 million Tanzania Shillings (approximately $180,000) is budgeted by Buckreef for 2023, commencing July 2022 – June 2023, to support priority areas in agreement with the District Council.

· Buckreef Gold’s operations: (i) are connected to the Tanzanian national electricity grid and utilize grid power which is significantly and increasingly sourced from hydroelectric facilities in Tanzania; (ii) recycle all water used in its operations; (iii) do not discharge water from its operations; (iv) employ a workforce that comprises 100% Tanzanian citizens (110 full-time employees, 249 contract miners and project contractors); (v) include development and building activities that are focused on maximizing local content; and (vi) exhibit a ‘100 mile diet’ by procuring all food locally. In addition, the Company’s sulphide development operations are expected to utilize dry stack tailings.

· The Company supports local procurement in its activities by first sourcing within the immediate wards, then out to district, region and nation. Only those items or services not available in Tanzania are purchased externally, first prioritizing East Africa, Africa, then globally.

· The Company will continue to develop a broader ESG program, including reporting aligned with definitions from the World Economic Forum (WEF), and identifying its contributions to the United Nations Sustainable Development Goads (SDGs) over the course of F2023.

Financial

· Gold ounces poured during Q1 2023 were 5,395 ounces – a quarterly production record for Buckreef Gold. Gold ounces sold were 5,754 ounces at an average realized price¹ of $1,689 per ounce.

· Following record production and sales during Q1 2023, the Company recognized revenue of $9.7 million, cost of sales of $4.4 million and cash costs¹ of $732 per ounce, generating gross profit of $5.3 million (55% gross profit margin), quarterly net income of $5.2 million, operating cash flow of $6.6 million and Adjusted EBITDA¹ of $4.4 million.

· As at November 30, 2022, the Company had cash of $8.9 million and working capital of $4.8 million after adjusting for derivative liabilities which will only be settled by issuing equity of the Company.

· As the Company advances and the production profile expands, management continually evaluates its liquidity requirements and available sources of financing including but not limited to: (i) cash flow from operations; (ii) corporate debt; (iii) project specific debt; (iv) off-take financing; and (v) equity financing. The Company will be prudent in how it capitalizes the Company over the short, medium and long-term with shareholder value being an overarching consideration.

· During Q4 2022, the Company announced that its operating subsidiary, Buckreef Gold Corporation Limited, entered into a pre-paid gold purchase agreement with a contract price totaling US$5 million with OCIM Metals & Mining SA (“OCIM”). The total contract price can be made available to Buckreef Gold in tranches with a $2.5 million upfront tranche and further tranches to be drawn over the next 18 months at Buckreef Gold’s option. During Q1 2023, the Company drew down the first tranche of $2.5 million in exchange for delivering 434 ounces of gold per quarter, commencing February 2023, for a total of 1,735 ounces of gold over four quarters.

Other

· The Company, along with land management consultants at Property Matrix, finalized ‘addendum payments’ for the remaining land compensation claims. ‘Addendum payments’ are characterized as those claims made as part of the locally defined process and were made after the successful completion of 98% of claims by Project Affected Persons. The final ‘addendum’ amounts will be paid in fiscal Q2 2023. In total, approximately $2.7 million have been distributed to local land and property owners.

7 

Management’s Discussion and Analysis November 30, 2022  

Operational Overview

The Buckreef Gold Project

The Company is focused on the Buckreef Gold Project located in the Geita District of the Geita Region south of Lake Victoria, approximately 110 km southwest of the City of Mwanza, Tanzania (Figure 1). The Buckreef Gold Project area can be accessed by ferry across Smiths Sound, via a paved national road and, thereafter, via well maintained unpaved regional roads. The Buckreef Gold Project comprises five prospects, namely Buckreef, Bingwa, Tembo, Eastern Porphyry and Anfield. The Buckreef Gold Project itself encompasses three main mineralized zones: Buckreef South, Buckreef Main and Buckreef North. The Buckreef Gold Project is fully licensed for mining and the extraction of gold.

The Buckreef Gold Project Mineral Resources as of May 15, 2020, are as follows:

	Measured				Indicated				Inferred				Total (Measured + Indicated)
		Tonnes	Grade	Au		Tonnes	Grade	Au		Tonnes	Grade	Au		Tonnes	Grade	Au
Area		MT	g/t	Oz		MT	g/t	Oz		MT	g/t	Oz		MT	g/t	Oz
Buckreef		19.98	1.99	1,281,160		15.89	1.48	755,120		17.82	1.11	635,540		35.88	1.77	2,036,280
Eastern Porphyry		0.09	1.20	3,366		1.02	1.17	38,339		1.24	1.39	55,380		1.10	1.18	41,705
Tembo		0.02	0.99	531		0.19	1.77	10,518		0.27	1.92	16,461		0.20	1.70	11,048
Bingwa		0.90	2.84	82,145		0.49	1.48	23,331		0.22	1.49	10,541		1.39	2.36	105,477
Total		20.99	2.03	1,367,202		17.59	1.46	827,308		19.55	1.14	717,922		38.57	1.77	2,194,510

Note: Main Zone at 0.4 g/t cut-off, and Eastern Porphyry, Bingwa and Tembo at 0.5 g/t cut-off

Mineral Resources inclusive of Mineral Reserves

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability

All resources below 540 mRL are classified as inferred

Estimates over variable widths of 2 to 40 meters

Bulk Density ranges 2.0 g/cm³ to 2.8 g/cm³

55% attributable to the Company

Effective Date: May 15, 2020

Mineral Reserves remained as of the May 15, 2020 Technical Report and are tabulated below.

	Tonnes	Grade	In Situ Gold Content
Buckreef Reserves	(Mt)	Au (g/t)	Kg	oz
Proven-Stockpile	119,726	1.86	223	7,160
Proven	9,352,183	1.72	16,092	517,358
Probable	9,730,764	1.36	13,265	426,492
Mineral Reserves	19,202,673	1.54	29,580	951,010

1) Mineral Reserves is inclusive of Mineral Reserve shapes, mining recovery, mining dilution and open pit preproduction development costs. Mineral Reserve estimate includes dilution.

2) Mineral Reserve was estimated using NI 43-101F compliant Standards on Mineral Resources and Reserves, Definitions.

3) Contained metal may differ due to rounding.

Mineral Resource and Reserve Statements

The Company did not conduct any new work that would warrant material changes in the previously reported Mineral Resource and Mineral Reserve statements during this reporting period.

8 

Management’s Discussion and Analysis November 30, 2022  

Figure 1: Location of Buckreef Gold Project Licences on Lake Victoria Greenstone Belt

9 

Management’s Discussion and Analysis November 30, 2022  

Processing Plant and Operations

In September 2022 Buckreef Gold announced that the 1,000+ tpd oxide mill circuit was commissioned and was ramping up production from its original 360 tpd capacity. First ore was introduced to the expanded processing plant in September 2022 and the team ramped up throughput reaching nameplate capacity of 1,000+ tpd at the end of October 2022. Commercial production of the 1,000+ processing plant was declared in November 2022.

Select operating, financial and stockpile information from the expanded operation follows below:

Select Operating and Financial Data

	Unit		Three months ended November 30, 2022		Three months ended November 30, 20211
Operating Data
Ore Mined	k tonnes		68		28
Waste Mined	k tonnes		438		88
Total Mined	k tonnes		506		116
Strip Ratio	w:o		6.5		3.1
Mining Rate	tpd		5,557		1,275
Mining Cost (Variable)	US$/t	$	3.17	$	2.84
Plant Ore Milled	k tonnes		77.1		8.4
Head Grade	g/t		3.06		2.71
Plant Utilization	%		95		81
Plant Recovery Rate	%		91		90
Processing Cost (Fixed)	US$ ('000s)	$	187	$	154
Processing Cost (Variable)	US$/t	$	18.51	$	17.56
Plant Mill Throughput	tpd		847		93
Gold Ounces Poured	oz		5,395		589
Gold Ounces Sold	oz		5,754		390
Financial Data2
Revenue3	$('000s)		9,718		—
Gross Profit	$('000s)		5,310		—
Net income (loss)	$('000s)		5,160		(2,158	)
Adjusted EBITDA4	$('000s)		4,412		(1,347	)
Operating Cash Flow	$('000s)		6,648		(2,955	)
Average Realized Price4	$/oz		1,689		—
Cash Costs4	$/oz		732		—

¹ Months Sept/Oct 2021 reflect 120 tpd test plant operations. November 2021 reflect operations from the newly commissioned 360 tpd processing plant.

² Note that the table above does not present comparative statistics for revenue, costs of good sold and related sales and cost metrics for the three month comparable period as Buckreef Gold early adopted the IAS 16 amendment as disclosed in the three and six months ended February 28, 2022 financial statements. Gold sales and related costs prior to that date were capitalized to exploration and evaluation assets and expenditures.

³ Revenue includes immaterial amounts from the sale of by-product silver and copper.

⁴ Refer to the "Non-IFRS Performance Measure" section.

10 

Management’s Discussion and Analysis November 30, 2022  

Operations Discussion

Gold Production and Sales

During Q1 2023, Buckreef Gold poured 5,395 ounces of gold and sold 5,754 ounces of gold, both new quarterly records for the Company. Gold ounces produced and sold reflected an increase relative to the prior year comparative period mainly due to an increase in plant throughput following commissioning of the expanded 1,000+ tpd processing plant in Q1 2023. Figures 2 to 6 illustrate several of the accomplishments detailed in the Operations Discussion.

Mining

Total ore mined in Q1 2023 increased to 68 thousand tonnes (kt) from 28 kt in the comparative prior year period following successful ramp-up and commissioning of the 1,000+ tpd processing plant during Q1 2023. In Q1 2023 total waste mined was 438 kt contributing to a strip ratio of 6.5 (waste:ore tonnes) and a total of 506 kt of material mined. During Q1 2023 the Company expedited waste stripping to access a greater extent of ore, including higher grade blocks.

Mining costs per tonne (variable) primarily reflect contractor mining costs following the hiring of FEMA in Q1 2022 on a two-year contract to mine ore, waste and to construct the TSF at Buckreef Gold. Mining costs per tonne (variable) of $3.17 in Q1 2023 were lower as compared to Q4 2022 ($3.64) primarily due to the impact of higher tonnes mined on the fixed portion of the mining contractor management fee combined with a decrease in blasting activity during Q1 2023 as compared to Q4 2022, as Buckreef Gold had increased blasting in the prior year as the Company ramped up mining operations in preparation for 1,000+ tpd processing plant commissioning. Mining cost per tonne was higher than the prior year comparative period ($2.84) mainly due to the impact of higher fuel prices on higher tonnes mined as the Company continued to operate the 120 tpd test plant during the three months ended November 30, 2021.

Processing

The 1,000+ tpd processing plant was commissioned in September 2022 and reached nameplate capacity at the end of October 2022. In Q1 2023, the expanded processing plant achieved the following statistics: (i) average throughput of 847 tpd; (ii) plant availability of 95%; and (iii) an average recovery rate of 91% with consistent tailings grade, regardless of head grade.

For the three months ended November 30, 2022, processing costs per tonne (variable) of $18.51 were higher than Q4 2022 ($14.45) mainly due to an increase in power utilization, fuel consumption, reagents and consumables associated with the first-fill of the expanded 1,000+ tpd processing facility which was commissioned during Q1 2023. Processing cost per tonne was higher than the prior year comparative period ($17.56) also due to an increase in power, fuel, chemicals and reagents following expansion of the processing plant from 120 tpd to 360 tpd during Q1 2022 followed by a further expansion to 1,000+ tpd in Q1 2023.

11 

Management’s Discussion and Analysis November 30, 2022  

Stockpile, Gold in Circuit (GIC) and Finished Goods Inventory

As at November 30, 2022, Buckreef Gold reported the following stockpile statistics: (i) the ROM pad contained 103,140 tonnes at an average grade of 1.21 g/t with an estimated 4,006 ounces of gold; and (ii) crushed mill feed of 5,309 tonnes at 2.45 g/t containing an estimated 418 ounces of gold. During Q1 2023, the Company processed stockpiled and mined material to commission the expanded 1,000+ tpd processing plant (which includes 7 new large CIL tanks) and consequently reported an increase of gold in circuit, reflecting a buildup of metal inventory in the CIL tanks during plant commissioning. The net result being a substantial increase of gold in circuit from 230 ounces at August 31, 2022 to 1,751 ounces at November 30, 2022. The significant stockpile and GIC balance at November 30, 2022 provide support for the Company to meet its production guidance in the upcoming quarters.

A summary of the ROM pad and crushed ore stockpile statistics are contained in Table 1 below:

Table: RoM Stockpile Summary (as at 30 November 2022)
Summary RoM Stockpile	Volume (m3)	Tonnes	Grade (g/t Au)	Metal (oz)
High Grade	1,010	1,492	3.42	164
Medium Grade	27,352	48,554	1.63	2,539
Low Grade	31,319	53,094	0.76	1,303
Total (RoM)	59,681	103,140	1.21	4,006
Crushed Ore (COS)	3,296	5,309	2.45	418
Total	62,977	108,449	1.27	4,425

12 

Management’s Discussion and Analysis November 30, 2022  

Figure 2: Buckreef Gold Mine Oxide Mineral Reserve Starter Pit (Blasting Activity Q1 2023)

 

Figure 3: 1,000 tpd Processing Plant at Buckreef Gold Mine, showing new CIL tanks and conveyor feed to the new ball mills (Q1 2023)

 

13 

Management’s Discussion and Analysis November 30, 2022  

Figure 4: Buckeef Gold Expanded 1,000 tpd Processing Plant, showing installation of two new 360 tpd ball mills (Q1 2023)

 

14 

Management’s Discussion and Analysis November 30, 2022  

Figure 5: Buckreef Gold Exploration Drilling (Q1 2023)

 

Figure 6: Buckreef Gold Drilling Contractors Making Survey Readings (Q1 2023)

15 

Management’s Discussion and Analysis November 30, 2022  

Exploration & Mineral Resources

TRX Gold and Buckreef Gold continue to evaluate the full potential of the Buckreef Gold property and identify opportunities for the discovery of additional mineral resources and their conversion to mineral reserves. Successful exploration will also provide greater production flexibility and growth. To achieve this goal the Company, in conjunction with Buckreef Gold, has:

· Re-evaluated the Buckreef Main Zone for strike extensions, off-shoot splays, and at depth potential. The deposit is open in all directions (See Figures 7 & 8). To date, the Company has tested the NE Extension and successfully identified gold mineralization over an additional 300 meters. The deposit remains open along strike to the northeast. The southwest extension has also been tested with wide spaced drilling and the exploration program has returned encouraging results. The deposit now remains open along strike to the southwest;

· Collectively, between the northeast extension and southwest drilling the known strike extent of the deposit has been expanded 500 meters, or by nearly 30% since exploration recommenced. The Company will now identify the areas offering the best opportunity to add gold ounces to the mineral resource inventory and commence an infill drilling program; and

· During the quarter the Company commenced drilling at Anfield and the Eastern Porphyry zones. Both zones represent compelling exploration targets to the Company. In 2021 the Company discovered the Anfield Zone, a set of parallel structures 200 - 500 meters to the east of the Buckreef Main Zone and with evidence of an additional strike length of 3 km of shear zone targets (Figure 8). Furthermore, the Anfield trend aligns and is on strike with the Eastern Porphyry zone to the northeast and a neighboring small scale mine to the southwest.

Buckreef Gold – Fiscal Q1 2023 Exploration to Date

During the quarter the Company drilled over 4,665 meters at Buckreef Gold including exploration, infill drilling and step-out drilling.

Buckreef Gold Main Zone Drilling Results and Interpretation

The significant mineralized intercepts of the Buckreef Main Zone are as shown in the Figures 7 & 8. It is evident that the deposit remains open on trend to the northeast and southwest. As previously noted, the Company had initiated a drill program, specifically to explore potential mineralization extensions to the NE and SW and to upgrade shallow Inferred Mineral Resources.

During the quarter the Company received more assay results from its exploration program which has provided another extension of known mineralization on the Buckreef Gold Main Zone (“Main Zone”) trend of approximately 200 meters to the southwest and deeper under the historical South. (These results are published in January 2023). The Company has drilled a total of 24 drill holes representing 4,255 meters in the southwest area, with full results provided in Table 2.

The results are positive and significant for the Company as they continue to demonstrate: (i) continuity of gold mineralization along strike to the southwest of the Main Zone deposit; and (ii) continued gold mineralization under the (historical) South Pit. The deposit, therefore, remains ‘open at depth and on strike,’ and in combination with the 300 m extension of the northeast (announced previously) represents approximately a 30% increase in the Main Zone deposit strike length to over 2.0 kms.

Highlights include:

· Hole BMDD250 intersected 34.80 m grading @ 1.26 g/t Au from 87.2 m, including 10.0 m grading @ 3.08 g/t from 89.9 m; and

· Hole BMDD275 intersected 16.5 m grading @ 2.01 g/t Au from 53.7 m, including 7.0 m grading @ 3.28 g/t from 56.0 m.

Notes: Sample Protocol QA/QC – see endnotes. Sampled widths are not true widths.

16 

Management’s Discussion and Analysis November 30, 2022  

· Extension of Buckreef Main Zone by a further 200 meters: Expansion of the gold deposit mineralization by 300 meters in the northeast and 200 m in the southwest (increases in the strike length of the Buckreef Main Zone to over 2.0 kms) on the Buckreef Gold deposit which already contains over 2.0 million ounces of gold in the Measured and Indicated Mineral Resources in the Buckreef Main Zone. The Buckreef Main Zone continues to be open further to the NE and extending to the Buckreef Special Mining License boundary (see Figures 8 & 9) and to the southwest. In the latter the trend is aligned to several historical artisanal scale miner pits; and

· The Company continued exploration drilling at the Anfield Zone and extended the program to include the Eastern Porphyry Zone, This exploration program combined with the extension of the Buckreef Main Zone is expected to expand the scope and scale of the Buckreef Gold Project.

Table 2: Buckreef Main Zone South Drill Hole Sample Results Summary

Buckreef South Assay Results
Hole ID	Hole Type	Drill Holes Location					Sample Depth		Width (m)	Assay Grade (gpt)	Lithology	Comment
		Easting (m)	Northing (m)	RL (m)	Azimuth	Dip	From (m)	To (m)
BMDD248	DD	391,071.5	9,657,427.0	1,214.5	306	-58	143.0	148.0	5.0	0.45	Msz	Shear zone with Mild alteration
							192.5	198.0	5.5	0.38	Msz	Shear zone with mild alteration
BMDD249	DD	391,042.0	9,657,447.3	1,215.5	306	-54	120.4	128.0	7.6	0.41	Msz	Shear zone with mild alteration
BMDD250	DD	391,114.5	9,658,259.0	1,227.8	306	-60	30.0	33.0	3.0	0.42	Msz	Shear zone with mild alteration
							87.2	122.0	34.8	1.26	Msz	Mineralised shear zone with mild to strong alteration
							89.0	99.0	10.0	3.08	Msz	Shear zone with strong alteration
BMDD252	DD	391,061.7	9,657,528.7	1,216.3	306	-48	34.0	38.7	4.7	0.32	Msz	Shear zone with mild alteration
							79.5	99.0	19.5	0.74	Msz	Mineralised Shear zone with mild alteration
BMDD253	DD	390,927.6	9,657,500.0	1,218.1	126	-51	82.1	85.5	3.4	0.96	Msz	Mineralised shear zone with mild alteration
BMDD254	DD	391,137.4	9,657,821.0	1,220.2	306	-57	56.0	59.8	3.8	1.3	Msz	Mineralised shear zone with mild alteration
BMDD256	DD	391,122.7	9,657,787.0	1,219.6	306	-57	27.9	30.0	2.1	1.21	Msz	Mineralised shear zone with mild to strong alteration
							43.3	45.0	1.7	0.56
							54.0	57.7	3.7	1.73
							77.0	81.0	4.0	0.5
BMDD258	DD	391,078.9	9,657,620.0	1,217.3	306	-50	23.0	25.0	2.0	1.76	Msz	Mineralised shear zone with mild alteration
							41.0	44.0	3.0	0.47
BMDD259	DD	391,156.0	9,657,714.0	1,217.7	306	-53	82.0	83.5	1.5	0.82
							108.0	110.0	2.0	0.71	Msz	Mineralised shear zone with mild alteration
							131.0	136.0	5.0	0.52
BMDD267	DD	390,966.4	9,657,379.9	1,213.7	305	-62	165.0	167.0	2.0	1.41	Msz	Shear zone with mild alteration
BMDD273	DD	390,969.4	9,657,256.9	1,210.3	306	-57	36.1	37.7	1.6	0.49	Msz	Shear zone with mild alteration
BMDD274	DD	390,918.3	9,657,289.7	1,212.0	306	-57	39.4	41.0	1.7	0.78	Msz	Shear zone with mild alteration
BMDD275	DD	390,940.4	9,657,216.0	1,210.0	306	-57	27.5	29.2	1.8	0.51
							43.0	52.1	9.1	0.58
							53.7	70.2	16.5	2.01	Msz	Mineralised shear zone with mild to strong alteration
							56.0	63.0	7.0	3.27
							80.3	84.6	4.3	0.96
BMDD278	DD	390,967.1	9,657,195.1	1,209.2	306	-57	63.6	71.6	8.1	0.65
							83.0	89.3	6.3	1.00	Msz	Mineralised shear zone with mild alteration
							128.0	131.0	3.0	0.74
BMDD279	DD	390,996.1	9,657,175.3	1,208.9	306	-57	41.0	46.0	5.0	1.13
							48.0	51.0	3.0	0.63
							140.6	142.0	1.4	2.72	Msz	Mineralised shear zone with mild to strong alteration
							148.9	159.4	10.5	0.96

Notes: Sample Protocol QA/QC – see endnotes. Sampled widths are not true widths.

17 

Management’s Discussion and Analysis November 30, 2022  

Figure 7: Long section of Buckreef Main Zone (View to the West) Showing 1 Meter Composite Values and Technical Report Pit Outline. Exploration to the NE of the Main Zone is Highlighted

18 

Management’s Discussion and Analysis November 30, 2022  

Figure 8: NE Buckreef Main Zone Exploration Target Highlighted and in Relation to the Anfield Zone

19 

Management’s Discussion and Analysis November 30, 2022  

Figure 9: Map Showing Mineralization Extension and Location of Drill Results at Buckreef Main Zone Southwest Extension

20 

Management’s Discussion and Analysis November 30, 2022  

Sulphide Development Project – Preliminary Metallurgical Results and Ongoing Test Work

The Company continues to work on its mid-long-term sulphide development project and has received assay results from its 19-hole metallurgical variability sampling program on the Buckreef Main Zone.

The results are positive and significant for the Company because they continue to demonstrate: (i) continuity of mineralization down dip and along strike of the deposit; and (ii) excellent width and grade of mineralization.

Highlights include:

· Hole BMMT015 intersected 28.0 m grading @ 10.68 g/t Au from 0 m;

· Hole BMMT020 intersected 123.0 m grading @ 2.69 g/t Au from 3 m;

· Hole BMMT009 intersected 121.0 m grading @ 2.96 g/t Au from 3 m;

· Hole BMMT022 intersected 106.0 m grading @ 4.19 g/t Au from 85 m, 77 m grading @ 3.09 g/t from 241 m; and

· Hole BMMT021 intersected 90.0 m grading @ 1.56 g/t Au from 139 m.

Detailed results are shown in Table 3 and locations are shown in Figure 10.

Figure 10: Map Showing Location of Metallurgical Drill Holes and Their Result Highlights

 

21 

Management’s Discussion and Analysis November 30, 2022  

Table 3: Metallurgy Drill Hole Sample Results Summary

Metallurgy Samples Assay Results
Hole ID	Hole Type	Drill Holes Location					Sample Depth		Width (m)	Assay Grade (gpt)	Lithology	Comment
		Easting (m)	Northing (m)	RL (m)	Azimuth	Dip	From (m)	To (m)
BMMT004	DD	391,096.8	9,657,894.8	1,217.7	127	-72	4.0	22.0	17.0	2.17	Msz	Oxidised and Mineralised shear zone
BMMT005	DD	391,134.7	9,657,947.9	1,217.6	119	-88	0.0	21.0	21.0	0.52	Msz	Oxidised and Mineralised Shear zone
BMMT006	DD	391,184.0	9,658,008.0	1,217.7	303	-77	4.0	15.6	11.6	0.68	Msz	Oxidised and Mineralised Shear zone
BMMT007	DD	391,223.8	9,658,080.1	1,214.7	304	-81	0.0	8.0	8.0	0.39	Msz	Oxidised and Mineralised Shear zone
BMMT008	DD	391,292.3	9,658,148.7	1,220.1	306	-77	2.0	94.0	89.0	1.72	Msz	Mineralised shear zone with Quartz Veining
BMMT009	DD	391,337.4	9,658,225.5	1,222.1	303	-82	3.0	124.0	121.0	2.96	Msz	Oxidised and Mineralised shear zone
							127.0	148.0	21.0	0.79	Msz	Shear zone with mild alteration
							152.0	157.0	5.0	0.2	Msz	Shear zone with mild alteration
BMMT010	DD	391,194.4	9,658,008.3	1,217.5	329	-87	69.0	86.0	17.0	3.82	Msz	Mineralised shear zone with strong alteration
							87.0	97.0	10.0	0.82	Msz	Shear zone with mild alteration
							100.0	129.0	29.0	3.28	Msz	Mineralised shear zone with strong alteration
							144.0	170.0	26.0	3.59	Msz	Mineralised shear zone with strong alteration
BMMT011	DD	391,112.2	9,657,940.2	1,217.5	136	-67	20.0	84.0	64.0	1.17	Msz	Mineralised shear zone with strong alteration
							85.0	114.0	29.0	0.37	Msz	Shear zone with mild alteration
							127.0	137.0	10.0	2.08	Msz	Mineralised shear zone with strong alteration
BMMT012	DD	391,253.7	9,658,097.7	1,215.1	242	-75	4.0	28.0	24.0	2.28	Msz	Mineralised shear zone with Quartz Veining
BMMT014	DD	391,055.0	9,657,666.9	1,218.3	90	-78	27.0	42.0	15.0	0.59	Msz	Mineralised shear zone with mild alteration
BMMT015	DD	391,231.1	9,658,072.9	1,215.3	310	-80	0.0	28.0	28.0	10.68	Msz	Mineralised shear zone with Quartz Veining
BMMT016	DD	391,353.7	9,658,331.9	1,223.4	306	-81	7.0	41.0	34.0	2.03	Msz	Mineralised shear zone with strong alteration
							49.0	76.0	27.0	1.45		Mineralised shear zone with strong alteration
							96.0	101.0	5.0	0.37	Msz	Shear zone with mild alteration
BMMT017	DD	391,469.3	9,658,387.0	1,219.9	142	-80	4.0	26.0	22.0	3.30	Msz	Oxidised and Mineralised shear zone
BMMT018	DD	391,521.8	9,658,681.8	1,218.6	126	-82	4.0	33.0	29.0	2.97	Msz	Mineralised shear zone with Quartz Veining
							43.0	53.0	10.0	0.34	Msz	Mineralised shear zone with mild alteration
							57.0	141.8	84.8	0.64	Msz	Mineralised shear zone with mild alteration
							143.0	169.0	26.0	0.63	Msz	Mineralised shear zone with mild alteration
BMMT019	DD	391,464.1	9,658,771.4	1,220.0	130	-67	50.0	78.0	28.0	2.33	Msz	Mineralised shear zone with strong alteration
							86.0	91.0	5.0	0.43	Msz	Mineralised shear zone with mild alteration
							100.0	111.0	11.0	0.55	Msz	Mineralised shear zone with mild alteration
							135.0	142.0	7.0	0.77	Msz	Mineralised shear zone with mild alteration
							161.0	167.0	6.0	0.55	Msz	Mineralised shear zone with mild alteration
							200.0	212.0	12.0	0.75	Msz	Mineralised shear zone with mild alteration
							214.0	218.0	4.0	0.32	Msz	Mineralised shear zone with mild alteration
							222.0	229.8	7.8	0.55	Msz	Mineralised shear zone with mild alteration
BMMT020	DD	391,519.4	9,658,607.6	1,219.9	126	-80	3.0	126.0	123.0	2.69	Msz	Mineralised shear zone with strong alteration
							128.0	130.0	2.0	1.55	Msz	Mineralised shear zone with strong alteration
							152.0	154.0	2.0	2.00	Msz	Mineralised shear zone with strong alteration
							202.0	208.0	6.0	2.82	Msz	Mineralised shear zone with strong alteration
BMMT021	DD	391,493.7	9,658,549.5	1,220.9	134	-85	2.0	80.0	78.0	0.58	Msz	Mineralised shear zone with quartz veining
							88.0	91.0	3.0	0.33	Msz	Mineralised shear zone with quartz veining
							118.0	126.0	8.0	0.54	Msz	Mineralised shear zone with mild alteration
							139.0	229.0	90.0	1.56	Msz	Mineralised shear zone with strong alteration
							238.0	245.0	7.0	0.95	Msz	Mineralised shear zone with mild alteration
BMMT022	DD	391,467.7	9,658,451.6	1,221.0	127	-82	42.0	54.0	12.0	0.3	Msz	Mineralised shear zone with mild alteration
							58.0	72.0	14.0	0.76	Msz	Mineralised shear zone with mild alteration
							85.0	191.0	106.0	4.19	Msz	Mineralised shear zone with strong alteration
							194.0	211.0	17.0	1.16	Msz
							213.0	240.0	27.0	1.78	Msz	Mineralised shear zone with strong alteration
							241.0	318.0	77.0	3.09	Msz	Mineralised shear zone with strong alteration
							321.0	338.0	17.0	2.95	Msz	Mineralised shear zone with strong alteration

Notes: Sample Protocol QA/QC – see footnote below. Sampled widths are not true widths. Of 19 holes drilled, 18 are reported, with the remaining hole unreported due to an incomplete intersection of the Main Zone.

22 

Management’s Discussion and Analysis November 30, 2022  

As part of the metallurgical variability study, using core from the 19 hole drill program, the Company will assess the amenability of the sulphide material to be processed through the existing processing plant, using its relatively simple flowsheet. In turn, this may have positive implications for potential plant expansions. During the quarter, the Company. working with Ausenco, has successfully identified a metallurgical laboratory of good renown to complete this work to undertake which will encompass the first 5-7 years of production from the sulphide mine and processing operations at Buckreef Gold. This study will build on the prior work of SGSC on deeper parts of the mineral resource and data gathered during processing of the oxide, transitional mineral reserve. All samples have been prepared and are ready for shipment.

The samples will be analyzed for:

· Overall gold recoveries;

· Process design to achieve those recoveries (grindability, retention times, straight CIL or flotation/regrind);

· Any pregnant solution robbing or refractory mineralogy;

· Acid Mine Drainage (if any) characteristics; and

· Dry stack tailings characteristics.

23 

Management’s Discussion and Analysis November 30, 2022  

First Quarter 2023 Financial Highlights

For the three months ended November 30, 2022, Buckreef Gold produced and sold 5,395 and 5,754 ounces of gold, respectively – both quarterly records for the Company.

The Company recognized revenue on the Statements of Income (Loss) and Comprehensive Income (Loss) of $9.7 million for the three months ended November 30, 2022.

Cost of sales, which includes production costs, royalties and depreciation, was $4.4 million generating a gross profit margin of $5.3 million or 55% during Q1 2023 and net income of $5.2 million.

The quarterly sales record (5,754 ounces) generated positive operating cash flow of $6.6 million in Q1 2023. Positive operating cash flow is being used to fund value creating activities, including exploration and advancing the sulphide development project.

At November 30, 2022 the Company had a cash balance of $8.9 million and a working capital surplus of $4.8 million after adjusting for current liabilities which will only be settled by issuing equity.

Capital Expenditures

During the three months ended November 30, 2022 the Company incurred a total of $5.4 million in cash capital expenditures. Net additions increased as the Company continued to invest in infrastructure and development for the Buckreef Gold property during the quarter, primarily relating to capital expenditures related to final commissioning of the 1,000+ tpd processing plant in November 2022, capitalized pre-stripping mine development activity with FEMA to access a greater extent of ore, including higher grade blocks, one-time expenditures related to final road realignment around the Special Mining License which will enable full life of mine access to the Main Zone, construction of a significantly expanded tailings storage facility and development drilling related to the diamond drill program with STAMICO, for a program which focused on infill and exploration drilling at Buckreef Main, Anfield and Eastern Porphyry.

Selected Financial Information

The following information has been extracted from the Company’s interim condensed unaudited consolidated financial statements for the three months ended November 30, 2022 and audited consolidated financial statements prepared in accordance with IFRS, for the years ended August 31, 2022 and 2021.

$(000's)	As at and for the three months ended November 30, 2022	As at and for the twelve months ended August 31, 2022		As at and for the year ended August 31, 2021
Net income (loss) and comprehensive income (loss) attributable to shareholders	3,512	(6,216	)	(4,004	)
Basic income (loss) per share	0.01	(0.02	)	(0.02	)
Diluted income (loss) per share	0.01	(0.02	)	(0.02	)
Total assets	75,338	71,845		56,518
Total long term financial liabilities	4,056	3,436		2,681

24 

Management’s Discussion and Analysis November 30, 2022  

Financial Results

Three months ended November 30, 2022

	Three months ended
	November 30
		2022			2021
Revenue	$	9,718		$	—
Cost of sales		(4,408	)		—
Gross profit		5,310			—
General and administrative expense		(1,837	)		(2,345	)
Gain on derivative warrant liabilities		3,365			208
Foreign exchange		(7	)		18
Interest, net and other expense		(185	)		(39	)
Income tax expense		(1,486	)		—
Net income (loss) and comprehensive income (loss)	$	5,160		$	(2,158	)
Net income (loss) and comprehensive income (loss) attributable to shareholders		3,512			(2,022	)
Net income (loss) and comprehensive income (loss) attributable to non-controlling interests		1,648			(136	)

Revenue

For the three months ended November 30, 2022, the Company recognized revenue of $9.7 million. Note that the financial statements for the comparable period do not present revenue, cost of sales or gross profit as Buckreef Gold early adopted amendments to International Accounting Standards (“IAS”) 16, Property, Plant and Equipment, as disclosed in the three and six months ended February 28, 2022 financial statements. Gold sales and related costs prior to that date were capitalized to exploration and evaluation assets and expenditures. During the period, the Company sold 5,754 ounces of gold at an average realized price¹ of $1,689 per ounce.

Cost of sales

Cost of sales for the three months ended November 30, 2022 was $4.4 million and is comprised of production costs, (including mining, processing and site general and administrative costs), royalties and depreciation. Assets are depreciated on a straight-line basis over their useful life or depleted on a units-of-production basis over the reserves to which they relate.

In connection with the successful processing plant expansion which resulted in higher plant throughput and gold production, the Company changed the method of estimating the cost of its ore stockpiles effective September 1, 2022. The updated methodology estimates the cost of ore stockpiles based on estimated recoverable ounces of gold in ore stockpiles whereby the previous methodology was based on tonnes of ore in stockpiles. The net result is that higher costs are attached to higher grade ore and consequently, higher costs are charged to the statements of comprehensive income/(loss) during periods that higher grade ore is processed and sold (and vice versa). The Company believes this methodology better matches revenue and expenses and has been applied prospectively.

For the three months ended November 30, 2022, the Company recorded production costs of $3.5 million and royalties of $0.7 million based on a 7.3% statutory royalty rate in Tanzania. Cash costs¹ which include production costs and royalties were $732 per ounce, below the low end of guidance range. Under the previous methodology, when estimating the cost of ore stockpiles based on tonnes rather than recoverable ounces, cash costs¹ would have been $605 per ounce.

25 

Management’s Discussion and Analysis November 30, 2022  

On November 1, 2022, the Company declared commercial production for the 1,000+ tpd processing plant at Buckreef after successful construction, commissioning and ramp-up of processing to a steady state throughput of 1,000+ tpd. Upon declaration of commercial production, capitalization of mine development costs ceases and depreciation of capitalized mine development costs commences. For the three months ended November 30, 2022, the Company recorded depreciation of $0.2 million.

As noted above, the prior year comparable period does not present cost of sales as Buckreef Gold early adopted amendments to IAS 16 as disclosed in the three and six months ended February 28, 2022 financial statements. Prior to that date any related cost of sales were capitalized to exploration and evaluation assets and expenditures.

General and administrative expense

During the three months ended November 30, 2022, the Company recorded general and administrative expense of $1.8 million compared to $2.3 million for the previous year comparable period, mainly due to a decrease in share-based compensation expense and a reduction in salaries and benefits. The decrease in share-based compensation expense was mainly due to a portion of equity based compensation granted to certain key management personnel in connection with their employment contracts being fully vested. The decrease in salaries and benefits as compared to the prior year period was mainly due to recognition of certain costs related to Buckreef’s operating activities in cost of sales in Q1 2023 as a result of early adoption of amendments to IAS 16 during the three and six months ended February 28, 2022.

Gain on derivative warrant liabilities

During the three months ended November 30, 2022, the Company had a gain on derivative warrant liabilities of $3.4 million compared to a gain of $0.2 million in the prior year period. The gain on revaluation of derivative warrant liabilities was principally due to a decrease in the share price using the Black Scholes option pricing model (Q1 2023 - $0.34, Q1 2022 - $0.41).

Income tax expense

Income tax expense is recognized based on management’s estimate of the weighted average annual income tax rate expected for the full financial year. During the three months ended November 30, 2022, the Company recorded net income at Buckreef Gold and recognized income tax expense of $1.5 million, comprised of a current income tax expense of $0.4 million (November 30, 2021 - $nil) and deferred income tax expense of $1.1 million (November 30, 2021 - $nil) based on current Tanzanian statutory tax rates.

Net income (loss) and comprehensive income (loss)

The Company reported net income for the three month period ended November 30, 2022 of $5.2 million ($3.5 million net income attributable to shareholders, basic and diluted earnings per share of $0.01, respectively). This compared to a net loss of $2.2 million in the prior year period ($2.0 million net loss attributable to shareholders, basic and diluted loss per share of $0.01, respectively).The increase in net income is primarily the result of an increase in gross profit of $5.3 million following sales of $9.7 million and cost of sales of $4.4 million during Q1 2023. This, combined with an increased gain on derivative warrant liabilities ($3.2 million) due to a decrease in share price and a decrease in general and administrative expense ($0.5 million) due to lower share-based compensation expense and lower salaries and benefits was partially offset by an increase in income tax expense of $1.5 million following recognition of net income at Buckreef Gold.

26 

Management’s Discussion and Analysis November 30, 2022  

Summary of Quarterly Results

($(000's), except per share amounts)
US$ unless otherwise stated	2023 Q1	2022 Q4		2022 Q3	2022 Q2		2022 Q1		2021 Q4		2021 Q3		2021 Q2
Net income (loss) and comprehensive income (loss)	5,160	(2,350	)	3,188	(1,002	)	(2,158	)	(3,517	)	33		(164	)
Net income (loss) and comprehensive (income) loss attributable to:
Non-controlling interests	1,648	1,857		1,217	956		(136	)	(79	)	(483	)	(197	)
Common shareholders	3,512	(4,207	)	1,971	(1,958	)	(2,022	)	(3,438	)	516		33
Net income (loss) and comprehensive income (loss)	5,160	(2,350	)	3,188	(1,002	)	(2,158	)	(3,517	)	33		(164	)

Liquidity and Capital Resources

At November 30, 2022 the Company had $8.9 million of cash (August 31, 2022 - $8.5 million) and working capital of $4.8 million after adjusting for current liabilities which will only be settled by issuing equity of the Company (August 31, 2022 - $5.4 million).

The increase in cash of $0.4 million over August 31, 2022 was primarily due to an increase in operating cash flow (Q1 2023: $6.6 million, Q4 2022: $2.4 million). During Q1 2023 the Company poured 5,395 ounces of gold (Q4 2022: 3,619) and sold 5,754 ounces of gold (Q4 2022: 3,363), both new records for Buckreef Gold which contributed to record operating cash flow during Q1 2023. The increase in operating cash flow was partially offset by an increase in capital expenditures related to the final commissioning of the expanded 1,000+ tpd processing plant, capitalized pre-stripping mine development, expenditures related to final road realignment around the Special Mining License, construction of a significantly expanded tailings storage facility and development drilling related to the diamond drill program with STAMICO.

To help supplement the Company’s liquidity and to fund productivity enhancing purchases, during Q4 2022 the Company announced that its operating subsidiary, Buckreef Gold Corporation Limited, entered into a pre-paid gold purchase agreement with a contract price totaling US$5 million with OCIM. The total contract price was made available to Buckreef Gold in tranches with a $2.5 million upfront tranche and further tranches to be drawn over the next 18 months at Buckreef Gold’s option. Tranche 1 in this non-dilutive financing includes a 6-month grace period and a repayment period over the following 12 months as quarterly deliveries of a pre-determined quantity of gold. During Q1 2023, the Company drew down the first tranche of $2.5 million in exchange for delivering 434 ounces of gold per quarter, commencing February 2023, for a total of 1,735 ounces of gold over four quarters. The Company intends to use these proceeds on an opportunistic basis and provides the flexibility to make value accretive equipment purchases, and to expedite exploration and sulphide development programs at Buckreef Gold.

In addition, to provide the Company with access to supplementary liquidity, during Q2 2022, TRX Gold entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”). This agreement provides TRX Gold with the right to sell up to $10 million of its shares to Lincoln Park over a 36-month period at its sole discretion. TRX Gold will control the timing and amount of any sales to Lincoln Park and will use the proceeds as needed to develop the Buckreef Gold asset. To date, TRX Gold has made no sales of common shares to Lincoln Park.

As of November 30, 2022, the Company has accumulated losses of $120.2 million since inception (August 31, 2022: $123.7 million).

Commitments

In order to maintain existing site mining and exploration licenses, the Company is required to pay annual license fees. As at November 30, 2022 these licenses remained in good standing and the Company is up to date on license payments.

27 

Management’s Discussion and Analysis November 30, 2022  

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.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Transactions with Related Parties

The Company may enter into related party transactions that are in the normal course of business. Transactions with Related Parties disclosure can be found in Note 15 of the Unaudited Interim Consolidated Financial Statements for the three months ended November 30, 2022.

Omnibus Equity Incentive Plan

Effective June 26, 2019, the Company adopted the Omnibus Equity Incentive Plan dated June 26, 2019 (the “Omnibus Plan”), which Omnibus Plan was approved by the shareholders on August 16, 2019, subsequently updated and approved by the shareholders on February 25, 2022.

The purposes of the Omnibus Plan are: (a) to advance the interests of the Company by enhancing the ability of the Company and its subsidiaries to attract, motivate and retain employees, officers, directors, and consultants, which either of directors or officers may be consultants or employees; (b) to reward such persons for their sustained contributions; and (c) to encourage such persons to consider the long-term corporate performance of the Company.

The Omnibus Plan provides for the grant of options, restricted share units (“RSUs”), deferred share units (“DSUs”) and performance share units (“PSUs”) (collectively, the “Omnibus Plan Awards”), all of which are described in detail in the Form 40-F Annual Report for the year ended August 31, 2022, and the Information Circular dated January 21, 2022, filed on SEDAR on January 27, 2022.

The Omnibus Plan provides for the grant of other share-based awards to participants (“Other Share-Based Awards”), which awards would include the grant of common shares. All Other Share-Based Awards will be granted by an agreement evidencing the Other Share-Based Awards granted under the Omnibus Plan.

Subject to adjustments as provided for under the Omnibus Plan, the maximum number of shares issuable pursuant to Omnibus Plan Awards outstanding at any time under the Omnibus Plan shall not exceed 10% of the aggregate number of common shares outstanding from time to time on a non-diluted basis; provided that the acquisition of common shares by the Company for cancellation shall not constitute non-compliance with the Omnibus Plan for any Omnibus Plan Awards outstanding prior to such purchase of common shares for cancellation.

For more particulars about the Omnibus Plan, we refer you to the copy of the Omnibus Plan previously filed as an exhibit with the SEC and on SEDAR. The Omnibus Plan replaces all previous equity compensation plans of the Company, including the Restricted Stock Unit Plan and Stock Option Plan.

Changes in Accounting Polices and Critical Accounting Estimates and Judgements

Significant accounting policies as well as any changes in accounting policies are discussed in Note 2 “Basis of Preparation”, Note 3 “Significant Accounting Policies” and Note 4 “Significant Accounting Judgments, Estimates and Assumptions” of the Company’s Unaudited Interim Consolidated Financial Statements for the three months ended November 30, 2022.

28 

Management’s Discussion and Analysis November 30, 2022  

Non-IFRS Performance Measures

Average realized price per ounce of gold sold

Average realized price per ounce of gold sold is a non-IFRS measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Average realized price per ounce of gold sold is calculated by dividing revenue by ounces of gold sold. It may not be comparable to information in other gold producers’ reports and filings.

Dollar amounts are expressed in thousands of US dollars.

		Three Months Ended
		November 30, 2022
Revenue per financial statements	$	9,718
Ounces of gold sold		5,754
Average realized price gold sold	$	1,689

Cash costs per ounce of gold sold

Cash cost per ounce of gold sold is a non-IFRS performance measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Cash cost per ounce may not be comparable to information in other gold producers’ reports and filings. Upon declaration of commercial production of the 1,000+ tpd processing plant in Q1 2023, capitalization of mine development costs ceased, and depreciation of capitalized mine development costs commenced. As the Company uses this measure to monitor the performance of our gold mining operations and its ability to generate positive cash flow, beginning in Q1 2023, total cash costs per ounce of gold sold starts with cost of sales related to gold production and removes depreciation. The following table provides a reconciliation of total cash costs per ounce of gold sold to cost of goods sold per the financial statements for the three months ended November 30, 2022.

Dollar amounts are expressed in thousands of US dollars.

		Three Months Ended
		November 30, 2022
Cost of sales per financial statements	$	4,408
Less: Depreciation	$	(193	)
Total cash costs	$	4,215
Ounces of gold sold		5,754
Cash costs per ounce of gold sold	$	732

29 

Management’s Discussion and Analysis November 30, 2022  

Adjusted EBITDA

Adjusted EBITDA is a non-IFRS performance measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Adjusted EBITDA may not be comparable to information in other gold producers’ reports and filings. Adjusted EBITDA is presented as a supplemental measure of the Company’s performance and ability to service its obligations. Adjusted EBITDA is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the industry, many of which present Adjusted EBITDA when reporting their results. Issuers present Adjusted EBITDA because investors, analysts and rating agencies consider it useful in measuring the ability of those issuers to meet their obligations. Adjusted EBITDA represents net income (loss) before interest, income taxes, and depreciation and also eliminates the impact of a number of items that are not considered indicative of ongoing operating performance.

Certain items of expense are added, and certain items of income are deducted from net income that are not likely to recur or are not indicative of the Company’s underlying operating results for the reporting periods presented or for future operating performance and consist of:

• Unrealized gain/loss on derivative warrant liabilities;

• Accretion related to the provision for reclamation; and

• Amortization of share-based compensation expense.

The following table provides a reconciliation of net income (loss) and comprehensive income (loss) to Adjusted EBITDA per the financial statements for the three months ended November 30, 2022.

Dollar amounts are expressed in thousands of US dollars.

		Three Months Ended			Three Months Ended
		November 30, 2022			November 30, 2021
Net income (loss) and comprehensive income (loss) per financial statements	$	5,160		$	(2,158	)
Add:
Depreciation		193			—
Interest and other expenses		185			39
Income tax expense		1,486			—
Gain on derivative warrant liabilities		(3,365	)		(208	)
Share-based compensation expense		753			980
Adjusted EBITDA	$	4,412		$	(1,347	)

The Company has included “average realized price per ounce of gold sold”, “cash costs per ounce of gold sold” and “Adjusted EBITDA” as non-IFRS performance measures throughout this MD&A as TRX Gold believes that these generally accepted industry performance measures provide a useful indication of the Company’s operational performance. The Company believes that certain investors use this information to evaluate the Company’s performance and ability to generate cash flow. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

30 

Management’s Discussion and Analysis November 30, 2022  

Disclosure of Outstanding Share Data

As at the date of this MD&A, there were 276,588,684 common shares outstanding, 41,970,074 share purchase warrants outstanding, 1,095,276 RSUs outstanding, nil PSUs/DSUs outstanding, and 12,711,000 stock options outstanding.

Risks Factors

The Company is subject to a number of extraneous risk factors over which it has no control. These factors are common to most mineral exploration and development companies and include, among others: project ownership, exploration and development risk, depressed equity markets and related financing risk, commodity price risk, fluctuating exchange rates, environmental risk, insurance risk, sovereign risk. For further details on the risk factors affecting the Company, please see the Company’s Form 40-F Annual Report for the year ended August 31, 2022 filed with the SEC on November 29, 2022 and on SEDAR as the Company’s Annual Information Form on November 29, 2022.

Internal Control Over Financial Reporting (“ICFR”)

Management of the Company is responsible for establishing and maintaining adequate internal controls over financial reporting (“ICFR”) for the Company as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934. The Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have conducted an evaluation of the design and effectiveness of the Company’s ICFR as of August 31, 2022. In making this assessment, the Company’s management used the criteria established in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO 2013”). This evaluation included review of the documentation of controls, evaluation of the design and operating effectiveness of controls, and a conclusion on this evaluation. Based on this evaluation, Management concluded that ICFR was not effective for the year ended August 31, 2022 due to the following material weaknesses: (i) the Company had not implemented and tested all of the Company’s key controls, including information technology general controls, internal control over financial reporting and disclosure controls and procedures as per the criteria established in the COSO 2013 Framework and (ii) lack of timely review and approval of certain journal entries and reconciliations.

Remediation of Material Weaknesses

The control deficiencies described above were concluded on by management during the year ended August 31, 2022. The Company has prioritized the remediation of the material weaknesses and is working under the oversight of the Audit Committee to resolve the issue.

During the year ended August 31, 2022, the Company continued to strengthen its internal controls and are committed to ensuring that such controls are designed and operating effectively. The Company is implementing process and control improvements and management made the following changes during the year to improve the internal control framework, including the following:

· Engaged a third-party service provider to design and implement an enhanced internal control environment framework. During the year, the Company developed a set of key risk control matrices by business cycle and by entity, including key controls, business processes and policies to enhance the maturity level of the Company’s internal control environment. The Company also developed narratives and process maps for each key business cycle as conducted through walkthroughs with management, staff and its third-party IT services provider within all key business cycles. Management has been proactive in implementing the newly designed internal control framework and is remediating any identified control gaps.

31 

Management’s Discussion and Analysis November 30, 2022  

· Built an experienced Buckreef Finance team with several internal personnel changes, including a new site Finance Manager and site Finance Superintendent, to enhance review and approval of invoices, journal entries and reconciliations, improve segregation of duties and to optimize the Company’s financial reporting close process.

· Hired a new Corporate Controller with extensive IFRS experience to further supplement review and approval of journal entries and reconciliations, and to improve the Company’s financial reporting close process and reporting of the Company’s financial results and disclosures. This also includes preparation of formal accounting memorandums to support our conclusions on technical accounting matters, and the development and use of checklists and research tools to assist in compliance with IFRS with regard to complex accounting issues.

· The Company implemented a new enterprise resource planning system subsequent to August 31, 2022 to help automate certain reconciliations and manual processes and to increase the efficiency of the financial statement review process. It is also expected to eliminate risk of manual spreadsheet errors and formalize procedures around validation of completeness and accuracy of spreadsheets related to account reconciliations. The Company will continue to expand on the use of the software tool to help manage month-end and quarter-end activities.

During the year ended August 31, 2022, the Company worked with a third-party service provider to design and document a new and improved system of internal controls and is currently in the process of implementing and testing the operating effectiveness of these newly designed key controls with the goal of remediating the material weakness identified above. However, as at August 31, 2022, the Company has been unable to complete this implementation by the required reporting date due to limited time and resources. Proposed changes to address the material weaknesses will take time to implement due to, amongst other things, a limited number of staff at the Company.

It is the Company’s intention to remediate the material weakness by engaging a third-party service provider to assist in the review, evaluation and testing of the Company’s controls and procedures in a timely manner over the course of fiscal 2023.

Additional Information

The Company is a Canadian public company listed on the Toronto Stock Exchange trading under the symbol “TNX” and also listed on the NYSE American trading under the symbol “TRX”. Additional information about the Company and its business activities is available on SEDAR at www.sedar.com; with the SEC at sec.gov; and the Company’s website at www.TRXgold.com.

Approval

The Board of Directors of TRX Gold Corporation has approved the disclosure contained in this Q1 2023 MD&A. A copy of this Q1 2023 MD&A will be provided to anyone who requests it. It is also available on the SEDAR website at www.sedar.com

32 

Management’s Discussion and Analysis November 30, 2022  

Endnotes

¹  Refer to “Non-IFRS Performance Measures” section.

²  Notes Regarding Sample Protocol QA/QC: The sample chain of custody is managed by the Buckreef Gold geology team on site. Reported results are from diamond drilled core samples. Intervals of core to be analyzed are split into half using a mechanized core cutter, with one half sent to the Laboratory for geochemical analysis and the remaining half kept in storage for future reference and uses. Diamond drilled core has been a HQ size and recoveries are consistently 100% across all drill holes intercept reported.

Sampling and analytical procedures are subject to a comprehensive quality assurance and quality control program. The QA/QC program involves insertion of duplicate samples, blanks and certified reference materials in the sample stream. Gold analyses are performed by standard fire assaying protocols using a 50-gram charge with atomic absorption (AAS) finish and a gravimetric finish performed for assays greater than 10 grams per tonne.

Sample Preparation and analysis are performed by independent SGS Laboratory in Mwanza, Tanzania. SGS Laboratory is ISO17025 accredited and employs a Laboratory Information Management System for sample tracking, quality control and reporting.

The results summarized in this MD&A are from Buckreef Main Zone NEE prospect. The prospect is an extension of the known Buckreef Main Zone. The intercepts confirm a continuity of over 200 m of known Buckreef main deposit to the North east. The intersections reported here are a down-hole length and may not represent true width, however the true width is estimated to be between 50% - 60% of the length.

 33

XML

Cover	3 Months Ended
	Nov. 30, 2022
Cover [Abstract]
Document Type	6-K
Amendment Flag	false
Document Period End Date	Nov. 30, 2022
Current Fiscal Year End Date	--08-31
Entity File Number	001-32500
Entity Registrant Name	TRX GOLD Corporation
Entity Central Index Key	0001173643
Entity Address, Address Line One	277 Lakeshore Road East
Entity Address, Address Line Two	Suite 403
Entity Address, City or Town	Oakville
Entity Address, State or Province	ON
Entity Address, Country	CA
Entity Address, Postal Zip Code	L6J 6J3

XML

Interim Condensed Consolidated Statements of Financial Position (Unaudited) - USD ($) $ in Thousands	Nov. 30, 2022	Aug. 31, 2022
Current Assets
Cash	$ 8,930	$ 8,476
Amounts receivable	1,624	2,540
Prepayments and other assets	1,220	1,206
Inventories	3,831	3,630
Total current assets	15,605	15,852
Other long-term assets	4,976	4,359
Mineral property, plant and equipment	54,757	51,634
Total assets	75,338	71,845
Current Liabilities
Amounts payable and accrued liabilities	7,103	7,920
Withholding tax payable	181	181
Income tax payable	789	436
Current portion of deferred revenue	2,627	1,864
Current portion of lease liabilities	64
Derivative warrant liabilities	3,484	6,849
Total current liabilities	14,248	17,250
Lease liabilities	77
Deferred revenue		621
Deferred income tax liability	1,129
Provision for reclamation	2,850	2,815
Total liabilities	18,304	20,686
Equity
Share capital	164,173	163,946
Share-based payments reserve	7,313	6,825
Warrants reserve	1,700	1,700
Accumulated deficit	(120,161)	(123,673)
Equity attributable to shareholders	53,025	48,798
Non-controlling interests	4,009	2,361
Total equity	57,034	51,159
Total equity and liabilities	$ 75,338	$ 71,845

XML

Interim Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Profit or loss [abstract]
Revenue	$ 9,718
Production costs	(3,518)
Royalty	(697)
Depreciation	(193)
Total cost of sales	(4,408)
Gross profit	5,310
General and administrative expenses	(1,837)	(2,345)
Gain on derivative warrant liabilities	3,365	208
Foreign exchange (losses) gains	(7)	18
Interest and other expenses	(185)	(39)
Income (loss) before tax	6,646	(2,158)
Income tax expense	(1,486)
Net income (loss) and comprehensive income (loss)	5,160	(2,158)
Net income (loss) and comprehensive income (loss) attributable to:
Shareholders	3,512	(2,022)
Non-controlling interests	$ 1,648	$ (136)
Earnings (loss) per share attributable to shareholders
Basic and diluted earnings (loss) per share	$ 0.01	$ (0.01)

XML

Interim Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Thousands	Issued capital [member]	Reserve of share-based payments [member]	Reserve For Warrants [Member]	Accumulated other comprehensive income [member]	Equity attributable to owners of parent [member]	Non-controlling interests [member]	Total
Beginning balance, value at Aug. 31, 2021	$ 158,129	$ 5,680	$ 1,606	$ (117,457)	$ 47,958	$ (1,533)	$ 46,425
Balance, number (in shares) at Aug. 31, 2021	254,870,556
IfrsStatementLineItems [Line Items]
Shares issued for settlement of debts	$ 98				98		98
Shares issued for settlement of debts, (In Shares)	165,889
Share-based compensation expense (Note 12)		980			980		980
Net income for the period				(2,022)	(2,022)	(136)	(2,158)
Ending balance, value at Nov. 30, 2021	$ 158,227	6,660	1,606	(119,479)	47,014	(1,669)	45,345
Balance, number (in shares) at Nov. 30, 2021	255,036,445
IfrsStatementLineItems [Line Items]
Shares issued for financing	$ 373				373		373
Shares issued for financing, (In Shares)	909,901
Shares issued for cash, net of share issuance costs	$ 3,867				3,867		3,867
Shares issued for cash, net of share issuance costs, (In Shares)	17,948,718
Stock options exercised	$ 258	(111)			147		147
Stock options exercised, (In Shares)	450,000
Shares issued for share-based payments	$ 1,221	(1,221)
Shares issued for share-based payments, (In Shares)	1,801,120
Witholding tax impact on restricted share units		(636)			(636)		(636)
Warrants issued			94		94		94
Share-based compensation expense (Note 12)		2,133			2,133		2,133
Net income for the period				(4,194)	(4,194)	4,030	(164)
Ending balance, value at Aug. 31, 2022	$ 163,946	6,825	1,700	(123,673)	48,798	2,361	51,159
Balance, number (in shares) at Aug. 31, 2022	276,146,184
IfrsStatementLineItems [Line Items]
Shares issued for share-based payments	$ 227	(227)
Shares issued for share-based payments, (In Shares)	442,500
Witholding tax impact on restricted share units		(94)			(94)		(94)
Share-based compensation expense (Note 12)		809			809		809
Net income for the period				3,512	3,512	1,648	5,160
Ending balance, value at Nov. 30, 2022	$ 164,173	$ 7,313	$ 1,700	$ (120,161)	$ 53,025	$ 4,009	$ 57,034
Balance, number (in shares) at Nov. 30, 2022	276,588,684

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Interim Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Operating
Net income (loss)	$ 5,160	$ (2,158)
Adjustments for items not involving cash:
Non-cash items	(1,016)	887
Decrease (increase) in amounts receivable	915	(42)
Increase in inventories	(125)	(338)
(Increase) decrease in prepaid and other assets	(14)	182
Increase (decrease) in amounts payable and accrued liabilities	1,371	(1,486)
Increase in income tax payable	357
Cash provided by (used in) operating activities	6,648	(2,955)
Investing
Exploration and evaluation assets and expenditures		(2,192)
Proceeds from gold sales		535
Purchase of mineral property, plant and equipment	(5,419)	(906)
Increase in other long-term assets	(617)
Cash used in investing activities	(6,036)	(2,563)
Financing
Withholding taxes on settlement of restricted share units	(94)
Lease payments	(64)
Cash used in financing activities	(158)
Net increase (decrease) in cash	454	(5,518)
Cash at beginning of the period	8,476	13,447
Cash at end of the period	$ 8,930	$ 7,929

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Nature of operations

3 Months Ended

Nov. 30, 2022

Nature Of Operations

Nature of operations

1. Nature of operations

TRX Gold Corporation (“TRX Gold”, “Group” 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”). On November 1, 2022, the Company declared commercial production on the 1,000+ tonnes per day process plant at its Buckreef Gold Project (“Buckreef”) in Tanzania.

The Company’s registered office is 400 3^rd 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: TNX) 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.

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Basis of preparation

3 Months Ended

Nov. 30, 2022

Basis Of Preparation

Basis of preparation

2. Basis of preparation

a) Statement of compliance

The Company’s interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board. 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 consolidated financial statements for the year ended August 31, 2022.

These interim condensed consolidated financial statements were approved by the Board of Directors of the Company on January 12, 2023.

b) Comparative figures

Certain comparative amounts have been restated to conform to the current period’s presentation.

The reclassification in presentation resulted in the following impact on the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three months ended November 30, 2021:

		Reported at November 30, 2021			Reclassification			Restated at November 30, 2021
General and administration expenses	$	(2,345	)	$	-		$	(2,345	)
Financial instrument related costs and other		174			(174	)		-
Gain on derivative warrant liabilities		-			208			208
Foreign exchange gains		18			-			18
Interest and other expenses		(5	)		(34	)		(39	)
Net loss and comprehensive loss	$	(2,158	)	$	-		$	(2,158	)

The reclassification in presentation resulted in the following impact on the Consolidated Statements Financial Position as at August 31, 2022:

		Reported at August 31,2022		Reclassification			Restated at August 31, 2022
Amounts receivable	$	40	$	2,500		$	2,540
Other receivables		2,500		(2,500	)		-

c) 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 U.S. 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 US dollars and C$ or CAD is to Canadian dollars.

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Significant accounting policies

3 Months Ended

Nov. 30, 2022

Significant Accounting Policies

Significant accounting policies

3. Significant accounting policies

The accounting policies applied in these interim condensed consolidated financial statements are consistent with those applied in the preparation of the Company’s annual consolidated financial statements for the year ended August 31, 2022.

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Significant accounting judgments, estimates and assumptions

3 Months Ended

Nov. 30, 2022

Significant Accounting Judgments Estimates And Assumptions

Significant accounting judgments, estimates and assumptions

4. Significant accounting judgments, estimates and assumptions

The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the carrying amount of assets and liabilities and the reported amount of revenues and expenses. The following discusses the most significant accounting policy judgments and accounting estimates that the Company has made in the preparation of these interim condensed consolidated financial statements.

a) Production Start Date

Management assesses the stage of each mine development project to determine when a mine moves into the production stage. The criteria used to assess the start date of a mine are determined based on the unique nature of each mine development project. The Company considers various relevant criteria to assess when the mine is substantially complete, ready for its intended use and moves into the production phase. Some of the criteria include, but are not limited to, the following:

· A significant level of capital expenditures compared to construction cost estimates are complete,

· Ability to produce gold in saleable form within specifications has been achieved,

· Reasonable period for testing has been completed, and

· Reasonable level of ongoing production based on mill throughput, recovery rates and mill availability.

On November 1, 2022, the Company declared commercial production for the 1,000+ tonnes per day (“tpd”) processing plant at Buckreef after successful construction, commissioning and ramp-up of processing to a steady state throughput of 1,000+ tpd. The processing plant was running consistently at or above nameplate capacity since October 2022 with gold recoveries exceeding 90%. All major construction activities were completed and Buckreef demonstrated its ability to sustain ongoing production levels.

b) Units-of-Production

Management estimates recoverable proven and probable mineral reserves in determining the depreciation and amortization of certain mineral property, plant and equipment that is expected to be used for the duration of the mine life. This results in a depreciation charge proportional to the recovery of the anticipated ounces of gold. The life of the asset is assessed annually and considers its physical life limitations and present assessment of economically recoverable reserves of the mine property at which the asset is located. The calculations require the use of estimates and assumptions, including the amount of recoverable proven and probable mineral reserves. The Company’s units of production calculations are based on recovered ounces of gold poured.

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Amounts receivable

3 Months Ended

Nov. 30, 2022

Amounts Receivable

Amounts receivable

5. Amounts receivable

	November 30, 2022			August 31, 2022
Receivable from precious metal sales	$	1,515		$	-
Sales tax receivable(1)		5,044			4,359
Prepaid gold purchase receivable (Note 9)		-			2,500
Other		41			40
		6,600			6,899
Less: Long-term portion		(4,976	)		(4,359	)
Total amounts receivable	$	1,624		$	2,540

(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 taxes due to the Tanzania Revenue Authority (“TRA”). VAT which still need to be verified by the TRA have been classified as long-term assets as the Company does not expect to recover these amounts within the next 12 months.

As at November 30, 2022 and August 31, 2022, no impairment has been recorded against these receivables and the Company held no collateral for any receivables.

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Prepayments and other assets

3 Months Ended

Nov. 30, 2022

Prepayments And Other Assets

Prepayments and other assets

6. Prepayments and other assets

	November 30, 2022		August 31, 2022
Prepaid expenses	$	713	$	699
Commitment fees(1)		507		507
Total prepayments and other assets	$	1,220	$	1,206

(1) Consists of 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 shares over a 36-month period.

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Inventories

3 Months Ended

Nov. 30, 2022

Inventory

Inventories

7. Inventories

	November 30, 2022		August 31, 2022
Ore stockpile	$	1,745	$	2,643
Gold in circuit		1,255		210
Gold doré		-		253
Total precious metals inventories		3,000		3,106
Supplies		831		524
Total inventories	$	3,831	$	3,630

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Mineral property, plant and equipment

3 Months Ended

Nov. 30, 2022

Mineral Property Plant And Equipment

Mineral property, plant and equipment

8. Mineral property, plant and equipment

	Construction in progress			Mineral properties		Processing plant and related infrastructure		Machinery and equipment		Other		Total
Cost
As at August 31, 2022	$	45,239		$	-	$	7,076	$	1,396	$	143	$	53,854
Additions		-			822		2,378		21		211		3,432
Transfers(1)		(45,239	)		45,239		-		-		-		-
As at November 30, 2022	$	-		$	46,061	$	9,454	$	1,417	$	354	$	57,286
Accumulated depreciation
As at August 31, 2022	$	-		$	-	$	1,566	$	619	$	35	$	2,220
Depreciation		-			112		95		31		71		309
As at November 30, 2022	$	-		$	112	$	1,661	$	650	$	106	$	2,529
Net book value
As at August 31, 2022	$	45,239		$	-	$	5,510	$	777	$	108	$	51,634
As at November 30, 2022	$	-		$	45,949	$	7,793	$	767	$	248	$	54,757

(1) On November 1, 2022, Buckreef achieved commercial production at which point development expenditures were subject to depreciation.

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Deferred revenue

3 Months Ended

Nov. 30, 2022

Deferred Revenue

Deferred revenue

9. Deferred revenue

On August 11, 2022, the Company entered into a $5 million prepaid Gold Doré Purchase Agreement (“Agreement”) with OCIM Metals and Mining S.A. (“OCIM”). The Agreement requires funds to be made available to the Company in two tranches. The Company drew down the first tranche of $2.5 million in exchange for delivering 434 ounces of gold per quarter, commencing February 2023, for a total of 1,735 ounces of gold over four quarters.

The Agreement has been accounted for as a contract in accordance with IFRS 15, Revenue from Contracts with Customers. As the total amount paid up-front by OCIM for the future deliveries of gold differs from the stand-alone selling price of the gold, the Company concluded the Agreement contains a significant financing component (“SFC”). Gold deliveries due in connection with the up-front payment are recorded in revenue based on the gold spot price originally established at the time of each advance, being the estimated stand-alone selling price of gold deliveries as determined at inception (after separating the SFC). The outstanding deferred revenue liability will accrue interest reflecting the cost of financing.

	Amount
As at August 31, 2022	$	2,485
Accretion of deferred revenue		127
Transaction costs expensed		15
As at November 30, 2022	$	2,627

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Derivative warrant liabilities

3 Months Ended

Nov. 30, 2022

Derivative Warrant Liabilities

Derivative warrant liabilities

10. Derivative warrant liabilities

	Amount
As at August 31, 2022	$	6,849
Change in fair value		(3,365	)
As at November 30, 2022	$	3,484

Derivative warrant liabilities of $3.5 million will only be settled by issuing equity of the Company.

Fair values of derivative warrant liabilities were calculated using the Black-Scholes option pricing model with the following assumptions:

	November 30, 2022		August 31, 2022
Share price	$	0.34	$	0.48
Risk-free interest rate		3.91% - 4.66%		3.32% - 3.44%
Dividend yield		0%		0%
Expected volatility		55% - 57%		55% - 60%
Remaining term (in years)		0.7 – 4.2		0.9 – 4.4

The fair value is classified as level 3 as the expected volatility 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, 2022 would increase or decrease by:

	November 30, 2022
10% change in expected volatility		Increase			Decrease
(Loss) income	$	(467	)	$	468

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Earnings (loss) per share

3 Months Ended

Nov. 30, 2022

Earnings Loss Per Share

Earnings (loss) per share

11. Earnings (loss) per share

	Three months ended November 30,
	2022		2021
Net income (loss) attributable to shareholders	$	3,512	$	(2,022	)
Weighted average number of common shares for purposes of basic EPS		276,477,860		254,983,579
Effect of dilutive stock options and warrants		1,221,178		-
Weighted average number of common shares for purposes of diluted EPS		277,699,038		254,983,579

The determination of weighted average number of common shares for the purpose of diluted EPS excluded 7.4 million share options and 42.0 million warrants that were anti-dilutive for the period (2021: 7.4 million share options and 23.4 million share warrants).

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Share-based payments reserve

3 Months Ended

Nov. 30, 2022

Share-based Payments Reserve

Share-based payments reserve

12. Share-based payments reserve

Share-based compensation expense for the three months ended November 30, 2022 totaled $0.8 million (November 30, 2021: $1.0 million).

As at November 30, 2022, the Company had 2,910,925 (August 31, 2022 - 2,106,675) share awards available for issuance under the Omnibus Equity Incentive Plan.

a) Stock options

Canadian Dollars denominated stock options

	Number of stock options		Weighted average exercise price per share
Balance – November 30, 2022 and August 31, 2022		5,336,000	CAD $0.41

Options to purchase common shares carry exercise prices and terms to maturity as follows:

						Remaining
	Number of options				Expiry	contractual
Exercise price	Outstanding		Exercisable		Date	life (years)
C$0.40		2,454,000		2,454,000	October 11, 2026		3.9
C$0.43		2,782,000		2,782,000	September 29, 2026		3.8
C$0.35		100,000		100,000	January 2, 2027		4.1
C$0.41(1)		5,336,000		5,336,000			3.9	(1)

⁽¹⁾  Total represents weighted average.

US Dollars denominated stock options

	Number of stock options		Weighted average exercise price per share
Balance – November 30, 2022 and August 31, 2022		7,375,000		$0.50

Options to purchase common shares carry exercise prices and terms to maturity as follows:

						Remaining
Exercise price	Number of options				Expiry	contractual
Outstanding $	Outstanding		Exercisable		Date	life (years)
USD $0.50		7,375,000		1,475,000	August 17, 2027		4.7

Share-based payment expenses related to stock options amounted to $0.1 million for the three-month period ended November 30, 2022 (November 30, 2021 - nil).

b) Restricted Share Units (“RSUs”):

The following table sets out activity with respect to outstanding RSUs:

	Number of RSUs
Balance – August 31, 2022		1,855,276
Vested		(600,000	)
Forfeited		(160,000	)
Balance – November 30, 2022		1,095,276

Share-based payment expenses related to RSUs amounted to $0.2 million for the three-month period ended November 30, 2022 (November 30, 2021 - nil).

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Warrants reserve

3 Months Ended

Nov. 30, 2022

Warrants Reserve

Warrants reserve

13. Warrants reserve

	Number of warrants		Weighted average exercise price per share
Balance – November 30, 2022 and August 31, 2022		41,970,074		0.72

As at November 30, 2022, the following warrants were outstanding:

	Number of Warrants		Exercise price		Expiry date
Convertible debenture warrants - July 27, 2020		3,002,037	$	1.21	July 27, 2023
Private placement financing warrants - December 23, 2020		2,777,268	$	1.50	December 23, 2023
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, 2022		41,970,074

The outstanding warrants have a weighted average exercise price of $0.72 and weighted average remaining contractual life of 3.3 years.

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Non-controlling interest

3 Months Ended

Nov. 30, 2022

Non-controlling Interest

Non-controlling interest

14. Non-controlling interest

Summarized financial information for Buckreef is disclosed below:

	Three months ended November 30,
Income Statement	2022		2021
Revenue	$	9,718	$	-
Comprehensive earnings (loss) for the period		3,662		(301	)

Statement of Financial Position	November 30, 2022			August 31, 2022
Current assets	$	8,283		$	7,253
Non-current assets		57,430			53,789
Current liabilities		(8,448	)		(8,602	)
Non-current liabilities		(3,995	)		(2,815	)
Advances from parent, net		(37,709	)		(37,725	)

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Related party transactions

3 Months Ended

Nov. 30, 2022

Related Party Transactions

Related party transactions

15. 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:

	Three months ended November 30,
Directors and key management personnel	2022		2021
Remuneration (1)	$	459	$	399
Share-based compensation expense		714		980
Total directors and key management personnel	$	1,173	$	1,379

 ⁽¹⁾ Remuneration includes salaries and benefits for certain key management personnel and director fees. Certain members of the board of directors have employment or service contracts with the Company. Directors are entitled to director fees and share based payments for their services and officers are entitled to cash remuneration and share based payments for their employment services.

As at November 30, 2022, included in amounts payable is $0.2 million of board fees (August 31, 2022 - $0.2 million) due to related parties with no specific terms of repayment.

During the three-month period ended November 30, 2022, $0.1 million for the stock options granted to key management personnel was expensed (November 30, 2021 - nil) and $0.2 million for RSUs granted to directors was expensed (November 30, 2021 - nil).

During the year ended August 31, 2021, the Company granted common shares upon hiring key management personnel in the aggregate of:

a) 1.56 million common shares having a fair market value of $1.1 million on the respective start dates of the key Management (December 1, 2020 to May 18, 2021).

b) Common shares on the first, second and third anniversary dates of the greater of up to 2.02 million, 3.55 million and 2.82 million common shares; or common shares having a fair market value of to $1.4 million, $2.5 million and $2.0 million provided that 80% of such issuance shall be guaranteed and 20% shall be subject to certain financial milestones to be determined by the Board of Directors respectively.

The common shares had a value of $7.0 million at grant date that is amortized over the service period.

During the three-month period ended November 30, 2022, $0.8 million related to common shares granted to key management personnel was expensed (November 30, 2021 - $1.0 million).

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General and administrative expenses

3 Months Ended

Nov. 30, 2022

General And Administrative Expenses

General and administrative expenses

16. General and administrative expenses

	Three months ended November 30,
	2022		2021
Directors’ fees (Note 15)	$	107	$	73
Insurance		99		122
Office and general		19		108
Shareholder information		128		113
Professional fees		101		152
Salaries and benefits(1)  (Note 15)		484		628
Consulting		51		45
Share-based compensation expense(1)  (Note 15)		753		980
Travel and accommodation		47		43
Depreciation(1)		40		81
Other		8		-
Total general and administrative expenses	$	1,837	$	2,345

 ⁽¹⁾ As a result of adoption to amendments to IAS 16, Property, Plant and Equipment, during the year ended August 31, 2022, certain costs incurred related to Buckreef’s operating costs, post adoption, were recorded in cost of sales.

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Income tax

3 Months Ended

Nov. 30, 2022

Income Tax

Income tax

17. Income tax

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 70% of its taxable profit for the current year. The remaining 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 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.

For the three months ended November 30, 2022, the Company recorded income tax expense of $1.5 million, comprised of current income tax expense of $0.4 million and deferred income tax expense of $1.1 million (November 30, 2021 - nil).

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Financial instruments

3 Months Ended

Nov. 30, 2022

Financial Instruments

Financial instruments

18. Financial instruments

Fair value of financial instruments

Cash and 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 cash, amounts receivable, 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, 2022 and August 31, 2022, cash was classified as Level 1 and derivative warrant liabilities (Note 10) were classified as Level 3 under the fair value hierarchy.

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Segmented information

3 Months Ended

Nov. 30, 2022

Segmented Information

Segmented information

19. Segmented information

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:

	Three months ended November 30,
Revenue	2022		2021
Tanzania	$	9,718	$	-
Total revenue	$	9,718	$	-

Non-current assets	November 30, 2022		August 31, 2022
Canada	$	65	$	-
Tanzania		59,668		55,993
Total non-current assets	$	59,733	$	55,993

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Commitments and contingencies

3 Months Ended

Nov. 30, 2022

Commitments And Contingencies

Commitments and contingencies

20. Commitments and contingencies

Commitments:

In order to maintain its existing mining and exploration licenses, the Company is required to pay annual license fees totalling $24. As at November 30, 2022 and August 31, 2022, 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, 2022 and August 31, 2022.

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Non-cash items

3 Months Ended

Nov. 30, 2022

Non-cash Items

Non-cash items

21. Non-cash items

	Three months ended November 30,
	2022			2021
Depreciation	$	233		$	81
Gains on derivative warrant liabilities (Note 10)		(3,365	)		(208	)
Share-based compensation expense (Note 12)		809			980
Accretion of provision for reclamation		35			34
Deferred income tax expense (Note 17)		1,129			-
Accretion of lease liabilities		5			-
Accretion of deferred revenue (Note 9)		127			-
Foreign exchange gains		(4	)		-
Other expenses		15			-
Total non-cash items	$	(1,016	)	$	887

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Amounts receivable (Tables)

3 Months Ended

Nov. 30, 2022

Amounts Receivable

Schedule of Summary of Receivables

	November 30, 2022			August 31, 2022
Receivable from precious metal sales	$	1,515		$	-
Sales tax receivable(1)		5,044			4,359
Prepaid gold purchase receivable (Note 9)		-			2,500
Other		41			40
		6,600			6,899
Less: Long-term portion		(4,976	)		(4,359	)
Total amounts receivable	$	1,624		$	2,540

(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 taxes due to the Tanzania Revenue Authority (“TRA”). VAT which still need to be verified by the TRA have been classified as long-term assets as the Company does not expect to recover these amounts within the next 12 months.

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Prepayments and other assets (Tables)

3 Months Ended

Nov. 30, 2022

Prepayments And Other Assets

Schedule of Prepaid and Other Assets

	November 30, 2022		August 31, 2022
Prepaid expenses	$	713	$	699
Commitment fees(1)		507		507
Total prepayments and other assets	$	1,220	$	1,206

(1) Consists of 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 shares over a 36-month period.

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Inventories (Tables)

3 Months Ended

Nov. 30, 2022

Inventory

Schedule of Inventory

	November 30, 2022		August 31, 2022
Ore stockpile	$	1,745	$	2,643
Gold in circuit		1,255		210
Gold doré		-		253
Total precious metals inventories		3,000		3,106
Supplies		831		524
Total inventories	$	3,831	$	3,630

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Mineral property, plant and equipment (Tables)

3 Months Ended

Nov. 30, 2022

Mineral Property Plant And Equipment

Schedule of continuity of expenditures on mineral properties

	Construction in progress			Mineral properties		Processing plant and related infrastructure		Machinery and equipment		Other		Total
Cost
As at August 31, 2022	$	45,239		$	-	$	7,076	$	1,396	$	143	$	53,854
Additions		-			822		2,378		21		211		3,432
Transfers(1)		(45,239	)		45,239		-		-		-		-
As at November 30, 2022	$	-		$	46,061	$	9,454	$	1,417	$	354	$	57,286
Accumulated depreciation
As at August 31, 2022	$	-		$	-	$	1,566	$	619	$	35	$	2,220
Depreciation		-			112		95		31		71		309
As at November 30, 2022	$	-		$	112	$	1,661	$	650	$	106	$	2,529
Net book value
As at August 31, 2022	$	45,239		$	-	$	5,510	$	777	$	108	$	51,634
As at November 30, 2022	$	-		$	45,949	$	7,793	$	767	$	248	$	54,757

(1) On November 1, 2022, Buckreef achieved commercial production at which point development expenditures were subject to depreciation.

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Deferred revenue (Tables)

3 Months Ended

Nov. 30, 2022

Deferred Revenue

Schedule of deferred revenue

	Amount
As at August 31, 2022	$	2,485
Accretion of deferred revenue		127
Transaction costs expensed		15
As at November 30, 2022	$	2,627

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Derivative warrant liabilities (Tables)

3 Months Ended

Nov. 30, 2022

Derivative Warrant Liabilities

Schedule of derivative warrant liabilities

	Amount
As at August 31, 2022	$	6,849
Change in fair value		(3,365	)
As at November 30, 2022	$	3,484

Schedule of assumptions fair value of derivative warrant liabilities

	November 30, 2022		August 31, 2022
Share price	$	0.34	$	0.48
Risk-free interest rate		3.91% - 4.66%		3.32% - 3.44%
Dividend yield		0%		0%
Expected volatility		55% - 57%		55% - 60%
Remaining term (in years)		0.7 – 4.2		0.9 – 4.4

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Earnings (loss) per share (Tables)

3 Months Ended

Nov. 30, 2022

Earnings Loss Per Share

Schedule of earning per share

	Three months ended November 30,
	2022		2021
Net income (loss) attributable to shareholders	$	3,512	$	(2,022	)
Weighted average number of common shares for purposes of basic EPS		276,477,860		254,983,579
Effect of dilutive stock options and warrants		1,221,178		-
Weighted average number of common shares for purposes of diluted EPS		277,699,038		254,983,579

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Share-based payments reserve (Tables)

3 Months Ended

Nov. 30, 2022

IfrsStatementLineItems [Line Items]

Schedule of continuity of outstanding stock options

	Number of stock options		Weighted average exercise price per share
Balance – November 30, 2022 and August 31, 2022		5,336,000	CAD $0.41

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		2,454,000		2,454,000	October 11, 2026		3.9
C$0.43		2,782,000		2,782,000	September 29, 2026		3.8
C$0.35		100,000		100,000	January 2, 2027		4.1
C$0.41(1)		5,336,000		5,336,000			3.9	(1)

⁽¹⁾  Total represents weighted average.

Schedule of restricted stock outstanding

	Number of RSUs
Balance – August 31, 2022		1,855,276
Vested		(600,000	)
Forfeited		(160,000	)
Balance – November 30, 2022		1,095,276

Stock Options [Member]

IfrsStatementLineItems [Line Items]

Schedule of continuity of outstanding stock options

	Number of stock options		Weighted average exercise price per share
Balance – November 30, 2022 and August 31, 2022		7,375,000		$0.50

Schedule of Options to purchase common shares carry exercise prices and terms to maturity

						Remaining
Exercise price	Number of options				Expiry	contractual
Outstanding $	Outstanding		Exercisable		Date	life (years)
USD $0.50		7,375,000		1,475,000	August 17, 2027		4.7

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Warrants reserve (Tables)

3 Months Ended

Nov. 30, 2022

Warrants Reserve

Schedule of Reserve for warrants

	Number of warrants		Weighted average exercise price per share
Balance – November 30, 2022 and August 31, 2022		41,970,074		0.72

Schedule of warrants and compensation warrants

	Number of Warrants		Exercise price		Expiry date
Convertible debenture warrants - July 27, 2020		3,002,037	$	1.21	July 27, 2023
Private placement financing warrants - December 23, 2020		2,777,268	$	1.50	December 23, 2023
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, 2022		41,970,074

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Non-controlling interest (Tables)

3 Months Ended

Nov. 30, 2022

Non-controlling Interest

Schedule of summarized financial information

	Three months ended November 30,
Income Statement	2022		2021
Revenue	$	9,718	$	-
Comprehensive earnings (loss) for the period		3,662		(301	)

Statement of Financial Position	November 30, 2022			August 31, 2022
Current assets	$	8,283		$	7,253
Non-current assets		57,430			53,789
Current liabilities		(8,448	)		(8,602	)
Non-current liabilities		(3,995	)		(2,815	)
Advances from parent, net		(37,709	)		(37,725	)

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Related party transactions (Tables)

3 Months Ended

Nov. 30, 2022

Related Party Transactions

Schedule of Related Parties Compensation

	Three months ended November 30,
Directors and key management personnel	2022		2021
Remuneration (1)	$	459	$	399
Share-based compensation expense		714		980
Total directors and key management personnel	$	1,173	$	1,379

 ⁽¹⁾ Remuneration includes salaries and benefits for certain key management personnel and director fees. Certain members of the board of directors have employment or service contracts with the Company. Directors are entitled to director fees and share based payments for their services and officers are entitled to cash remuneration and share based payments for their employment services.

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General and administrative expenses (Tables)

3 Months Ended

Nov. 30, 2022

General And Administrative Expenses

Schedule of General and Administrative expense

	Three months ended November 30,
	2022		2021
Directors’ fees (Note 15)	$	107	$	73
Insurance		99		122
Office and general		19		108
Shareholder information		128		113
Professional fees		101		152
Salaries and benefits(1)  (Note 15)		484		628
Consulting		51		45
Share-based compensation expense(1)  (Note 15)		753		980
Travel and accommodation		47		43
Depreciation(1)		40		81
Other		8		-
Total general and administrative expenses	$	1,837	$	2,345

 ⁽¹⁾ As a result of adoption to amendments to IAS 16, Property, Plant and Equipment, during the year ended August 31, 2022, certain costs incurred related to Buckreef’s operating costs, post adoption, were recorded in cost of sales.

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Segmented information (Tables)

3 Months Ended

Nov. 30, 2022

Segmented Information

Schedule of operating segments

	Three months ended November 30,
Revenue	2022		2021
Tanzania	$	9,718	$	-
Total revenue	$	9,718	$	-

Non-current assets	November 30, 2022		August 31, 2022
Canada	$	65	$	-
Tanzania		59,668		55,993
Total non-current assets	$	59,733	$	55,993

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Non-cash items (Tables)

3 Months Ended

Nov. 30, 2022

Non-cash Items

Schedule of Non-cash items

	Three months ended November 30,
	2022			2021
Depreciation	$	233		$	81
Gains on derivative warrant liabilities (Note 10)		(3,365	)		(208	)
Share-based compensation expense (Note 12)		809			980
Accretion of provision for reclamation		35			34
Deferred income tax expense (Note 17)		1,129			-
Accretion of lease liabilities		5			-
Accretion of deferred revenue (Note 9)		127			-
Foreign exchange gains		(4	)		-
Other expenses		15			-
Total non-cash items	$	(1,016	)	$	887

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Amounts receivable (Details) - USD ($)		Nov. 30, 2022	Aug. 31, 2022
Amounts Receivable
Receivable from precious metal sales		$ 1,515,000
Sales tax receivable	[1]	5,044,000	4,359,000
Prepaid gold purchase receivable			2,500,000
Other		41,000	40,000
Other receivable		6,600,000	6,899,000
Less: other long-term asset		(4,976,000)	(4,359,000)
Total amounts receivable		$ 1,624,000	$ 2,540,000

[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 taxes due to the Tanzania Revenue Authority (“TRA”). VAT which still need to be verified by the TRA have been classified as long-term assets as the Company does not expect to recover these amounts within the next 12 months.

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Prepayments and other assets (Details) - USD ($) $ in Thousands		Nov. 30, 2022	Aug. 31, 2022
Prepayments And Other Assets
Prepaid expenses		$ 713	$ 699
Commitment fees	[1]	507	507
Total prepayments and other assets		$ 1,220	$ 1,206

[1] Consists of 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 shares over a 36-month period.

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Inventory (Details) - USD ($) $ in Thousands	Nov. 30, 2022	Aug. 31, 2022
Inventory
Ore stockpile	$ 1,745	$ 2,643
Gold in circuit	1,255	210
Gold doré		253
Total precious metals inventories	3,000	3,106
Supplies	831	524
Total inventories	$ 3,831	$ 3,630

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Mineral property, plant and equipment (Details) $ in Thousands	3 Months Ended
	Nov. 30, 2022 USD ($)
IfrsStatementLineItems [Line Items]
Beginning balance	$ 51,634
Ending balance	54,757
Net book value	54,757
Construction in progress [member]
IfrsStatementLineItems [Line Items]
Beginning balance	45,239
Ending balance
Net book value
Mineral Properties [Member]
IfrsStatementLineItems [Line Items]
Beginning balance
Ending balance	45,949
Net book value	45,949
Processing plant [member]
IfrsStatementLineItems [Line Items]
Beginning balance	5,510
Ending balance	7,793
Net book value	7,793
Machinery [member]
IfrsStatementLineItems [Line Items]
Beginning balance	777
Ending balance	767
Net book value	767
Other [Member]
IfrsStatementLineItems [Line Items]
Beginning balance	108
Ending balance	248
Net book value	248
Gross carrying amount [member]
IfrsStatementLineItems [Line Items]
Beginning balance	53,854
Additions	3,432
Transfers		[1]
Ending balance	57,286
Net book value	57,286
Gross carrying amount [member] | Construction in progress [member]
IfrsStatementLineItems [Line Items]
Beginning balance	45,239
Additions
Transfers	(45,239)	[1]
Ending balance
Net book value
Gross carrying amount [member] | Mineral Properties [Member]
IfrsStatementLineItems [Line Items]
Beginning balance
Additions	822
Transfers	45,239	[1]
Ending balance	46,061
Net book value	46,061
Gross carrying amount [member] | Processing plant [member]
IfrsStatementLineItems [Line Items]
Beginning balance	7,076
Additions	2,378
Transfers		[1]
Ending balance	9,454
Net book value	9,454
Gross carrying amount [member] | Machinery [member]
IfrsStatementLineItems [Line Items]
Beginning balance	1,396
Additions	21
Transfers		[1]
Ending balance	1,417
Net book value	1,417
Gross carrying amount [member] | Other [Member]
IfrsStatementLineItems [Line Items]
Beginning balance	143
Additions	211
Transfers		[1]
Ending balance	354
Net book value	354
Accumulated depreciation and amortisation [member]
IfrsStatementLineItems [Line Items]
Beginning balance	2,220
Depreciation	309
Ending balance	2,529
Accumulated depreciation and amortisation [member] | Construction in progress [member]
IfrsStatementLineItems [Line Items]
Beginning balance
Depreciation
Ending balance
Accumulated depreciation and amortisation [member] | Mineral Properties [Member]
IfrsStatementLineItems [Line Items]
Beginning balance
Depreciation	112
Ending balance	112
Accumulated depreciation and amortisation [member] | Processing plant [member]
IfrsStatementLineItems [Line Items]
Beginning balance	1,566
Depreciation	95
Ending balance	1,661
Accumulated depreciation and amortisation [member] | Machinery [member]
IfrsStatementLineItems [Line Items]
Beginning balance	619
Depreciation	31
Ending balance	650
Accumulated depreciation and amortisation [member] | Other [Member]
IfrsStatementLineItems [Line Items]
Beginning balance	35
Depreciation	71
Ending balance	$ 106

[1] On November 1, 2022, Buckreef achieved commercial production at which point development expenditures were subject to depreciation.

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Deferred revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Deferred Revenue
Deferred revenue, beginning	$ 2,485
Accretion of deferred revenue	127
Transaction costs expensed	15
Deferred revenue, ending	$ 2,627

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Deferred revenue (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Aug. 11, 2022
IfrsStatementLineItems [Line Items]
Deferred revenue description	The Company drew down the first tranche of $2.5 million in exchange for delivering 434 ounces of gold per quarter, commencing February 2023, for a total of 1,735 ounces of gold over four quarters.
Purchase Agreement [Member]
IfrsStatementLineItems [Line Items]
Prepaid gold dore		$ 5,000

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Derivative warrant liabilities (Details) $ in Thousands	3 Months Ended
	Nov. 30, 2022 USD ($)
IfrsStatementLineItems [Line Items]
Ending balance at derivative warrant liabilities	$ 3,500
Derivative Warrant Liabilities [Member]
IfrsStatementLineItems [Line Items]
Beginning balance at derivative warrant liabilities	6,849
Change in fair value	(3,365)
Ending balance at derivative warrant liabilities	$ 3,484

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Derivative warrant liabilities (Details 1) - Derivative Warrant Liabilities [Member] - $ / shares	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Aug. 31, 2022
IfrsStatementLineItems [Line Items]
Share price	$ 0.34		$ 0.48
Dividend yield	0.00%	0.00%
Bottom of range [member]
IfrsStatementLineItems [Line Items]
Risk-free interest rate	3.91%	3.32%
Expected volatility	55.00%	55.00%
Remaining term (in years)	8 months 12 days	10 months 24 days
Top of range [member]
IfrsStatementLineItems [Line Items]
Risk-free interest rate	4.66%	3.44%
Expected volatility	57.00%	60.00%
Remaining term (in years)	4 years 2 months 12 days	4 years 4 months 24 days

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Derivative warrant liabilities (Details Narrative) $ in Thousands	Nov. 30, 2022 USD ($)
Derivative Warrant Liabilities
Warrant liability	$ 3,500

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Earnings (loss) per share (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Earnings Loss Per Share
Net income (loss) attributable to shareholders	$ 3,512	$ (2,022)
Weighted average number of common shares for purposes of basic EPS	276,477,860	254,983,579
Effect of dilutive stock options and warrants	1,221,178
Weighted average number of common shares for purposes of diluted EPS	277,699,038	254,983,579

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Earnings (loss) per share (Details Narrative) - shares shares in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Stock Options [Member]
IfrsStatementLineItems [Line Items]
Weighted average number of common shares	7,400	7,400
Warrants [Member]
IfrsStatementLineItems [Line Items]
Weighted average number of common shares	42,000	23,400

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Share based payment reserve (Details) - $ / shares		Nov. 30, 2022	Aug. 31, 2022
IfrsStatementLineItems [Line Items]
Number of shares outstanding		5,336,000
Weighted average exercise price	[1]	$ 0.41
Stock Options [Member]
IfrsStatementLineItems [Line Items]
Number of shares outstanding		5,336,000	5,336,000
Weighted average exercise price		$ 0.41	$ 0.41

[1] Total represents weighted average.

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Share based payment reserve (Details 1)	3 Months Ended
	Nov. 30, 2022 $ / shares
IfrsStatementLineItems [Line Items]
Exercise price	$ 0.41	[1]
Number of options outstanding	5,336,000
Number of options exercisable	5,336,000
Remaining contractual life	3 years 10 months 24 days	[1]
Range 1 [Member]
IfrsStatementLineItems [Line Items]
Exercise price	$ 0.40
Number of options outstanding	2,454,000
Number of options exercisable	2,454,000
Expiry date	Oct. 11, 2026
Remaining contractual life	3 years 10 months 24 days
Range 2 [Member]
IfrsStatementLineItems [Line Items]
Exercise price	$ 0.43
Number of options outstanding	2,782,000
Number of options exercisable	2,782,000
Expiry date	Sep. 29, 2026
Remaining contractual life	3 years 9 months 18 days
Range 3 [Member]
IfrsStatementLineItems [Line Items]
Exercise price	$ 0.35
Number of options outstanding	100,000
Number of options exercisable	100,000
Expiry date	Jan. 02, 2027
Remaining contractual life	4 years 1 month 6 days

[1] Total represents weighted average.

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Share based payment reserve (Details 2) - $ / shares	Nov. 30, 2022	Aug. 31, 2022
Share-based Payments Reserve
Number of stock options	7,375,000	7,375,000
Weighted average exercise price per share	$ 0.50	$ 0.50

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Share based payment reserve (Details 3)	3 Months Ended
	Nov. 30, 2022 shares $ / shares
Share-based Payments Reserve
Number of exercise price outstanding | $ / shares	$ 0.50
Number of options outstanding	7,375,000
Number of options exercisable	1,475,000
Expiry date	Aug. 17, 2027
Remaining contractual life	4 years 8 months 12 days

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Share based payment reserve (Details 4)	3 Months Ended
	Nov. 30, 2022 shares
Share-based Payments Reserve
Beginning balance	1,855,276
Restricted share units, vested	(600,000)
Restricted share units, forfeited	(160,000)
Ending balance	1,095,276

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Share-based payments reserve (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Aug. 31, 2022
IfrsStatementLineItems [Line Items]
Share based payment expenses	$ 800	$ 1,000
Stock Options [Member]
IfrsStatementLineItems [Line Items]
Share based payment expenses	100	0
Restricted Stock Unit [Member]
IfrsStatementLineItems [Line Items]
Share based payment expenses	$ 200	$ 0
Omnibus Plan [Member]
IfrsStatementLineItems [Line Items]
Number of shares issued for options	2,910,925		2,106,675

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Warrants reserve (Details) - $ / shares	Nov. 30, 2022	Aug. 31, 2022
Warrants Reserve
Number of stock options	41,970,074	41,970,074
Weighted average exercise price per share	$ 0.72	$ 0.72

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Warrants reserve (Details 1)	3 Months Ended
	Nov. 30, 2022 $ / shares shares
IfrsStatementLineItems [Line Items]
Number of warrants	41,970,074
Convertible Debenture Warrants [Member]
IfrsStatementLineItems [Line Items]
Number of warrants	3,002,037
Exercise price | $ / shares	$ 1.21
Warrants outstanding expiry date	Jul. 27, 2023
Private Placement Financing Warrants December 232020 [Member]
IfrsStatementLineItems [Line Items]
Number of warrants	2,777,268
Exercise price | $ / shares	$ 1.50
Warrants outstanding expiry date	Dec. 23, 2023
Private Placement Financing Warrants February 112021 [Member]
IfrsStatementLineItems [Line Items]
Number of warrants	16,461,539
Exercise price | $ / shares	$ 0.80
Warrants outstanding expiry date	Feb. 11, 2026
Private Placement Financing Broker Warrants February 112021 [Member]
IfrsStatementLineItems [Line Items]
Number of warrants	1,152,307
Exercise price | $ / shares	$ 0.80
Warrants outstanding expiry date	Feb. 11, 2026
Private Placement Financing Warrants January 262022 [Member]
IfrsStatementLineItems [Line Items]
Number of warrants	17,948,718
Exercise price | $ / shares	$ 0.44
Warrants outstanding expiry date	Jan. 26, 2027
Private Placement Financing Placement Agent Warrants January 262022 [Member]
IfrsStatementLineItems [Line Items]
Number of warrants	628,205
Exercise price | $ / shares	$ 0.44
Warrants outstanding expiry date	Jan. 26, 2027

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Warrants reserve (Details Narrative) - $ / shares	Nov. 30, 2022	Aug. 31, 2022
IfrsStatementLineItems [Line Items]
Weighted average exercise price	$ 0.72	$ 0.72
Warrants [Member]
IfrsStatementLineItems [Line Items]
Weighted average exercise price	$ 0.72

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Non-controlling interest (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Aug. 31, 2022
IfrsStatementLineItems [Line Items]
Revenue	$ 9,718
Comprehensive loss for the period/year	5,160	(2,158)
Current assets	15,605		$ 15,852
Non-current assets	59,733		55,993
Current liabilities	14,248		17,250
Non-controlling interests [member] | Buckreef [Member]
IfrsStatementLineItems [Line Items]
Revenue	9,718
Comprehensive loss for the period/year	3,662	$ (301)
Current assets	8,283		7,253
Non-current assets	57,430		53,789
Current liabilities	(8,448)		(8,602)
Non-current liabilities	3,995		2,815
Advances from parent, net	$ (37,709)		$ (37,725)

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Related party transactions (Details) - USD ($) $ in Thousands		3 Months Ended
		Nov. 30, 2022	Nov. 30, 2021
IfrsStatementLineItems [Line Items]
Key Management		$ 1,173	$ 1,379
Share based payments		800	1,000
Key management personnel of entity or parent [member]
IfrsStatementLineItems [Line Items]
Key Management	[1]	459	399
Share based payments		$ 714	$ 980

[1] Remuneration includes salaries and benefits for certain key management personnel and director fees. Certain members of the board of directors have employment or service contracts with the Company. Directors are entitled to director fees and share based payments for their services and officers are entitled to cash remuneration and share based payments for their employment services.

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Related party transactions (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Aug. 31, 2022
IfrsStatementLineItems [Line Items]
Payables to related parties	$ 200		$ 200
Stock value	7,000
Shares granted	800	$ 1,000
Stock Options [Member]
IfrsStatementLineItems [Line Items]
Compensation expense	100	0
R S Us [Member]
IfrsStatementLineItems [Line Items]
Compensation expense	$ 200	$ 0

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General and Administrative expense (Details) - USD ($) $ in Thousands		3 Months Ended
		Nov. 30, 2022	Nov. 30, 2021
General And Administrative Expenses
Directors’ fees (Note 15)		$ 107	$ 73
Insurance		(99)	(122)
Office and general		19	108
Shareholder information		128	113
Professional fees		101	152
Salaries and benefits(Note 15)	[1]	(484)	(628)
Consulting		51	45
Share-based compensation expense  (Note 15)	[1]	753	980
Travel and accommodation		(47)	(43)
Depreciation	[1]	40	81
Other		8
Total general and administrative expenses		$ 1,837	$ 2,345

[1] As a result of adoption to amendments to IAS 16, Property, Plant and Equipment, during the year ended August 31, 2022, certain costs incurred related to Buckreef’s operating costs, post adoption, were recorded in cost of sales.

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Income tax (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Income Tax
Income tax expenses	$ 1,500
Current income tax expense	400
Deferred income tax expense	$ 1,100	$ 0

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Segmented Information (Details) - USD ($)	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Aug. 31, 2022
IfrsStatementLineItems [Line Items]
Revenue	$ 9,718,000
Non-current assets	59,733,000		$ 55,993,000
Tanzania [Member]
IfrsStatementLineItems [Line Items]
Revenue	9,718,000
Non-current assets	59,668,000		55,993,000
Canada [Member]
IfrsStatementLineItems [Line Items]
Non-current assets	$ 65,000

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Commitments and contingencies (Details Narrative) $ in Thousands	3 Months Ended
	Nov. 30, 2022 USD ($)
Commitments And Contingencies
Annual license fees	$ 24

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Non-cash items (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Non-cash Items
Depreciation	$ 233	$ 81
Gains on derivative warrant liabilities (Note 10)	3,365	208
Share-based compensation expense (Note 12)	809	980
Accretion of provision for reclamation	35	34
Deferred income tax expense (Note 17)	1,129
Accretion of lease liabilities	5
Accretion of deferred revenue (Note 9)	127
Foreign exchange gains	(4)
Other expenses	15
Total non-cash items	$ (1,016)	$ 887