Mount Gibson Bets $50M on Central Tanami Gold Amid $82M Loss

A Challenging Year for Iron Ore

Mount Gibson Iron Limited has reported a net loss after tax of $82.2 million for the 2024/25 financial year, a sharp reversal from the modest profit of $6.4 million in the prior year. This loss was driven primarily by $90.4 million in non-cash impairment charges linked to the impact of weaker iron ore prices on the carrying value of assets at its Koolan Island operation. Despite these accounting setbacks, the company’s underlying operational performance remained resilient in a volatile market environment.

Sales volumes at Koolan Island fell to 2.6 million wet metric tonnes (Mwmt) of high-grade iron ore at 64.5% iron content, down from 4.1 Mwmt the previous year. Correspondingly, sales revenue halved to $330.5 million, reflecting both lower volumes and a decline in realised prices to US$83 per dry metric tonne, compared with US$110 the year before. Operating cashflow from Koolan Island dropped sharply to $26.5 million, underscoring the challenges of transitioning mining phases and market headwinds.

Strong Cash Position and Cost Management

Despite the earnings hit, Mount Gibson ended the year with a robust cash and investment position of $484.6 million, slightly up from $463 million a year earlier. The company’s disciplined capital management is further evidenced by an ongoing on-market share buyback program, which has repurchased 3.2% of issued shares to date. Operating costs at Koolan Island increased to an average of $101 per wet metric tonne, reflecting higher waste stripping ratios and operational adjustments, but are expected to improve in FY26 as mining transitions stabilize.

Pivot to Gold – Central Tanami Acquisition

In a strategic move to diversify and grow, Mount Gibson announced a transformational acquisition of a 50% interest in the Central Tanami Gold Project in the Northern Territory for $50 million. This advanced gold project boasts over 1.6 million ounces of gold resources and includes a dormant processing plant and infrastructure, offering a near-term development opportunity. The company aims to fast-track the project towards a development decision within 12 to 18 months, marking a significant pivot towards establishing a new Australian precious metals business.

The acquisition price equates to approximately $61 per ounce of JORC-compliant gold resources, positioning Mount Gibson competitively within the gold sector. The deal is subject to regulatory approvals and other customary conditions, with completion expected by March 2026. This move signals Mount Gibson’s intent to leverage its operational expertise and financial strength to expand beyond iron ore into gold mining.

Looking Ahead – FY26 Guidance and Market Conditions

Mount Gibson is targeting an increase in iron ore sales to 3.0–3.2 Mwmt in FY26 at a reduced site cash operating cost of $80–85 per wet metric tonne, reflecting anticipated efficiencies as mining activities normalize. However, the company remains cautious amid ongoing global economic uncertainties and volatile iron ore prices, which have pressured earnings and asset valuations.

No dividend has been declared for FY25, reflecting the company’s focus on preserving cash for growth initiatives. Investors will be watching closely how Mount Gibson balances its legacy iron ore operations with the promising but capital-intensive Central Tanami gold project as it charts its next phase of growth.