MGX Navigates Koolan Rockfall with $15M Cashflow, Eyes Central Tanami Gold Boost

Koolan Island Rockfall Disrupts Mining Operations

In mid-October 2025, MGX Resources Limited faced a significant operational setback when a substantial rockfall occurred on the eastern footwall of the Main Pit at its Koolan Island iron ore mine. This event forced an immediate suspension of mining activities due to safety concerns, with further instability detected in November. Fortunately, no injuries were reported thanks to effective monitoring systems.

In response, MGX swiftly pivoted its operational strategy to focus on processing and selling lower grade stockpiled iron ore, previously held for blending purposes. This shift, combined with cost-cutting measures including workforce reductions of approximately 270 roles, helped the company mitigate the impact of the disruption. Rehabilitation efforts were accelerated, with earthworks progressing rapidly ahead of the northern Australian wet season.

Financial Resilience Amidst Operational Challenges

Despite the suspension of mining, MGX reported a robust December quarter, generating $15 million in free cashflow from Koolan Island operations. The company shipped 0.80 million wet metric tonnes of iron ore, split between 0.32 million tonnes of high-grade ore averaging 62.6% iron and 0.48 million tonnes of lower grade material averaging 49.6% iron. Processing costs improved, with unit cash costs dropping to $12.44 per tonne from $16.39 in the prior quarter.

MGX’s strong cash position was maintained, with cash and investment reserves totaling $497 million as of 31 December 2025, equivalent to approximately $0.42 per share. The company remains debt-free, providing financial flexibility as it navigates the post-rockfall period.

Strategic Acquisition of Central Tanami Gold Project Advances

Looking beyond Koolan Island, MGX is progressing its transformative acquisition of a 50% interest in the Central Tanami Gold Project Joint Venture (CTPJV) from Northern Star Resources. The deal received Foreign Investment Review Board approval in December 2025, with completion expected in the March 2026 quarter. This acquisition positions MGX to diversify into gold mining, leveraging its operational expertise in northern Australia.

The CTPJV’s updated Mineral Resource estimate, announced in November 2025, increased to 31 million tonnes grading 2.8 grams per tonne gold, containing 2.8 million ounces of gold. MGX’s 50% share equates to 1.4 million ounces, marking it as one of Australia’s highest grade undeveloped gold projects. The project includes infrastructure such as a non-operating processing plant, haul roads, accommodation, and an airstrip, offering a solid foundation for future development.

Outlook and Corporate Developments

MGX plans to continue processing and shipping approximately 1.0 million wet metric tonnes of low-grade stockpiled iron ore through the first half of 2026, aiming to reduce the net cost of post-rockfall activities, previously estimated at $30-40 million for FY26. The company is also exploring potential repurposing of Koolan Island’s infrastructure for post-mining uses.

On the corporate front, MGX completed a name change from Mount Gibson Iron Limited to MGX Resources Limited in December 2025, reflecting its strategic shift towards a diversified mineral portfolio. The company anticipates reporting a non-cash impairment of $55-65 million on Koolan Island assets in its upcoming half-year financial results, due to the rockfall’s impact.

MGX continues to hold a diversified investment portfolio in Australian resources companies and is advancing exploration activities in Western Australia’s Mid-West and Edmund Basin regions, targeting precious and base metals.