MGX Advances Central Tanami Gold Development While Selling Koolan Island Operation

Central Tanami Project Accelerates Towards Development

MGX Resources (ASX:MGX) is making tangible strides in transforming into a focused Australian gold developer, with key activities ramping up at its Central Tanami Project Joint Venture (CTPJV). The company has selected Macmahon Underground as the preferred contractor to commence construction of an underground exploration decline at the Groundrush gold deposit, targeting portal development by September 2026. This $38 million contract marks a significant step towards unlocking over 400,000 ounces of inferred resources through underground drilling planned to follow the 14-month decline construction.

Alongside this, resource definition drilling recommenced at the Jims gold deposit, a nearby open-pit candidate, with an initial phase comprising 10,500 metres of reverse circulation and 2,600 metres of diamond core drilling. This program aims to infill existing resources, explore extensions, and provide samples for metallurgical testing. MGX’s 50% share of expenditure on the CTPJV reached $4.7 million during the June quarter, reflecting an acceleration in development activities.

Koolan Island Sale Provides Cash and Rehabilitation Relief

In parallel with its gold ambitions, MGX continued to wind down its Koolan Island iron ore operation, shipping 0.94 million wet metric tonnes (Mwmt) of low-grade ore during the quarter. This low-grade stockpile program generated net positive cashflow of $5.8 million after rehabilitation costs, helping offset the substantial site rehabilitation expenses that have followed the October 2025 rockfall.

Crucially, MGX executed a binding conditional agreement to sell Koolan Island to Crestlink Koolan Pty Ltd, backed by US infrastructure investor Cerberus Capital Management. The deal includes upfront and deferred payments totalling at least $20.2 million plus a potential $5 million indexed revenue share. Crestlink will also assume the remaining rehabilitation obligations estimated around $30 million. Completion is targeted for late 2026 but may extend to March 2027 depending on regulatory approvals including FIRB and ACCC clearances.

Strong Financial Position Supports Growth

MGX closed the quarter with robust cash and investment reserves of $412.1 million and no bank debt, positioning the company well to fund ongoing development at Central Tanami. Group net cashflow was positive $3.1 million, supported by Koolan Island operations and interest income that exceeded corporate and exploration costs. The company also holds strategic equity stakes valued at approximately $41 million in other Australian resource companies, including a 4.9% interest in copper producer AIC Mines and a 9.4% stake in iron ore producer Fenix Resources.

Exploration and Infrastructure Progress

Beyond the immediate development work, MGX is advancing infrastructure upgrades at the CTPJV site, including camp repairs and utility improvements to support increased workforce levels. The company is evaluating options for a new airstrip to improve site accessibility, subject to regulatory and Traditional Owner approvals. Concurrently, detailed geological modelling using government seismic and gravity data is underway to refine exploration targeting across both joint venture and wholly owned tenements covering over 5,700 square kilometres in the Central Tanami region.

Regional exploration also continues in Western Australia’s Mid-West and Gascoyne regions, with diamond drilling preparations near the former Tallering Peak iron ore mine and airborne gravity surveys completed over prospective tenements.