MGX Resources and Tanami Gold have contracted Macmahon Underground for a $38 million build of a 3.5km underground decline at Groundrush, aiming to upgrade 400,000 ounces of inferred gold resources and push the Central Tanami Project towards a 2027 development decision.
- Signed $38 million contract with Macmahon for underground decline
- 3.5km decline to enable 33,000 metres of infill drilling
- Targeting upgrade of 400,000 ounces from Inferred to Indicated resources
- Surface works underway; portal construction starting September
- Ongoing resource drilling at Jims Gold Deposit and site upgrades
Major Contract Signed for Groundrush Underground Decline
MGX Resources (ASX:MGX) and joint venture partner Tanami Gold NL (ASX:TAM) have formalised a $38 million agreement with Macmahon Underground Pty Ltd to construct a 3.5-kilometre underground decline at the Groundrush Gold Deposit, part of their Central Tanami Project Joint Venture (CTPJV) in the Northern Territory. The decline will reach a depth of approximately 350 metres over a 14-month build period, setting the stage for extensive underground drilling.
Drilling to Upgrade Significant Gold Resources
The underground decline is not merely an access development; it will facilitate around 33,000 metres of infill drilling designed to convert more than 400,000 ounces of gold currently classified as Inferred Resources into the higher-confidence Indicated category. This upgrade is critical for mine design and advancing towards a development decision targeted for 2027. Drilling platforms will be established progressively during the latter stages of the decline construction, enabling resource definition to depths of around 650 metres.
Surface Preparations and Broader Site Activities
Surface works, including preparation of laydown areas and re-establishment of the pit access ramp, are already in progress, with portal construction within the historic open pit scheduled to commence in September. Beyond Groundrush, resource definition drilling has resumed at the Jims Gold Deposit, which holds an estimated 220,000 ounces of gold and presents potential as a supplementary open pit ore source. Concurrently, the site is undergoing infrastructure repairs and upgrades, including accommodation and utilities, to support ongoing and future operations.
Project Scale and Resource Base
The CTPJV boasts a substantial Mineral Resource Estimate of 31 million tonnes at 2.8 grams per tonne gold, equating to 2.8 million ounces of contained gold. Within this, the Groundrush deposit accounts for 11 million tonnes at 3.3 grams per tonne, or 1.2 million ounces. These figures underscore the project’s significance as one of Australia’s higher-grade undeveloped gold assets.
Leadership Perspective and Next Steps
MGX CEO Peter Kerr described the decline commencement as a "key milestone" in advancing the CTPJV towards production. The joint venture partners plan to provide regular updates as they progress, signalling a clear intent to establish a major new gold operation in the Northern Territory. The project’s momentum follows MGX’s strategic pivot from its Koolan Island iron ore operations, where recent divestments have bolstered its capacity to fund gold development initiatives.
Bottom Line?
The $38 million contract for the Groundrush decline marks a tangible step toward unlocking significant gold resources, but the ultimate success hinges on drilling results and the 2027 development decision.
Questions in the middle?
- Will the infill drilling successfully convert the targeted 400,000 ounces to Indicated status?
- How will the construction timeline and costs evolve over the 14-month decline build?
- What impact will the Jims Gold Deposit drilling have on overall project economics?