Tanami Gold funds the next step towards Groundrush development

Groundrush decline marks a funded development step

Tanami Gold NL (ASX:TAM) is moving its Central Tanami Project from surface exploration towards underground definition work, with a $38 million contract to build the Groundrush exploration decline. Macmahon Underground is scheduled to establish the portal and ventilation infrastructure and develop about 3,500 metres of decline over 14 months from the September 2026 quarter.

The decline is not a mine restart contract. Its initial purpose is to provide underground headings for resource infill drilling and early access to ore, with drilling planned down to a vertical depth of about 650 metres. The $38 million figure represents the full construction cost to the 50:50 Central Tanami Project Joint Venture, leaving Tanami responsible for its share through the joint venture funding arrangements.

Rights issue leaves Tanami with a substantial cash balance

Tanami completed a fully underwritten 1-for-1 renounceable rights issue in June, issuing 1.175 billion shares at $0.06 each for gross proceeds of $70.5 million. After $2.912 million in issue costs, net proceeds were $67.594 million, with the company directing the capital towards its share of the Groundrush decline, resource drilling, camp and infrastructure upgrades, and working capital.

Cash and cash equivalents stood at $75.943 million at 30 June 2026, up from $18.872 million a year earlier. The balance sheet also included $9.475 million of Northern Star Resources shares. That liquidity is important because Tanami remains an exploration and development company, carrying the cost of its 50% Central Tanami interest without operating revenue from gold production.

Drilling expands the resource-definition case

The field program delivered 13,600 metres of drilling across Jims, Groundrush, Western Dolerite and Defa. Jims produced some of the strongest reported results, including 12.17 metres at 6.94 grams per tonne gold and 13 metres at 6.61 grams per tonne. Mineralisation has now been identified over roughly 900 metres of strike and to a vertical extent of 500 metres, while remaining open to the north and at depth.

Groundrush drilling also returned high-grade intercepts, including two metres at 20.02 grams per tonne gold and four metres at 7.20 grams per tonne. The company says the work improved confidence in the southern edge of the deposit ahead of resource updates and mining studies, but the annual report does not turn those results into an Ore Reserve or establish that commercial production will recommence.

Resource stands at 2.8Moz before the next update

The Central Tanami Mineral Resource was reported at 31 million tonnes grading 2.8 grams per tonne for 2.8 million ounces as at 30 September 2025. That represented an 18% increase in tonnes and a 9% increase in contained ounces against the June 2023 estimate, although grade declined 8%. The estimate was constrained using pit and stope optimisations and a long-term gold price assumption of A$3,500 per ounce.

The estimate does not include all FY26 drilling at Jims and Groundrush. Tanami says another update is in progress, with additional material potentially included following a sustained increase in the gold price and revised resource wireframes. The timing and size of that update will matter more than the headline resource alone: the next step is converting geological confidence into mineable inventory and a credible development case.

Losses continue while project spending accelerates

Tanami reported a $7.559 million net loss for FY26, widening from $5.842 million in FY25. Operating cash outflow increased to $8.391 million, while exploration and evaluation expenses fell to $3.759 million from $4.809 million as the company also recorded $1.665 million of site administration costs associated with camp and infrastructure work.

MGX Resources replaced Northern Star as Tanami’s joint venture partner in February 2026, and the two parties are now targeting a development decision focused initially on Groundrush. The immediate test is execution: portal construction, decline development, underground drilling and the subsequent technical studies must demonstrate whether the enlarged resource base can support a commercially viable restart rather than simply a more expensive exploration program.