Tanami Gold begins Groundrush decline as drilling expands at Jims

Groundrush moves from contract to construction

Tanami Gold NL (ASX:TAM) has begun turning the Central Tanami Project’s Groundrush deposit from a study target into a live underground worksite. The company’s 50%-owned Central Tanami Project Joint Venture signed a formal agreement with Macmahon Underground in August, and mobilisation of underground personnel, machinery and supporting infrastructure began during the September quarter.

Macmahon’s scope covers portal and ventilation establishment plus approximately 3,500 metres of exploration decline development over an estimated 14 months. The decline is initially intended to support infill drilling of Groundrush’s down-plunge extensions, with underground drilling planned from established headings towards the end of the development period and targeting resource definition to a vertical depth of 650 metres. The filing does not disclose the value or detailed commercial terms of the agreement, while earlier coverage reported the Groundrush decline contract.

Site preparation has already moved beyond paperwork. The initial bench strip providing access to the Central Decline portal was fired, air and water pipelines were installed, and raw mine-water header tanks were positioned. Macmahon’s Jumbo and Loader equipment arrived at site, while the initial blast into the main portal was scheduled for the following week. Decmil also completed works around the Mine Operations Centre, access roads and the southern explosives magazine compound.

Jims drilling targets resource confidence

At Jims Gold Mine, the joint venture completed 13,900 metres across 95 reverse circulation holes during the quarter. The programme is designed to improve confidence in the Mineral Resource estimate and support future mine planning, but final assays remain pending.

A diamond rig arrived in mid-September for a separate 4,866-metre programme, completing 639.1 metres across three holes during the quarter. Some of that drilling is aimed at generating material for metallurgical test work, alongside existing core from Groundrush and Jims that has been sent to a laboratory to inform process-plant engineering studies.

Jims sits about 23 kilometres southwest of the Central Tanami processing facility. The filing cites a resource beneath and beside the historical pits of 2.6 million tonnes at 2.7 grams per tonne for 220,000 ounces of contained gold as at 30 September 2025, with the estimate constrained by pit and stope optimisation shells using a gold price assumption of A$3,500 an ounce. That figure is not a production forecast, and the current quarter’s drilling results have not yet been reported.

Cash funds activity but development is consuming capital

Tanami finished the quarter with $63.261 million in cash and cash equivalents, down from $75.943 million at 30 June. Net operating cash used was $3.303 million, while investing outflows reached $9.375 million, including $9.350 million for property, plant and equipment and assets under construction at the Central Tanami Project. On the Appendix 5B calculation, the company reported an estimated 19 quarters of funding based on operating outgoings alone.

That runway measure should be read alongside the project’s advancing construction requirements. It excludes future changes in spending and does not treat the quarter’s capital outflows as operating cash burn. The Central Tanami Project Joint Venture separately held $13.561 million at quarter end, while Tanami also held 500,000 Northern Star Resources shares valued at $12.385 million.

Hyperion discussions paused as Central Tanami takes priority

Preliminary discussions with Prodigy Gold over a potential Hyperion Gold Project joint venture have been placed on hold, with no transaction agreed. The company said both parties currently have other priorities. For Tanami, the disclosed activity is concentrated on Groundrush construction, Jims resource definition and the engineering work needed to assess future processing options.