MGX Resources and its joint venture partner Tanami Gold have signed a $38 million construction agreement with Macmahon Underground for an underground decline at the Groundrush Gold Deposit, marking significant progress toward development of the Central Tanami Project in the Northern Territory. The deal represents a material capital commitment and validates the joint venture’s confidence in the project’s economic potential.
The decline will extend 3.5 kilometres to a depth of 350 metres and is scheduled for completion within 14 months, with portal construction activities commencing in September. Surface works necessary for decline construction are already underway, including preparation of laydown areas and re-establishment of the pit access ramp. This timeline positions the joint venture to commence infill drilling in the latter stages of decline construction, enabling rapid advancement of resource definition once the underground infrastructure is in place.
The primary objective of the decline is to enable 33,000 metres of resource definition drilling targeting the conversion of over 400,000 ounces of mineral resources from the lower-confidence Inferred category to the higher-confidence Indicated classification. For investors, this resource upgrading is critical for reducing geological risk and provides the certainty required for bankability assessments that typically precede development financing and external funding commitments.
The broader Central Tanami Project holds considerable scale, with a total mineral resource estimate of 31.0 million tonnes at an average grade of 2.8 grams per tonne gold for 2.8 million ounces of contained gold. The Groundrush deposit alone accounts for 11.0 million tonnes at 3.3 grams per tonne, representing a substantial component of the project’s overall endowment. The focus on drilling to approximately 650 metres depth will expand the geological database and support more detailed mine design work.
MGX holds a 50 percent interest in the Central Tanami Project Joint Venture, meaning the company will benefit proportionally from upgraded resources and development progress, though it also carries half the financial exposure and operational responsibility. The phased development approach, with the decline construction preceding infill drilling, demonstrates disciplined capital management and reduces execution risk compared to concurrent development and drilling activities.
Beyond Groundrush, the joint venture is continuing resource definition drilling at the Jims Gold Deposit, which was previously mined 25 years ago. The company is also undertaking repairs and improvements to site accommodation and utilities infrastructure while recruiting key site and project personnel. These parallel activities position the project for sustained operational capability through the development phase.
Investors should monitor progress on the September portal construction start, the timing and results of the infill drilling program, and updates to mineral resource estimates during 2027. The project’s advancement toward the 2027 development decision will depend on successful resource conversion, funding security, and regulatory approvals. This announcement is price sensitive and flagged as material by the ASX.
View the full ASX announcement (PDF)
About MGX Resources Limited (ASX: MGX)
MGX Resources Limited is an Australian mining company that primarily operates the Koolan Island hematite iron ore mine in Western Australia’s Kimberley region, with over 40 million tonnes of export history. The company is diversifying into precious and base metals exploration, including a 50% stake in the Central Tanami Gold Project in the Northern Territory, while maintaining exploration activities across Western Australia’s Mid-West and Gascoyne regions.
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