MGX Resources has executed a binding conditional agreement to sell its Koolan Island iron ore operation to Crestlink for at least $20.2 million in upfront and deferred payments, plus up to $5 million in future revenue share, while transferring approximately $30 million in remaining rehabilitation obligations to the buyer. The agreement marks a strategic inflection point for the company, enabling it to exit a legacy asset and redeploy capital toward gold development at its Central Tanami Project.
The Koolan Island sale crystallizes value from winding down the low-grade stockpile shipping program, which generated $5.8 million in net cashflow during the June quarter after rehabilitation costs. Completion is targeted for late 2026, with an option to extend to March 2027, timing that allows the company to optimize the final shipments scheduled for late July. By transferring rehabilitation liabilities to Crestlink, MGX effectively derisks a material future cost burden while monetizing a non-core asset in a controlled manner.
The proceeds and strong balance sheet position MGX to fund development of the Central Tanami Project, where MGX holds a 50 percent interest alongside Newcrest Mining. The company spent $4.7 million on its CTPJV share during the quarter while preparing for underground exploration decline work at the Groundrush deposit, with Macmahon selected as the preferred contractor and initial site works scheduled for August. Parallel resource definition drilling is recommencing at the Jims deposit, identified as a potential open pit opportunity near the process plant. The combined CTPJV resource stands at 31 million tonnes grading 2.8 grams per tonne gold, representing 2.8 million ounces of contained gold, with MGX’s attributable share at 1.4 million ounces.
MGX’s financial position reinforces its development credentials. Cash and investment reserves totaled $412.1 million at June 30 with no bank borrowings, while quarterly net cashflow of $3.1 million benefited from $4.0 million in interest and other income, substantially offsetting corporate and exploration costs. This means the company can largely self-fund Central Tanami development capex without diluting shareholders or accessing debt markets.
The transition from iron ore to gold developer represents a material strategic shift, repositioning MGX in a different risk and return profile. While Central Tanami offers meaningful upside through a substantial near-surface resource base and proximity to existing infrastructure, execution on underground exploration at Groundrush and resource expansion at Jims will be critical inflection points. Investors should monitor the timing of Groundrush portal development in September, progress on Jims drilling results, and the pacing of capital deployment against the company’s cash reserves. The Koolan Island sale completion in late 2026 will also confirm the final rehabilitation assumption by Crestlink. This announcement is price sensitive and has been 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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