MGX Resources (ASX: MGX) – MGX Resources Quarterly Activities Report

MGX Resources has commenced construction of the Groundrush Decline at its 50 percent stake in the Central Tanami Project Joint Venture, following execution of a $38 million contract with Macmahon Underground in August. Initial site works began in August with portal and infrastructure establishment now underway, and the company is targeting completion within 14 months. This marks a significant step in transitioning MGX from an iron ore producer to a prospective underground gold developer.

The decline itself is not a mine, but rather an access tunnel that enables underground drilling to convert existing mineral resources to a higher confidence classification. The CTPJV holds 2.8 million ounces of contained gold across its resource base, of which MGX’s attributable share is 1.4 million ounces. Management is targeting conversion of over 400,000 ounces of inferred resources into the indicated category, which is required for development decision-making. The company plans to commence underground drilling from the decline in 2027 as construction progresses. Alongside this, surface drilling programs continue at the Jims gold deposit with results expected in the December quarter.

MGX’s traditional iron ore operation at Koolan Island has completed its final production run and entered wind-down mode. The mine shipped its last cargoes in July following a rockfall incident in October 2025 that forced suspension of mining. The company generated positive operating cashflow of $0.3 million in the quarter despite $7.7 million in site rehabilitation expenditure, which largely satisfies MGX’s obligations under the pending divestment to Crestlink. A $9 million insurance settlement was received during the quarter for the rockfall incident, with discussions ongoing with remaining insurers. MGX and Crestlink are targeting completion of the sale in late 2026 or early 2027, at which point Crestlink assumes remaining rehabilitation obligations estimated at approximately $30 million.

From a financial perspective, MGX remains well positioned. The company reported cash and investment reserves of $408.7 million at quarter end with no bank borrowings. The group incurred a net cash outflow of $5.1 million for the quarter, comprising CTPJV expenditure of $14.7 million offset partially by interest and other income of $13.2 million. At current spending rates, MGX’s balance sheet provides substantial capacity to fund CTPJV development costs through to a development decision, which management is targeting within the next 12 months. The company also maintains an equity investment portfolio of approximately $67 million in other resources sector companies.

Investors should monitor progress on the Groundrush Decline construction over the coming months, with the initial blast into the main portal scheduled for late October. Key milestones include commencement of underground drilling in 2027, metallurgical testwork results for plant design, and the timing of mineral resource estimate updates incorporating new drilling data. The Crestlink transaction settlement timeline and any further insurance recoveries will also be relevant to tracking the company’s transition. The 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.

If you would like to discuss this announcement, request a callback or call us on 1300 889 603.